Ofgem Slaps Engie With Fine for Manipulation of Gas Prices
18 September 2019: Ofgem, the UK energy market regulator, has taken enforcement action against the trading arm of the French energy utility, Engie, for the discovery that a trader there had manipulated UK wholesale gas prices for profit. Ofgem fined Engie Global Markets (EGM) £2.1m for the contravention. EGM cooperated with the investigation, settled early and took remedial steps to prevent a recurrence, which netted a 30 percent discount on the fine.
In November 2016, another market participant alerted the regulator to suspicious activity in the UK wholesale gas market. Ofgem’s subsequent investigation found that EGM had engaged in spoofing during a three-month period between June and August 2016.
Ofgem found that a number of bids and offers to trade, for a forward gas contract, were in breach of Article 5 of REMIT (Regulation on Wholesale Energy Market Integrity and Transparency). The investigation found no evidence of more widespread market manipulation on the part of EGM, it added.
EGM said it immediately undertook measures ‘to ensure that such practices are detected and not repeated again by reinforcing the implementation of existing supervising tools which guarantee a constant and rigorous follow-up, and audit of, energy trading activities’. Ofgem stated that while EGM did have some measures in place, these were inadequate at the time to detect and prevent the breaches of REMIT.
Dermot Nolan, CEO of Ofgem said, “Ofgem’s enforcement action sends a strong signal to all energy market participants that we have the powers to tackle market manipulation wherever we find it — and are ready to use them.”