Blog: EU regulatory bodies ACER, ESMA to strengthen cooperation under … – S&P Global

Covers new cooperation on gas price cap, benchmarks

Market correction mechanism entered effect on Feb. 15

First ACER, ESMA memorandum signed in July 2013

EU energy regulatory body ACER and EU financial regulator ESMA have agreed to strengthen cooperation — mainly concerning the EU’s new gas market correction mechanism — under an updated memorandum of understanding.

ACER and ESMA have a long-established cooperative relationship with the first MOU on collaboration signed in July 2013.

However, the role of both bodies came into sharp focus in 2023 after they were tasked with monitoring the impact on markets of the gas market correction mechanism that came into effect on Feb. 15.

“The MOU notably incorporates new cooperation areas under the market correction mechanism regulation and benchmarks related to the energy sector,” ACER said in a statement March 6.

“It also details the role of the recently established ACER–ESMA task force,” it said.

The main areas covered by the updated MOU are:

• Coordinated and consistent approach to market abuse framework under the regulation on wholesale energy market integrity and transparency and the market abuse regulation to further enhance market integrity in energy and energy derivative markets
• Technical cooperation on data and knowledge with respect to the functioning of energy and energy derivative markets
• LNG price assessments and benchmarks administered by ACER and other energy-related benchmarks relevant for ACER’s or ESMA’s mandates.

ACER publishes a daily LNG reference price that is used in the market correction mechanism.

To be triggered, the mechanism requires the TTF month-ahead price to exceed Eur180/MWh for three working days and the month-ahead TTF price to be Eur35/MWh higher than the LNG reference price at the same time.

Platts, part of S&P Global Commodity Insights, assessed the benchmark Dutch TTF month-ahead price at an all-time high of Eur319.98/MWh on Aug. 26.

Prices have weakened significantly since then on the back of healthy storage levels throughout most of Europe and demand curtailments, with Platts assessing the TTF month-ahead price on March 3 at Eur44.88/MWh.

The ACER LNG reference price includes its own price assessment as well as others published by price reporting agencies Platts and Argus.

Both ACER and ESMA concluded in separate March 1 reports that the market correction mechanism had had no clear impact on markets to date.

But both agencies stressed that this did not mean there would not be impacts in the future.