The Nordic power market

The Nordic power market and the power exchange Nasdaq OMX Commodities (formerly Nord Pool) is an important contribution to the European energy markets. Nordic power prices are mostly influenced by local weather condition, such as temperature and precipitation, and less by traditionally economic factors. The price movements will therefore have low correlation with other asset classes.

Nasdaq OMX Commodities is a traditional marketplace where power producers, industry, traders, and distribution companies meet. From an investment perspective, the Nordic power market is interesting because of its independency to other assetclasses, high price volatility (historically the second most volatile market after the coffee market) and 

Nordic Power market prices are mostly influenced by weather condition, such as temperature and precipitation, less by traditional economic factors. Price development is correlated with temperatures and the hydrologic situation in the region. Appr. 55 % of the electricity production in the Nordic region is based on hydropower, which output is highly correlated with precipitation levels. Over the past years, prices for emission and continental power prices have played a greater role in price formation.