Criminal Prosecution of Energy Market Abuse

Detailed Explanation With Case Laws

1. Introduction

Criminal prosecution of energy market abuse means using criminal law to prosecute serious misconduct in wholesale electricity and gas markets. The main concerns are insider dealing, market manipulation and other conduct that damages market integrity.

In Great Britain, the main framework is REMIT — the Regulation on Wholesale Energy Market Integrity and Transparency, together with the Electricity and Gas (Market Integrity and Transparency) (Criminal Sanctions) Regulations 2015. The 2015 Regulations created criminal offences for certain forms of wholesale-energy insider dealing and market manipulation, alongside the civil enforcement regime. (Legislation.gov.uk)

The purpose is to ensure that energy prices are determined by genuine market conditions rather than deceptive or unlawful conduct.

2. What Is Energy Market Abuse?

Energy market abuse generally involves conduct that gives an unfair advantage to a market participant or produces misleading information about supply, demand or prices.

Important forms include:

A. Insider Dealing

A person may possess inside information about an electricity-generating unit, transmission constraint, unexpected outage or other price-sensitive matter.

Using that information improperly when trading wholesale energy products can constitute insider dealing.

B. Market Manipulation

Market manipulation involves conduct intended to create false or misleading signals about supply, demand or prices, or to establish prices at an artificial level.

Examples may include:

submitting misleading generation information;

deliberately creating false signals about plant availability;

trading designed to distort wholesale prices; and

manipulating information supplied to the system operator.

REMIT prohibits both market manipulation and attempts to manipulate the market. (Ofgem)

3. Criminal Sanctions

The 2015 Criminal Sanctions Regulations were specifically introduced to create criminal offences for certain serious forms of wholesale-energy market abuse.

The Regulations supplement the civil enforcement regime established by the 2013 REMIT Enforcement Regulations. The Government's post-implementation review confirms that the criminal regime covers particular cases of insider dealing and market manipulation in wholesale electricity and gas products. (Legislation.gov.uk)

This creates two related but distinct forms of enforcement:

Civil/regulatory enforcement → financial penalties and regulatory measures

Criminal enforcement → criminal prosecution and, where established, criminal punishment

Therefore, an Ofgem regulatory finding should not automatically be described as a criminal conviction.

4. Role of Ofgem

Ofgem is responsible for monitoring and enforcing wholesale-energy market rules in Great Britain.

Its enforcement framework allows it to investigate suspected market manipulation and insider trading. Ofgem currently states that it can impose unlimited fines and prison sentences under REMIT, where the applicable criminal provisions are engaged. (Ofgem)

Ofgem's prosecution policy states that criminal investigations must follow relevant statutory requirements and procedures, including the Criminal Procedure and Investigations Act 1996 (CPIA) and Police and Criminal Evidence Act 1984 (PACE). (Ofgem)

The general process can therefore be understood as:

Market surveillance → suspicion → investigation → evidence gathering → charging/prosecution where appropriate → criminal court determination.

5. Evidence in Criminal Prosecution

Evidence is particularly important in market-abuse cases because trading decisions can involve large amounts of technical and financial information.

Investigators may examine:

trading records;

telephone calls;

emails;

electronic messages;

generation data;

Physical Notifications;

bidding patterns;

market prices;

internal instructions; and

communications between traders and operational staff.

Ofgem's 2023 Morgan Stanley enforcement case illustrates the importance of recording and retaining relevant communications for effective investigation and enforcement. (Ofgem)

This is important because criminal prosecution requires evidence capable of establishing the relevant offence according to the applicable criminal-law standard.

6. InterGen: Important Electricity Market Abuse Case

InterGen — Ofgem Enforcement Decision (2020)

InterGen is an important electricity-market example.

Ofgem found that InterGen companies submitted false or misleading Physical Notifications concerning expected generation from power stations. The information was used in connection with the GB Balancing Mechanism and, according to Ofgem, resulted in manipulation from which InterGen obtained additional revenues. (Ofgem)

Ofgem also found misleading information concerning certain Dynamic Parameters, including Stable Export Limits.

