How is the Nord Pool spot price set? Step by step

You look at the electricity price in the Tibber app and see hourly prices ranging from 12 öre to 220 öre on the same day. Who actually decides this? Who makes the decision that 18:00 should cost 17 times more than 03:00?

The answer is Nord Pool — the Nordic electricity exchange where all major producers and buyers in the Nordics meet every day and set prices for the next 24 hours through an auction. Here we walk through how the process actually works, why prices end up where they do, and what it means for you as a heat pump owner.

Short answer

• Nord Pool is the Nordic electricity exchange (Norway, Sweden, Finland, Denmark + Baltics)
• Producers submit sell offers, end-consumers and industry submit buy bids
• The price is set where the buy and sell curves intersect — the market-clearing principle
• Results are published at 13:00 Swedish time each day for the next 24 hours
• The price applies per hour and per electricity price area (Sweden has four: SE1–SE4)

Who is Nord Pool?

Nord Pool is a shared European electricity exchange founded in 1996 — the first in the world. Today it's owned by Nordic and Baltic system operators (in Sweden, Svenska kraftnät). Nord Pool runs two electricity markets:

1. Day-Ahead Market — auction for the next day's 24 hourly prices (this is the "spot price" you see in the app)
2. Intraday Market — continuous trading during the day itself to balance production deviations

The Day-Ahead market drives nearly all Swedish electricity trade — over 90 % of all electricity is traded there.

The auction — step by step

Step 1: Sell offers (10:00)

All major electricity producers (Vattenfall, Fortum, Statkraft, etc.) submit offers to Nord Pool: "I'll sell X MWh at minimum Y öre/kWh for each hour tomorrow."

The offers form a stack:

• Hydro can be sold cheaply since marginal cost is low
• Nuclear must maintain constant output and is sold almost regardless of price
• Gas turbines and oil burners are expensive to start and are only offered if the price gets high

Step 2: Buy bids (11:00)

Large electricity buyers (industries, district heating networks, retailers representing households) submit corresponding buy bids: "I'll buy X MWh at a maximum of Y öre/kWh for hours when I need power."

Step 3: Market clearing (12:00–13:00)

Nord Pool's algorithm sorts all bids per hour and price area, then finds the price point where:

• All offered electricity up to the price = all demand up to the price

That price becomes the clearing price for that hour — every seller who bid lower gets that price, every buyer who bid higher pays that price.

Step 4: Publication (13:00)

At 13:00 Swedish time Nord Pool publishes the 24 hourly prices for the next day. This is the moment when Tibber's forecast for tomorrow "freezes" and becomes final.

For Therilly this is the most important event of the day — it's when we know exactly which hours will be cheapest/most expensive and can start planning the heat pump's operation for the next 24 hours.

Why does the price vary so much?

On the same day in the same area, the cheapest and most expensive hours can differ by 5–15 times. Why?

Consumption patterns

• Morning peak 07–09: Everyone wakes up at once, makes coffee, showers
• Evening peak 17–20: People come home, cook, run laundry
• Night 23–06: Industry slows, households sleep → low demand

Production possibilities

• Wind: Strong wind = cheap electricity. No wind = expensive
• Solar: Most production midday (summer)
• Hydro: Most production spring and autumn (snowmelt, rain)
• Nuclear: Constant, weather-independent

Geographic import/export

• When Germany has no wind: SE4 is pulled up by German imports
• When Norway has low water: SE1/SE2 pulled up by Norwegian imports
• When Finland needs: SE3 pulled up by Finnish exports

Why is the price different in SE1 and SE4 the same hour?

Limited transmission capacity. The grid can't move arbitrary amounts of electricity from north to south. When northern Sweden has surplus but can't export it all southward, price differences appear between areas.

This is the whole point of having four price areas instead of one — it makes the bottleneck visible and creates economic incentives to build out the grid (or more production in the south).

For you as a heat pump owner this is decisive: your savings value with smart control depends heavily on which area you're in. Read more in our SE1 vs SE3 vs SE4 guide.

Three common misconceptions

"The spot price is what I pay"

No. The spot price is the base. On top come markup from your retailer, grid fee from your operator, energy tax (49.9 öre/kWh in 2026) and VAT (25 %). The spot price typically accounts for 40–60 % of your total bill.

"The price is set by speculators"

No. The Day-Ahead market is a physical delivery market — every buyer must actually take delivery, every seller must deliver. Financial derivatives exist too, but the spot price itself is pure supply and demand.

"My electricity contract sets the price"

The opposite. Your retailer reads Nord Pool's spot price and adjusts your bill accordingly (if you have hourly spot). The retailer has no control over the price.

What does this mean for you as a heat pump owner?

Three practical consequences:

1. 13:00 is more important than you'd think

That's when the day's price picture locks in. A smart controller like Therilly pulls tomorrow's prices immediately after publication and plans pump operation for the entire period. Manual control that doesn't actively check the 13:00 publication misses the planning window.

2. Weather drives the price more than you think

Because wind power sets the price below marginal cost, it's the weather 24–72 h out that determines tomorrow's spot price. That's why the SMHI forecast is a key component in smart heat pump control — not just to forecast outdoor temp, but to forecast the electricity price.

3. You pay for other people's peaks

With a "rolling monthly price" you pay the month's average. That means you indirectly subsidise those who draw the most during peaks. With hourly spot you only pay for what you actually draw — which combined with smart control cuts your contribution substantially.

Summary

The spot price isn't magic. It's the result of a structured auction where thousands of producers and buyers gather daily to match supply and demand, hour by hour, across four Swedish price areas. Prices vary because consumption, production and transmission capacity vary.

As a heat pump owner you have two paths:

• Passive — pay whatever it is, around the average
• Active — use hourly spot + smart control to shift your consumption to the cheapest hours, every day

The latter typically saves 15–30 % depending on price area. Calculate your savings or read about our full approach.