According to the new electricity and natural gas law no. 123/2012, transactions with electricity can only be carried on the centralised market. OTC power purchase agreements can no longer be concluded.
In an attempt to mitigate the issue created by the abovementioned legal provisions, ANRE has recently published on its official website draft documents regarding the implementation of new „OTC type” trading platform managed by OPCOM. Such draft documentation comprises of:
- a draft regulation regarding the centralized framework for the transactions on the centralized market with continuous double negotiation of bilateral power contracts (the
- a procedure regarding the transactions on the CM-CDN.
Comments in relation to these documents may be submitted with ANRE until 21 January 2013.
We have summarized below some of the main features of the CM–CDN and the transactions carried thereon, as resulting from the draft documentation. We would be happy to provide you with further information as you may deem necessary:
- The „products” traded on the CM-CDN are standardized with respect to:
- minimum hourly power offered for trading – 1 MW;
- delivery period – which may be one day, one week-end, one week, one month, one quarter, one semester or one year; and
- daily delivery profile – base load, peak load, off-peak
- There are several instruments that can be traded within the CM-CDN, organised per delivery profile and delivery period (e.g. for forward contracts for peak load for one quarter, forward contracts for base load for one day).
- Each participant has to prepare its eligibility list including the participants on the market with whom it is willing to enter into transactions and conclude agreements. The eligibility lists are published with OPCOM and may be updated by the
- Unlike on the other OPCOM platforms already existing on the centralized market for bilateral contracts, the contracts based on which the transactions are performed are not standardized, but must be pre-agreed between the parties that are eligible to conclude transactions. In the pre – agreed contracts all the contractual terms are established, except for the delivery profile, the price and the delivery
- The draft documents also regulate a so called „Sleeve” procedure for intermediating transactions between two participants who are not eligible to conclude them
Thus, if on the market for any of the instruments available on the CM-CDN, the highest price purchase offer and the lowest price sale offer are made by participants which are not eligible to conclude a contract directly, if the two participants agree, Opcom may identify a third participant who is included in the eligibility lists of the initial two and which shall act as an intermediary (if it agrees).
- There is no central counterparty and no guarantees are requested by OPCOM in view of performing the transactions on this market. Registration on the market is allowed for licence holders, who must also conclude a market participation convention. The draft convention, as well the specific procedures for the registration/suspension/revocation of the participants, the submission of the offers have not been yet made
- Each participant, regardless its position (i.e. purchaser or seller), may successively adjust its offer price in real time, the transactions being performed with the first participant that, following the adjustment, meets the conditions of the
- If a transaction is erroneously performed, it may be cancelled within 10 (ten) minutes, conditional upon the request of both
- In order to ensure a certain degree of transparency, the price and the traded quantities are published on the official website of OCPOM and are available for a period of 2 (two) years.