Nordic energy markets: intraday and balancing shifts in 2025

The Nordic power system and its electricity market have always been closely linked and in recent years, both have faced profound change. The biggest shift came on 30 October 2024, when the day-ahead (DA) market switched from the long-used Available Transmission Capacity (ATC) method to Flow-Based Market Coupling (FBMC).

What is the difference? ATC offers a simplified, almost schematic view of the grid, while FBMC captures its real-world complexity, producing market results that align more closely with physical reality. The new approach has boosted cross-border flows in the DA market, maximising social welfare, but it has also left less transmission capacity for subsequent stages, such as the intraday and balancing markets, which still run on ATC.

In these later markets, capacity depends entirely on what’s left after Day-ahead (DA) allocation, with no dedicated reserve. That makes quick reactions vital, especially in a Nordic system increasingly powered by variable renewables. Intraday traders must rely on updated forecasts and imbalance price expectations to act fast. Spotting an unexpected surplus in Finland, for example, and selling it intraday (ID) markets can make the difference between a balanced system and extremely low imbalance prices.

With the shift to FBMC now in place, the question is: how has this affected the capacity available for ID trading, and what can market participants learn from the data so far?

Key takeaways

In the past year, since the go-live of Nordic FBMC in the DA market, we have seen various interesting trends and pattern. The trends have not been limited to the DA market where this change was implemented, but we have also observed its impact on subsequent markets in the market timeline.

Post Nordic FBMC go-live, there has been decline in the cross-border capacities allocated to the intraday and balancing markets, while more capacities are allocated to the DA market. The market is designed such that the actors get to trade based on their expectation of the future. In order to best utilise the opportunities and optimise the trading decisions, it is advantageous to know how the capacities would look like in the upcoming market stages. Therefore, we use the added market intelligence from DA FBMC domain to derive insights into the intraday capacity limitations.

Furthermore, the decline in intraday continuous volumes seems to be partially compensated by the rise in the intraday auction volumes. The rise in ID auction volumes has been more visible after the go-live of new Nordic balancing model on 4th March 2025.

Clearly, the Nordic balancing market has undergone a significant change in the way it functions since 4th March 2025. While understanding the balancing activations and price formation are still work in progress for most, this blog sheds light on some of the factors that can be crucial to better prepare for the imbalance spikes.

At the end, better real-time data sharing, transparency, and active collaboration between transmission system operators (TSOs) and market participants will be key to ensuring stability and fairness in this evolving market. 

Keep reading for the full analysis, including real-world examples and tips on what to look out for when it comes to spotting significant market events before they happen.

Comparing intraday cross-border capacities

In this section, we dig into the details of the cross-border intraday capacities across Nordics by referring to the historical data. We analyse the shift in the pattern before and after the Nordic FBMC go-live last year. We also investigate how the data published in the FBMC domain can provide initial hints on cross-border capacities limitations for intraday timeframe. At the end, we also uncover the potential improvements in the calculation methodology to avail more capacities for ID/balancing market trading.

1. Decline in intraday capacities?

Figures 1 and 2 show hub-to-hub capacities for DK1–NO2 and DK2–SE4 from January 2024 to July 2025 at H-8, the point in time when most intraday liquidity arrives. Import capacities towards DK2 were already limited, and since late October 2024, export capacities to SE4 have dropped sharply, while the decline towards NO2 has been more gradual.

As the figures above only give a limited perspective of the changes in the capacities, Table 1 gives a more comparative overview of various borders across Nordics. Note that the import and export capacities are in MW. The data in the table covers a period of nine months before and after the go-live of Nordic FBMC. The given results are the average of the hub to hub capacities released at H-8 during the period of these nine months.  

In the table, the percentage decline is reported as positive while the increase is negative. On certain borders with countries outside of the Nordics, there has been rise in the ID capacities and with NO1-NO3. The rest of the borders have experienced decline in capacities.   

