Roles and market participants

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The Norwegian power market is no longer "solely" Norwegian. We have had a common Scandinavian market for buying and selling electricity since 1996. At the turn of the millennium, all of Scandinavia became a single market, with daily trading of spot and forward contracts over the Scandinavian power exchange Nord Pool in Oslo.

As a transmission system operator in Norway, Statnett SF is the organisation that coordinates and manages the power system from hour to hour – day after day. Statnett is also responsible for the main Norwegian power grid – and it has a duty to ensure that the grid is open to all the participants in the power market as provided for by the Energy Act of 1991.

Ministry of Petroleum and Energy (OED)
The Norwegian government represented by the Ministry of Petroleum and Energy is the owner and ministry responsible for Statnett. The Minister of Petroleum and Energy is the general meeting of Statnett SF.

The Norwegian Water Resources and Energy Directorate (NVE), which is the regulator and licensing authority for the electrical power sector in Norway, reports at the same time to the Ministry of Petroleum and Energy.

Norwegian Water Resources and Energy Directorate (NVE)
The NVE has the authority to grant trading licences for electrical power and construction licences, and to stipulate system operator guidelines. The NVE also stipulates guidelines for transmission tariffs and sets the revenue ceilings for the grid companies – including Statnett. The latter entails a duty to increase the efficiency of natural monopolies.

The NVE regulates Statnett's revenue through an annual revenue ceiling for the overall operations as a transmission system operator. In Proposition no. 100 (1990-91) to the Storting – Reorganisation of Statkraft – the foundation was laid for the establishment of Statkraft SF and Statnett SF, and the roles of these two organisations in the supply of energy were defined. An important prerequisite for a freer power market was making the distinction between the production and transport of power as clear as possible. The competitive activities (Statkraft) were to be separated from the natural monopoly (Statnett).

Statnett SF
Statnett is the Norwegian transmission system operator. Statnett's area of responsibility was and is to develop the Norwegian transmission grid and international connections, as well as the development, maintenance and technical operation of sections of the main grid, main grid tariffs and the aforementioned system operator responsibility, including key operating functions. Statnett is the owner of over 80 per cent of the main grid, and it has ownership of 100 per cent of this grid as its goal.

As a transmission system operator Statnett is responsible for the system safety of the Norwegian power system in the short and long term and to help ensure that the transmission grid is developed in a manner that is efficient and beneficial to society.

Statnett's goal as a transmission system operator in Norway is to be a neutral facilitator for the power market, based on socioeconomic criteria, and to ensure at the same time that the customers' demand for cost-effective operations is fulfilled.

The power exchange Nord Pool ASA
is owned by Statnett and Affärsverketn Svenska Kraftnät with a 50 per cent interest each. Nord Pool is the Scandinavian power exchange. It was established in 1993 and has developed into a well-functioning power exchange with operations in all the Scandinavian countries. The operations are divided into four business areas, which can be described in brief as follows:

Elspot: is the market for physical trading of electrical power. This market operates in cooperation with the transmission system operators.
Eltermin: is the market for financial futures trading and risk management. Nord Pool offers a number of products, such as futures contracts, forward contracts and options.

Clearing: Nord Pool is the other party in financial power contracts. The company clears the contracts that are traded on the power exchange and the financial bilateral contracts that are reported.
Information to the market is a separate business area of Nord Pool ASA.

Statnett's User Council
was created as part of the enterprise's organisation when it was established on 1 January 1992, and the role of the User Council was stipulated in the Statnett's Articles of Association. For Statnett it is important to have a good working relationship with its customers, and that the customer – in accordance with the basic principle of the User Council – shall have an opportunity to exert influence on Statnett's operations in the monopoly areas.

Power producers
generate electrical power. In Norway almost all electrical power is generated by hydroelectric power stations. Average annual production is 118 TWh. Statkraft is Norway's largest power producer.

Grid owners
offer the transport of electricity from producers to buyers by means of their transmission facilities (such as grids and transformer stations). The transmission grid in Norway is broken down into three levels: the nationwide main grid ("highways"), which transports electricity between regions; regional grids ("county roads"), which transport electrical power from the main grid to and from the local distribution grids ("local roads"), which handle the transport of the lowest voltages to the end user.

The local grid operators (normally power companies) are obligated to deliver power to the consumers in their area, but the individual consumer has a right to choose whatever supplier he desires. This delivery obligation may for example be relevant if the originally chosen supplier goes bankrupt.

Supplier
The sale of electrical power takes place in various arenas. A producer may sell directly to consumers, or power companies may buy electrical power from a producer or power exchange (Nord Pool) and then resell the power. Brokers help establish contracts between buyers and sellers, while traders buy and resell power.