The Maritime and Commercial Court in Denmark has ruled that Effekthandel A/S and five combined heat and power plants engaged in unlawful coordination of bids and pricing in auctions for electricity reserve capacity in Western Denmark. The judgment concerns six lead cases within a broader set of 50 disputes involving CHP operators and the Danish Competition and Consumer Authority.
According to Deputy Director General of the DCCA, Tine Rønde, the CHP plants allowed Effekthandel to set their bids instead of submitting them independently, with profits shared among the participants. The court found that this arrangement, which lasted for more than three years, artificially inflated prices for reserve capacity in the daily digital auctions, constituting a breach of competition law. Effekthandel was identified as the initiator and organiser of the anti-competitive scheme, a factor the court cited as aggravating. While the CHP plants argued they believed their actions were lawful based on advice from Effekthandel’s external counsel, the court concluded that this misunderstanding did not exempt them from liability, though it led to reduced fines.
Financial penalties were imposed on the companies involved, reflecting new fine-setting principles that came into effect in July 2024, which consider the proportion of a company’s business represented by reserve capacity sales. In addition, Brønderslev Varme was held jointly liable for the fine of Ø Brønderslev District Heating Plant, which it has since absorbed.
The case has its roots in findings by the Danish Competition Council in October 2023, which determined that Effekthandel and 49 CHP plants had violated the Competition Act. Several appeals were lodged, but the Competition Appeals Board upheld the Council’s decision in November 2024. During the court proceedings, evidence showed that coordinated bids sometimes exceeded other market prices by 230 to 930 percent, affecting the state-owned Energinet, which purchases the reserve capacity.