2. Early indicators for limited cross-border intraday capacities

From the previous section, it is visible that there has been a decline in cross-border capacities on most borders for the intraday market.

As the availability of intraday capacities play a major role in determining the strategies for trading, it is important to get early indicators of any limitation in the cross-border capacities.  

One of the ways to determine early whether a Critical Network Element with Contingency (CNEC) is going to limit the intraday capacities is to check the Remaining Available Margin at the Market Clearing Point (RAM@MCP). For a given CNEC, RAM@MCP can be calculated using RAM, Power Transfer Distribution Factor (PTDF) and Net Position (NP) of a Bidding Zone (BZ) as follows:

RAM@MCP = RAM – ΣBZ(PTDFBZ x NPBZ)

If the RAM@MCP comes out to be negative then it is already an indicator of a CNEC limiting the intraday capacities.

Another way to dig into the details would be to explore for which CNEC is the PTDF threshold violated. After the feedback on limited cross-border intraday capacities, the Nordic TSOs have moved the threshold to 3% subjected to monitoring of system security.

Fig. 3 shows an example from the week of 13th July where the daily count of the number of hours when there is a unique limiting CNEC lying within or in between two bidding zones is illustrated. The CNEC might be limiting the intraday capacities for only certain hours of the day and the pattern can change from day to day. For example, the CNEC in NO5 seems to be consistently limiting for 24 hours per day, whereas the CNEC is SE3 is limiting for more than 20 hours on 16th and 18th July but relatively fewer hours on rest of the days.

As this data on the DA FBMC domain is already published in the morning on D-1, it can help with providing an early insight for trading strategies in the sequential short-term markets.

Investigating one of the bidding zones, NO5, with the most number of limiting CNEC hours, we see which borders are limited and how often for trading with NO5 on 13th July. Fig. 4 below shows this:

Verifying the initial estimates with the released hub-to-hub capacities:

In Fig. 5, we can view the hub-to-hub capacities at H-8 for NO5-NO1 and NO5-NO2. Both these charts verify the reduced capacities on the borders of NO5 for ID trading. It also confirms our initial estimate of capacity limitations on the NO5 borders.

Future steps: Learning from our neighbours

The Core region and formerly the Central Western European (CWE) capacity calculation region has been operating the DA market with FBMC principles for years. In May 2024, they launched an update to their ID capacities allocation. IDCC(b) was launched in end of May 2024 where a recalculation of FBMC domain is performed based on DA congestion forecasts.

On the other hand, IDCC(a) which went live in June 2024, does not create a new FBMC domain, but uses the leftover capacities from DA market. The DA market is solved with the FBMC domain with two days-ahead congestion forecasts.

On 25th June 2025, the new intraday capacity calculation stage, IDCC(c) went live in the Core capacity calculation region. This is a new stage in the intraday market capacity recalculation after IDCC(a) and IDCC(b).  

A detailed timeline with these intraday recalculations can be found in Fig. 6.

IDCC(c) works by developing a new flow-based domain based on updated intraday congestion and other forecasts by the TSOs. As the intraday markets work on ATC method, from the recent FBMC domain, ATC extraction is performed and the new ATC is released to the market. The Net Transmission Capacity (NTC) is calculated from the ATCs for SIDC and the already allocated capacities for both directions for the borders.

In this case, for IDCC (c), the capacities are released at 03:45 for the intraday continuous capacities of the same day from 06:00 and IDA3 capacities from 12:00.

IDCC(c) uses updated forecasts. During the extraction performed, the aim is to redistribute capacities fairly across all borders. Therefore, we can observe the borders that get negative capacities in IDCC(a) and IDCC(b), then turn out to be positive in IDCC(c ) after a bit more than one month of operational data. One such example is shown in Fig. 7.

In the Nordics, such a recalculation of the FBMC domain is not yet performed. Therefore, we miss out on the opportunity to update (and in several cases) release more intraday capacities. Hopefully, this type of an update will be implemented - which can serve as a ray of hope for those borders that have suffered the most.

