Ofgem, the energy regulator for Great Britain, recently published a letter addressed to all market participants regarding the use of thresholds for determining when to publish inside information under the UK version of REMIT. The four-page letter from Ofgem’s Head of Wholesale Market Conduct outlines their concerns over the use of fixed thresholds, particularly the widely referenced 100MW limit, for making inside information disclosures under Article 4.
Ofgem acknowledges the operational efficiency gains supported by fixed disclosure thresholds but strictly rejects their arbitrary use. The regulator asserts that careful judgement is needed when determining what qualifies as inside information. Following ACER’s interpretation of the EU’s inside information disclosure requirements, Ofgem expects firms to assess the likelihood of information having a price impact on a case-by-case basis. A blanket 100MW threshold is too high in certain circumstances, such as during strained market conditions or periods of tight margin where small volumes can have outsized impacts on market prices.
The regulator specifically highlights issues relating to non-Balancing Mechanism Unit (BMU) assets. These are often distribution-connected, smaller-scale generators that bypass the balancing market. Many smaller generators fail to realise that they count as market participants under REMIT and subsequently omit publishing outage or availability information.
The cumulative effect of multiple smaller outages can heavily impact price transparency and formation according to Ofgem. Information emerging from the aggregation of multiple smaller outages is currently overlooked, which directly raises insider trading risk. Market participants must review their inside information procedures and recalibrate frameworks that rely on a blanket 100MW threshold. Thresholds must act as internal advisory guides rather than strict limits. Ofgem and Person Professionally Arranging Transactions (PPATs) are monitoring this area closely and will take action for non-compliance.