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On Thursday last week, 29 October 2015, the General Assembly of Europex held a regular meeting in Prague. On this occasion, the Chairperson, a new Board and the Heads of the Working Groups were elected for the next two-‐year mandate running from 1 January 2016 to 31 December 2017. In addition, a number of current issues that are of particular interest to Europex, like the debate on a new electricity market design, MiFID II Level 2, the recently updated Gas Target Model and the further development of the Guarantees of Origin system, were discussed by the members.
Election results
The General Assembly confirmed the current Chairman of Europex, Massimo Ricci (Chairman & CEO of GME), in his role for another two years.
Five additional Board members were elected for the 2016-‐2017 term: Ireneusz Łazor (President of the Management Board of TGE) and Pieter Schuurs (President & COO at ICE Endex) were re-‐ elected while Egbert Laege (CEO of Powernext), Mikael Lundin (CEO of Nord Pool Spot) and Pedro J. Mejía Gómez (Chairman & CEO of OMIE & OMIP) will join as new Board members of Europex.
Three of the four current Heads of the Working Groups have been confirmed for a second term: Frederick Bernthaler (Head of Legal at CEGH) for the Working Group Gas Markets, Borut Rajer (Director of Operations at Borzen) for the Working Group Environmental Markets and Daniel Wragge (Head of Political & Regulatory Affairs at EEX) for the Working Group Financial Markets, Integrity and Transparency. As of the beginning of next year, the Working Group Power Markets will be headed by Rickard Nilsson (Senior Adviser Innovation and Market Design at Nord Pool Spot).
The members of the General Assembly thanked the current office holders for their outstanding efforts and achievements and wished the newly elected representatives all the best for the upcoming term.
Current energy market issues
During a discussion on current energy market issues, the members of the General Assembly emphasised that there is considerable debate in Europe about the future design of electricity markets. These markets are facing rapid changes in the generation mix and from smart technologies. Against this background, Massimo Ricci, the Chairman of Europex, underlined that “Europe’s energy exchanges strongly believe that well-‐functioning wholesale markets should be at the heart of the market design, building on the considerable advances made in recent years towards an integrated European electricity market.” By providing access to the wholesale market for small generators and demand side, the wholesale market can enable the most efficient response to the changes the industry is experiencing.
The current debate on the technical implementation of MiFID II/MiFIR and the closely connected discussion about CRD IV/CRR was also highlighted by the General Assembly. It was noted that both issues have the potential to pose fundamental challenges to the existing business and risk management models of commodity trading firms, suppliers and other involved stakeholders in energy wholesale trading, including energy exchanges. They can undermine the efficient and effective operation of both derivatives and the underlying physical commodity markets. In this context, Ricci remarked: “Any requirements for the implementation of MiFID II/MiFIR and CRD IV/CRR must reflect the specificities of commodity markets and the business activity of those firms falling under prudential regulation. Overly restrictive and insufficiently calibrated requirements will only lead to a diversion of capital, a significant decrease in liquidity and less competition. This will result in considerably less efficient energy markets and will have a negative impact on investment and growth in Europe.” The General Assembly also concluded that the first step with regard to CRD IV/CRR is to extend the current exemption beyond 2016 in order to allow for more time to develop and implement a regulatory framework that is fit for purpose.
In relation to the latest developments on the European gas market, the General Assembly recalled that the full and harmonised implementation of the network codes by all involved stakeholders should remain a core priority to further foster cross border trading and liquidity. In this context, the Europex members welcomed the updated Gas Target Model as a decisive step forward towards a deeper integration of the European internal gas market. It further noted that appropriate measures and instruments for its implementation must be tailored according to market needs and under full European coordination.
Moreover, the members of the General Assembly underlined the importance of market based solutions for the integration of renewable energy sources (RES) and for carbon emission reductions. As an essential measure to further empower the customer, Europex stressed the need to further promote, harmonise and implement the common standards for Guarantee of Origin (GO) systems. This explicitly includes a reliable and robust disclosure mechanism in a transparent system of full disclosure of all energy sources.
