EMIR Refit marked a new era of regulatory oversight in the derivatives markets. Among its numerous amendments, EMIR Refit introduced crucial changes affecting the reporting of existing Power Purchase Agreements (PPAs).
Why EMIR Reporting Requirements Extend to PPAs
PPAs are integral to the renewable energy sector, facilitating the purchase of electricity by corporate buyers and other entities. While providing developers with revenue certainty and allowing buyers to secure a stable source of clean electricity, PPAs drive investment in sustainable energy projects.
As financial derivative instruments (usually Contracts for Difference), PPAs fall under EMIR regulation, which requires compliance with reporting obligations and subsequent amendments/revisions.
PPAs contain unique contractual terms and provisions specific to the renewable energy sector, which require careful interpretation and mapping to reporting fields in EMIR Refit. What key challenges do PPA transaction counterparties face in adapting to the revised reporting requirements under EMIR Refit?
The Challenges of EMIR Refit for PPA transaction counterparties
Format change. Re-reporting of outstanding transactions:
As EMIR Refit mandated a change in submission format (ISO20022), previously reported PPA trades that remained open for longer than 6 months after Refit came into force had to be re-reported or “uplifted” in the new EMIR Refit format to comply with the updated reporting requirements.
- This meant:
For EU – trades entered into before 28 April 2024, that remained open after 29 October 2024; - For UK – trades entered into before 30 September 2024 that remained open after 29 March 2025
had to be converted into the EMIR Refit format and resubmitted.
Additional/ pre-existing but Modified Fields:
Commodities (General):
- Base product
- Sub-product
- Further sub-product
Commodities (Energy):
- Delivery point or zone
- Interconnection Point
- Load type
- Delivery interval start time
- Delivery interval end time
- Delivery start date
- Delivery end date
- Duration (of the delivery period)
- Days of the week (of the delivery)
- Delivery capacity
- Quantity Unit
- Price/time interval quantity
- Currency of the price/time interval quantity
Other:
- Corporate sector of the counterparties
- Unique Product Identifier (UPI)
- Unique Transaction Identifier (The UTI isn’t new but follows new format and validation rules)
Recommendations
PPAs entered into after the EMIR Refit go-live dates (29 April 2024 for the EU and 30 September 2024 for the UK) need to include the additional fields from inception.
TRAction’s role in helping firms adapt to EMIR Refit
Addressing the above challenges requires a comprehensive understanding of the unique characteristics of PPAs, as well as deep insight into the constantly evolving regulatory requirements. Collaborating with an experienced service provider like TRAction, with expertise in reporting under EMIR and its subsequent revisions will help ensure accurate and efficient compliance.
Summary
If you are interested in learning more about how EMIR Refit has affected your reporting requirements, please reach out to our team at TRAction.
