Electricity exchange

An electricity exchange is the infrastructure that makes the electricity wholesale market work. Its core job is to find, for every hour, a price that balances supply and demand. Without an exchange, producers and retailers would have to negotiate bilateral contracts — slow and expensive.

The exchange brings transparency: everyone sees the same price, everyone buys from the same pool. The largest exchange in the Nordics and Baltics is Nord Pool, which started in Norway in 1993 and expanded across the region in the 2000s.

The exchange operates in English but its transaction language is electricity. All producers and retailers submit bids by 12:00 the day before. At 12:42 the exchange publishes the next day's hourly prices — these are the spot prices you see on Verrokit's spot page.

Nord Pool — the Nordic electricity exchange

The main marketplace in the Nordics and Baltics is Nord Pool. It operates a day-ahead market where next-day hourly prices are set at 12:00 CET. Nord Pool is owned by the regional TSOs (Fingrid, Statnett, Svenska kraftnät etc.) — the company is non-profit, pricing covers costs.

Nord Pool handles about 1 000 TWh per year — 90 % of Nordic electricity consumption. The remaining 10 % trades through bilateral contracts with large industrial buyers.

How the electricity exchange affects consumers

A spot customer experiences the exchange price directly — your hourly price is the Nord Pool FI area price plus margin. A fixed-price customer experiences it indirectly: the retailer uses Nord Pool forward prices to forecast and prices the fixed contract with a margin.

Exchange price changes feed into new contracts with a delay: when the spot price trends up sustainably, new fixed contracts become more expensive.

Exchange vs OTC markets

The exchange (Nord Pool) is transparent: the price is the same for everyone, each hour's result is published. OTC markets (over-the-counter) are bilateral contracts between producers and buyers — prices are not public.

OTC contracts (typically industrial PPAs with wind farms) can be below the exchange price if the buyer takes long-term risk. Wind operators often finance new farms via PPAs guaranteeing revenue for 10–15 years.