Spot price contracts
What is the spot price tariffs on power?
Spot price is simply described as the price of electric power for physical delivery the next day. A spot price agreement is based on the same price the vendors purchase the electricity for. The difference between the spot price and the purchase price is that the spot price is calculated from an average price per hour over a month, while the purchase price is the actual price per hour. Therefore, spot prices, in this case, will be less expensive. Spot price is a current price associated with the Norwegian market and is calculated by the Nord Pool ASA power exchange every single day and will therefore vary and be constantly changing. That is, the electricity price paid to the suppliers is regulated according to how it is located on the power exchange, in addition, there will be a fixed fee as well as any fixed installments paid to the suppliers based on their kWh, either at a fixed price, one charge per kWh or both.
Calculation of spot price
The calculation of the electricity price is based on a purchase and sales announcement of the population for the next 24 hours. This again means that it is simply the market and the population who decide what the price will be each day. Since the spot price, as said, is linked to the power prices, one would have to expect large fluctuations between the seasons. This is because electricity prices change as needed and prices will naturally be higher in the cold winter months as there will be much lower temperatures and the need to use more power increases as this while in summer prices will decrease significantly when the need for power is sinking with warmer and longer days. This is something to be considered when choosing a spot price, but looking at this over a long period of time, spot prices will pay off, and it turns out that it will be the cheapest option if you choose a good spot price deal . It is also possible to save a lot of money if it turns out that it will be a mild winter and the need does not get too high. Here, those who have chosen other power agreements will lose money. Spot prices also have a separate calculation for each place in the country, so the price may, for example, be higher in Tromsø than it is in Oslo, and vice versa. This is because there may be milder winters in the east than in the north, and the needs are different and must be calculated from it. It may also depend on other different conditions, such as error situations. What tomorrow’s price will be available is available approx. at 12:30 every day and you can go to Nordpool to check and keep up to date on the prices to get an overview and to be aware of the power usage the days the price is high so you do not be surprised when the electricity bill comes. Each supplier pays just as much to purchase power and when choosing a power supplier and it’s the spot price you’re looking for, you only need to look at each vendor’s surcharge as well as the spot price to find the vendor that delivers the cheapest price agreement .
Spot prices so far this year
Spot price power agreement compared to traditional deals
Whether a spot price deal is right for your household will depend on a number of factors and it is valuable to compare spot prices with other types of power agreements. While spot prices will give potentially lower prices when spot prices are low, the same goes in the opposite direction, when the spot price is right, the total electricity bill will also be right. Regarding which power agreement will provide greater savings in the long term, this will depend on a number of factors related to usage patterns, along with future price differences – and consumers must weigh these factors in relation to their individual household needs. If you are considering a spot rate agreement, we recommend that you consider the following:
- A budget for fluctuations in power bills, which will sometimes be higher than if you had a fixed price deal.
- Uses less power at times as the spot price is generally higher (for example, switching to alternative heating methods like gas and wood)
- Temporarily reduce power consumption due to particularly high prices by using less power.