Q&As on REMIT – Question III.3.21.

What if an organised market place (OMP) does not offer a data reporting agreement at the request of the market participant as defined in Commission Implementing Regulation 1348/2014 [or is not a registered as an RRM by 7 October 2015]?


Answer:

In line with Article 6(1) second subparagraph of Commission Implementing Regulation (EU) No 1348/2014, the OMP, where the wholesale energy product was executed or the order was placed, has an obligation, at the request of the market participant, to offer a data reporting agreement.

If the OMP does not offer a data reporting agreement or is not registered as an RRM, and therefore cannot offer a data reporting agreement, the OMP will have to nominate a third party RRM and will have to fulfil its obligation to offer a data reporting agreement through the nominated third party RRM. The nominated third party RRM would offer a data reporting agreement to market participants on behalf of the OMP.

RSS_Icon Last update: 30/09/2015  

Q&As on REMIT – Question III.3.22.

Could you please explain how the final customer should notify its technical capability of the consumption unit to consume 600 GWh/year or more under Article 3(2), third subparagraph, of Commission Implementing Regulation (EU) No 1348/2014?


Answer:

According to Article 3(2), third subparagraph, of Commission Implementing Regulation (EU) No 1348/2014, final customers who are parties to a contract for the supply of electricity or natural gas to a single consumption unit with a technical capability to consume 600 GWh/year or more (as referred in Article 3(1)(a)(vii)) of Commission Implementing Regulation (EU) No 1348/2014 are obliged to notify their counterparties if the consumption unit in question is technically capable to consume 600 GWh/year or more.

The Agency is of the view that the notification obligation can be included as a part of the contract for supply of electricity or natural gas to final customer. As for the outstanding contracts for supply of electricity or natural gas to final customers, the Agency anticipates that the final customers will notify their counterparties in a standard way as defined by the outstanding contracts. In order to raise awareness on the final customer’s notification obligation, the Agency recommends the counterparties to the contracts for supply of electricity or natural gas to remind the final customers on their notification obligation under Article 3(2), third subparagraph, of Commission Implementing Regulation (EU) No 1348/2014.

RSS_Icon Last update: 30/09/2015  

Q&As on REMIT – Question III.3.23.

Are contracts for the supply or transportation of biogas covered by the scope of REMIT?


Answer:

In line with Article 1(2) of Directive 2009/73/EC, the rules established (…) for natural gas, including LNG, shall also apply in a non-discriminatory way to biogas and gas from biomass or other types of gas in so far as such gases can technically and safely be injected into, and transported through, the natural gas system. Therefore, if biogas can technically and safely be injected into, and transported through, the natural gas system, it will: (i) meet all criteria to be treated as natural gas and (ii) REMIT will apply for the biogas supply/transportation contracts.

RSS_Icon Last update: 30/09/2015  

Q&As on REMIT – Question III.3.24.

Are derivative contracts traded on platforms in the EU relating to electricity or natural gas delivered outside the EU within the scope of REMIT?


Answer:

Pursuant to Article 2(4)(b) of REMIT, the definition of wholesale energy product includes ‘derivatives relating to electricity or natural gas produced, traded or delivered in the Union’. Therefore, a derivative contract relating to electricity or natural gas delivered in the Union is not the only criterion. The scope of REMIT also includes derivatives relating to electricity or natural gas produced or traded in the Union. Such contracts are wholesale energy products irrespective of whether the related electricity or natural gas is delivered in the Union. However, the scope of REMIT and its prohibitions (e.g. prohibition of insider trading or market manipulation) and obligations (e.g. obligation to publish inside information) is wider than the scope of the reporting obligation under 8(1) of REMIT in connection with Commission Implementing Regulation (EU) No 1348/2014.

Article 3(1)(a)(viii) of Commission Implementing Regulation (EU) No 1348/2014 specifies that ‘options, futures, swaps and any other derivatives of contracts relating to electricity or natural gas produced, traded or delivered in the Union‘ are reportable.

Furthermore, the first sentence of Article 3(1)(a) of Commission Implementing Regulation (EU) No 1348/2014 limits the scope of reporting to the contracts that are wholesale energy products in relation to the supply of electricity or natural gas ‘with delivery in the Union’.

Therefore, from the group of derivatives of contracts related to electricity/natural gas (a) produced, (b) traded or (c) delivered in the Union, only those that also relate to the supply of electricity/natural gas with delivery in the Union shall be reported to the Agency pursuant to Article 3(1)(a)(viii) of Commission Implementing Regulation (EU) No 1348/2014.

In conclusion, if a derivative contract (i.e. wholesale energy product) is traded on a platform in the Union, but it relates to the supply of electricity or gas with delivery outside the Union, the above condition ‘with delivery in the Union’ is not fulfilled. For this reason, the market participant has no obligation to report this derivative contract to the Agency pursuant to Article 3(1)(a)(viii) of the Commission Implementing Regulation (EU) No 1348/2014. However, the Agency highlights that such contracts fall under the scope of REMIT and therefore other REMIT prohibitions and obligations remain applicable.

RSS_Icon Last update: 30/10/2015  

Q&As on REMIT – Question III.3.25.

Who is responsible for the backloading of trades executed at the organised market places? Is there an obligation for organised market places to offer a data reporting agreement to the market participants?


