The Danish Competition Council: Price coordination and bid rigging in the energy sector in West Denmark (DK1)

The Danish Competition Council has adopted a decision finding that Effekthandel ApS, 46 cogeneration plants and 3 power plants have infringed upon Section 6 of the Danish Competition Act and TFEU Article 101(1). The plants, which are all located in West Denmark (DK1), have illegally engaged in price coordination and bid rigging in the daily auctions for manual Frequency Restoration Reserve ("mFRR").

Effekthandel ApS (“Effekthandel”), 46 cogeneration plants and 3 power plants (“the 49 undertakings”) have illegally engaged in price coordination and bid rigging in the daily auctions for mFRR in Western Denmark (DK1). The 49 undertakings have entered an agreement to leave their pricing in the auctions for mFRR to Effekthandel. Documentation shows that the agreement was made in order to raise the price levels on mFRR.

MFRR refers to manual reserves, which help to restore the frequency and power balance within the electricity system when activated by the Danish transmission system operator (TSO).

The evidence in the case shows that the 49 undertakings have participated in a pool scheme through individual and identical agreements with Effekthandel. By participating in the pool scheme, the 49 undertakings did not independently set the price of their own bids in the mFRR auction but instead left the pricing of the bids to Effekthandel.

The evidence further shows that Effekthandel in joint emails addressed to the 49 undertakings regularly informed the 49 undertakings about the coordinated behaviour of the pool scheme on the market for mFRR.

As part of the agreement, Effekthandel received commission from the 49 undertakings' earnings on mFRR. In turn, Effekthandel distributed the turnover on mFRR between the participating undertakings based on the amount of registered capacity from each individual member. Accordingly, it was not essential for each individual undertaking to sell its capacity in order to make a profit, as it received a payment from the pool scheme regardless of whether its bid won the auction. 

The fact that the prices and bids were coordinated by Effekthandel and thus, that the 49 undertakings did not communicate directly about prices and bids, does not change the fact that they have engaged in an illegal agreement, which restricts competition between competitors. 

The conduct took place from September 2019 until at least August 2022.