Posted on 02 Jul 2024
A freak movement in electricity spot prices on European power exchange Epex Spot last week forced German rebar mill Feralpi Stahl to interrupt its production for a full day.
In the morning of 26 June, prices on Epex Spot surged to a value of nearly €3,000 ($3,223) per MWh, before falling back to around noon to a normal value of below €50. They saw another unusual peak in the evening hours of that day. According to reports, the incident was caused by an IT error.
Feralpi Stahl, as a customer of the exchange, reacted in the morning with a stoppage of production. “The prices peaked only in the morning and in the evening, and were low during the day. But switching off only to switch back on for seven hours does not make sense, so we stopped for 24 hours,” mill director Uwe Reinecke director informs Kallanish upon request.
He notes that the standstill will mean a loss in the six-digit euro range, but refrains from commenting on potential damage claims. Continued operation that day would have meant a seven-digit euro loss, he points out.
“We receive a large share of our power on spot trade contracts; as a supplier to the construction industry, we have a short lead time of orders, meaning long-term power contracts make little sense,” he explains.
Source:Kallanish
