316 000 GWh 316TWh

73%

45.6 TWh
26.0 growth from 2010

the nordic
blueprint
annual report 2011
 Nord Pool Spot operates the leading power
markets in Europe and offers both day-
ahead and intraday markets to its members.

316 000GWh
350 companies
from 20 countries
trade on Nord Pool
Spot’s markets. In
2011 Nord Pool Spot
had a total turnover
of 316 terrawatt
hours (TWh) of
power.

316TWh

73% 45,6 TWh

26,0 growth from 2010

contents the nordic blueprint

04 Key facts and figures For nearly 20 years we have developed and We are proud to offer efficient, trustworthy,
proven and successful energy markets. In recent
07 Highlights
10 cEO's observations
perfected the delivery of robust, secure years we have taken the Nordic day-ahead auction

13 management team and transparent energy trading markets in ‘blueprint’ to the Baltic states and to the United
Kingdom and are determined to play our part in
14 N2EX: Powering the UK market the nordic countries and beyond. realising unified energy trading across Europe.
18 A blueprint for Europe
22 How does the day-ahead auction work?
24 A day at the trading desk
30 Directors report
35 Financial report
Key facts and figures

Key facts and figures

Market share Total traded volume Members elspot and elbas traded volumes in tWh

73% 316 350

tWh
of the total consumption of power in the including the day-ahead auction
Nordic market, excluding Estonia. at N2EX in the UK
Our power trade 300
growth including both
the day-ahead market 250
Elspot in the Nordic
countries and Estonia, 200
and intraday market
companies from 20 countries 150
Elbas covering the
trade on our markets
Nordic countries as
100
well as Estonia and
Germany. 50

0
2004 2005 2006 2007 2008 2009 2010 2011

elspot turnover per country in tWh System price average price in eur/MWh

nord pool Spot annual report 2011

elspot volume 2011

294.4
300
■ Estonia The hourly system 60
■ Germany price is determined
250 at the point where all 50
■ Denmark
■ Finland supply and demand
200
■ Sweden tWh for the entire Nordic 40

■ Norway region within each

150 305.2 in 2010 30
hour meet, not taking
100 the trading capacities 20
between the bidding
50 areas into account. 10

0 0
2004 2005 2006 2007 2008 2009 2010 2011 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

elbas turnover per country in tWh elbas volume 2011 N2eX share of turnover N2eX turnover 2011 in tWh N2eX volume 2011 5

2.7 45.6
3.0
■ Estonia ■ Prompt and 50
■ Norway spot volume
2.5 2011: 26.9 TWh 40
■ Germany
■ Denmark ■ Day-ahead
2.0
■ Finland tWh auction volume
30 tWh
1.5 ■ Sweden 2.2 TWh in 2010 2011: 18.7 TWh 20 19.6 TWh in 2010

1.0 10

0.5 0
2010 2011
0.0
2004 2005 2006 2007 2008 2009 2010 2011
operations by location
Highlights 2011 January

highlights 2011
12
The NorNed interconnector
■ Nordic and Baltic market: day-ahead and intraday
between Norway and The Neth-
■ UK market N2EX: day-ahead and intraday
erlands is included in market
■ System provider for day-ahead and/or intraday
coupling between the Central West-
■ German market: intraday
ern Europe area and the Nordic
countries.

oslo Norway
Finland Helsinki
tallin Estonia 14 February 17 February 5 May
stockholm Sweden Nord Pool Spot introduces negative The three power exchanges Nord Launch of a new corporate website
prices on Elbas and reduces gate Pool Spot, APX-ENDEX and providing a more user-friendly pres-
closure on Elbas in Germany. Belpex announce the launch of a entation of data and information.
cross-border intraday market for
Copenhagen Denmark trading across the Dutch-Belgian
border.

london United Kingdom

May July September

nord pool Spot annual report 2011

24
The Nord Pool Spot Regulatory
Council is founded to provide a
forum for exchange of informa-
tion and discussion on market
development in the Nord Pool
History 1991: Norwegian power market
deregulated
fully integrated as Denmark joins
2002: Nord Pool Spot established as
Spot market area.
31
Nord Pool Spot breaks monthly
volume record both in Estonian
bidding area (500 GWh) and on
the N2EX day-ahead auction (1.1
TWh).
28
The two power exchanges Nord
Pool Spot and Epex Spot sign a
Letter of Intent to create a Joint
Venture. This will build and operate
a joint system platform for power
trading.

