The electricity exchange price (also called spot price or wholesale price) is the market price at which electricity is traded on power exchanges like Nord Pool. It changes every hour — or every 15 minutes since October 2025 — based on supply and demand. But this is only one part of what you actually pay.
Exchange Price vs. Your Final Bill
When you see a price of "5 cents/kWh" on Nord Pool or our service, that's just the wholesale energy component. Your actual bill includes several additional elements:
In this example, the exchange price is only about 37% of your total cost. The rest consists of regulated fees that don't change with market prices.
Breaking Down the Components
1. Exchange Price (Variable)
This is the wholesale market price from Nord Pool. It varies by hour or 15-minute interval and is determined by supply and demand through daily auctions. This is the only part you can optimize by shifting your consumption to cheaper times.
2. Supplier Margin (Usually Fixed)
Your electricity supplier (retailer) adds a small margin for their services. On spot-price contracts, this is typically 0.2–1.0 ¢/kWh. Some suppliers charge a monthly fee instead of (or in addition to) a per-kWh margin.
3. Grid Fees (Regulated)
You pay for using the transmission and distribution network. These fees are set by network operators and approved by regulators. They're the same regardless of your electricity supplier or when you use power. In some countries, there are time-of-use grid tariffs (cheaper at night), but most residential customers pay a flat rate.
4. Taxes and Levies (Regulated)
Governments impose various taxes on electricity: energy taxes, renewable energy surcharges, security of supply fees, and more. These vary significantly by country.
5. VAT (Percentage)
Value-added tax is applied on top of everything else. Rates differ by country:
| Country | Standard VAT | Notes |
|---|---|---|
| Estonia | 24% | — |
| Latvia | 21% | — |
| Lithuania | 21% | Reduced rate for heating possible |
| Finland | 25.5% | Increased from 24% in 2024 |
| Sweden | 25% | — |
| Norway | 25% | Reduced rates in some northern regions |
| Denmark | 25% | — |
Why the Exchange Price Matters Most
Even though the exchange price might be only 30–50% of your total bill, it's the only component you can control through your behavior. Consider this:
- Grid fees are the same at 3 AM and 6 PM
- Taxes don't change based on when you run your dishwasher
- Your supplier margin is typically flat
But the exchange price can swing dramatically:
- Night prices might be 2–3 ¢/kWh
- Peak evening prices might be 15–30 ¢/kWh
- During extreme events, prices can exceed 100 ¢/kWh or even go negative
How to Read Prices on Nord Pool
When checking prices on Nord Pool's website or our service, keep these conversions in mind:
- Nord Pool shows €/MWh — Divide by 10 to get cents per kWh (e.g., 85 €/MWh = 8.5 ¢/kWh)
- Prices are in CET timezone — Add 1 hour for Finland and the Baltics (2 hours during summer)
- Prices exclude VAT — Our service adds VAT automatically for your region
Types of Electricity Contracts
Spot Price Contract (Variable)
You pay the hourly (or 15-minute) exchange price plus a small margin. Your bill varies month to month based on both your consumption and market prices. Best for those who can shift consumption to cheaper hours.
Fixed Price Contract
You pay a locked-in price per kWh for the contract period (typically 1–3 years). Provides predictability but you can't benefit from low market prices. Generally more expensive on average, as suppliers add a risk premium.
Hybrid / Capped Contracts
Some suppliers offer spot-price contracts with a price ceiling. You benefit from low prices but are protected from extreme spikes. The cap comes at a cost (higher margin or monthly fee).