III.3.17.
If a market participant owns a 5MW production unit and sells this output to a second market participant is that contract reportable (by either counterparty)? Furthermore, if the second market participant sells this output on to a third market participant under another contract, is that contract reportable?
Answer: Article 4 of Commission Implementing Regulation (EU) No 1348/2014 stipulates a list of contracts reportable at request of the Agency. Article 4(1)(b) and (c) of Commission Implementing Regulation (EU) No 1348/2014 defines certain thresholds for contracts reportable at request.
For electricity, only contracts where a counterparty can show that the electricity was produced by a single production unit with a capacity equal to or less than 10MW or by production units with a combined capacity equal to or less than 10MW would meet the definition set out in Article 4(1)(b) of Commission Implementing Regulation (EU) No 1348/2014, unless concluded on organised market place.
For example, if market participant A owns a 5MW production unit and sells this output to market participant B, this contract would fall under Article 4(1)(b) of Commission Implementing Regulation (EU) No 1348/2014 and only be reportable upon the reasoned request of the Agency and on an ad-hoc basis.
If market participant B sold this output to market participant C under another contract then this contract would not fall under Article 4(1)(b) of Commission Implementing Regulation (EU) No 1348/2014 and therefore would be reportable.
The same principle applies to gas contracts under Article 4(1)(c) of Commission Implementing Regulation (EU) No 1348/2014[1].
[1] Please note that the effectivity of the ‘No-action letter’ to provide time-limited no-action relief from the requirement to report contracts and details of transactions in relation to those contracts listed in Article 4(1) of Commission Implementing Regulation (EU) No 1348/2014 upon reasoned request of the Agency expired on expired on 31 December 2017. The No-action letter is available here: https://www.acer.europa.eu/remitdocuments/guidance-remit-application