The EU passed legislation on 14 September which aims to prevent energy-trading abuse – the bill, which is called the Regulation on Energy Market Integrity and Transparency(REMIT), was widely approved in the European Parliament, with only 26 of the 656 members voting against.
The most important part of the bill introduces the concept of independent member-state monitoring of wholesale energy trading, meaning that member states will now be able to directly punish those found guilty of anti-competitive behaviour. This does not mean, however, that member states will be able to punish arbitrarily; instead, their decisions have to reflect the damage done to energy consumers.
With the explosion of energy trading in the past decade, certain gaps have appeared in the regulatory framework of energy trading. This has meant that insider trading and market abuse abounded, and previous regulative frameworks such as the Markets in Financial Instruments Directive (MiFID), or national marketplace rules, only addressed some of the risks associated with energy abuse.
With the Agency for the Co-operation of Energy Regulators(ACER) now in partial charge of monitoring and supplying data to the EU, however, the Parliament hopes to ensure a more comprehensive investigation into trade abuse.
"Energy must remain affordable for everyone as it is the key to the economy”, said Parliament President Jerzy Buzek. “I welcome this important regulation which guarantees transparency and prevents abuses in wholesale energy trading ensuring affordability and fairness in the market. The regulation will help to ensure more transparent pricing across the EU."
The regulation will be put into full effect with ACER's cooperation within six months, but only time will tell if the Parliament is successful in curbing the abuse of the increasingly popular energy trading market.