REMIT breach: E-Control fines managing director of balancing service provider for manipulating the electricity market

The Austrian national regulatory authority, E-Control, has fined the managing director of a balancing service provider (BSP) €150,000 for manipulating the balancing energy market. The BSP is jointly liable for the fine and must return its gains from the manipulation, around €200,000.

The BSP placed non-genuine bids (i.e. bids that were not intended to be executed), which were likely to give false or misleading signals to the market and, once activated, secured the price at an artificial level. The bids also employed a form of deception.

The REMIT Regulation prohibits market manipulation, including behaviour that is likely to give false or misleading signals or secure prices at an artificial level, to protect the integrity and transparency of the EU’s wholesale energy markets.

What happened?

In winter 2024, the Austrian transmission system operator (Austrian Power Grid, APG) awarded capacity to a prequalified BSP in its tender for automatic Frequency Restoration Reserve (aFRR), a reserve that grid operators activate to keep the system in balance. This obliged the BSP to submit corresponding energy bids for the awarded delivery periods.

However, the BSP risked being unable to deliver, as the back-up measures it had presented to APG during prequalification (the process that verifies a BSP’s ability to provide balancing services) were not available. To avoid activation, the BSP modified its bids for negative balancing energy (used when there is a surplus of electricity on the grid) for the relevant delivery periods to the price limit of -15,000 €/MWh.

Some of these bids were nonetheless activated, setting the marginal price in several delivery periods under the pay-as-cleared mechanism (where the last activated bid sets the price). As a result, APG’s costs for balancing energy in the aFRR that day were extraordinarily high (around €5 million) and ultimately fell on network users.

E-Control found that the BSP’s bids were non-genuine and likely to give false or misleading signals to the market. Once activated, they set prices at an artificial level. The bids were also deceptive, as they intended to give the impression that the BSP could meet the commitments made to APG during prequalification, which was not the case. E-Control concluded that this behaviour constituted market manipulation in breach of REMIT (Article 5).

For more information, access E-Control’s publication (in German).

See the latest table of REMIT breach sanction decisions adopted by national regulatory authorities.

Check the ACER REMIT Guidance (6.1^st edition) for more information on trading practices that could constitute market manipulation under REMIT.

Interested in further information on enforcement decisions under REMIT? Check out ACER’s REMIT Quarterly reports.