Nord Pool Spot (NPS) is an electricity market that is used by Nordic power producers and buyers for trading with one another. Today already 350 market participants are trading on NPS and the annual volume traded on the exchange is roughly 316 TWh (consumption in Estonia is ca. 8 TWh). The owners of NPS are Scandinavian and Baltic system operators (Elering AS in Estonia).

Trading on the power exchange takes place every day and every hour. This is done usually on “a day-ahead” principle. The prices for the following day are known by 15:00 on the previous day.

 

The prices that form on the power exchange are influenced by several external factors. Main factors are:

1. Air temperature – if the weather is cold, demand instantly rises and thus also the market price.

2. CO2 quota prices in the global market – the electricity price of the biggest producer in our price area depends on the price of CO2 bought.

3. Hydro reservoirs of the Baltic States

4. Ratio between demand and supply

 

As trading on the power exchange takes place every day and every hour, the electricity price of most home users is formed on the basis of the monthly weighted average. The monthly weighted average is calculated on the basis of all NPS hourly prices and the hourly consumption of packages depending on the exchange price (EXACT and general service). Hourly consumption for a specific consumer group is found on the basis of a standard load schedule.

If the consumer uses dual-tariff consumption, they are calculated a separate night and day tariff price based on the hourly night and day rates.

The weighted average is approximately 1-2% more expensive than the arithmetic mean of the month. This is caused by the fact that more is consumed in those hours when the price is higher.

The following schedule indicates the average prices on Nord Pool Spot power exchange in last 12 month.

  • 3.74
    April
  • 3.68
    May
  • 3.68
    Juny
  • 4.12
    July
  • 4.36
    August
  • 4.47
    Sep
  • 4.01
    Oct
  • 4.04
    Nov
  • 3.84
    Dec
  • 4.45
    January
  • 5.20
    February
  • 5.44
    March

More information: www.nordpoolspot.com