1 / 8

Market Governance

Market Governance. Andrew Claxton Chief Executive. Governance Entities. Market Operator. System Operator. Transmission Operator. Several different combinations adopted so far around the world Influenced by: - historical structure - nature of trading arrangements

leora
Download Presentation

Market Governance

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Market Governance Andrew Claxton Chief Executive

  2. Governance Entities Market Operator System Operator Transmission Operator • Several different combinations adopted so far around the world • Influenced by: • - historical structure • - nature of trading arrangements • - maturity of arrangements

  3. Governance of Different Elements Optional Natural Monopoly Mandatory Examples Forward markets Optional pool Mandatory pool Futures markets Imbalance arrangements Bilateral contracts Residual settlement System operation Ancillary services Capacity contracts Governance For profit Non profit, stakeholder organisation Financial sector Sector regulation regulation - e.g. Rules - e.g. compliance

  4. Governance Objectives -Mandatory Elements Confidence Ensure that decisions achieve a predictable and reasonable Enhancing balance between predefined objectives for the trading arrangements Effective Possess the authority, resources and procedures to develop and operate the [mandatory element] effectively, fairly and efficiently Inclusive Provide to all stakeholders an adequate level of participation in the decision making and supervision of the [mandatory element] Objective Every aspect of governance should be designed to pursue the objectives identified for the trading arrangements where this is appropriate

  5. Managerial Effectiveness Stakeholder Process Corporate Process Regulatory Process Role: • Communication • Access to expertise • Transparency • Ensuring cost-effective and timely delivery against objectives • Protection against abuse • Check and balance of monopoly functions (e.g. IMO Board) • Integrated energy policy Key Attributes: • Focused, delivery orientated • Experience in driving process • Discretion + judgement • Accountability • Formal, transparent and understood procedures • Multi-class • Relevant Expertise • Authoritative

  6. Two-tier Governance StructureWorld Bank Report on Market Governance Advantages • Melds independence with expertise • Reduces the impasse of conflicting commercial interests • Potentially replicates the role of the regulator, but better • because: • Faster decision making due to flexibility of process • Better policy decisions as it has the expertise • Board decisions can be appealed to Regulator as final backstop

  7. Current Options under Consideration Independent Market Organisation Balancing and Settlement Code Panel OFFER OFFER IMO Board Mgt. Stakeholder Forum BSC Panel NGC Service Providers Service Providers

  8. Key Issues • Is industry self governance inherently flawed and vulnerable? • Is acceptable regulatory control possible - if unchecked, imposes unacceptable, unmanageable risk? - if bound by due process, imposes unacceptable costs and inflexibility? • ISO or profit maximising System Operator/Transmission company? • Does IMO offer a better way? • Governance matters!

More Related