1993: Nord Pool established by the a separate company for short-term

norway was the first Norwegian Transmission System power trading
of the nordic coun- Operator (TSO) Statnett as ‘Stat-
2005: The Kontek bidding area in
nett Marked’
tries to deregulate Germany opens for both day-ahead
october october November
7

its power markets. 1996: Rebranded to Nord Pool
when the Swedish market joins, cre-
the energy act of ating the world’s first international
1990 formed the power market
basis for deregulation 1998: Finland’s market joins Nord
Pool
in the other nordic
1999: Elbas becomes the first inter-
countries. national intraday energy market
2000: The Nordic market becomes
and intraday power trading
2008: The financial market part
of Nord Pool is sold to NASDAQ
OMX Commodities
2010: N2EX launched by Nord Pool
Spot and NASDAQ OMX Com-
modities to offer a UK energy mar-
ket. Nord Pool Spot opens bidding
area in Estonia
1 12
The Euro becomes the official trad-
ing currency for the Nordic day-
ahead market Elspot.
SSE announces it intends to trade
100% of its generation and supply
volume through the N2EX day-
ahead auction by the end of March
2012. Effective immediately the
company will start to ramp up its
volumes.
1
Sweden is divided into four bidding
areas, a decision made by Svenska
Kraftnät (SvK) after legally bind-
ing commitments from SvK to the
European Commission.
“Today we look across
Europe to see the Nordic
73%
market ‘blueprint’ at work.“
Mikael lundin Ceo

nord pool Spot annual report 2011

316TWh
45,6 TWh 9
26,0 growth from 2010

73% 45,6 TWh

26,0 growth from 2010

Important projects
– diverse markets
2011 was a year that saw many of the important projects nord pool spot
had initiated in 2010 being adopted by, and incorporated into, the market.
Key projects that we had planned on paper began to come alive.
Clearly these projects are being implemented in very
diverse markets. But we find that the Nordic market
model – what we refer to as the ‘blueprint’ – can often
be successfully applied, while managing to accom-
modate different national market characteristics and
regardless of previous historical developments.
We have many years of experience in developing
secure, transparent and liquid day-ahead markets, pro-
viding an efficient public service for the common good.
Encapsulated in our day-ahead auction are tried and
tested criteria for an effi-
“With many years of cient and well-functioning
market.
experience learned from Among these criteria we
Nordic developments, place paramount impor-
tance on providing accurate
we want to play a leading information to the whole
role in the accelerating market to ensure transpar-
ency. We offer equal access
integration of the to market for all our mem-
European energy markets.“ bers to trade power and we
are the counterparty for all
trades; guaranteeing settlement and delivery, providing
a secure market and a credible power index price. We
work very closely with members, regulators, transmis-
sion system operators and governments to build a
trusted power market in order to improve both current
and future market conditions.
The various energy markets that we are currently
developing are in very different phases. In the Baltic
region we are in the process of initiating new projects;
in the UK we have just completed our first full opera-
tional year; while here in the Nordic region we are
ceo's observations
continuing to develop and improve our services in a
well-functioning market. Today we look across Europe
and see the Nordic blueprint at work.
Including the Baltics
One of the key areas in which we made major strides
nord pool Spot annual report 2011
during 2011 was the Baltic region. The processes
involved in bringing the Baltic countries into the Nor-
dic energy market have been politically initiated and
have combined well-coordinated work with enthusiastic
involvement and participation at ministerial and trans-
mission system operator levels.
Deregulation has been very important for the Baltic
region both to secure power supply and in realising the
ambition of establishing a credible power index price,
which is economically highly important.
We work in close cooperation with all Baltic mem-
bers to improve current and future market conditions
and maintain a focus on transparency of all price-
relevant information and in all issues related to market
11
operations.
Estonia has been included in the Nordic day-ahead
market since 2010. On 18 June 2012 we plan to open a
new bidding area in Lithuania. Latvia will follow. At the
same time cables are being laid from the Baltic coun-
tries to Sweden and Finland, completing the integration
of the Nordic and Baltic power markets.
N2EX in the UK
A completely different, but equally encouraging, story
applies to our market development in the United King-
dom. Here the markets were deregulated at around the
same time as in the Nordic region but, unlike in the
 ManageMent teaM
Management team

