MARKET OPERATOR JSC INFORMED BUSINESSES ABOUT PRACTICES THAT MAY CONSTITUTE MANIPULATION ON THE DAM AND IDM

230 representatives of energy companies participated in an online event organized by Market Operator JSC, focusing on market integrity in the Day-Ahead Market (DAM) and Intraday Market (IDM). Participants learned about specific practices that, in the opinion of Market Operator JSC, may indicate manipulative behavior or attempted manipulation on the DAM and/or IDM. The event also covered the implementation of the DAM and IDM monitoring system introduced by Market Operator JSC.

Integrity and Transparency on the DAM and IDM

Market Operator JSC conducts market monitoring in accordance with the Law of Ukraine "On the Electricity Market," the Rules of the DAM and IDM, and the Requirements for Ensuring Integrity and Transparency in the Wholesale Energy Market.

On December 18, 2024, in compliance with Law No. 3141-IX, Market Operator JSC launched the DAM and IDM Monitoring System. This software system provides continuous surveillance of the DAM and IDM, generating alerts (a set of indicators) that detect suspicious behavior among market participants and flag activities requiring further analysis.

The system has identified numerous cases where market participants' behavior requires additional investigation in line with the Requirements for Ensuring Integrity and Transparency in the Wholesale Energy Market.

How the DAM and IDM Monitoring Works

The Market Surveillance Department of Market Operator JSC conducts an initial analysis of transactions flagged by the system. If atypical or suspicious behavior is detected, the company requests explanations from market participants regarding their transactions on the DAM and IDM. Following the receipt of explanations, a secondary analysis is conducted, which may lead to further reporting to the National Energy and Utilities Regulatory Commission of Ukraine (NEURC).

Identified Manipulative Practices on the DAM and IDM

During the online event, Market Operator JSC illustrated three types of practices that may be present on the DAM and IDM. These include:

• Wash trades – Transactions in which parties agree to buy and sell wholesale energy products without any change in their net market position or risk exposure, or where market risk and benefits are transferred between colluding entities.
• Creating a price floor or ceiling – Transactions or bid submissions that artificially lower or raise prices beyond a certain level, distorting market prices and avoiding financial consequences that would otherwise arise from market-driven price fluctuations.
• Cross-product manipulation – Conducting trades or submitting bids for one wholesale energy product (including showing interest) to unfairly influence the price of another, typically related, energy product.

Open Discussion with Market Participants

Market Operator JSC remains open to dialogue with market participants. All suggestions and comments can be sent to the Market Surveillance Department at dsr@oree.com.ua.

Event Summary

The event was attended by 230 representatives of energy companies engaged in electricity trading on the DAM and IDM, including:

• 87 representatives of supply companies,
• 33 from other companies,
• 20 from distribution system operators,
• 16 electricity producers,
• 12 traders,
• 2 consumers,
• 1 representative each from the Transmission System Operator, Guaranteed Buyer, and NEURC.