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Wholesale Energy Market Monitoring: ACER


and the Technical Implementation of REMIT
S.Papageorgiou

AbstractThe Agency for the Cooperation of Energy


Regulators (ACER) has been tasked with the technical
implementation of REMIT Regulation (Regulation (EU)
No 1227/2011 of the European Parliament and of the
Council on wholesale energy market integrity and
transparency).
The REMIT Regulation is a pioneering market monitoring
framework covering trading and potential market abuse in
natural gas and electricity wholesale markets in the EU.
REMIT in particular prohibits market manipulation and
insider trading and introduces obligations for the
disclosure of inside information and the reporting of
specified data to ACER. The Agency will store the
collected data in a central data warehouse for purposes of
analysis and selective sharing as part of its market
monitoring activity.
Given the strict implementation timeline stipulated by the
REMIT Implementing Acts (Commission Implementing
Regulation (EU) No 1348/2014) and the forthcoming
starting dates for the reporting of different categories of
data to ACER, 2015 is a particularly important year in
REMIT implementation history, especially concerning
technical aspects.
Looking ahead, this practitioner paper aims to provide
insight into the relevant work to be carried out and the
most important milestones to be achieved within the year.
General provisions of the regulation and the
implementation work performed thus far (REMIT Annual
Report 2013) are also covered as background information.
Index TermsData collection; market monitoring;
REMIT; technical implementation; wholesale energy
markets;

I. INTRODUCTION

s EU national markets progressively evolve into a single,


connected and integrated market, the necessity to perform
effective cross-border monitoring has led to the
preparation and adoption of the REMIT Regulation by the
European Parliament and the European Council. REMIT
Regulation entered into force on 28 December 2011. Its
application brings significant impact on the completion of the
EU internal energy market. With no precedence, this sector-

978-1-4673-7172-8/15/$31.00 2015 European Union

specific framework allows for detection and prevention of


market abuse in European wholesale electricity and gas
markets.
Ultimately, the effective implementation of the Regulations
provisions should lead to increased confidence in the market
integrity, safeguard fair competition and ensure efficient
prices reflective of proper market functioning- for EU
consumers.
Earlier within 2011, the Agency for the Cooperation of Energy
Regulators (ACER) was set up by the Third Energy Package
with a mandate to advance the EU internal energy market. One
of the key energy policy objectives served is the work towards
a monitored and transparent market, preventive of abusive
practices.
Consequently, the implementation of REMIT including legal,
policy and technical aspects- was assigned to ACER.
II. LEGISLATIVE BACKGROUND
The Articles of the Regulation provide the foundations based
on which the Agencys priorities are determined. They define
obligations for a variety of industry stakeholder groups.
Market Participants (MPs) must register with their competent
National Regulatory Authority (NRAs) (Article 9). In
addition, MPs must report to the Agency wholesale energy
market transactions, including orders to trade (Article 8). This
can be done by the participants themselves, or via authorised
parties acting on their behalf.
The prohibition of trading based on inside information (Article
3) as well as of market manipulation (Article 5) is specified.
Furthermore, the obligation to publish inside information is
imposed on MPs (Article 4).
The Agency is empowered to monitor the trading activity,
detect and deter trading based on inside information and
market manipulation. According to the provisions of Article 8,
ACER will collect and analyse an array of data from the
energy markets, in order to effectively conduct its monitoring
and surveillance duties.
According to Article 10, the Agency will have the necessary
means in place to share collected data with specific competent
authorities such as financial, competition and regulatory
authorities of the Member States.

Article 13 provides the NRAs with the necessary investigatory


and enforcement powers which, upon being exercised, can
ensure the respect of the prohibitions of Articles 3 and 5 and
the obligations defined in Article 4.
As stipulated in Article 8, the European Commission shall
define the rules for the provision of data to the Agency. This is
done by the adoption of an additional legislative text, the
Implementing Regulation. This defines in detail the reportable
trade and fundamental data. It also establishes the channels for
reporting and the timing at which each data type reporting will
commence (alongside the regularity of this reporting.)

composed of three main stages; ARIS Pilot stage, ARIS


Operational Prototype stage and the ARIS Production stage.
The conceptual 4-tier architecture of the system is reflective of
the REMIT Regulation provisions in relevance to the
Agencys responsibilities (see Fig. 2).