Nordic markets, no liquid power market developed.
Day-ahead trading has largely been bilateral in nature
with brokers acting as middlemen backed by organisa-
tions with substantial resources. This has created high
barriers to entry for small traders and also resulted in an
absence of credible power index prices.
The N2EX energy market in the UK was launched
in 2010 as a joint offer from Nord Pool Spot and
NASDAQ OMX Commodities. The UK energy sector
authorities have been pushing for the establishment of
a liquid market, and we aim to show that our Nordic
blueprint model is more efficient than the bilateral trad-
ing which currently dominates.
However, this involves making changes to an entire
We remain confident that the Nordic blueprint is the
right one to successfully move forward European energy
market integration by 2014. In the meantime we have
to continue to build understanding and support for the
day-ahead auction.
In September 2011 we signed a Letter of Intent with
Epex Spot, the operator of the day-ahead markets for
France, Germany, Austria and Switzerland, in order
to create a joint venture to build and operate a joint
system platform. We approached this as a strategic alli-
ance to establish common systems and operations for
the energy markets in Europe. To us this project is an
important step, with
substantial resources “We remain confident that the
stina Johansen
HEAD OF cOmmUNIcATIONS
Stina Johansen leads the department respon-
sible for corporate communications, including
strategic communication, media and stake-
holder relations, web communication and
branding. Stina has broad experience within
corporate communication from several com-
panies. She joined Nord Pool Spot in 2010.
Mikael lundin
cHIEF EXEcUTIVE OFFIcEr
mikael lundin has extensive and long stand-
ing international experience from the energy
Hans randen
DIrEcTOr EUrOPEAN INTEGrATION
Hans randen leads the department responsi-
ble for expansion into new markets and new
business affairs. Hans worked for Nord Pool
ASA from 1993 before joining Nord Pool Spot
in 2009, with trading as his main focus area. He
holds a master of Science degree in Electrical
Engineering and has been Nord Pool Spot’s
Director European Integration since 2010.
Marianne W. Jenssen
DIrEcTOr mArKETS AND OPErATIONS
marianne Wergeland Jenssen heads up our
department market operations, customer
Camilla Berg
GENErAl cOUNSEl AND HEAD OF mArKET
SUrVEIllANcE
camilla Berg is responsible for all legal mat-
ters, regulatory compliance and oversees the
market Surveillance department. She has
many years of experience from the law firm
Selmer DA, as well as holding the position of
general counsel in Think Global AS. camilla is
cand.jur. from the University of Oslo and has
been our General counsel and Head of market
Surveillance since 2009.
Ulf Kurtén
DIrEcTOr IT
Ulf Kurtén is head of the IT department and
responsible for all IT services and develop-

