Nordic electricity market
Finland is part of the common Nordic and Baltic wholesale electricity market which uses Nord Pool Spot of Norway as its trading centre. The wholesale electricity price is determined hourly based on the balance of demand and supply in the common market. The common market is possible because the electricity systems of the countries are interconnected.
The Finnish electricity system is directly connected to the Swedish, Norwegian, Estonian and Russian systems. Via these connections, Finland is also connected to the electricity systems of the other Nordic countries, the Baltic states and Europe. This enables the transfer of electricity across national borders, which ensures that the most affordable electricity production methods are always used.
At present, the connection between the Finnish and the Russian electricity system is not included in the scope of the above-mentioned pricing system. The electricity grid operator, Fingrid Oyj, is in charge of the functionality of the Finnish electricity system and the main electricity grid.
In the autumn of 2013, the Nordic electricity market was connected to the common wholesale market covering Western Europe. This means that the electricity prices, volumes and transfers in all Western European countries are simultaneously determined.
In the Nordic countries, derivative transactions take place at Nasdaq OMX Commodities. Market actors can hedge themselves against the risks pertaining to the hourly changing electricity price.