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On 23 March 2023, EWRC adopted a decision fining Energy Supply Eood (‘Energy Supply’) BGN 165,238 (approx. €84,486) for manipulating the Bulgarian wholesale intraday electricity market in breach of Article 5 of the Regulation on Wholesale Energy Market Integrity and Transparency (REMIT).
What were EWRC’s findings?
EWRC concluded that Energy Supply carried out the market manipulation in the form of 'layering' and 'spoofing' from 1 January 2021 to 31 March 2022. Layering and spoofing involve the placing of orders that the trader never intends to carry out.
According to EWRC, Energy Supply issued fictitious orders to sell, with which it achieved a short-term reduction in the price of certain products. Energy Supply created an impression among other market participants that the price would continue to decrease. This prompted other market participants to sell electricity to Energy Supply at lower prices than those at which they would trade if there was no market manipulation. After this unjustified short-term reduction in price, Energy Supply cancelled its sell orders and made purchase transactions at the lower prices, thereby making an unjustified profit.
See the EWRC decision (in Bulgarian).
What was the role of ACER?
- As a result of its monitoring under REMIT, ACER first notified EWRC of the case in December 2021, providing EWRC with an initial assessment of the market participant’s behaviour including market data and the estimation of the potential damage caused to the market;
- Due to the continuation of the behaviour, ACER provided a second notification to EWRC in July 2022, including additional data over a longer time frame; and
- ACER provided assistance during the investigation process, including clarifications on the interpretation of the REMIT provisions, the ACER Guidance on REMIT (6th Edition) and the ACER Guidance Note on Layering and Spoofing. The latter provides National Regulatory Authorities (NRAs) with a framework for assessing such behaviours under REMIT, including concrete examples of layering and spoofing.
See the latest table of REMIT breach sanction decisions adopted by NRAs.
ACER welcomes this decision, EWRC’s second decision under REMIT.
