Proposed New OTC Trading Arrangements For Electricity
Friday (11 January 2013), the Romanian energy market regulator (ANRE) published on its website for public consultation a proposal for a procedure and regulation on OTC electricity trading (the "Proposal"). ANRE has invited stakeholders to submit their comments by 21 January 2013.
The Energy Act 2012 that came into force in July 2013 placed a ban on negotiated bilateral contracts in the energy sector (commonly referred to as PPAs - power purchase agreements). Since then, the only trading place and instruments available have been on one of the platforms organised by the Romanian market operator OPCOM.
Following the entry into force of the Energy Act 2012, the stakeholders reacted vividly in an attempt to unwind such a restrictive legal framework. However, apart from a plethora of conferences and industry events, there hasn't been much progress since July 2012.
In the cover letter accompanying the Proposal, ANRE explains that this Proposal follows the efforts of the Association of the Power Suppliers in Romanian (AFEER). Given the restrictive legal framework, AFEER has argued the need for a flexible, yet transparent, option for trading and requested the setting up of an OTC trading plat-form similar to the ones already in place in Western Europe. The Proposal is the result of a series of meetings and debates (organised in October and November 2012) of a task force comprising members of AFEER, the representatives of the power generators trading on OPCOM forward market (PCCB) and of the association of power generation (COGEN), the association of the power distributors (ACUE), the TSO, as well as representatives of OPCOM, ANRE and Romania's Ministry of Economy.
This newsletter briefly summarises the key provisions of the Proposal:
there is no standard model form imposed on the participants, and the par-ties are free to use model forms of their choice (eg: EFET model form); however the capacity, delivery period and profile (ie: base load, peak, off-peak) are standardised. each participant can set up an eligibility list to include its preferred trading partners. The trading partners are freely chosen by the participant; there are no pre-requisites in this respect. the parties are free to enter into a master trading agreement preceding trading on the OTC market. The master trading agreement can comprise all terms and conditions of a typical power trading master agreement; however, the price, the delivery period and profile must be left out, as these...
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