Economists seek more transparent Nordic electricity market

Monday, 07 June 2010

LampThe pricing policy of Nord Pool should be more comprehensible and transparent for consumers, say Swedish economists Thomas Tangerås and Sven–Olof Fridolfsson, who have been studying competition on the power market of the Nordic countries.

The economic specialists focussed their attention on suspicions that Nord Pool is abusing its monopoly status to raise prices. The issue boiled over last December when the arrival of sub-zero temperatures saw electricity prices in the Nordic countries skyrocket. Nord Pool explained the sharp rise as being due to the drop in the use of nuclear energy, which in turn raised the question as to why consumption had suddenly decreased when the coldest weather of the season had just arrived.

At present it is impossible to follow Nord Pool's price shaping, unlike on many other European power markets. Tangerås and Fridolfsson have stressed that the monopoly's data should be made available to a wider circle. In their view, the governments of the Nordic countries should place greater pressure on Nord Pool if pressed to do so by the people.

"This is an important issue for consumers," said Ann-Kristine Johansson and Lisbeth Grönfeldt Bergman, the chairs of the environmental and economic committees of the Nordic Council. "Better access to date would boost consumers' trust in the power market."

Tangerås and Fridolfsson also raised this issue in the Swedish newspaper Dagens Nyheter in December. In January the Swedish authorities responded in the same newspaper, confirming that Nord Pool had effective rules in place preventing unjustified pricing policy. "But in order to make the power market more trustworthy in the eyes of consumers further investigations may be warranted," conceded the directors of Sweden's electricity network, energy market inspectorate and energy board. "That is why we are prepared to grant independent specialists access to energy market data."

Nord Pool's reach now also extends to Estonia. Taavi Veskimägi, chairman of the management board of Elering, and Mikael Lundin, director of Nord Pool Spot, entered into a partnership agreement in early February to extend the NPS day-ahead electricity market throughout the Baltic States and to create a real-time electricity market between the countries. The power markets of the Nordic countries and Baltic States should be completely interconnected by 2013.

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