On Thursday, a bidding error sparked chaos across the Finnish electricity market that sent power prices deeply negative.
Bloomberg reported that market participant Kinect Energy mistakenly sold half the country's power consumption at an hourly auction for Friday, resulting in power prices crashing to -203.40 euros per megawatt-hour (MWh).
Kinect blamed the bad trade on an "internal system error" for the market chaos, forcing Finnish transmission system operator Fingrid to intervene to ensure stability.
"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. He said power markets will remain messy but manageable.
The crux of the problem is when Kinect Energy entered the wrong bid for Finland for Friday delivery, selling an average of 5,787 megawatts. This was revealed in a regulatory filing posted on Nord Pool's website.
Nord Pool's website also said:
"Fingrid is planning to make Intraday purchases to ensure system security and balancing capacities concerning the non-matching situation in the Finland bidding zone."
Kinect Energy said in a filing, "We are working with other market parties to solve this extreme situation."