Gas Market Transparency Trails Power as Scrutiny Tightens

Natural gas companies and grid operators in Europe are behind their power market counterparts in providing flow and supply data under rules designed to prevent insider trading.

The Agency for the Cooperation of Energy Regulators is discussing whether it can oblige gas importers in Europe to report disruptions of flows into the region, according to Alberto Pototschnig, a director at the organization. Data such as Russian inflows and liquefied natural gas cargoes to Europe have to be published under two-year-old European Union rules on energy market transparency.

“Gas trading has a legacy of long-term contracts, the conditions of which are not publicly known, whereas power is traded more in organized markets,” Pototschnig said yesterday in an interview in Ljubljana, Slovenia, where ACER is based.

Under the EU’s wholesale energy market integrity and transparency rule, known as Remit, companies must publish outages, flow data and, by next year, will have to report to ACER all trades in the region’s 900 billion-euro ($1.2 trillion) power and gas markets. Energy costs hinge on how much is being produced at any given time, so unexpected supply interruptions can cause price swings that may benefit those with advance knowledge.

Least Transparent

There needs to be “more transparency in the gas market,” Folker Trepte, a Frankfurt-based partner at PricewaterhouseCoopers LLP, said by phone on June 6. “What’s least transparent is import data from Russia or Qatar and it will be difficult for the EU to change this under Remit.”

Information relating to the capacity and use of production, storage, consumption or transmission of electricity, natural gas or LNG, including planned or unplanned unavailability of these facilities, must be reported under Remit.

ACER can’t force foreign countries to disclose information on operations outside the EU, Pototschnig said.

Stockholm-based Vattenfall AB, the Nordic area’s biggest utility, has published live data from its reactors since at least 2004. Germany’s biggest generators, EON SE and RWE AG, started releasing near real-time power plant outage information in 2007 after industry groups campaigned for more transparency. Utilities throughout Europe have since stepped up publishing gas and power data on their own websites to meet the transparency requirements of Remit.

Centralized Platforms

While Remit makes energy markets more transparent, it’s one of several trade reporting requirements under EU regulations, according to Rune Bjoernson, a senior vice president at Statoil ASA, Norway’s biggest energy company.

“We need to comply with all these systems, which makes it even more complex and costly,” Bjoernson said in a May 20 interview. “We would like a more coordinated approach to that.”

To make generation and supply data easier to see, the European Energy Exchange AG in Leipzig, Germany, and London-based National Grid Plc are creating centralized platforms to display outage data.

EEX plans to start its transparency platform by the end of this month. The exact date isn’t yet known, Eileen Hieke, a spokeswoman for the exchange, said by e-mail June 5. The size of the plant, fuel type, reason and duration of outage will be published without the operating company or unit name, she said.

EON plans to get rid of its own Remit website and report details of outages via EEX, Markus Nitschke, a spokesman for the Dusseldorf-based utility, said by e-mail on June 5.

ACER Review

National Grid plans to start a platform for power data by the end of this year at the request of utility SSE Plc, Mark Malbas, a London-based spokesman for the company, said by e-mail on June 5. It already operates a website for gas market information.

ACER reviewed 13 cases of potential breaches of Remit rules last year, compared with 10 in 2012, the regulatory group said in its annual report today.

Guidelines on the trade data that companies need to submit have been delayed until after summer, the European Commission said yesterday. Trade monitoring will begin six months after the data requirements are published.

The number of cases needing investigation for possible market abuse will probably increase once ACER has the trade information, the agency’s Pototschnig said.