The Finnish Energy Authority is investigating whether Swedish energy giant Vattenfall artificially tried to raise the market price of electricity last year. The company, which says its actions took place by mistake, could face massive fines.
The Finnish Energy Authority is investigating possible violations by the energy company Vattenfall last year, when electricity prices soared in Europe following the Russian attack on Ukraine.
According to the agency, Vattenfall on several occasions purchased less electricity from the market than it needed or offered less electricity to the grid than it could have. For example, on May 5 last year, Vattenfall failed to offer a total of 2,000 megawatt hours of electricity to the Nordic electricity exchange.
Sweden's Vattenfall is one of the largest electricity vendors in Finland and the rest of Europe.
By manipulating the market price of electricity, energy companies can achieve great financial benefits at customers' expense.
According to the Nordpool electricity exchange, even a 100 megawatt-hour variation in supply has an effect on the price. By reducing the supply of electricity, the energy company could therefore artificially raise the market price.
If the Energy Authority concludes that Vattenfall is guilty of price manipulation, it may ask the Market Court to impose a penalty.
The maximum possible penalty for price manipulation is 10 percent of a company's turnover in the year in which the violation occurred. Vattenfall's turnover last year was 21.3 billion euros, so this could mean a maximum fine of 2.13 billion euros.
Swedish utility admits "unintentional mistakes"
Vattenfall itself informed the agency about the possible price manipulation, saying that the actions were unintentional mistakes.
"We are cooperating with the Energy Authority. We are awaiting a decision on the matter and decline to comment at this stage," said Markus Fischer, a communication advisor at Vattenfall.