Norway’s Kinect Energy’s incorrect electricity sales offer collapsed the price of electricity on the stock exchange in Finland on Friday.
Norwegian the electricity company Kinect Energy estimates that it will face a bill of 50-55 million dollars due to the mistake that threw the Finnish electricity market into chaos last Friday. The amount corresponds to approximately EUR 46–50 million.
Kinect Energy’s incorrect electricity sales offer in Thursday’s spot electricity auction led to the fact that the electricity exchange price in Finland fell to the minimum level of the market, i.e. -50 cents per kilowatt hour, starting at 3 p.m. on Friday.
Finland threatened to lack a huge amount of electricity on Friday, because Kinect Energy mistakenly offered electricity for sale on the electricity exchange Nordpool on Thursday to the Finnish market for the entire day of Friday with a power of almost 5,800 megawatts.
Kinect Energy operates in thirty countries and belongs to the US-based World Kinect Corporation.
World Kinect Corporation says in its stock exchange release that its subsidiary made an incorrect offer on the Finnish electricity market on November 23, and that the subsidiary estimates the total costs related to the case to be 50–55 million dollars. Despite the incident, the company’s balance sheet is still strong, the release says.
HS tried on Friday reach Norwegian Kinect Energy to comment on what happened, but the company was not willing to explain its actions.
The stock market price the decline also caused Finnish exchange electricity sellers to lose millions of euros.
The reduced price made many Finns increase their consumption briskly on Friday evening. However, the electricity companies were not prepared for a consumption spike, because they did not know about the reduced prices caused by Friday’s bid error at the time when they made their own purchase offers for Friday’s electricity market.
Electricity sellers therefore had to sell electricity at a price of -50 cents and buy it on the secondary market at a positive price.
Director responsible for the electricity market in the energy industry Pekka Salomaa in the HS interview, considered it unlikely that the companies would receive compensation for their losses from the cause of the damage, i.e. Kinect Energy.