System price different from area price
There are two situations that can lead to inquiries from interested market participants.
- How can the system price be different from the area price in an hour where all bidding areas have equal prices?
- How can the system price be lower or higher than all area prices in one or several hours?
In this price calculation, there are mainly two things that may lead to a higher (or lower) system price than all area prices, in one or several hours during one day.
1) Block order
- A block order is valid for a certain amount of consecutive hours within a day. The block order may be accepted if the average price in these hours is equal to or better than the price condition in the block order.
- The system price and the area prices in hour A are influenced by the selection of block orders that are accepted, and which includes hour A in each of the two calculations. So a block order spanning over many hours may be accepted in one of the calculations and not the other.
In a situation where you have equal prices for all areas in one or more of these hours, the system price may be either higher or lower than all area prices for these hours. This depends on whether the block order making the difference is a purchase- or a sales block order.
2) Flexible hourly orders
- The flexible hourly order is not specified to any specific hour, but may be accepted in the hour where the volume is needed the most.
A flexible hourly order may therefore be accepted in hour A in the system price calculation, but in a different hour in the area price calculation. Thus the sales volume accepted in hour A in the system price calculation may push the system price for this hour to be lower than all the area prices for the same hour.