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Slide 3 of 8
Trade of power is done at Nord Pool and in the bilateral OTC (Over the counter) market.
At Nord Pool, the Elspot market can be considered as a combined energy and capacity market where contracts are traded on a daily basis for delivery the next day.        Most traders in the Elspot market send their orders on a daily basis using local installed software, and use of  EDIFACT messages transmitted by X.400 or Internet. Bidding on Internet is a supplement to the present EDI system, and will gradually replace the use of bidding via fax. Role players can choose between several competing software solutions to handle this task.

Eltermin is a financial market for price hedging/assurance and risk management when buying or selling electrical power. The purpose of this market is to enable buyers and sellers to predetermine the price of power. Trade in this market do not result in actual supply of power, but in a finacial settlement.        Traders in the Eltermin market send their orders either by making a telephone call to the Nord Pool helpdesk, or by using the client software Power Click. Power Click is the client in a client-server solution, using a closed network for communication and a prorietary application programming interface.       Electronic commerce on the Eltermin market was established in the autumn of 1996, and an average of two thirds of the trade volume is today traded by use of Power Click.

When role players trade at Nord Pool, Nord Pool is their counterpart. This means that Nord Pool is economically responsible for fulfilling the contract. This clearing service can also be used to clear bilateral contracts, if they are equal to the contracts offered in the Eltermin market at Nord Pool.

In 1998, Elspot and Eltermin represented approximately 20% of total power turnover in the Nordic power market and the value of this 20% was 19,5 billion NOK (close to 3 billion dollars).

The OTC market (Over the Counter) is a common name of the market operated mainly by brokers. Around 80% of the transactions are made outside the Nord Pool trading system. These contracts are normally made through brokers who to a large extent compete with Nord Pool. At least one of the brokers have an Internet based power exchange for finacial contracts.