30 March 2021
“Power exchanges are central to the efficient functioning of electricity markets. Electricity trading plays an important and growing role in the effective and safe management of electricity grids. It helps ensure that electricity flows from where it is produced to where it is most needed, to the benefit of European consumers. Preserving healthy competition between power exchanges and between traders contributes to accurate price and investment signals for new sources of energy, which are central for the cost-effective integration of renewable technologies in the electricity mix”.
Intraday markets are the markets where sellers and buyers of electricity can trade power in the last hours before it is injected into the network. They play an essential role for the safety of the network, but also for the efficient use of green technologies such as solar and wind, whose output can be forecast most accurately just prior to production.
The Commission is concerned that EPEX Spot may have restricted competition in the intraday markets. More specifically, the investigation will focus on concerns that EPEX Spot may have adopted behaviours aimed at foreclosing its competitors by curtailing the ability of their customers to access the entire liquidity of the intraday market.
If proven, this behaviour may constitute an exclusionary practice, in breach of the EU’s antitrust rules, specifically on the abuse of a dominant market position as prohibited under Article 102 of the Treaty on the Functioning of the European Union (TFEU). In particular, the behaviour may distort the prices of trading services, and could ultimately lead to higher electricity prices for consumers and a slowdown in the greening of the electricity system by preventing the cost-effective integration of renewable technologies into the electricity mix.
The Commission will now carry out its in-depth investigation as a matter of priority. The opening of a formal investigation does not prejudge its outcome.
Electricity can be traded at different timeframes, from several years before it is produced until a few hours or minutes before it is injected into the network. Spot markets, and in particular intraday markets, play an important role in ensuring that market participants can trade power and balance their positions shortly before electricity is delivered. They are particularly important for the seamless integration of renewable energy supplies that are difficult to forecast until the last hours, such as solar or wind. Power exchanges, like EPEX Spot, are intermediaries, which facilitate transactions between sellers and buyers of electricity on these markets.
EPEX Spot is the biggest power exchange in several EU Member States. Electricity trading is a market worth tens of billions of euros annually. Power exchanges are central to the efficient functioning of electricity markets. Preserving healthy competition between power exchanges and between traders contributes to ensuring that electricity markets operate as efficiently as possible. Given the central role of electricity trading for the internal electricity market, the Commission has taken steps in the past years, both in terms of antitrust enforcement and adoption of electricity sectoral regulation, to remove barriers to electricity trading between Member States and to foster competition between power exchanges.
Background on antitrust investigations
Article 102 of the Treaty on the Functioning of the European Union prohibits the abuse of a dominant market position which may affect trade between Member States. The implementation of this provision is defined in the Antitrust Regulation (Council Regulation No 1/2003), which can be applied by the Commission and by the national competition authorities of EU Member States.
Article 11(6) of Regulation 1/2003 provides that the opening of proceedings by the Commission relieves the competition authorities of the Member States of their competence to apply EU competition rules to the practices concerned. Article 16(1) of the same Regulation provides that national courts must avoid adopting decisions that would conflict with a decision contemplated by the Commission in proceedings it has initiated.
The Commission has informed EPEX Spot and the competition authorities of the Member States that it has opened proceedings in this case.
There is no legal deadline to complete inquiries into anti-competitive conduct. The duration of an antitrust investigation depends on a number of factors, including the complexity of the case, the extent to which the undertaking concerned cooperates with the Commission and the exercise of the rights of defence.
More information on this investigation will be available on the Commission’s competition website, in the public case register under the case number AT.40700.