Electricity prices are set on Nord Pool Spot, which is a marketplace (exchange) for electricity generators and electricity retailers. The price is determined by demand. When access to electricity is high, the spot price falls and during shortages, the spot price rises. In the same way that individual households can lock in their electricity prices, electricity generators can hedge their electricity deliveries with various electricity retailers. This enables secure calculations and safeguards against price declines. On the other hand, you might miss a rise on electricity prices.
On November 1, 2011, Sweden was divided into four electricity price areas. In northern Sweden, electricity generation is greater than electricity consumption. However, in southern Sweden, more electricity is consumed than the amount generated, which means that electricity prices are higher in the two southernmost Electricity Price Areas. Wind power has a particular role to play in bringing new electricity generation to southern Sweden.
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