Montel Magazine 4 2021 - Nordic power spat - Page 13

“ The calculation error meant that the flows on the cables were counted twice , resulting in an erroneous outcome in the system price ” trust in the market , which is something an exchange is depending on . Erroneous information is therefore something we look at very seriously and we expect that Nord Pool and the regulators introduce measures that prevent this from happening again .”
Hermund Ulstein , chair of the Nordic Association of Electricity Traders ( Naet ), also calls Nord Pool ’ s error a “ major mistake ” that damages trust in the exchange . “ The system price is reference for all trading in the financial market . Then they manage to calculate the price EUR 67.55 / MW higher than it should have been for 27 November , which is twice the power price back in the good old days .” The erroneous calculations might have induced market participants into positions in the financial market they otherwise would not have taken , he says .
Arne Osterlind , portfolio manager at Shepherd Energy in Sweden , points out that the Nordic power contract for Q1 2022 rose EUR 4 immediately after the erroneous 27 November system price – the record high EUR 228.02 / MWh – was published . A later recalculation from Nord Pool showed that the system price should have been EUR 160.47 / MWh , a level that would probably not have trigged the EUR 4 rise in the Q1 contract , says Osterlind . On average , Nord Pool had calculated the system price EUR 10.37 / MWh higher than it should have been between 10-27 November which , with an open interest for November of around 10,540 MW , meant an incorrect financial value of more than EUR 47m had been calculated , according to Osterlind .
“ This was a mistake that should not have happened and shall not happen again ,” says Stina Johansen , head of communications at Nord Pool . Nord Pool is now reviewing its processes , procedures and systems to avert any repeats of similar miscalculations . “ We have to work every day to maintain trust in the market ,” says Johansen , though she is unable to answer whether the exchange has received any requests for compensation from participants that have lost money owing to the mistake . n
Montel Magazine 4 – 2021
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