The price of electricity was 500 euros minus – and now there was a penalty claim of millions of euros

Energy Agency submit to market lawthat it would dictate to the Swede Kinect Energy Sweden AB:lle a little on top of the EUR 9.2 million fine for violating the ban on market manipulation of the electricity market.

In practice, Kinect Energy Sweden’s failed electricity bid shook the electricity market, closed intraday trading in all of Northern Europe and pushed prices into deep red. In Finland, exchange electricity customers could enjoy a whole day’s worth of electricity, which they were paid for using.

On November 24, Kinect offered electricity at the bottom price of the market for all hours, a quantity that roughly corresponded to half of Finland’s entire electricity use. The company did not have the ability to produce the electricity it offered, but the offer went through in the electricity market despite that – and the crisis was over.

As a result of the incorrect offer submitted by the company, the “Black Friday” price of electricity on the spot markets was -203.40 euros/MWh on average, and the discount price on the largest was -500 euros/MWh for a total of ten hours.

There was a power shortage in Finland, but luckily for the Finns, Kinect managed to buy physical electricity from the market all day long – with big losses, losses of millions of euros.

The electricity retailer’s mistake looks like pure damage in the matter, but the Energy Agency has taken a strict line in the matter.

Penalty fee for the first time

The agency already stated last December that Kinect Energy Sweden had violated the prohibition of market manipulation laid down in the so-called Remit regulation. The Energy Agency is now proposing for the first time the imposition of a penalty fee for a procedure that violates the Remit regulation.

The reason for imposing the penalty fee is Kinect Energy’s considered negligent actions, when the company submitted an incorrect offer to the daily electricity market on November 23, 2023, which led to significant market effects on the wholesale energy market.

The error also had an impact on the price of electricity in an area wider than Finland.

In its decision last December, the Energy Agency considered that the incorrect offer gave false or misleading messages about the supply of wholesale energy products and set the prices on the day-ahead electricity market at an artificial level.

According to the Energy Agency, the procedure fulfills the hallmarks of market manipulation prohibited in the Remit regulation.

The penalty fee proposed by the Energy Agency corresponds to 5.5 percent of Kinect Energy Sweden AB’s turnover in 2023. The matter regarding the penalty payment proposal is handled in the market court.

If the Market Court orders a penalty payment for Kinect Energy, the payment will be ordered to be paid to the Finnish government.

The decision of the Market Court is not necessarily final in the case, but the decision can be appealed to the Supreme Administrative Court.