In the aftermath of the European energy crisis that started in late 2021, European regulators have begun to turn their attention to alleged abuses of energy markets. Earlier this year, the European Commission proposed strengthening the Regulation on Wholesale Energy Market Integrity and Transparency (REMIT) (Regulation (EU) No 1227/2011), particularly in cross-border matters. Since 2018, REMIT enforcement has been rising steadily: 2022 saw the most enforcement decisions yet. However, most penalties under REMIT remain relatively small and therefore unlikely to significantly concern market participants.

In this white paper, Senior Managing Director George Anstey and Consultant Dr. Zoë Fannon evaluate the role of REMIT as a tool for controlling energy market abuse. Recent high prices and volatility in European energy markets have brought the actions of market participants under increasing scrutiny from both regulators and the public. Over the last decade, regulators have demonstrated renewed interest in policing market abuse, particularly in the form of market manipulation. Nonetheless, regulatory enforcement of potential REMIT abuses has been eerily quiet in 2023.  

The authors note that in Europe, when the broad prohibitions set out by competition authorities are insufficient, REMIT is the principal regulation to prevent abuse of market power in wholesale electricity and gas markets. They analyze recent trends in enforcement and consider likely future developments in light of the European energy crisis.

The authors conclude by providing insight into the relative paucity of REMIT enforcement decisions in 2023 and the future of market reforms.