Jan 31, 2023
EU’s Power Market is Failing to Curb Manipulation, Watchdog Says
(Bloomberg) -- The European Union’s electricity market is vulnerable to exploitation due to its failure to integrate better across national boundaries, according to a report by the bloc’s auditing watchdog, highlighting the challenges the bloc faces ahead of a crucial reform.
Despite nearly three decades of development, the EU’s power market is still governed by 27 national regulatory frameworks, which opens the door to “abuse and manipulation,” the European Court of Auditors said in a report Tuesday.
“Electricity producers, suppliers and brokers may all exploit loopholes,” the institution warned Tuesday, after assessing the market over the past six years. “Or – worse – that member states may compete to provide the most permissive environment in terms of penalties and enforcement.”
The criticism comes just weeks before the European Commission is due to unveil a reform of the region’s electricity market, a task that has been complicated by an unprecedented energy crisis. The aim is to weaken the price-setting role of gas, while still encouraging investments to flow toward renewable technologies.
The auditors also said that the bloc’s Agency for the Cooperation of Energy Regulators lacked the power to ensure member states enforce the rules. They added that its monitoring and reporting of the market was insufficient, in part due to poor communication with the EU’s executive branch.
A public consultation on the power reform is due to end on Feb. 13, before a proposal by the commission is unveiled in March.
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