NOME auction produces surprise late-session result

Yesterday’s NOME auction session, the third to be held since the measure’s introduction last October, produced a surprise development during the session’s closing stages.

Five minutes and 19 seconds before the session’s end, one bidder secured a sizeable 14 MWh electricity amount for the starting price of 37.37 euros per MWh.

Other offers submitted prior to this particular bid, or seconds later, led to far higher purchase prices.

The bidder who managed to secure the 14 MWh electricity amount for 37.37 euros per MWh saved nearly 325,000 euros.

With the exception of one offer for 1 MWh, at 13:07, which reached 38.62 euros per MWh, nine other offers reached levels of about 40 euros per MWh.

With the exception of this one extremely successful bidder, the fact that electricity amounts selling for around 40 euros remained unallocated serves as a sign of the market’s view of wholesale prices.

The price level of 40 euros per MWh is nearly 6 euros below yesterday’s System Marginal Price (SMP) and approximately 10 euros below today’s SMP of 50.308 eurps per MWh. Compared to the average price in March, auction prices were 6.2 euros lower.

In January, when the NOME auction prices reached 41 eurps per MWh, December’s average SMP had shot up to 51.09 euros per MWh.

Quite clearly, the market is not interested in a premium of anything less than 6 euros per MWh.