As soon as the 12:00 CET deadline for customers to submit orders has passed, all purchase and sell orders are aggregated into two curves for each delivery hour.
One aggregated demand curve and one aggregated supply curve is created per hour with bidding area and all different types of block orders anonymised. Area prices and the system price are calculated for each delivery hour.
The Nordic and Baltic areas are divided into bidding areas by the relevant transmission system operator in order to handle congestions in the electricity grid. Bidding areas can have a balance, deficit or surplus of electricity. Electricity will flow from areas where the price offered is lower towards areas where demand is high and price offered is higher.
If the transmission capacity between bidding areas is not sufficient to reach full price convergence across the areas, congestion will lead to bidding areas having different prices.
If the flow of power between bidding areas is within the capacity limits set by the transmission system operators, area prices in these different bidding areas will be identical.
All producers are paid according to the calculated area price, and similarly all consumers pay the same price.
For block orders, the same principle applies. If the block is accepted, then the consumer/producer pays/gets the area price.
The system price is an unconstrained market clearing reference price. It is calculated without any congestion restrictions by setting capacities to infinity. All orders from Nordic and Baltic regions are included in system price calculation.
The system price is calculated locally at Nord Pool after area prices are calculated for all bidding areas. Flows between the Nordics and the Netherlands/Germany from area price calculation are taken into account in system price calculation. These flows are used when calculating the System price either as import/sales or as export/purchase orders.
Area configuration used in System price calculation differs from configuration used in Area price calculation. Bidding areas in Norway, Denmark, Sweden and Finland constitute one common bidding area (since capacities between these are set to infinity). The Baltic area is handled as in Area price calculation, i.e. the same capacities as in Area price calculation are used between Baltic bidding areas and between Baltic and Nordic bidding areas.
Most standard financial contracts traded in the Nordic region use the System price as their reference price.