III. IMPLEMENTATION BACKGROUND


The entry into force of the Implementing Regulation on 7
January 2015 has effectively set in stone the implementation
timelines for data collection under REMIT. Fig.1, presents the
various milestones to be met following the entry into force of
the Implementing Regulation.
The two most critical milestones within 2015 are:
-

NRAs must set up national registration systems


for MPs by 17 March 2015; The Agency, based on
the information provided by national registries, will
publish a European Register of MPs on 17 March
2015 (to be updated regularly)
1st phase of data collection commences; Trade data
from Organised Market Places and transparency
platform fundamental data from the ENTSOs will be
reported starting on 7 October 2015

Fig. 2. The ARIS High-Level Design


Tier 1 supports the collection of trade and fundamental data.
Three interfaces were defined by the Agency as
communication protocol standards, namely; WebGUI, Web
Service and SFTP. These allow for bidirectional
communication, meaning that reporting entities send data to
ACER whilst they receive feedback reports on the
completeness, correctness and validity of their data. The data
submission is done via XML files to ensure a harmonised,
structured and consistent transfer of data to the Agency. In
principle, XML schemas are defined and maintained by the
Agency although certain exceptions apply when adopting
existing industry schemas.
Tier 2 is the systems central data warehouse. This makes it
possible to logically and physically arrange the collected data,
in a manner that allows ACER teams to analyse it. Moreover,
it is the core component serving the data validation process.

Fig. 1. REMIT Implementation Timeline


One of the major challenges the Agency has had to face since
it started its preparation activities for REMIT implementation,
has been the limited information available to define complete
business and technical requirements for the processes and
systems to be put in place.
The strategic decision taken to address this, was to define a
flexible and adaptable architecture which would permit further
tuning according to the gradual specification of requirements.
Equally, an iterative approach was followed for development,

Tier 3 is a market monitoring software solution which plugs in


to Tier 2 and identifies abnormal trading activity and
behaviour in the markets. This is mainly achieved via alerts
based on economic modelling and algorithms programming.
In addition, it allows the Agencys analysts to view the
collected data in a user-friendly and graphical manner.
Tier 4 is the data sharing system, allowing for the provision of
information to relevant authorities as mentioned earlier in the
text.
In addition to the core ARIS modules, other systems have also
been developed, such as CEREMP and the Notification
Platform.

In order to support the NRAs in meeting their obligation to


provide a national register of MPs and to more efficiently
centralise all information necessary for maintaining a
European Register, ACER has developed and made available
to NRAs the CEREMP (Centralised European Register of
Energy Market Participants) system as of 16 June 2014. The
vast majority of the NRAs are using the system for
establishing their national register. A few NRAs have opted to
use their own systems to establish national registries. These
registries either connect via Web Services to establish an
interface with CEREMP and automatically feed it with
relevant data, or send data to ACER via batch uploads or data
entries. These options are depicted in Fig. 3 below.

Attestation; the applicant attests that it has


mechanisms in place and undertakes to fulfil a list of
requirements spanning from governance to technical
relevance

Testing; the applicant is granted access to a


dedicated ARIS testing environment. This is a replica
of the production system and is automatically tailored
according to the interface(s) and data type(s) the
candidate selects in the system

Provision of compliance information and


evidence; according to the category of RRM selected
during registration, the applicant is requested to
provide a set of information proving compliance with
its corresponding requirements

The Agency launched a dedicated online Portal for REMIT


(https://www.acer-remit.eu/portal/home) on 8 January 2015.
The REMIT Portal is a central, web-based portal for allowing
the users community in its totality to retrieve all relevant
information. This mainly consists of a public part, including
information that ACER would like to publish such as the list
of Organised Market Places, the List of Standard Contracts,
and the European Register of MPs. It serves as the central
point of access to the Agencys REMIT Information System
(ARIS) applications, but also to relevant REMIT
documentation.
Fig. 3. CEREMP Usage
Similarly, the Agency has made available the Notification
Platform system to allow the reporting of suspicious
transactions according to Articles 15 and 16, and also to notify
on events according to Articles 3(4)(b) and 4(2) of REMIT.
To ensure operational reliability, ACER believes in the
necessity of having Registered Reporting Mechanisms
(RRMs) reporting trade and fundamental data. The legal
grounds for this are evident in Article 11 of the Implementing
Regulation. For this, a relevant registration process for entities
intending to become RRMs has been established, fully
facilitated by a dedicated web-based system. The core steps of
the process are as follows:
-

