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The German National Regulatory Authority for Energy, Bundesnetzagentur (BNetzA), imposed fines of EUR 200 000 on Energi Danmark A/S (‘Energi Danmark’) and of EUR 175 000 on Optimax Energy GmgH (‘Optimax Energy’) for market manipulation in the German wholesale electricity market in breach of the EU Regulation on Wholesale Energy Market Integrity and Transparency (REMIT). In its decisions published today, BNetzA held that on three days in June 2019, the behaviour of Energi Danmark and Optimax Energy sent misleading signals as to the supply of electricity in the intraday market.
What did BNetzA find out?
On those three days, the intraday price on the EPEX SPOT exchange was unusually high and was also above the price on the balancing market. In this context, BNetzA found that Energi Danmark and Optimax Energy issued sell orders on the intraday market towards the end of the trading sessions and close to the actual delivery, in order to benefit from the abnormally high prices observed on these days. Yet, the electricity offered by Energi Danmark and Optimax Energy was not available to be supplied by them and the companies did not deliver it.
The sales of these market participants caused an imbalance in their balancing group for which they had to pay the imbalance settlement price (price for being imbalanced at the time of delivery). The imbalance settlement cost was lower than the gains derived from their transactions on the intraday market. Considering that Energi Danmark and Optimax Energy entered sell orders on the intraday market electricity that they knew they could not deliver, this trading behaviour sent misleading signals to the market as to the supply of the electricity and was found by BNetzA to be in breach of REMIT.
On these three days, the German transmission system operators fully activated for several hours all the balancing reserves and had to take additional measures (e.g. activation of the emergency reserves from the neighbouring transmission system operators), in order to keep the power system in balance.
What was the role of ACER?
According to REMIT, ACER monitors the European wholesale energy markets to detect and prevent trading based on inside information and market manipulation. In doing so, ACER identified suspicious orders related to high prices in the German intraday market.
For several market participants, among which also the two sanctioned, ACER identified high selling volumes that led to unusually large short positions of these market participants. Following these and further observations, and in line with its legal competencies, ACER prepared a preliminary assessment and notified BNetzA about its reasonable grounds to suspect that the trading behaviour of these market participants sent misleading signals as of the actual available supply of electricity in the market.
ACER welcomes the effective oversight of wholesale energy trading and these decisions to impose penalties within the framework of REMIT in Germany. Previously, in February 2019, BNetzA imposed fines on Uniper Global Commodities SE and two of their traders for market manipulation on the within-day gas market.
