DFC Economics

We are happy to share that our Managing Director Guido Cervigni led the team that delivered the report on "Barriers to demand response - participation in electricity markets and State aid support" for the European Commission (DG Competition) Thanks to the consortium members Business Integration Partners · Bip, Grimaldi Alliance and Seureca! The full report is available on the EC's website: https://lnkd.in/dPYd935N

We are happy to share that our Managing Director Guido Cervigni led the team that delivered the report on "Barriers to demand response - participation in electricity markets and State aid support" for the European Commission (DG Competition) Thanks to the consortium members Business Integration Partners · Bip, Grimaldi Alliance and Seureca! The full report is available on the EC's website: https://lnkd.in/dPYd935N

Congrats to the Energy Vault team for this exciting project! We are glad to have contributed with business planning and market analysis for this rather unique 100MW hybrid energy storage system, comprising the EV0™ modular pumped hydro gravity storage technology plus lithium-ion batteries. The system is proposed to be deployed in 500-meter-deep shafts at the largest former coal mine in Italy, CARBOSULCIS S.p.A. https://lnkd.in/gMkcPNsu

Thanks to all participants of last Monday's event on #REMIT, hosted by DFC Economics and GPA - GiusPubblicisti Associati in Milan! The introduction of REMIT in 2011 was something of a revolution for market participants, as the regulation introduced obligations to disclose 'inside information' and the explicit prohibition of abusive and manipulative behaviour. REMIT established a 'code of conduct' that sits somewhat in the middle between licensing obligations, national regulation and competition law. Over the past 13 years, this very nature of the regulation has paved the way for different interpretations of the concepts of 'insider trading' and 'market manipulation' - leading to very different experiences of REMIT application in different markets, despite the increasingly detailed specifications provided by ACER in its guidelines (now in their 6th edition). The development of REMIT II increases ACER's powers in cross-border cases and introduces more specific provisions on the definition of sanctions at national level. In the increasingly integrated European markets, this may pave the way for a more harmonised application of REMIT at European level, further increasing the scope and importance of #compliance activities in the #energy sector. Guido Cervigni Eugenio Bruti Liberati Alessandra Canuti Alberto Pototschnig

Congratulations to our Consultant Chiara Belforti for winning the Ana Aguado Scholarship Award at the Eurelectric #PowerSummit24!

The establishment of the Internal Energy Market in Europe called for a high degree of competition in the wholesale energy markets, also promoted by the integration of such markets through time. However, at the time of the Third Energy Package, no specific provisions existed to prevent market abusive behaviour in the electricity and gas market. The Regulation on Wholesale Energy Markets Integrity and Transparency (REMIT) was adopted in 2011 to this purpose, extending the financial markets regulation to the energy sector, and complementing the standard toolkit available in the context of competition law. Learn more about REMIT, its rationale and economic foundation in this article by our Director Alberto Pototschnig https://lnkd.in/dZSABwVW

How to ensure that final consumers can benefit from competition in the retail energy markets? Our Directors Guido Cervigni and Alberto Pototschnig contributed to the debate hosted by the Florence School of Regulation discussing the recent Italian experience running auctions for the termination of the regulated market ('Maggior tutela') More info and full recording here here: https://lnkd.in/dQn-2Uec The presentation by Guido Cervigni and Massimo Ricci (ARERA - Autorità di Regolazione per Energia Reti e Ambiente) is available here: https://lnkd.in/dvkEiYSh

𝐓𝐡𝐞 𝐈𝐧𝐭𝐞𝐫𝐧𝐚𝐥 𝐄𝐧𝐞𝐫𝐠𝐲 𝐌𝐚𝐫𝐤𝐞𝐭: 𝟐𝟓 𝐲𝐞𝐚𝐫𝐬 𝐨𝐧 Alberto Pototschnig, Director at DFC Economics and Deputy Director at the Florence School of Regulation reviews the past 25 years of the European energy sector liberalisation in this paper published by Energy Traders Europe https://lnkd.in/dsq2aKYk

DFC Economics supported ARERA - Autorità di Regolazione per Energia Reti e Ambiente in designing and implementing the auction that transferred ex-officio about 4.5 million Italian electricity consumers from the regulated price regime ('Maggior Tutela') to market-based supply starting from July 2024. 👉🏼The tendering process has been designed by ARERA - Autorità di Regolazione per Energia Reti e Ambiente, the Italian sector regulator, and implemented by Acquirente Unico, in January 2024. 👉🏼In order to win those customers, competing suppliers bid a discount over the current regulated tariffs; each winning supplier must apply, for three years, that discount to the consumers it will acquire as a result of the auction, unless those consumers choose to switch supplier or to subscribe to a different supply option. 👉🏼The price discounts that cleared the auction were substantial. On average, each consumer will save about 130 €/year compared to the current regulated tariff. If all consumers assigned via the auction choose to be supplied at the auction-clearing prices for the next three years, the total savings generated by the auction will turn out to be in the order of 1.8 billion euros. The results of the auction can be found at: https://lnkd.in/d_2P8Xrh In many countries, concerns that electricity retail competition might not be effective have been raised. Suppliers appear to be able to increase prices above competitive levels because of the inability or unwillingness of a large share of their customers to engage in the market. Such a flaw is hard to address with the usual competition policy measures, since these measures focus on the supply side of the market. Perhaps, that explains why dissatisfaction about the retail market performance has led to calls for consumer protection measures, including the reinstatement of price regulation, even in Great Britain, a pioneer of retail competition. The auctions carried out in Italy in 2024 provide a reassuring evidence that consumer aggregation and tendering may provide an effective way to deliver the benefits of competition to all electricity consumers. https://lnkd.in/dMJ3qCEB

Our team led by Alberto Pototschnig advised Energiavirasto (Energy Authority), the Finnish regulator, in assessing how the revenue-cap methodology implemented in Finland accounts for inflation and identifying a way forward, taking into account the main features of the currently employed network regulation. As part of the project, we: • conducted a literature review on the RAB setting and adjustment for inflation, • identified and review the main methodologies employed at international level, • assessed and compared different methodologies to adjust the rate-base for inflation in energy network regulation, • investigated the equivalence of all identified approaches in term of compensation for regulated operators. The results of our assessment were published by Energiavirasto as part of the price review consultation process and can be found here: https://lnkd.in/dqtYMNDu For more information, see: https://lnkd.in/dJnpdbAn