REMIT (Regulation on Wholesale Energy Market Integrity and Transparency) provides an EU framework for the transparency and integrity of energy markets and aims to deter market participants from manipulating the market. It plays an important role in protecting the interests of companies and consumers and ensuring trust in energy markets. The Regulation was revised this year to ensure it keeps pace with evolving market dynamics.

What is in the latest REMIT Quarterly?

The REMIT Quarterly is ACER’s main channel of communication with stakeholders on REMIT-related matters, providing updates on ACER’s REMIT activities.

The 37th edition covers the second quarter of 2024 and features:

• Key takeaways from the ACER and European Commission joint workshop on REMIT II implementation, held on 11 June 2024.
• Further details on ACER’s public consultation on new data reporting requirements of the REMIT Implementing Regulation’s Annex, running until 6 September 2024. Have your say here.
• The announcement of a joint roundtable meeting on proposals for REMIT II delegated acts for Registered Reporting Mechanisms (RRMs) and Inside Information Platforms (IIPs), scheduled for 17 and 18 September 2024.
• Updated overview of the sanction decisions under REMIT for 2024, with 345 cases under review at the end of the second quarter.
• Statistics for RRMs’ contingency reports.
• Overview of trading on organised market places in the second quarter of 2024.
• Other REMIT updates.

The Regulation on Wholesale Energy Market Integrity and Transparency (REMIT) aims to prevent and protect consumers and businesses against market abuse in the European electricity and gas markets. The rules were revised in May 2024 to ensure they keep pace with evolving market dynamics.

In April 2024, ACER addressed several questions from stakeholders to help them comply with their reporting obligations under the revised REMIT, before it entered into force.

As a follow up, ACER now clarifies (in an open letter) the obligations for market participants to notify national regulatory authorities and ACER on their usage of algorithmic trading and direct electronic access.

What is algorithmic trading?

Algorithmic trading involves using computer algorithms to automate trades at high speeds, while direct electronic access allows persons to trade directly on organised market places using another entity’s trading code or infrastructure.

Why is the open letter relevant?

Today’s open letter provides examples of activities that fall under the new notification obligations for algorithmic trading, helping market participants comply with the revised REMIT (Article 5a).

These notifications will reinforce regulatory oversight, ensure market transparency, and help manage risks associated with advanced trading methods.

ACER invites market participants to review both open letters and ensure they meet the new obligations.

What are the next steps?

In September 2024, ACER intends to publish an open letter to clarify the obligations detailed in Article 9 (1), which require  that non-EU market participants must designate their representative in the EU, as well as the obligations for persons professionally arranging or executing transactions (Article 15).

By the end of 2024, ACER aims to revise the existing ACER Guidance on the application of REMIT to incorporate the changes introduced by the revised REMIT.

Learn more about REMIT.

Today, ACER releases its first interactive dashboard on monitoring the implementation of the Imbalance Settlement Harmonisation (ISH) methodology.

What is the ISH methodology?

The ISH methodology, introduced in 2017 by the Electricity Balancing (EB) Regulation and approved by ACER in 2020, aims at harmonising the main features of electricity imbalance settlement across the EU.

Each Transmission System Operator (TSO) calculates the difference between the forecasted and actual electricity consumption or production for each Balance Responsible Party (BRP) in its area. By identifying these imbalances, BRPs can take actions to support the power grid’s balance, helping to maintain or restore the balance between electricity supply and demand.

With the implementation of the ISH methodology, the TSOs were required to harmonise the main features of the imbalance settlement:

• Imbalance calculation, including its position, actual allocated volume, and imbalance adjustment.
• Main components for calculating the imbalance price. Additional components such as scarcity, incentivising, and connecting TSOs’ financial neutrality may also be used if approved by the NRA.
• Use of single or dual imbalance pricing:
  • Single (EU’s target model): imbalances are settled at a single price, regardless of whether they result from excess supply or excess demand. This pricing incentivises BRPs to help restore the system’s balance.
  • Dual: different prices apply for positive (excess supply) or negative (excess demand) imbalances. This pricing incentivises BRPs to maintain their own balance.

Why is the harmonisation of ISH aspects important for the electricity market?

Harmonising these aspects across EU Member States creates a more integrated and efficient electricity market. It ensures that imbalance prices accurately reflect real-time energy values, provides consistent incentives for market participants, and enhances the transparency and efficiency of balancing markets. This, in turn, supports the stability and reliability of the electricity grid, key for meeting the EU's energy goals and transitioning to a sustainable energy future.

What did ACER monitoring find?

ACER’s 2024 monitoring exercise evaluated the implementation degree of each ISH methodology feature by each TSO. The analysis is based on the data received from the TSOs of 23* EU Member States (the methodology is not applicable in Malta and Cyprus, while Austria* and Bulgaria did not submit their data).
*Update of 19 August 2024: The analysis is now updated with the data received from 24 Member States (after Austria submitted their data on 30 July 2024).

The ACER monitoring found:

• The ISH methodology has been fully or largely implemented in nearly all observed Member States (22).
• 5 TSOs do not use any additional components, 19 TSOs (from 16 Member States) are using one or more additional components, and 2 TSOs are in the process of implementing the use of additional component/s.
• 20 TSOs (from 17 Member States) use single imbalance pricing, 5 TSOs use dual pricing while 1 TSO is in the process of implementing the use of dual pricing.

What are the next steps?

In the coming months, ACER will continue to check the implementation status of Terms, Conditions and Methodologies (TCMs) of the:

• Electricity Balancing (EB);
• Capacity Allocation and Congestion Management (CACM);
• Forward Capacity Allocation (FCA); and
• System Operation (SO).

The information collected will be the foundation of ACER’s implementation monitoring dashboards (the next expected in 2025). Relevant stakeholders will be notified in due time about when and how to submit their data.

What else is new?

Have you checked ACER’s updated Electricity Balancing TCMs monitoring webpage? It offers a clear, colour-coded overview of each TCMs’ implementation status, complete with useful links and key dates.