Answer:

The ultimate responsibility for reporting of wholesale energy contracts under REMIT is always with the market participant. This is also the case for the backloading of outstanding contracts. The reporting of details of contracts in wholesale energy products which were concluded before the date on which the reporting obligation becomes applicable and remain outstanding on that date shall be reported to the Agency by market participants through the third-party RRM(s) of their choice. According to the Agency’s understanding, the obligation for organised market places to offer a data reporting agreement to the market participants does not relate to the backloading of outstanding contracts executed at organised market places.

In line with Recital 5 of Commission Implementing Regulation (EU) No 1348/2014, since market participants cannot be expected to record such data with ease, organised market places are considered best placed to report order book data to the Agency in order to enable the Agency to effectively uncover market abuses. Since there is no obligation to backload orders to trade, the obligation for organised market places to offer a data reporting agreement on the request of the market participants does not apply to the backloading of outstanding contracts executed at organised market places. However, organised market places may nevertheless be willing to assist the market participants with the backloading reporting.

RSS_Icon Last update: 30/10/2015  

Q&As on REMIT – Question III.3.26.

Could you please explain the concepts of ‘intragroup contracts’ and ‘consolidation on a full basis’ mentioned in Article 2(6) of Commission Implementing Regulation (EU) No 1348/2014?


Answer:

Pursuant to Article 2(6) of Commission Implementing Regulation (EU) No 1348/2014, an ‘intragroup contract’ is a contract on wholesale energy products entered into with a counterparty which is part of the same group provided that both counterparties are included in the same consolidation perimeter on a full basis.

Article 2(5) of Commission Implementing Regulation (EU) No 1348/2014 defines that the concept of group to be taken into consideration is the one included in Article 2 of Directive 2013/34/EU on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings.

Article 2(6) of Commission Implementing Regulation (EU) No 1348/2014 details that ‘consolidation on full basis’ is the relevant criterion to assess if the contracts are intragroup. If a company ‘consolidates on a full basis‘, its assets, liabilities, income and expenses are all shown in full in the consolidated financial statements of the parent company, with the exclusion of the ones related to intercompany transactions that are eliminated in the consolidation process.
Further details on the rules and interpretations can be found in Directive 2013/34/EU and its implementing laws in the relevant Member State(s).

RSS_Icon Last update: 30/10/2015  

Q&As on REMIT – Question III.3.27.

Could you explain what country’s calendar i.e. “working day” shall be used for the reporting purposes under Article 7 of Commission Implementing Regulation (EU) No 1348/2014?


Answer:

According to Article 6(1) of Commission Implementing Regulation (EU) No 1348/2014, the market participant has an obligation to report its data. The timing for reporting under Article 7(1) in Commission Implementing Regulation (EU) No 1348/2014 refers to the ‘working day following the conclusion of the contract or placement of the order’. Therefore, it is not the calendar in use in the country of the RRM that should be used but the calendar of the relevant market participant’s country. Please note that the public holidays of the EU Member States are published in the Official Journal of the European Union.

A list of public holidays for 2016 is available here: http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.C_.2016.019.01.0009.01.ENG&toc=OJ:C:2016:019:TOC.

In addition, the Agency points out that the market participant’s data reporting agreement should contain a provision governing the obligation to report the contract on the ‘working day following the conclusion of the contract or placement of the order’. The Agency would also welcome the reporting of data by the market participant before the actual date of fulfilling this obligation.

The Agency will not consider as public holidays the ones at federal state/regional level that are not listed to the above mentioned list.

RSS_Icon Last update: 29/04/2016  

Q&As on REMIT – Question III.3.28.

Concerning the threshold of 600GWh/year under Article 3(1)(a)(vii) of Commission Implementing Regulation (EU) No 1348/2014: is only burning of gas considered an end-use, or should purchases for other industrial processes also be included in the calculation of this threshold (e.g. natural gas used as feedstock, etc.)?


Answer:

The 600GWh/year threshold in Article 3(1)(a)(vii) of Commission Implementing Regulation (EU) No 1348/2014 relates to the consumption of gas or electricity, irrespective of the purpose of this consumption. If a single consumption unit has a technical consumption capability greater than 600GWh/year, then contracts for the supply of electricity or gas to that unit are reportable, irrespective of whether the purpose is burning gas or using it for other purposes.

RSS_Icon Last update: 30/11/2015  

Q&As on REMIT – Question III.3.29.

How to report when a continuous explicit intraday cross border capacity allocation method is in place?


Answer:

In case the relevant allocation rules define that the allocated intraday cross border capacity is automatically nominated with no possibility of intervention from the market participant and that the amounts of allocated and nominated intraday cross border capacity are equal, then there is no need for the relevant TSOs or third party acting on their behalf to submit both allocated and nominated information. Only the nominated cross border capacity will be reported to the Agency by the reporting party.

In case the relevant allocation rules allow the market participant to nominate a different amount of cross border capacity to the allocated amount, then both the allocated and the nominated reports will have to be submitted to the Agency.

RSS_Icon Last update: 30/11/2015  

Q&As on REMIT – Question III.3.30.

Should gas storage nominations be reported as trades?


Answer:

No, storage contracts are not considered wholesale energy products under REMIT (please see the definition of wholesale energy products under Article 2(4) of REMIT). Storage system operators are required to report nomination data as defined in Article 9(7) of Commission Implementing Regulation (EU) No 1348/2014 as fundamental data. In addition, the market participants or storage system operators (on their behalf) are required to report gas storage data as specified in Article 9(9) of Commission Implementing Regulation (EU) No 1348/2014.

RSS_Icon Last update: 16/02/2016  

RSS_Icon Subscribe to this Category’s RSS