S u0026 P Global Platts: Europex reports that the main challenge of the block chain is lack of regulation


nnnnWrong comment: Energy Exchange Association Europex released the latest report, proposed the energy industry through the centralization of supervision and protection of consumer rights and interests, management of risk. And have great potential of the block chain technology there is IT security, clearing and settlement issues. And rely on a technology to bring risks to the market, especially the futures market.n
nnTranslation: Annie_Xun
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nn· Exchange provides central supervisionn
nThe benefits of liquidationn
n· Market reports call for mild regulationn
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nThe Energy Industry Association Europex report “Our Vision of an Evolving Energy Sector” points out that the lack of regulation in the chain chain may be seen as an advantage, but also accompanied by risks.n
nThe report said that enthusiasts believe that the chain chain “has the potential to subvert the financial industry” to the central network to replace the central intermediary to manage transactions to protect data security.n
nBut Europex sees one of the traps and limitations.n
nCentralized regulation is the key to protecting the consumer and managing risk in the energy industry. “Unsuit consumers in point-to-point networks also need to be protected, and in block-chain transactions they may conclude that they may be accompanied by a risk that they can not fully understand and therefore need to be supervised by the central operators.”n
nEurope’s Secretary-General Christian Baer said the chain-chain transaction was worrying about IT security and clearing.n
nn”This is not only through the point-to-point mechanism to define the price of the clearing house of the exchange can provide more services, not just the price of the chain of chain price information may not be as high liquidity with a single neutral central market efficiency” Then
nnMoreover, there is a systemic risk that depends on a technology, especially in the spot market.n
nn”In the automated high-speed trading market, what happens if there is a problem with the block chain? How will you settle your position and determine that the energy is delivered? There are a lot of problems with the transfer of OTC transactions to the chain. We recognize this technology, but we do not think It is a competitor. “n
nnIn addition, Europex’s report on market-oriented practices is described as: Customized Stable Regulatory, Rules Continuously Adopted in Cross-jurisdictional Areas, Competitive Liquidity The importance of a single energy market is greater than the capacity market, sustainable energy uses market pricing, Be responsible for.n
n”We then think that the capacity mechanism is a bad idea, it should be a last resort, and limit the time and scope.”n
nThe regional energy saturation assessment should limit this mechanism, and he also cited the Dutch gas power station on the Belgian border, which was bid in the Belgian project in 2014.n
nHe said that such power plants could have provided safe cross-border electricity, but lacked political and regulatory will. Europe has a lot of potential that can make the operation more efficient, rather than waiting for you to go distort the market.n
nAlthough Network Codes support the change process to a certain extent, these detailed regulations can hinder innovation.n
nThere is always a quick solution for the market, and Europex urges policymakers to “keep enough space for new solutions.”n
nEuropex calls for a fair and sustainable energy market for everyone, “there is no priority in the future, and everyone assumes the same balance of energy.”n
n”If sustainable energy manufacturers can not rely on themselves, they can always ask for third-party service providers, but we are not saying that installed capacity uses the same rules: you need to comply with contractual relationships.”n
nDespite Baer’s support for Germany’s refusal of long-term capacity, he argues that it is highly beneficial to actively eliminate overcapacity.n
n”The exchange of new futures products show that the market is well-innovated, can cope with the volatility of the sustainable energy market, but the lack of demand, resulting in trading volume.”n
nFive to ten years, futures products may play a substantial role, “if we return to a more balanced, no price cap of the market must have sufficient political will to support a few years a year negative price. Will attract the system to continue to run the investment. “n

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