European Commission - Press release
Energy markets: Commission welcomes adoption of new rules on wholesale electricity and gas trading
Brussels, 10 October 2011 - The EU has adopted today new stringent rules on wholesale energy trading. The main objective is to prevent use of insider information and other forms of market abuse which distort wholesale energy prices and normally mean that businesses and consumers pay more for their energy than they need. The new law will enter into force by the end of this year. For the first time energy trading will be screened at EU level to uncover abuses. National authorities in Member States will put in place penalties to help stop and prevent market manipulation.
EU Energy Commissioner Günther Oettinger said: "Today is an important milestone in the development of the internal market. The new trading rules will contribute to fair energy prices. Moreover, by improving market transparency and integrity, we also build confidence of all market participants in the good functioning of the internal market. This will foster competition and ensure that consumers will always get the best deal."
There are several hundreds of companies involved in wholesale electricity and gas trade in Europe and up to 10 000 transactions take place every day.
In energy, more than in other sectors, market prices are highly sensitive to the availability of production and transmission capacities. This is due to the fact that electricity cannot be stored on an industrial scale. For this reason prices can be influenced easily by creating a false impression about the availability of capacities or indeed by reducing actual production. Europe's wholesale energy markets are also increasingly cross-border in nature. Price setting occurs through the interaction of supply and demand across national boundaries. Besides, transactions are frequently concluded outside the country to which the trades relate. All of this creates ways of market abuse transcending national borders. As until now regulators in Member States have not had access to all the data on cross-border transactions, it has been difficult to understand what has been going on in these markets and effectively detect abuse.
The regulation adopted today aims to put an end to this situation. It will apply to all wholesale electricity and gas trades in the EU, including contracts for the transportation of these goods to customers. The regulation also sets out a system of detection of market abuse and foresees penalties in case rules are not respected.
In particular, the regulation:
All these measures were already part of the Commission's proposal, except the EU register which aims to increase transparency by identifying the market players active on the market and the reference that penalties need to reflect the damage caused to consumers. Both will help to enforce the aim of our regulation.
The Commission proposed a regulation on energy market integrity and transparency on 8 December 2010. The text was adopted in the first reading by the European Parliament on 14 September 2011. Today the regulation has been adopted by the Council and will be soon published in the Official Journal
The regulation on energy market integrity and transparency can be consulted here.
Commission web page on:
For more information please see also MEMO/10/655