The matter resulted in a substantial financial settlement.

However, it is important academically to distinguish this case from a criminal conviction: the InterGen matter was a regulatory REMIT enforcement decision, not a reported criminal conviction.

It nevertheless demonstrates the type of conduct that can potentially fall within the market-manipulation framework.

7. EDF Energy Case

EDF Energy (Thermal Generation) Limited — 2020

Ofgem also investigated EDF Energy concerning technical information submitted about its West Burton B generating station.

The regulator found breaches involving REMIT and relevant Grid Code requirements. EDF agreed to make a £6 million voluntary payment. The matter illustrates that inaccurate or misleading technical information can create serious regulatory consequences.

Again, this was an Ofgem enforcement matter rather than a criminal conviction.

This distinction is important when discussing criminal prosecution of energy-market abuse.

8. Insider Information and Criminal Liability

Insider information is particularly important in electricity markets because information about generation and network availability can rapidly affect prices.

For example, information concerning:

an unexpected power-station outage;

restoration of generating capacity;

major transmission restrictions; or

significant changes in available generation

may be relevant to wholesale prices.

Ofgem's current 2026 guidance emphasises that market participants must publish inside information effectively and in a timely manner. Ofgem has also warned that fixed thresholds alone may not adequately determine whether outage information is inside information. (Ofgem)

This demonstrates the increasingly sophisticated nature of energy-market surveillance.

9. Corporate Compliance and Individual Liability

Criminal prosecution can have consequences for individual decision-makers, while companies can face separate regulatory and financial consequences.

Energy companies should therefore maintain strong compliance systems, including:

insider-information policies;

trader training;

transaction monitoring;

communication-recording systems;

approval procedures;

controls over market disclosures; and

independent compliance oversight.

A company cannot safely assume that market conduct is lawful merely because it produces short-term commercial benefits.

10. Relevant Legal Framework

The main legal instruments include:

REMIT — prohibiting insider trading and market manipulation;

Electricity and Gas (Market Integrity and Transparency) (Enforcement etc.) Regulations 2013 — providing investigation and civil enforcement powers;

Electricity and Gas (Market Integrity and Transparency) (Criminal Sanctions) Regulations 2015 — creating specified criminal offences;

Electricity Act 1989 — providing wider electricity-sector criminal and regulatory provisions; and

relevant criminal-procedure legislation governing investigation and prosecution.

The UK Government's 2025 post-implementation review concluded that the REMIT enforcement and criminal-sanctions framework should be kept, confirming its continuing regulatory importance. (Legislation.gov.uk)

11. Importance for Energy Law

Criminal prosecution changes the nature of energy-market regulation.

Traditional regulation may respond to misconduct through:

Investigation → regulatory finding → financial penalty.

Criminal enforcement adds:

Investigation → criminal charge → court proceedings → conviction or acquittal.

This creates stronger procedural safeguards and a higher evidential burden, but also allows the legal system to treat particularly serious market abuse as criminal conduct rather than merely regulatory non-compliance.

12. Conclusion

Criminal prosecution of energy market abuse is an important part of maintaining confidence in wholesale electricity and gas markets. The UK framework combines REMIT prohibitions, regulatory investigation, civil penalties and criminal sanctions.

The InterGen and EDF Energy matters demonstrate how misleading generation information can lead to significant regulatory enforcement, while the criminal-sanctions framework provides a separate route for serious qualifying conduct. Ofgem's prosecution policy also ensures that criminal investigations operate under established criminal-procedure safeguards. (Ofgem)

For PhD-level energy-law analysis, the subject demonstrates the growing movement from ordinary market regulation toward stronger accountability for serious energy-market misconduct, while maintaining the distinction between regulatory enforcement decisions and actual criminal convictions.