Capacity withholding under REMIT: economic and physical

ACER's Guidance distinguishes two forms. Economic withholding is offering available generation capacity at prices at or above the market price that do not reflect the marginal cost, including opportunity cost, of the asset, so that it is not dispatched. Physical withholding is not offering the available capacity at any price.

Withholding does not automatically breach Article 5. ACER proposes two concurrent questions: whether the participant is able, in the circumstances, to influence the price or the interplay of supply and demand (being a pivotal supplier is one example), and whether it has a legitimate technical, regulatory or economic justification for not offering, or for offering above marginal cost.

In a day-ahead auction, a withheld block shifts the supply curve left at the margin, so the effect is largest where the curve is steep and when the participant's capacity is needed to meet demand. In a balancing market, a bid priced above cost can change the activation order and, under pay-as-cleared pricing, the price every activated provider receives, even if that bid is never activated itself.

The decisions show the evidence regulators use. ARERA established A2A's withholding by re-clearing the Italian day-ahead market with A2A's offers replaced by each unit's estimated variable cost and every other offer unchanged. RME found that SFE's up-regulation bids, in about 350 cases, did not reflect the real cost of activation.

ACER's description is not limited to generation: manipulative capacity withholding covers available production, storage or transportation capacity, including the undue limiting of infrastructure or transmission capacity. In gas, the questions are the same: whether the capacity was available, and whether there was a legitimate reason for not offering it.

Opportunity cost is part of marginal cost: a hydro plant pricing at its water value, or a unit pricing the risk of not being able to ramp down, is not withholding if the price reflects a real cost. Technical limits, force majeure and localised network constraints are legitimate reasons ACER names. In the SFE case, RME accepted the higher price where the reduction could not be moved to another plant, and found a breach only where it could.

Scarcity is not withholding either. In hours of inadequacy, ACER notes that the clearing price is set by the value of lost load and every technology earns a legitimate rent. The burden that matters is on the participant: under Article 2(2)(a)(ii) it is for the person who placed the order to establish that its reasons were legitimate.

For each hour or period under review: was the capacity available, at what price was it offered, how does that price compare with the unit's cost including opportunity cost, was the participant's capacity needed to meet demand, and is there a documented reason for every departure from cost. A counterfactual that re-clears the market without the offer measures the effect; it does not establish the reason.

• SFE fined NOK 3 million for balancing bids above cost (RME, 2026)Norway · Published 29 September 2026 · Electricity
• A2A fined EUR 5 million for economic withholding (ARERA, 2026)Italy · Decided 30 July 2026 · Electricity
• Iberdrola's EUR 25 million hydro withholding fine, later annulledSpain · Decided 24 November 2015 · Electricity

• ACER, Guidance on the application of REMIT, 6.1st edition, 18 December 2024 (Guidance)
• Regulation (EU) No 1227/2011 (REMIT), consolidated text including Regulation (EU) 2024/1106 (Regulation)

Sources read on 15 October 2026. This guide summarises the regulation and ACER’s non-binding guidance for orientation; it is not legal advice, and the decisions it cites are the deciding authorities’ findings, some of them under appeal.