Italy Gas & Power Market Access
Italy Gas Market Access
What is the lead time to begin trading in the Italy gas market?
5 months
What are the licencing requirements to trade in Italy’s gas market for EU & non-EU firms?
A ministry license is required for import/export and supply to end-consumers with a duration of longer than one year. However, a simpler communication is still due to the Ministry for gas import contracts of less than one year. A series of requirements must be met for shippers to book capacity in the SNAM network.
1. End-consumer license: is provided if suppliers have the adequate ability to modulate supplies to consumers based on peak-demand periods, proof of the origin of the gas supplied, and the reliability of transportation routes, as well as adequate technical and financial capabilities. The application must be submitted within 6 months from the start of the supply, and authorization cannot be denied unless there are objective and non-discriminatory reasons for denial by the Ministry of Environment and Security of Supply.
2. Supply license (import authorization): is provided if the applicant has the necessary technical and financial capabilities to import gas into the country, as well as if the origin of the gas is clearly defined. This is a requirement for LNG or pipeline contracts longer than one year. The template forms must be submitted in Italian 90 days before the import begins. Note LNG or pipeline import contracts with a duration of less than one year are subject to the submission of a simpler communication form to the Ministry 30 days before import commencement, if capacity has been awarded.
What are the requirements to register with the gas market TSO Snam?
A number of documents and contracts must be submitted to Snam, these may be found on the JARVIS platform. The forms that are available in English on the JARVIS platform are for reference only. All contracts and annexes must be submitted in Italian.
An ACER Code and EIC Code are required along with a User ID to operate on the PRISMA Platform. In addition, a financial guarantee is required to cover the system's exposure by the Shipper.
Where is cross border capacity allocated for the Italy’s gas market?
Cross border capacity is allocated via the PRISMA platform.
Where is the Italian gas market traded?
Parties authorized to carry out transactions at the PSV may carry out transactions on the M-GAS platform managed by the GME. The M-GAS market consists of several different platforms allowing for market participants to trade multiple products:
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MGP-GAS: This is the day-ahead market. Trading on this Platform occurs continuously, and the gas purchase, sale, and bid offers related to the three gas days following the trading sessions are carried out. There is also an AGS session carried out on gas day D-1 via auction.
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MI-GAS: This is the intraday market. Continuous trading happens on this Platform. Gas purchases/sales/bids and related offers relate to the gas day corresponding to that of the trading session of the day (intraday gas market). There is also an AGS session carried out on gas day D via auction.
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MT-GAS: This is the forward market. Trading of forward gas deliveries occurs continuously on this Platform. Bids for demand and supply are traded over a range of products, including yearly, half-yearly, quarterly, monthly, and balance-of-month products.
All these platforms are integrated with Trayport. Trayport is a specialised electronic trading platform widely used in European energy and commodities markets, particularly for gas, power, coal, emissions, and derivatives. It functions as the core screen and infrastructure through which traders access brokers’ markets, view aggregated order books, submit bids/offers, and execute trades. It also provides market-data distribution, trade-capture, and connectivity solutions linking brokers, exchanges, clearing houses, and proprietary trading systems. Trayport is effectively the industry-standard front end for OTC energy trading across Europe.
Italy Power Market Access
What is the licence lead time to begin trading the physical Italian power market
There is no licence for wholesale electricity trading in Italy. However, a Dispatching Contract/BRP contract with Terna and access to the power exchange GME may take around five months.
What are the licencing requirements to enter the Italy power market?
No specific licensing requirements apply to wholesale electricity trading in Italy. However, a licence applies to market participants who want to enter the retail market.
Market participants, wishing to trade physical electricity, i.e. electricity that physically flows on the electricity grid, are required to sign the so-called “Standard Balancing Agreement” (Contratto di dispacciamento) with Terna (TSO).
What is required to sign a Dispatching Contract with TERNA?
TERNA is the national Transmission System Operator for Italy’s power market. In order to deliver to final customers located in Italy, firms must sign the Dispatching/BRP Contract (Contratto di Dispacciamento) with Terna. This allows you to operate in the electricity market . Prior to signing the following are required:
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Telemetry arrangements (direct or via aggregator – only necessary if you have physical generation assets)
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Balancing responsibility (or assigning it to a Balancing Responsible Party)
What are the requirements to be able to book capacity at the Italian border?
To be eligible for import/export activity at the Italian border and for transporting electricity on the grid, a Balance Responsible Party (BRP) contract is required. Signed to open "virtual import units" (UVI for import activity) and "virtual export units" (UVE for export activity). Cross-border capacity in import/export on the Italian side has to be nominated to the TSO Terna via its web portal DAMAS because only physical transmission rights are available (PTRs).
The right import or export electricity in the Italian electricity network is only granted after approval from Terna. Additionally, the national regulatory agency (ARERA) approves access conditions and tariffs, ensuring they comply with the provisions of applicable European and Italian legislation.
Are there any prerequisites to becoming a Balancing Responsible Party in Italy’s power market?
Any customer, supplier, producer, or trader can apply to serve as a Balance Responsible Party (BRP) at Terna. Prior to signing a BRP contact an EIC and ACER code are required.
The BRP contract (Contratto di dispacciamento) requires firms to sign additional annexes on legal power of representations and solvency requirements among others. The Client can use its existing Italian BRP contract with Terna if it has one, or sign a new one through the myTerna platform.
Terna requires mandatory financial guarantees to trade in the balancing market before activating the dispatching/BRP contract.
Where is Italy’s power market traded?
The GME is the monopoly exchange for Italy’s power market.
Are there any exceptional requirements to access the GME?
The GME does not have any requirements such as obtaining prior BRP status. Similar to Terna, a financial guarantee is required to begin trading on the GME.
Are there any additional requirements for Non-EU entities?
No, but the Annexes are slightly different in wording for non-EU entities and they require to provide documentation (statutes, proof of representation, possibly criminal background checks) and satisfy GME’s equivalence assessment for non-EU companies.
Correggio Consulting Market Access Services
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