22.A.1. Background for the development of the new approach inItaly. The increase in the relevance of the European electricity market as the reference market for commercial and financial transactions, and the introduction of some relevant changes in national fiscal regulation, have led to a dramatic rise in measurement problems associated with the compilation of external trade statistics in natural gas and electricity based on customs data. The key measurement problems associated with customs declarations are due to the increasing relevance of international operations not associated with the physical movements of the goods across national borders and, from the respondent side, to the lack of information on the partner country as defined by EU regulation and compilation manuals. These measurement issues have generated some relevant data-quality problems in provisional figures already published by ISTAT on the external trade of electricity and natural gas. In particular, these provisional data were affected by overestimation and incorrect allocation of trade by partner country. The reference data sources used to benchmark customs data against external trade “real figures” in volume areTerna S.p.A.,Italy’s national grid operator for transmission and dispatching of electricity, and Snam Rete Gas S.p.a,Italy’s natural gas operator.
22.A.2. Methodology. In the new data production system, figures on total exports and imports of natural gas in the gaseous state and electricity measured as physical quantities are collected monthly from reliable sources, while for the other data required by European statistical regulations (total trade in values and breakdown of volumes and values by partner countries), new estimation procedures have been designed, tested and implemented. Table XXII.A.1 provides the list of new information sources (for a description of the methodological approach, see box XXII.A.1).
22.A.3. Conclusions. The revisions of the trade values of natural gas and electricity due to the introduction of the new estimation methodology were quite considerable. The introduction of this new data production system for external trade in electricity and natural gas has produced the following benefits:
- Increase in the data quality of national figures
- Improvement in mirror study comparisons
- Reduction of the statistical burden on the respondents from 2012 onward
Box XXII.A.1
Methodology for estimation of monthly trade in electricity and natural gas, Italy
(a) Quantity flows by partner country
In the case ofItaly’s external trade in electricity and natural gas in the gaseous state, quantity data by partner country are not directly available from the reference data source. Therefore, they are estimated on the basis of physical quantities crossing each point of entry or exit at the borders ofItalyand a weighting structure which connects each entry and exit point with a set of partner countries, as follows:
where represents trade quantity in period t with partner country i {1, …, I}, while represents trade quantity in period t through the entry or exit point j { 1, …, J}. The weights represent the share of the trade through entry or exit point j that is allocated to partner country i.
Notice that each partner country i can be associated to more than one entry and exit point j, and thus the analysis of external trade flows by entry and exit points leads to a more accurate decomposition of trade in volumes by “real” partner countries.
For electricity, an in-depth investigation of trade flows through the European network was carried out in order to estimate the weight structure, , considering national electricity surplus and deficit as constraints. This approach allows discrimination between “real” partner countries and other countries which are totally or partially crossed by physical flows of electricity through the network but are not relevant according to statistical definitions. A similar approach was adopted for the estimation of quantities of trade in natural gas by partner country, but the weights were directly obtained from data provided the Ministry of Economic Development.
(b) Monthly prices
Owing to differences in the availability and reliability of data from the respective sources, the estimates of monthly prices associated with trading transactions involving electricity and natural gas follow two different approaches.
For natural gas, unit values computed from custom data are used as price indicators. In the case of electricity, a preliminary comparison of time series for unit values of ISTAT’s sources, average monthly national single price (PUN) on Italy’s electricity market, and average monthly electricity prices picked up from the main European markets has been carried out.a Electricity import prices from “statistical country” i have been defined as a weighted average of the average monthly single price (PUN) on the Italy’s electricity market and the average monthly electricity prices on the main European markets, as follows:
Instead, export prices have been defined as the average monthly electricity prices on the main European markets, as follows:
aThe comparison shows that unit values associated to custom declarations lie in an interval defined by the PUN as upper limit and by the partner-country national price as lower limit, with a progressive convergence to the partner-country national price. Main traders confirmed this price behavior.