Trends in intraday trading volumes

With the decline in the cross-border intraday capacities discussed in the section above, it is important to also review the impact on the ID volumes. We will also discuss the trends in terms of new possibilities to trade in the intraday markets through auctions and 15 minute continuous ID products.

1. Change in the continuous intraday volumes

At first, we begin with the discussion around the ID volumes traded, as well as the ways in which they have changed before and after the Nordic FBMC go-live at the end of October 2024. The other significant, recent change in the Nordic market is the new Nordic balancing model, which went live on 4th March 2025. More on that in the last section of this blog.  

Fig. 8 and Fig. 9 show the EPEX import-export volumes in the southern Swedish bidding zones, SE3 and SE4. We can observe changes in the trading volumes after the go-live of Nordic FBMC. The volumes seem to have reduced in general. However, occasionally they match the highest volumes traded in the past. These are just some examples. For a more detailed overview, the volume changes in both the power exchanges and for all the Nordic bidding zones are compared in Table 2.   

From Table 2, we can see that the volumes traded in the continuous ID market have increased in some bidding zones and reduced in some others. The change can also be seen differently in the two power exchanges. Overall, the Norwegian bidding zones have seen a net decline in traded volumes.

For two of the Swedish zones, SE1 and SE4, the net volumes traded have increased, while for the other two, they have declined. Volumes traded in both Finland and Denmark have significantly increased after FBMC go-live.

2. Intraday auction volumes

Intraday auctions were introduced last year in June. There are three auctions. The first one takes place at 15:00 CET on D-1, the second at 22:00 on D-1 and the last one at 10:00 CET for same day delivery. Traded volumes have slowly started to rise since the introduction of FBMC. After the go-live of the new Nordic balancing market model in March 2025, traded volumes have significantly increased in several Nordic bidding zones. Figs. 10, 11 and 12 show the ID auction volumes

3. Launch of 15 min intraday products

On 18th March 2025, the trading for 15 minute cross-border ID products was launched in the Nordics for delivery starting from 19th March 2025. This change allows the market to trade at a higher resolution and thereby generate results which can be closer to the reality. It is particularly important for a system with growing levels of intermittent renewable energy sources in the grid. It also allows order matching with other regions outside of the Nordics where quarterly products are also available, facilitating access to larger pool of liquidity.

Fig. 13 shows the trading evolution of the product at 14:15. It shows both the quarterly and hourly product. There are lower volumes traded for the quarterly product compared to the hourly product. In this case, the quarterly product was traded at a much lower price than the hourly product.    

Even though the volumes traded in the quarterly product are lower compared to the hourly product, at times, we observe that it follows the market trend much better in terms of what’s coming next. This helps with understanding the scarcity in the market and can be a proxy for the imbalance prices.

The motivation behind investigating the intraday market dynamics is that it will help us move on to understanding the next market stage, which is balancing markets and imbalance settlement.

Fig. 14 shows an example of the imbalance price spike being detected beforehand - in the intraday market orderbook depth chart. This chart is for the quarterly product at 8:00 EET (Settlement period 33) for 6th June 2025. The corresponding imbalance price reached 990 EUR/MWh for this interval and for the next one, it was 1068 EUR/MWh.

Impact on Nordic balancing markets  

On 4th March 2025 the Nordic balancing market underwent a major transformation, driven by the growing share of variable renewable energy and the need for greater system flexibility. The main changes included the launch of the automated manual Frequency Restoration Reserve Energy Activation Market (mFRR EAM) a move towards area-based balancing to integrate with Europe’s cross-border MARI platform, as well as the shift from 60-minute to 15-minute market resolution for more precise matching of power supply and demand.

These adjustments, along with reduced bid sizes, respond to tighter local reserve needs following FBMC. While automation improves efficiency, it reduces human oversight, potentially increasing the exposure to volatility and extreme prices, as seen in recent times.

