EFET pan-european survey amongst energy traders about market distortions

Transcription

1 EFET pan-european survey amongst energy traders about market distortions April 2007 European Federation of Energy Traders Peter STYLES Carmen OPREA

2 Survey initiated in in January 2007 and completed in in April based on a standardized questionnaire and conducted among 50 senior traders and originators (52% responded). Aims: Aims: Assess Assess the the importance of of each each distortion for for our our members Pinpoint EFET EFET priorities on on electricity, gas, gas, and and other other commodities ies Obtain Obtain feed-back for for further further discussions with with the the European Commission, ERGEG, ETSO ETSO etc. etc. Identify Identify the the topics topics to to be be tackled tackled in in EFET EFET Trading Summit

3 Five questions I. Which are the more serious distortions preventing the proper development of liquid, harmonized European wholesale energy markets (14 possible distortions being nominated) II. III. IV. Ranking of the five most important market distortions Regional and national market distortions: regions or individual countries that suffer most from market distortions Responsible entities for solving market distortions V. Identify top priorities of EU energy policy

4 Question I Indicate the more serious distortions preventing the proper development of liquid and harmonized European wholesale energy markets

5 Serious distortions The respondents were asked to choose among the following: Lack of transparency about use of infrastructure (power and gas) National failures to implement EU Directives (power, emissions and gas) Price caps or regulated tariffs imposed by national governments or regulators (power and gas) Improper or insufficient or non-firm allocation of transmission capacity (power and gas) National requirements to obtain wholesale licenses (power and gas) Renewable energy subsidies or feed in tariffs (power) Uncertainty about CO2 emissions and allocation of allowances

6 Serious distortions (continued) Access to transmission and storage (gas) Favorable or exclusive long term contracts for classes of industrial customers (power and gas) Mergers and protection of national champions Ineffective or insufficient unbundling Multiplicity of national power exchanges Uncertainty on method to determine coal index reference price Threat of financial regulatory restrictions on commodity derivatives trading

7 Distortions of most concern Price caps or regulated tariffs imposed by national governments or regulators (power and gas) 76% of respondents have indicated it as a serious distortion National failures to implement EU Directives (power, emissions and gas) 73% Improper or insufficient or non-firm allocation of transmission capacity (power and gas) 73% Mergers and protection of national champions 73% Lack of transparency about the use of infrastructure (power and gas) 65% Uncertainty about CO2 emissions and allocation of allowances 61.5% Ineffective or insufficient unbundling 57.5% Access to transmission and storage (gas) 57.5%

8 Question II Rank the five market distortions which you consider to be the most important

9 Most important distortions the top three Transmission capacity allocation Nonimplementation EU legislation Score Most serious Price caps

10 Most important distortions (continued) Ineffective unbundling LTC CO2 emissions Score Most serious Renewable energy subsidies Transparency

11 Most important distortions (continued) Financial regulation Coal index price National PEx Nat.champs,mergers Access (gas) Licences Score Most serious

12 Other distortions indicated by respondents Non-existence of intraday trading on cross border profiles Lack of standardization and accuracy of published data (unenforceable obligation on TSO) Insufficient clarity on taxation for new entrants Inconsistent regulatory frameworks on transport, storage, LNG Lack of level playing field for companies i.e. due to diverging national implementation of directives Entry capacity and transportation capacity constraints/storage The high degree of concentration endorsed by Government Especially bad distortions in SEE, with Central Europe worse than Western Europe

13 Question III Indicate the regions or individual countries that suffer most from market distortions

14 Regions/Countries suffering from distortions Europe CEE/SEE Switzerland Iberia Italy Emissions Trading Wholesale gas Wholesale electricity Germany France

15 CEE/SEE Countries suffering from distortions Slovakia Croatia Romania CEE Serbia Emissions Trading Gas Electricity Bulgaria Poland

16 Question IV Who do you consider must take the greatest responsibility for solving market distortions?

17 Who should take responsibility? Rank five amongst the following: European Commission National Governments Energy Regulators Transmission System Operators (TSOs) Power Exchanges Generation companies Gas producers Gas supply companies Power supply companies Energy consumers Traders

18 Who should take responsibility? Who should take responsibility? Greatest Score Eur.Commission Nat.Governments Nat.Regulators TSOs Nat. PEx Traders Gen./Prod.

19 Question V Describe briefly what in your opinion should be the first priority of EU energy policy

20 Priorities EU energy policy 1. Completing the internal market and market integration, including harmonized and uniform regulatory framework in EU (14) 2. Unbundling, formation of an Independent Transmission Operator(6) 3. Development of gas markets, improving access to the gas infrastructures, changing business practices (4) 4. Merger control and preventing the anti-competitive behaviour (4) 5. Improving cross border trading: Increasing transmission capacity allocation, reduction of bottlenecks, common procedures (3) 6. Transparency (e.g. unused/used transportation capacity) (3)

21 Priorities EU energy policy (continued) 7. Eliminate regulated tariffs (2) 8. National Regulators: independence, more power, stability of the regulatory framework (2) 9. Long term energy supply stability (2) 10. Cross-subsidies prevention 11. Establishment of regional exchanges 12. Clear and long term policy in CO2

22 Priorities EU energy policy Completing the internal market 21% 33% Improve transmission system operation Development of gas markets 7% Preventing anticompetitive behaviour 7% Improving cross border trading 9% 9% 14% Transparency Other

23 European Federation of Energy Traders Tel: +31 (0)