Wholesale energy markets: Council adopts law to protect against market manipulation
The wholesale energy market in the European Union is now better protected against market manipulation. The Council today adopted a new regulation that will reinforce market surveillance in the European Union and ensure open and fair competition in the wholesale energy markets.
The regulation sets the basis for increased market transparency and integrity, enhancing the public’s trust in the functioning of wholesale energy markets.
It creates clearer and stricter requirements for market participants in the EU who are resident in a third country. From now on, they will have to designate a representative in a member state in which the market participants are active in the wholesale energy market. The representative must be designated by a written mandate and authorised to act on behalf of the market participant.
The new regulation gives the European Union Agency for the Cooperation of Energy Regulators (ACER) the right to investigate cases with a cross-border dimension, where at least two member states are affected.
The national regulatory authorities will be able to object to the exercise of ACER’s investigatory powers when these have been formally initiated or an investigation has been conducted based on the same facts. Authorities will have a maximum of 3 months to object.
The regulation introduces new tools for ACER to use for conducting investigations: for example, it will be able to conduct on-site inspections and issue requests for information, and it will be authorised to take statements.
ACER will be able to take decisions regarding on-site inspections, requests for information and authorisations or withdrawal of authorisations of inside information platforms and registered reporting mechanisms.
In addition, ACER will have the power to impose periodic penalty payments in order to ensure compliance with on-site inspection decisions and requests for information.
The power to impose fines for infringements or breaches of the prohibitions or substantive obligations included in the regulation will remain in the hands of the member states.
Next steps
The regulation will now be signed and published in the EU’s Official Journal and will enter into force 20 days later.
Background
The regulation adopted today is part of a wider reform of the EU’s electricity market design. It amends the regulation on wholesale energy market integrity and transparency (regulation (EU) No 1227/2011, also known as the REMIT regulation) and the regulation on the establishment of ACER (regulation (EU) 2019/942).
The draft regulation was presented by the European Commission on 14 March 2023 as a response to the high and volatile energy prices in 2022, adapting the scope of the previous regulation to the current and evolving market circumstances.
