After the distribution of the Elspot results on 27 October 2010, Nord Pool Spot was notified by Statkraft that they had sold about 4000 MW too much at the resulting spot price. This was due to technical problems at Statkraft during the nominations for spot areas NO1-NO5 for the day ahead auction.
Nord Pool Spot has previously published information regarding this event, but we have received requests from customers desiring more information regarding Nord Pool Spot’s handling of the incident.
The responsibility for the correctness of bids lies with the participants. However, Nord Pool Spot does, to the extent possible, try to minimize the risk of errors. All bids received by Nord Pool Spot are subject to a reasonability check comparing the bid volume and price for the actual day with the bid volume and price for a previous day.
The reasonability check gives the trading desk a warning of possible errors in participants' bids and the participant may be contacted and asked to verify their bids.
Prior to the price calculation, the reasonability check in Nord Pool Spot's trading system showed considerable deviations in Statkraft's bids for the 27 October 2010. Statkraft was then contacted by Nord Pool Spot trading desk at 12:00 and they were asked to verify whether the bids were correct or not. Upon confirmation from Statkraft that the bids indeed were valid, the auction took place based on the bids entered.
Elspot prices were published at 13:08 and trading results for all participants were available in SESAM Web at the same time. The distribution of trading results to participants through EDIEL takes a little longer and the last participant report was distributed at 13:48.
Statkraft contacted Nord Pool Spot trading desk at 14:30 to inform that they had discovered a trading error. Following this conversation, Statkraft contacted Market Surveillance, and a UMM was published at 14:54.
After the incident, Nord Pool Spot has taken the following measures in order to minimize the risk of similar errors occurring in the future:
- There has been a management meeting between Nord Pool Spot and Statkraft to discuss the issue and the effects on the market and to make sure Statkraft has done necessary improvements to prevent similar errors in the future.
- Market Surveillance is in the process of investigating the case to see if there are any breaches of the Market Conduct rules. If their investigation identifies a breach a sanction may be given. In the event of a sanction, such information will be made public.
- Nord Pool Spot is continuously evaluating the internal routines and logical checks in the trading system to prevent similar incidents in the future.
About Nord Pool Spot
Nord Pool Spot runs the leading power market in Europe and offers both day-ahead and intraday markets to its customers. 350 companies from 18 countries trade on the market. The Nord Pool Spot group has offices in Oslo, Stockholm, Helsinki, Copenhagen, Tallinn and London. In 2010 the group had a total turnover of 310 TWh, which includes the auction volume in the UK market N2EX.
Lysaker, 5 January 2011 14:00 CET
For further information, please contact Nord Pool Spot:
Siw Hauge, director communications, phone + 47 90 61 59 92