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Why electricity prices differ between countries on the same exchange
On our map, neighbouring countries often have completely different colours: Finland green, Estonia red; northern Sweden almost free, southern Sweden expensive. The auction is one and the same – the differences are made by the wires.
One auction, many prices
Europe’s day-ahead market is divided into bidding zones. Usually a zone is a country, but Sweden is split into four (SE1–SE4), Norway into five (NO1–NO5), Denmark into two (DK1, DK2), while Germany and Luxembourg form one joint zone. The algorithm calculates a separate price for each zone, taking into account how much electricity can be moved between them.
When prices match and when they don’t
If there is enough spare capacity on the lines between two zones, electricity flows from the cheaper zone to the dearer one until the prices equalise – the zones are “coupled”. If the line is full, nothing more can be moved and each side keeps its own price. That is exactly what the flow arrows show: the arrow points from the cheaper side to the dearer one, the number is megawatts.
This is why Finnish and Estonian prices are often identical in the morning, yet in the evening, when the Estlink cables (about 1,000 MW in total) are loaded to the limit, Estonia, Latvia and Lithuania pay considerably more than Finland.
Why Norway and northern Sweden are cheap
Almost all of Norway’s electricity comes from hydro plants with reservoirs; northern Sweden runs on hydro and wind. They produce more than they use, but the lines southwards are not unlimited. As a result SE1 and SE2 often sit at a couple of cents while SE4 (Malmö) approaches German levels, because it has cables to Germany, Poland and Lithuania and “breathes in” the continental price.
Why the Baltics are dearer
The Baltics do not have enough cheap generation of their own in the evenings and in calm weather, and the import routes are limited: Estlink from Finland, NordBalt from Sweden, LitPol from Poland. When they are full, local gas plants set the price. The good news: new solar and wind capacity, batteries and the synchronisation with the Continental European grid completed in February 2025 are gradually changing the picture.
Germany: from negative prices to the evening peak
Germany has enormous solar and wind capacity. At sunny midday, supply exceeds demand and the price drops to zero or below; in the evening, when the sun sets, gas plants have to be switched on and the price jumps. That is why the daily curve of Germany (and of the Netherlands, Belgium and Austria coupled to it) is U-shaped, while Norway’s is almost flat.
How to read the flows on the map
- Arrow – electricity flows from one zone to another; the number is megawatts right now.
- A country’s window lists all of its connections and the total import or export.
- If an arrow runs from a dearer zone to a cheaper one, that is not an error – flows are set by the state of the whole network, not just by the prices of two neighbours.
What changes this
Planned new connections (for example a third Estonia–Finland cable, Estlink 3, and the Lithuania–Poland Harmony Link), batteries that shift midday solar into the evening, flexible demand and new offshore wind. Each of them narrows the price gaps. While they exist, they can at least be used – see how to use the cheapest hours.