Framework of Trading Activity and Market Entry in Albania by Lorenc Gordani | Sunday, July 26, 2015

At the begin
of July 2015 the Albanian Ministry of Energy announces the plans for the
opening of a power exchange platform. Announcement that follow the enactment
the new Law of the Electricity Sector nr. 43 on 30th April 2015. The
new law aim a fully aligned with Directive 2009/72/EC of the European
Parliament and the Council, dated 13 July 2009 “On common rules for the
internal market in electricity”. A process that ranks the country in the second
post among the rest of the WBs (only Serbia have done it until now).

In regard the
ECS release on 15 July 2015 the Draft for Consultation on the Policy Guidelines
on the Promotion of Organised Electricity Markets in the Contracting Parties
developed with the support of an ad-hoc working group comprising academia and
industry professionals.

The part of
the Rules governing trading activity and market entry report the “a
comprehensive set or rules governing market entry, trading activity, product
development and market oversight is needed for operating an organised market
which is suitably designed to swiftly couple with connected markets. Joining
existing market couplings that have a well established structure and standards
for these rules offers not only a focal point, but should deliver all guiding
principles in order to ensure a harmonised set of rules, ready for coupling”.

A framework
that is address in the Part VIII “The Electricity Market” by the Law 43 / 2015
that in the Article 98 “Market Rules” state “ERE, upon proposal of the
Transmission System Operator and in collaboration with all participants of the
electricity sector, shall adopt the Electricity Market Rules, in accordance
with this law and the Electricity Market Model, including the rules for
planning, dispatching, balancing, settlement of disputes and requests for
reserve management. In regard, the Market Rules shall be adopted by the ERE,
within 1 (one) year from the date of entry into force of this law.”

Indeed the
Draft for Consultation on the Policy Guidelines on the Promotion of Organised
Electricity Markets in the Contracting Parties bring in brief that market
coupling will lead to sufficiently harmonised trading rules. No additional
regulation of these will be required. Nevertheless, a few elements will facilitate
market participation: All documents should be made available in English, what
at best is also the language of working documents. All standard contracts
between the power exchanges or operators of the organised market and the market
participants should also be in English.

Despite the
fact that rules for the supervision of market activity or market surveillance
practices will be needed, as well as a code of conduct developed by the
operator of the trading platform to be followed by the market participants, the
present Policy Guidelines recommend the adoption of the REMIT Regulation into the
Energy Community acquis. In order to avoid discrimination between market
participations, the same standards for market monitoring should be applicable
in an integrated market. Following existing European standards may lead to
lower implementation and transaction costs as compared to a separate and
potentially different scheme resulting in undue discrimination and hampering
overall market monitoring.

In general,
quality in trading and security for clearing and settlement should be coming
from the internal rules agreed between the parties running the processes and
those participating in the market. Most importantly, the contractual
requirements from the side of the power exchange, the TSOs (requirements for
balance responsible parties) and, in case separately organised, the clearing
house provide for the most important elements and constitute market
participation requirements which do not require further regulation.

Then even
the fully implementation will require a further time and efforts the country
gives an important signal, probably also due to its guide role as the actual
holder of the Energy Community Presidency for the 2015, in the path on the
reforms necessary to be followed. Indeed, it constitutes a decisive step
forward a long path of reforms in energy sector in Albania for which the Law 43
/ 2015 lays a solid foundation.

In regard, it
can be conclude with what in the ECS Draft for Consultation state “It is in the
interest of all parties to have functioning markets based on the best possible
rules; existing standards have largely proved this. Still, market participation
requirements should provide for low market entry barriers and receive
regulatory facilitation to be harmonised and gradually reduced where outdated.
Where these rules provide for all minimum requirements, no additional trading
licenses should be required”.

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