1. Imbalance price formation

Historically, the imbalance price has been set in the Nordic bidding zones solely based on the mFRR activations. Today, the imbalance prices are set by the need of a specific bidding zone, rather than the activation in the bidding zone, as these two can be different.

In Sweden and Norway, due to the lack of aFRR energy market (and PICASSO) the imbalance price is still decided by the mFRR energy market.

However, in Denmark there have been changes in the imbalance price determination due to the launch of PICASSO. In Finland, this had already changed with a local aFRR energy market first and further when joining PICASSO in March this year. If you are interested in reading more details on Picasso, please see the blogposts about Denmark and Finland.

Balancing markets can still be cleared together if there is cross border capacity, but the imbalance prices set are determined by the situation in a given bidding zone. Therefore, the relation between balancing market prices and imbalance prices is getting more complicated to comprehend. 

2. Trends in the imbalance prices

After the changes in the Nordic balancing market in March 2025, imbalance prices have been quite volatile and extreme at times. Fig. 15 shows the imbalance prices in all the Nordic bidding zones before and after the market change.

Fig. 16 and Fig. 17 compare the correlation between the Nordic imbalance prices before and after the switch in March 2025. It shows that the correlation between Danish bidding zones has weakened, both amongst themselves and with the rest of the Nordic zones. The only zones where the correlation has increased since March, are the Swedish zones. The Norwegian zones NO1 and NO2 have mostly retained their correlation, while it has reduced by more than half with NO5. The strong correlation between NO3 and SE1 has disappeared since March.

3. Challenges in foreseeing imbalance price spikes

When imbalance prices in some Nordic bidding zones have moved from extremely negative to positive values in a matter of hours, this has created challenges for market actors attempting to foresee such spikes. The reasons for this range from limited transparency, delayed data publication and the challenge for smaller players to adapt.

However, in the recent months, we do observe some improvement. More data is being shared by some TSOs regarding balancing needs, which is crucial in setting the imbalance prices with the new model.  Data publication delays have also been reduced.

Several factors have also caused changes in the balancing activation pattern. Limited cross-border transmission capacities (due to being strictly followed by the new algorithm) also plays a major role in local activations. At least to some extent, this has shifted the focus on to more local activations instead of sharing of reserves across Nordics.

There can be occasional price spikes when a zone is isolated, or when it shares even a minor cross-border capacity with another zone under deficit or excess. The real-time cross-border capacities that go into the algorithm are fundamental in determining these price formations. However, the TSOs do not yet publicly disclose this data.    

4. Opportunities and ray of hope

The shift in the balancing markets and imbalance price patterns shows that the market values those who can detect the price signals sooner and act on them.

Some of the early indicators of the price spikes can be sensed through the urgent market messages, fuel mix, forecasts, intraday trades, bidding curves (wherever possible) and cross-border capacities.  

We have shown 3rd July 2025 as a case study above. In this example, the imbalance price spiked to 4691 EUR/MWh from 1:15 to 1:45 CET in DK2. Fig. 18 shows the various factors which explain this spike, as well as how to better prepare for it. The lack of wind power available in this time period was compensated for by gas, oil and coal power generation.

As a result, all the available upward mFRR activation resources were exhausted. Importing capacities were negligible towards DK2. The continuous intraday trading for quarterly product (at 13:15 for example) was already indicating this spike with the sharp rise in the median sell price. PICASSO prices were fairly moderate, so they did not play a role in the imbalance price setting.

We have observed more stable prices from July onwards (compared to the previous months) after the market shift. Part of the reason could be that the market is starting to adapt to the new change. Some TSOs have also actively played a role in applying tolerance bands to reduce the number of dominating hours.

For example, Energinet has applied a 25 MW tolerance band on scheduled activations. Such changes have only been made locally by some TSOs. It would be fair to have such changes at the Nordic level. There are already plans for such updates to the algorithm with elastic demand for example.

And if that happens, you'll know where to come to find out about the impacts!