If an external factor limits the production of a unit (e.g., a weather event or a congestion on the network), should the limitation be made public?
Answer: The production of a unit may be affected either by factors internal to the operating company (e.g. labour shortages, equipment malfunction, suspension of operations for economic reasons, safety concerns) or factors external to the operating company. The present Q&A focuses on the impact of external factors.
Due to external factors, it may be strictly impossible for the producer to run the unit at full power (e.g. fuel shortage, dust on solar panels) or it may cause the producer to make the decision to limit the production of the unit in order to either preserve the equipment (for instance, if there is accumulation of ice on the surface of wind turbines), comply with environmental rules (for instance, if the operation of a hydropower plant must be suspended to keep the height of the surface of a river below a certain level or if a thermal unit must be stopped to maintain the temperature of the river below a certain threshold), or maintain network stability. Such limitations may be considered inside information, even if the external factors are already public, because precise information about their impact may not be public.
The external origin of the cause of such limitations may give the impression that these situations leave a discretion margin to the operators to produce or not. However, this is generally not the case, since situations where external factors prevent or limit the production are very often determined by extraordinary and compelling circumstances. Consequently, decisions based on such circumstances are not part of the market participant’s own plans and strategies for trading.
At any event, if the limitation qualifies as inside information, the content of the publication needs to indicate that the limitation is caused by external factors. This distinction must be considered to correctly populate the field ‘reason’ (e.g. ‘other’, ‘external factors’) and should be further elaborated if there is a possibility for a more precise description (e.g. free text). Market participants must consult the handbook of the inside information platforms that they are using to ensure that the publication contains all relevant information.
Due to their fluctuating characteristic, the precise impact of the external factors (storms, avalanches, floods, icing, etc.) may be hard for the market participants to assess and predetermine, even in the event where data about the external factors are publicly available. Therefore, as soon as the producer becomes aware of any new relevant information, the description of the impact shall be updated accordingly.
Please find some indicative examples below, keeping in mind that an ad hoc case-by-case examination remains necessary to determine if the information concerned qualifies as inside information):
1. A possible scenario could refer to a pumped storage power plant where the downstream river is affected by a flood. Any decision to reduce or stop the production due to environmental reasons qualifies as inside information. It is irrelevant whether the internal decision was taken upon the request of environmental or other authorities or was based on an internal assessment.
2. The ice accretion on wind turbines is another plausible scenario. If a wind power plant is affected by icing and there is an internal decision to reduce or stop the production because of the icing, such information needs to be published according to Article 4(1) of REMIT. (The potential risk of icing, made available through local weather reports, does not amount to public information about the limitation of a specific wind farm.)
3. Other weather events could have a similar impact on production assets, including, but not limited to, dust laid by wind on solar panels and heat waves that raise the temperature in rivers used for cooling thermal units.
For instance, if a power plant is contracted for congestion management and exclusively produces for the TSO (please see Q&A III.7.18 for more details).