Trading and settlement arrangements

Our knowledge of commodity trading and settlement arrangements comes mainly from the electricity sector.

We also have experience in arrangements for managing and trading capacity in energy and transport networks.

*Franck Latrémolière

Energy commodity

We understand in detail the workings of the electricity trading arrangements (NETA/BETTA) in Great Britain, and the similarities and differences between them and the previous Electricity Pool and Scottish interconnector rules. Franck Latrémolière was involved in developing the business requirements and drafting parts of the Balancing and Settlement Code.

*NETA development and implementation

We can help interested parties with their participation in modification processes, and with the analysis and modelling of the risks that the arrangements or possible changes to them might create.

We keep a watch on the main proposals for changes to the Balancing and Settlement Code. Given this, and our prior knowledge of the arrangements, we are prepared to take on relatively small assignments on specific issues without the need for a significant learning curve.

See also: Electricity

Energy network capacity

We understand the interactions between markets or other trading arrangements for energy commodity and for energy capacity.

The management of interconnectors was a significant aspect of Franck Latrémolière's work on NETA development and implementation. Subsequently he advised a transmission company on the early stages of the development of the BETTA System Operator Transmission Owner Code and the financial arrangements for compensation in case of unplanned outages or outage cancellations.

*Incentive arrangements for electricity system operator (2002)

We are able to get into the detail of ancillary services arrangements. Franck Latrémolière trained as a physicist to PhD level and understands the behaviour of reactive power, frequency response or losses, and the interaction between ancillary services, capacity arrangements and energy markets.

Water

We take a particular interest in the interactions between competition law and trading and settlement arrangements, and can help water companies faced with difficulties in establishing workable and lawful arrangements for the management of unders and overs in the event of common carriage.

See also: Water

Transport network capacity

Our expertise is also relevant to the trading and settlement of access rights over transport infrastructure, e.g. airport slots or railway paths.

In these cases, the technical restrictions on the feasibility of schedules means that it may not be possible to define a single commodity product capture most of the value of the rights and intended to be traded on a bilateral basis. Instead more centralised approaches may be necessary, involving elements of administrative allocation and financial compensation mechanisms.

*Compensation for withdrawal of railway access rights

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Reckon LLP is an economics consultancy with expertise in data analysis, economic regulation and competition law.