Trader Error Causes Huge Plunge in Finnish Power Prices

(Bloomberg) -- A power trader error sent shockwaves through the Finnish market as it mistakenly offered to sell the equivalent of at least half the country’s entire consumption at an hourly auction.

Prices dived after the mistake by Kinect Energy AS, which said it was an “internal system error.”

Grid manager Fingrid Oyj is planning to intervene to ensure system security and balancing capacities on Friday, and there will be no intraday trading from Finland toward Sweden that day. 

“Slightly simplified, you can say that they sold something they didn’t have, and buyers bought something that doesn’t exist,” said Pontus de Mare, head of power system operation at Svenska Kraftnat AB. While tomorrow will be manageable, it could be messy, he said.

Kinect, a unit of World Kinect Corp., sold on average 5,787 megawatts from hour 1 to hour 24 for Friday delivery, according to a regulatory filing. That compares with current consumption of about 11,000 megawatts in Finland, according to grid data.

The faulty trades led to an average price of -203 euros ($-221) per megawatt-hour, compared with an average in the Nordic region of 35.28 euros, according to Nord Pool. From 2 p.m. to midnight on Friday, the Finnish power price is -500 euros per megawatt-hour, Nord Pool data showed.

“We are working with other market parties to solve this extreme situation,” Kinect said in the filing. The exchange is investigating the issue, Fingrid said. 

(Updates with comments from Swedish and Finnish network managers)

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