What is a stock exchange electricity contract?

An exchange electricity contract is an electricity contract where the price of electricity is determined based on the market prices of the electricity exchange. In the electricity exchange, the price of electricity constantly varies according to supply and demand, and in the exchange electricity contract, the customer undertakes to pay for electricity according to the current market price.

An exchange electricity contract can be either a spot price contract, where the price of electricity is determined daily based on market prices, or a fixed price contract, where the customer pays a pre-agreed fixed price for electricity for a certain period of time. A spot price contract can be a riskier option because the price of electricity can vary a lot every day, while a fixed price contract gives predictability to the price of electricity.

The exchange electricity contract is usually suitable for large electricity users who are able to follow market prices and take the risk of price fluctuations. A stock-exchange electricity contract can offer an opportunity to save money if market prices are low, but on the other hand, it can also cause large costs if prices rise unexpectedly.

Sources: Energiavirasto, Energy Agency