August's unprecedentedly high electricity prices quoted on the Nord Pool exchange may have been the result of block trading, the Competition Authority (Konkurentsiamet) finds.
The price levels, which included the €4,000 per MWh quoted for one hour on one day in August were not the result of market manipulation as had been suspected, the authority says, but instead from block trading in electricity supply offers of a kind which may not be suitable for the Baltic markets.
Not only the Competition Authority but also regulators in Latvia and Lithuania, however, still need time to come to their final conclusions.
Evelin Pärn-Lee of the Competition Authority told ERR that: "NordPool has a product of such a type whereby energy producers can make an offer to the market in blocks, and at the moment it seems that the supply of such block trades caused this anomaly. We will further explain how and why, later.
"On the other hand, it seems that the algorithm worked as it should, and the result is an anomaly," Pärn-Lee continued, though was unable to state what the conclusions of the meetings between Nord Pool and the regulators of all three Baltic States will be yet.
"It is [however] likely a block offer. As a product, this is probably not suitable for the Baltic market whatsoever," she went on.
Nord Pool's 28-day time-frame in which to conduct its analysis has not yet expired, however, while next week, the Competition Authority will provide an overview on where the analysis has reached so far.
The issue will likely still be under investigation over a week from now, X added, and said that cooperation between the regulators of all three countries and the Nord Pool market place had been good.
The €4,000 per MWh price set on August 17 was the maximum permissible at the time under European Commission rules, though the price ceiling automatically rose to €5,000 once that level had been attained.
Suspicions at the time were raised that suppliers had been acting as a cartel, since most power plants in the Baltic States were offline in the time leading up to the record price being posted, ostensibly for maintenance work, while causation offered from the industry included the high natural gas price, the Ukraine conflict, and a lack of wind during the summer impacting on renewables.
Block trading is often conducted by institutional investors via a large, privately negotiated securities transaction.
Editor: Andrew Whyte, Karin Koppel