Energy supplier Engie handed £2.1m fine for gas price manipulation
Ofgem said a trader working on behalf of the France-based energy firm increased prices to boost trading profits in 2016.
Energy watchdog Ofgem has slapped European utilities giant Engie with a £2.1 million fine after one of its traders manipulated UK wholesale gas prices.
The regulator said a trader working on behalf of the France-based energy firm increased prices to boost trading profits during a three-month period in 2016.
It said an investigation found that Engie was involved in a form of market manipulation called “spoofing”, which involves placing bids or offers to trade with no intention of executing them, to increase or decrease prices.
Ofgem said the “spoofing” – which took place from June to August 2016, and involved a number of bids and offers to trade concerning a natural gas contract on the UK wholesale gas market – broke market manipulation rules.
Despite the breach of REMIT – energy market integrity and transparency legislation – the investigation found no evidence of more widespread market manipulation by Engie.
Ofgem said the energy provider “failed to take appropriate measures” to prevent the breach from happening or detect it.
While the regulator said Engie did have some measures in place, it added that they were inadequate at the time to detect and prevent the breaches of REMIT.
Ofgem said the company co-operated with investigations and has taken measures to prevent this type of price manipulation happening again.
The watchdog granted Engie a 30% discount for an early settlement, reducing the fine from £3 million.
Dermot Nolan, chief executive at Ofgem, said: “This investigation demonstrates Ofgem’s commitment to monitoring wholesale energy markets in Great Britain and ensuring their integrity on behalf of consumers.
“Ofgem’s enforcement action under REMIT 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.”