Kinect trader's $55 mln error behind Finland's 'Black Friday' power discount

World Kinect

29/02/2024 16:22

By Anne Kauranen
       HELSINKI, Feb 29 (Reuters) - An erroneous offer that
caused havoc in the Finnish power market in November was down to
human error by a substitute trader, Kinect Energy, the company
making the bid, said as part of an investigation into the
incident. 
    Day-ahead power prices in Finland fell to as low as -500
euros/MWh for delivery on Nov. 24, in what some described "Black
Friday" for the power market as it coincided with the bargain
shopping day.
    The bid was placed by an unnamed substitute trader of Kinect
Energy Sweden, a unit of New York-listed World Kinect
Corporation  WKC.N , Kinect said in a response to a Finnish
Energy Authority investigation seen by Reuters.
    The trader's error, the total cost of which the parent
company estimated to be up to $55 million (50.8 million euros),
overestimated by a thousand-fold the production of a Finnish
wind power park still under commissioning, the company said.
    Instead of buying power in the market, Kinect ended up
offering 5,787 megawatt hours (MWh) of power every hour for Nov.
24, equalling roughly half of the country's power demand that
day, it said.
    This sent prices plunging to negative levels, with some
consumers effectively being paid for their electricity use while
some vowed on social media to turn on their electrically heated
saunas, a popular Finnish pastime, for the discount hours.
    National consumption hit an annual record and system
operator Fingrid took additional measures to balance the market.
    The Energy Authority continues to investigate the matter and
agreed to Kinect's request to not share all the details it
revealed in its statement publicly, Antti Paananen, its deputy
director general, told Reuters. 
    It was too early to comment on the liabilities from the
incident, if any at all, he added. Penalties could be
substantial, however.
    "For a company, the maximum penalty is 10% of the company's
previous year's turnover," Paananen said, adding a single trader
could also be found liable and sanctioned with a penalty of up
to 100,000 euros ($108,290).    
    ($1 = 0.9234 euros)

 (Reporting by Anne Kauranen in Helsinki; Editing by Nora Buli
in Oslo and Jan Harvey)
 ((anne.kauranen@thomsonreuters.com; +358401895560;))