The Electricity Market Authority (Gestore dei Mercati Energetici S.p.A) is the company which was set up by Gestore della Rete di Trasmissione Nazionale S.p.A. (now Gestore dei Servizi Energetici – GSE S.p.A.) with the mission of organising and economically managing the Electricity Market, under principles of neutrality, transparency, objectivity and competition between producers, as well as of economically managing an adequate availability of reserve capacity.
The take-off of the Electricity Market on 31 March 2004 marked the advent of the first regulated electricity market in Italy, as in other international experiences.
The creation of an electricity market responds to two specific requirements:
• encouraging competition in the potentially competitive activities of electricity generation and sale, through the creation of a “marketplace”;
• favouring maximum efficiency in the management of electricity dispatching, through the creation of a market for the purchase of resources for the dispatching service.
The Electricity Market, commonly called Italian Power Exchange (IPEX), enables producers, consumers and wholesale customers to enter into hourly electricity purchase and sale contracts. Market Participants connect to an electronic platform through the Internet and enter into on-line contracts under secure-access procedures based on digital certificates.
The Electricity Market consists of:
1. the Spot Electricity Market (Italian ecronym MPE), including:
a. the Day-Ahead Market (DAM, Italian acronym MGP), where producers, wholesalers and eligible final customers may sell/purchase electricity for the next day; GME is the central counterparty in the transactions concluded in the DAM;
b. the Intra-Day Market (IM, Italian acronym MI), where producers, wholesalers and final customers may modify the injection/withdrawal schedules that they have defined in the DAM; GME is the central counterparty in the transactions concluded in the IM; and
c. the Ancillary Services Market (ASM, Italian acronym MSD), where Terna S.p.A. provides the dispatching services needed to manage, operate, monitor and control the power system. The ASM consists of the scheduling stage (ex-ante ASM) and of the Balancing Market (BM). Terna is the central counterparty in the transactions concluded in the ASM.
2. the Forward Electricity Market with delivery taking/making obligation (FEM, Italian acronym MTE), where Participants may sell/purchase future electricity supplies. GME is the central counterparty in the transactions concluded in the FEM.
3. the Platform for physical delivery of financial contracts concluded on the IDEX (CDE), where financial electricity derivatives contracts concluded on the IDEX are executed. IDEX is the segment of the financial derivatives market of Borsa Italiana S.p.A. where financial electricity derivatives are traded. The contracts executed on the CDE are those for which the Participant has requested to exercise the option of physical delivery in the Electricity Market. GME is the central counterparty of the delivered contracts.
As part of the organisation and economic management of the Electricity Market, GME is also vested with the organisation of trading venues for Green Certificates (giving evidence of electricity generation from renewables), Energy Efficiency Certificates (the so-called "White Certificates", giving evidence of the implementation of energy-saving policies) and Emissions Allowances or Units.
Moreover, as per Annex A to the AEEG’s Decision 111/06 (as subsequently amended and supplemented), GME also manages the Forward Electricity Account Trading Platform (Italian acronym PCE) for the registration of forward electricity purchase/sale contracts that have been concluded off the market.
On 15 August 2009, Law no. 99 of 23 July 2009, concerning provisions on the development and internationalisation of companies, as well as on energy matters, came into force. Article 30 of the Law vests GME with exclusive responsibility to economically manage the natural gas market under principles of neutrality, transparency, objectivity and competition.
© 2009 ASSONEBB