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EFET Position on Information Transparency. Paul Dawson, Barclays Capital ERGEG Public Hearing on Transparency 6 th July 2006. Lack of information transparency is a key barrier to greater competition and liquidity.

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efet position on information transparency

EFET Position on Information Transparency

Paul Dawson, Barclays Capital

ERGEG Public Hearing on Transparency

6th July 2006

lack of information transparency is a key barrier to greater competition and liquidity
Lack of information transparency is a key barrier to greater competition and liquidity
  • Traders need to understand supply, demand and transport fundamentals to take a view on future price movements
  • Customer and market confidence requires ability to explain price movements in terms of fundamentals
  • Ability to understand and quantify associated risks is essential to liquidity provision and greater competition
  • Asymmetric information increases risk and reduces liquidity
  • The lack of information transparency is a key barrier to greater competition in the power and gas sectors
  • Commission and ERGEG initiatives to address this problem are hugely welcome
physical generation data released
Physical generation data released

Unit-by-unit

Complete aggregated

Incomplete

Nothing

generation data released and available
Generation data releasedand “available”

Unit-by-unit

Complete aggregated

Incomplete

Nothing

actual demand data release
Actual demand data release

Real-time

Partial

Nothing

perceived risk of collusion should not limit information made available
Perceived risk of collusion should not limit information made available
  • Collusion is also a concern in opaque markets
  • Aggregation can address concerns for ex ante information
  • No grounds for restricting ex post production data & standing capacity data
  • Transparency allows traders to provide liquidity and competition even in presence of collusion
  • Transparency = effective scrutiny from participants, regulators, academics etc = effective regulation
  • Anti-trust and market abuse rules also apply
  • Delaying information release pending the development of sufficient competition & liquidity is inherently circular
  • Benefits of transparency >> potential detriment
commercial confidentiality should not unduly limit information made available
Commercial confidentiality should not unduly limit information made available
  • Confidentiality of ex ante information is arguable, but limited aggregation addresses concerns
  • Standing data and ex post production data should not present major concerns (borne out by UK, Spain and Nordpool experience)
  • Trading is a zero-sum game
  • Case for temporary differentiation for small independent generators in isolated and illiquid national markets
  • Even delayed plant-by-plant information is hugely valuable
  • Commercial data provision = data is no longer confidential (but coverage is partial and costly)
information requirements generation and demand
Information requirements: generation and demand
  • Ex post, actual generation data
    • Plant-by-plant
    • As soon as practicable after generation
    • Prompt publication of unplanned outages
  • Ex ante generation data
    • Installed capacity by plant
    • Annual maintenance and availability with quarterly updates
    • Planned availability for the coming week
    • Aggregated by fuel per price zone or smaller areas if feasible
    • Timetable for transition to plant-by-plant disclosure
  • Demand
    • Hub-by-hub forecasts per TSO forecasts and at least at D-1
    • Close to real-time actual
    • Historical data for past 3 years
information requirements transmission capacity etc
Information requirements: transmission capacity etc
  • Forecast capacity, maintenance etc from year-ahead to day-ahead
  • Actual outage details
  • Capacity requests, offers and bookings (including any long-term contracts and bookings)
  • Thermal, ratings and flows
  • Immediate publication of assumptions and estimation methodologies is also required (in particular treatment of contingency safety margins)