Why we have bidding zones
The flow of electricity in Norway is limited by the capacity of the power grid. When there are different power situations in different parts of the country, situations can arise where there is a shortage in some places and a surplus in others.
Since the transmission capacity in the power grid is limited, this can lead to differences in the price that electricity customers have to pay.
By organizing the power grid into bidding zones, we ensure that we can utilize Norway's power resources efficiently. The organization provides good signals to the market about scarcity and surplus and ensures the safe operation of the power system.
Five bidding zones
In and between some bidding zones, the transmission capacity is large because it is often needed, while it is smaller in other places because there is normally not much transport of electricity. Roughly speaking, the power grid is divided into the following areas:
- Eastern Norway (NO1)
- Southern Norway (NO2)
- Central Norway (NO3)
- Northern Norway (NO4)
- Western Norway (NO5)
The other Nordic countries are also divided into bidding zones, except for Finland. Sweden has four bidding zones and Denmark has two.
- Electricity is produced and consumed in different places in the country, and production and consumption must be connected. This means that electricity must flow from one area to another, but we do not have a power grid that allows electricity to flow freely in every situation. Thus, areas with surplus and deficit of electricity can arise, says Maria Brekke Langum, head of the National Control Center at Statnett.