Verbesserung der Transparenz auf dem Stromgroßhandelsmarkt aus ökonomischer sowie energie- und kapitalmarktrechtlicher Sicht (Improvement of Transparency in the Power Wholesale Trading Market)
18 December 2006
By Graham Shuttleworth and Dr. Sharon Brown-Hruska with White & Case LLP and Dr. Michael Kraus
The State Ministry for Economic Affairs and Labour of the State of Saxony in Dresden commissioned NERA and White & Case LLP to review the market information provided by the European Energy Exchange operating in Leipzig and the OTC markets, and to identify any significant deficiencies in the transparency of the German electricity market. In the economic part of the resulting report, the NERA team -- led by Director Graham Shuttleworth and Vice President Dr. Sharon Brown-Hruska -- analyzed the conditions for efficient price disclosure in terms of semi-strong transparency, in which a minority of traders have access to information on supply and demand necessary to form a view of the true price.
The authors found that the theory of semi-strong market efficiency and the objective of efficient price formation provide the basis for requiring provision of relevant price information -- on the basis of which any market participant, including non-informed market participants, can form an opinion over the true value of the traded good -- with regard to supply (generation) and demand (load, large customers). The authors identify the appropriate and necessary information requirements, differentiating the areas of spot and term markets, network load, transmission, interconnectors, generation plants, large customers, and balancing markets. They note that with regard to generation, no reasons were found that would require or justify disclosure of unit-by-unit availability of capacity and unit ownership.
In the legal part of the report, White & Case identify options for and barriers to the legal implementation of mandatory information disclosure from a German energy law and capital markets law perspective.
