Regulation and Competition on the Nordic Power Market Lars Bergman

There is a long tradition of close cooperation and short term power exchanges between the major power companies in the Nordic countries, i.e. Denmark, Finland, Norway and Sweden. The main economic rationale of the short term power trade is the differences in terms of hydro power resource endowments between the countries and the resulting variations in short term relative cost conditions. However, for a long time the short term power exchanges between the major power producers was the only trade in electricity across the borders in the Nordic countries. Thus, in a customer perspective the Nordic power market was a set of regionally sub-divided markets. Moreover, as the national markets were dominated by single vertically integrated generation and transmission companies market power was a salient feature of the Nordic power market.