British energy companies are under pressure to improve the way they announce outages or capacity reductions at their plants after regulator Ofgem found examples that could lead to market distortions.
Under European Union regulation called REMIT, introduced in 2011, energy generators have to publish information related to any changes in capacity or use of their production, storage or transmission facilities, such as outages or shutdowns.
Yet three years on, British regulator Ofgem is unhappy with the progress made by the sector, and it says it has initiated an industry review.
At issue is what the industry understands by "inside information", which REMIT defines as information that when made public could significantly affect the prices of wholesale energy products.
"The driver for our review was a concern that inside information publications by market participants are not as effective as they could be," Ofgem said in a letter sent to wholesale energy market participants last week.
"Our review found significant variations in the quality, consistency and timeliness of inside information publications that are being put online by market participants," it added.
"We are also actively looking into possible breaches of REMIT on an ongoing basis," it continued.
Ofgem has found variations in the way changes in capacity and the start and end-times of such events are reported, as well as a lack of public records on historic notifications of inside information, which could call into question the use of social media as a sole method for publicising such data.
"This is a warning signal to the industry. A number of players have taken a very narrow view on what is inside information and if they are wise they will have another look at their policies," Jonathan Herbst, partner at law firm Norton Rose Fulbright, told Reuters.
However, the lack of definition around some aspects of REMIT when it was introduced has allowed generators to make a more liberal interpretation of its requirements, he added.
Lack of Definition?
Under REMIT, participants have to disclose inside information related to businesses or facilities which they own or control in an "effective and timely manner."
REMIT does not spell out what that timeframe should be and it is up to participants to take legal advice on defining that.
Many firms, such as EDF Energy, have followed guidance from the Agency for the Cooperation of Energy Regulators (ACER), which advises that participants ensure information is published at the latest within one hour of an event, such as an outage or change in capacity.
EDF Energy is one of the largest energy firms in Britain, operating eight nuclear plants, two coal plants and one gas-fired power station. It publishes data related to these plants on a website and updates energy market journalists via email.
"We are aware that REMIT guidance on timing is not specific. For EDF Energy, as soon as we are aware of a change to published data we make every effort to inform the market as soon as possible in the clearest of manners," a company spokeswoman said.
There is also a lack of detail about what platform or method should be used for disclosing information.
On Monday, Total E&P UK reported an unplanned outage at its St Fergus gas terminal in the North Sea on social media services Twitter and Facebook but not on its company REMIT website, as it does with its planned outages.
The outage had a market impact, driving UK natural gas prices up by around 6 percent in morning trade on Monday.
On Total's website, it says: "Information on the unplanned unavailability of infrastructure operated by Total E&P UK and Elf Exploration UK Limited can be found on our Twitter and Facebook pages."
"We will continue with this procedure until we are advised otherwise," said Total E&P UK communication adviser Sandra McIntosh.
"Another big issue is what 'public' means for REMIT purposes. I would be surprised if tweeting was sufficient," Herbst said.
(By Nina Chestney, Editing by Henning Gloystein and Keiron Henderson)