Exchange Council calls for European-wide implementation of Reverse Charge Mechanism
European Power Exchange to focus on Intraday trading availability
Vienna / Paris, 8 December 2014. The Exchange Council of EPEX SPOT, at its latest meeting in Vienna, called for the European-wide implementation of the Reverse Charge Mechanism (RCM) in order to battle effectively VAT fraud on European energy markets. The Council also acknowledged the work of the European Power Exchange on improving the Intraday trading availability.
The fight against VAT fraud is one of the most crucial, yet challenging tasks of any Exchange and its members. Since its creation, EPEX SPOT has been at the forefront of the European-wide campaign against tax fraudsters and money laundering.
In 2013, the European Union adopted an ambitious anti-VAT fraud package, including the possibility for Member States to implement a Reverse Charge Mechanism to qualifying electricity and gas transactions. It moves the obligation for collecting VAT from the seller to the buyer of the goods; this prevents VAT fraud and forestalls significant losses to their Exchequers as well as to affected organizations.
A group of ten European gas and electricity associations stated recently that only six EU Member States have transposed this set of legal measures into national law: Austria, France, Germany, the Netherlands, Romania and the United Kingdom. Hence, 22 EU Member States remain unprotected.
The Exchange Council called upon the Member States to implement quickly the RCM across Europe, as VAT fraud poses a significant high-level risk to market participants. "This has the potential to severely damage energy markets integrity", says Jean-François Conil-Lacoste, Chairman of the Management Board of EPEX SPOT. "Let’s be coherent with the principles that led to implement REMIT throughout Europe!"
The role of Intraday trading and its quality gains in importance. Exchange members and the Exchange Council follow closely the development and improvement of Intraday trading. Today, the Intraday trading system ComXerv provides an availability of over 99.5% on yearly average.
The teams of EPEX SPOT work hard on further improving this performance, as the quality of a 24/7 trading solution with direct impact on the efficiency of the overall power system is determined by its availability. EPEX SPOT is tackling several topics, thereof:
• the improvement of the Intraday trading chain via a central Data Transfer Tool, to be deployed in Q1 2015;
• the roll-out of a new improved ComTrader client which is currently ongoing;
• a reinforcement of the frequency the trade and flow data is exchanged amongst the links of the Intraday trading chain.
The European Power Exchange is dedicated to further safeguard Intraday trading. The members of the Exchange Council acknowledged the efforts of EPEX SPOT. "Trading participants are eager to see these improvements", says Peter Heydecker, Chairman of the Exchange Council. "We need to set a strong foundation for the future of power trading, and Intraday is clearly one important cornerstone."
The fourth meeting of the Exchange Council in 2014 was held in Vienna on 4 December 2014 and was chaired by Peter Heydecker.
The Exchange Council of EPEX SPOT is an official body of the Exchange. 16 members and 7 permanent guests represent adequately the diversity of economic and corporate profiles that exists among the Exchange Members from various sectors: producers, power trading companies, transmission system operators, regional suppliers and financial service providers, as well as commercial consumers and academics. Its missions include in particular the adoption of the Exchange Rules and the Code of Conduct of EPEX SPOT and their amendments. The Exchange Council approves new trading systems as well as new contracts or market areas and approves the appointment of the Head of the Market Surveillance Office. It meets up quarterly.
The European Power Exchange EPEX SPOT SE operates the power spot markets for Germany, France, Austria and Switzerland (Day-Ahead and Intraday). Together these countries account for more than one third of the European power consumption. EPEX SPOT also acts as market operating service provider for the Hungarian Power Exchange HUPX and operates the coupling between the Czech, the Slovak, the Hungarian and the Romanian markets on behalf of the local Exchanges. It is a European company (Societas Europaea) based in Paris with branches in Leipzig, Bern and Vienna. Over 220 companies from Europe are active on EPEX SPOT. 344 TWh were traded on EPEX SPOT’s power markets in the first eleven months of 2014.