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Operations and Electricity Markets

In order for the electrical system to work, there must be a constant balance between production and consumption of electricity. The fact that the weather varies and affects both production and consumption is one of the challenges when it comes to keeping balance in the electrical system. 

Svenska kraftnät is the system operator for electricity in Sweden. It means that we have an overall responsibility to keep the balance between production and consumption of electricity.

In order for the electrical system to work, there must always be a balance between the electricity produced and consumed. Therefore, we control and monitor Sweden's electrical system around the clock.

Balance management in the electricity system is based on planning

The responsibility for ensuring that there is enough output to meet consumption falls to the balance responsibility parties. Under the Electricity Act, an electricity supplier is obliged to supply as much electricity as its customers consume. The electricity supplier may take on this responsibility themselves for its electricity supply or transfer the responsibility to another company.

The balance responsibility parties create a balance between supply and consumption by planning their production based on a forecast of consumption, and also by buying electricity, for example on the power market Nord Pool Spot.

There must be balance each hour of the day. In retrospect, we check how the balance responsibility parties throughout the country have managed. If any member of the balance responsibility parties have delivered too little or too much power compared with consumption for a given hour this is regulated economically afterwards. This is called balance settlement.

The weather affects the amount of electricity produced and consumed

The weather affects how much electricity can be produced by hydro and wind turbines. The weather is also of great importance for the amount of electricity consumed. On a cold and dark winter's day Sweden needs much more electricity than on a hot summer day. 

Electricity is bought and sold on a joint Nordic - Baltic market

In the Nordic countries we have a liberalized electricity market. The Nordic power exchange Nord Pool is owned jointly by Svenska kraftnät and our Nordic and Baltic counterparts. At the power exchange participants of the electricity market can buy and sell electricity.

Electricity prices are determined by supply and demand of electricity

The availability of electricity and the amount of electricity used at a particular time affect electricity prices. When more electricity is produced than is needed the price will be lower, and when more electricity is needed than the power plants can produce the price rises. The electricity priced is priced per bidding area (the Nordic system has 15 geographically divided areas) and is therefore directed by the production and demand in the respective bidding area.

We create opportunities for electricity trading

We are not only system operator for electricity in Sweden. We are also responsible for creating rules and formulating agreements and procedures for trading electricity in the country, between the Nordic and Baltic countries and with the continent. We work actively with other countries in Europe to create a common electricity market where the goal is that electricity users in the future can choose their supplier among electricity suppliers in Europe.

Electricity trade

The marketplace for the trading of electricity is the Nordic power market Nord Pool, which has a spot market for trading electricity per hour for delivery the next day. Most of the trade per hour takes place on Nord Pool, while a smaller portion is made directly between electricity generators and electricity suppliers. Nord Pool also has a market for electricity coming up - intra-day trading - in order for traders and producers to more easily end up in short-term balance between production and consumption.

Four bidding areas in Sweden

Sweden is divided into four bidding areas from bidding area Lulea SE1 in the north to bidding area Malmö SE4 in the south. The price of electricity in each bidding area is determined by supply and demand of electricity and transmission capacity between bidding areas. In northern Sweden more electricity is produced than is needed, in southern Sweden it is the opposite. Therefore a large amount of electricity is transported from north to south Sweden.

There can be different prices in different bidding areas

Bidding areas can have different prices for electricity due to the physical limitations of the national grid. The boundaries between bidding areas are drawn where there are limitations as to how much electricity can pass. When the entire transmission capacity at such a limitation is utilized for electricity trade between two bidding areas, there will be different electricity prices in the different areas.

In the page "The control room" you can follow the flows and prices in the bidding areas in real time. To the control room.

We produce statistics for production, consumption, imports and exports and more. Read more about our statistics.

The national grid needs to be expanded to meet the needs of society

A national grid that is operationally reliable is a prerequisite for the electricity supply and electricity market to function. The grid must also be able to transfer the amount of electricity that society needs. We need to increase the national grid's capacity between bidding areas and strengthen it in order to receive electricity from new power plants, in particular wind turbine plants. Therefore we are making great efforts to maintain and develop the national grid in the coming years. Read more about our Grid development.

With production reserves we can restore operations in event of a disruption

When there are disruptions in the electrical system, unplanned events that cause power stations or lines suddenly to become disconnected from the network, we need to quickly start production in order to maintain the balance between production and consumption, or to relieve the grid. There are special production reserves that can be activated at such events.

When there is a risk of a power shortage

There is a risk of a power shortage in the electrical system when electricity demand is very high, such as in very cold conditions, while production and imports are not enough to supply the electricity needed. We have a responsibility to procure and administer a power reserve that will reduce the risk of having a power shortage. Both reducing consumption and increasing production helps to create balance in the electrical system when there is a power shortage.