Ensuring competitiveness and integrity of wholesale energy markets: the regulators’ view
Podcast with Clara Poletti and Nicolo Rossetto
Since 2011, Clara Poletti has been Head of the Energy Division at ARERA (formerly known as AEEGSI) the Italian independent regulatory Authority for electricity, gas and water. She was appointed Co-Chair of the Agency for the Cooperation of Energy Regulators (ACER) Working Group for Market Integrity and Transparency, and also served as coordinator of ACER’s gas regional initiatives. She is an expert in design and regulation of energy markets as well as economic analysis of retail markets.
ACER Board of Regulators (BoR) elected Ms Clara Poletti as its next Chair.
She will succeed Mr Garrett Blaney as of 23 January 2019 for a (renewable) term of office of two and a half years. The ACER BoR consists of senior representatives of the National Regulatory Authorities (NRAs) and one non-voting representative of the European Commission. Each NRA also appoints an alternate representative.
Tune in to the podcast interview with Nicolò Rossetto (FSR) and Clara Poletti below!
The latest FSR Regulatory Policy Workshop on Market Abuse and Abuse of Market Power in Wholesale Energy Markets compared and contrasted the notion of market manipulation, particularly in the form of price positioning; as well as the notion of abuse of dominant position, mainly in the form of artificial limitations in the production of an energy product. During the workshop, the Lights on Women team organized an interview with Nicolò Rossetto (FSR) and Clara Poletti for a regulatory perspective on ensuring competitiveness and integrity of wholesale energy markets.
For more than 20 years, competitiveness of wholesale energy markets has been a fundamental goal of the EU. Recently, specific pieces of legislation like REMIT have introduced specific obligations and prohibitions to promote the integrity and transparency of trading in wholesale energy products. Specifically, it prohibits market abuse in the forms of market manipulation, attempted market manipulation and insider trading. It also envisages a sector-specific monitoring framework to detect and deter these types of abusive behavior.
According to Clara Poletti, national energy regulators, who are accustomed to cooperate with national competition authorities and the European Commission to promote competition both ex-ante and ex-post, are now obliged to adapt their procedures and praxis to the new rules. Beside traditional issues like abuse of market power and market foreclosure, they need to consider further cases of market abuse, not necessarily implemented by dominant players. Harmonised implementation across Europe is vital.
A relevant example is represented by excessive pricing. Unfortunately, due to the current deployment of more capital intensive electricity generation technologies, it is more and more difficult to assess whether a price is excessive or not. In other words: are the high prices recorded from time to time on wholesale markets the result of scarcity or the consequence of market power and other unfair conducts by market players?
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