Identification; provision of information on the


candidate RRM organisation and the contact person
for communications by the applicant and their
verification by the Agency

Non-Disclosure
Declaration;
the
applicant
electronically signs a Non-Disclosure Declaration in
order to gain access to a comprehensive technical
guide on reporting preparation

While ARIS is a fully integrated system, the various tiers can


operate independently of each other. This allows for
continuance of operations when one or more components
might experience issues. At the same time, it provides
flexibility for the Agency in case due to contractual changes
there has to be a major component replaced.
ACER has strived for a state of the art set of technologies to
be used in development, in order to create a modern, advanced
and robust system. Java-based technologies are used for
development and it is noteworthy that this project is one of the
first worldwide to adopt and use the capabilities of Oracle 12c
database. In addition, an underlying IT infrastructure
composed of advanced technology equipment has already
been set-up to satisfy the strict requirements on operational
reliability and security.

IV. LOOKING AHEAD


Despite the difficulties encountered due to financial and
human resources constraints, a lot of progress has been
achieved within the past 3 years. ACER has managed to
deliver in respect to its obligations and commitments.
At the moment of writing this paper the Agency;
-

Continues with the registration of RRMs (initiated as


of 8 January 2015)

Prepares for the first publication of the European


Register of MPs on its REMIT Portal (17 March
2015)

Has just deployed a release of ARIS which fully


covers the needs for 1st phase reporting. This includes
a full data flow from Tier 1, to Tier 2 and Tier 3 for
all relevant data types. This allows sufficient time for
all interested parties to conduct their preparation
activities and to be ready to start reporting by the
indicated date (7 October 2015)

Has concluded its Pilot Project. Consisting of two


phases, the Pilot was initiated in the first half of 2013
and reached its end in February 2015. This brought
important benefits in the advancement of the
Agencys work, as it allowed for the development
and testing of an operational prototype of ARIS by a
large end-users group, primarily consisting of third
parties reporting data on behalf of MPs (including,
but not limited to; Organised Market Places,
ENTSOs, TSOs and Trade Repositories).

Continues the development of Tier 4, which is to be


delivered in Q4 2015

Has also initiated the development work for an


additional application named Case Management
Tool, dedicated to facilitate collaboration between
ACER and NRAs in their common investigatory
duties for cases of suspected breaches of the
information disclosure obligations and of the market
abuse prohibitions under REMIT. This is also
planned to go-live in Q4 2015

ACER continues working hard towards the realisation of its


REMIT-related objectives, with the close engagement and
involvement of its stakeholders, not only within 2015 but also
beyond. The unique technical expertise and capabilities built
within ACER in the specific domain has a great potential to
develop EU-wide, cross-border wholesale energy market
monitoring. This is also mirrored by the recent public
presentation of the European Commissions Energy Union

policy, which clearly specifies the intention to review the role


of ACER and explore such reinforcement possibilities.
V. BIOGRAPHY
Sofronis Papageorgiou holds an MSc in Strategic Project
Management and a BSc (Hons) in
Computer Science. He is currently a
Market Data Management Officer in the
Market Monitoring Department of
ACER, managing various projects within
the scope of the technical implementation
of REMIT. He is a certified Project
Management and IT Service Management
professional with international experience in the private sector
as well as the European Commission (Directorate General of
Informatics). He has served as a Director on the Board of
Directors of PMI Luxembourg and itSMF Luxembourg and
holds professional membership (MBCS) in the British
Computer Society.
Disclaimer the information and views expressed in this
paper are those of the author and do not necessarily reflect
the official position of the Agency for the Cooperation of
Energy Regulators.