The Nordic power market is set to change its day-ahead pricing method on Tuesday to enhance grid efficiency and facilitate better integration of renewable energy sources. This updated approach involves 12 bidding zones across Norway, Sweden, Denmark, and Finland, interconnected through transmission lines.
Traditionally, the four Nordic transmission system operators (TSOs)—Svenska kraftnat, Statnett, Energinet, and Fingrid—calculated power transfers between adjacent zones. The new “flow-based market coupling” system will adopt a broader perspective, considering transit flows across both the Nordics and Europe. This method has been successfully implemented in continental Europe and preliminary tests indicate that power flows from north to south could increase by over 10%.
With a significant portion of new Nordic power generation coming from intermittent wind sources in the north, while demand remains in the southern regions, the new system is expected to converge prices—potentially raising them in the north and lowering them in the south. It will also lead to cost efficiencies, reducing the need for extensive new grid infrastructure.
The updated methodology is anticipated to create more opportunities for traders, allowing for adjustments in bidding behavior and improved capacities in both day-ahead and intraday markets. [1]