About the market > History

Nord Pool

The aim of the Energy Act of 1990 was to facilitate competition in production and distribution of electricity in Norway. The Swedish market was deregulated five years later, and in 1996 the two countries opened the worlds first multinational power exchange. The exchange was named Nord Pool ASA. In 1998 Finland was integrated in the Nord Pool area, and the following year Demark was also included. These four Nordic countries are linked together in a transmission network for power exchange between the countries.
 

Spot

The spot market was established to facilitate balance between production, consumption and transition between the countries. Spot prices are calculated for each single hour based on bid and offers from the participants in the market. The spot price also has an important function as the reference price for the financial contracts traded at Nord Pool.
 

Price development

The first ten years after the liberalization of the electricity markets Norwegian consumers could benefit from a significant decrease in electricity prices. However the low prices almost stopped development of new production capacity, and the Nordic countries became dependent on energy import to meet their consumption also in years with normal precipitation and temperature. The autumn 2002 was extremely dry resulting in huge deficits in the hydro reservoirs. In Norway many will remember this as the “energy-crises” were the price of electricity were multiplied many times. Large import, much precipitation and falling consumption ensured that the situation improved throughout the winter. Prices have fluctuated sharply since, but enhanced export opportunities have resulted in Nordic power prices approaching the Continental level.