On Svenska Kraftnät's commitment to establish price areas in Sweden
(11/4/2009)
Svenska Kraftnät (SvK) has proposed to implement four price areas in Sweden that will be operational from July 2011. Statnett is positive to this initiative from SvK but however points out that the substantial investment plans to build new capacity between and within Sweden and Norway must also be implemented to increase cross border capacity for the market.
Daily operation of the Nordic system will be significantly affected by the new Swedish price areas, with more precise control of network flows. The actual capacity constraints in the system will be apparent through trading limits applied directly in Nord Pool Spots price calculation algorithm. More representative spot and tertiary reserve power prices are expected as they will be closer linked to the actual network constraints, and the allocation of resources will be better both in the short and long term. The need for counter-trade in the operational phase will be significantly reduced and it is Statnetts’ view that this will contribute to improved system security in general including improved frequency quality.
Prices are expected to rise slightly in southern Sweden and to reduce slightly in the north of Sweden. It is expected that the prices in the north and south of Norway will both reflect these price increases and decreases in the same directions, though less pronounced than in Sweden. The new Swedish price areas have marginal or no impact on planned network development projects in Norway.