nord pool Spot annual report 2011

industry sector and that will inevitably take time. Nev-
ertheless some sound work has been carried out and
we are seeing good progress being made. During the
last quarter of 2011 trading on N2EX increased from
a market share of 2-3 per cent to 12-13 per cent. I am
pleased to see that we have succeeded in gaining the
confidence of members in such a short period. That is a
testament to the work of our small, but dedicated, UK
market team
In order to achieve further growth, an increase in
derivatives trading is essential. Increased trading in
derivatives will build confidence in day-ahead trading.
The two drive each other and will help ensure that trad-
ing takes place in an efficient, transparent and secure
power market – our ultimate goal wherever we operate.
European integration
Although we are, at heart, a Nordic business, at Nord
Pool Spot we have a vision that goes beyond country
borders. With many years of experience learned from
Nordic developments, we want to play a leading role
in the accelerating integration of the European energy
markets. The continuing integration of energy markets
under the auspices of the EU gives us an opportunity to
demonstrate that. That said, it is clear that this will be a
long-term, complicated process involving many partici-
pants. Progress may not be evident for some time.
devoted to the devel-
opment of a common Nordic blueprint is the right
business. Before taking his position with Nord satisfaction, new sales and product devel- ment within Nord Pool Spot. He has wide
Pool Spot in 2009 he was President of Vatten- opment. She has extensive international experience from financial services and the
IT solution designed one to successfully move fall Power consultant AB, having held several experience from the commodities business. Finnish energy market. Ulf’s most recent
different positions in the Vattenfall group. He marianne managed the financial markets position was Director IT Governance for Aktia
to ensure we improve
the services we offer forward European energy was educated at Stockholm School of Eco-
nomics, where he holds a master of Science in
in Nord Pool ASA before joining Nord Pool
Spot in 2010, and holds a master's Degree in
plc. Prior to this he held several management
positions. Ulf started as Director IT in 2011.
to our members. market integration by 2014.“ Business Administration. Business and Economics.
After some good
first steps we have, unfortunately, put this work on hold
after an inspection by the EFTA Surveillance Author-
ity and the European Commission, which began in
February 2012. We understand that the purpose of the
inspection is to investigate possible anticompetitive
effects in connection with the planned joint venture 13
with Epex Spot.
We have made no secret of our conviction that suc-
cessful European energy market development and
integration is a goal that we share with the EU and one
in which we believe we can play a leading role. We look
forward to proving that belief.
Going forward we anticipate that 2012 will prove to
be another exciting and eventful year. European energy
market integration is currently developing through
the Price Coupling of Regions (PCR) and North West
European integration (NWE) projects. With interest-
ing developments in the UK and the Baltic also on the
cards, 2012 looks like it will be another year to remem-
ber for Nord Pool Spot.
 “The success of N2EX and our aspirations

powering the uK MarKet

to assist in closer integration of European
power markets show the Nordic market
N2eX: ‘blueprint’ at work in a UK context.“

Powering the uK market

richard Sarti, Business development Manager, N2eX

2011 saw important new achievements in the uK power market driven by an

expanded offering from n2eX. our day-ahead auction index was adopted by
the wider market, having traded more than 18 tWh by year end. successes
like this left the door wide open for 2012.

N2EX ended 2010 having achieved two extremely posi-
tive landmarks in its first year of operation. The fledg-
ling UK power market had brought a very creditable
23 members on board and traded 21 TWh, well above
expectations.
the market would have to establish the day-ahead index
price as a robust figure, meaning it would have to focus
trading on the auction.
These changes in the way the UK market trades
electricity are essential if the United Kingdom is to

nord pool Spot annual report 2011

Our positive growth attracted numerous enquiries for
membership and left N2EX with a healthy pipeline of
prospective members to continue the market’s growth
and development into 2011.
In addition to its expanded membership N2EX also
saw an encouraging growth in volumes traded. This was
undoubtedly motivated by our members gaining confi-
dence in how the market was being operated. As 2010
gave way to 2011 N2EX was starting to see encourag-
ing growth not just in the prompt, but also in the day-
ahead auction.
After much deliberation N2EX identified the auc-
tion as the appropriate source from which to produce
a day-ahead reference price for power generated within
the UK.
This was another important landmark for the market
because it meant that our partner in N2EX, NASDAQ
OMX Commodities, could launch its UK futures con-
tracts benchmarked off the day-ahead index price. This
was also an important step for Nord Pool Spot since if
there was to be good liquidity in the futures market,
meet its obligations under the 3rd Energy package* and
form part of the integrated electricity trading market in
Europe, in particular the requirement relating to market
coupling. This requires the centralisation of physical
trading around a day-ahead index to develop a robust
price signal which will determine the direction of flow
on the interconnectors between countries.
This closely follows the model developed in the
Nordic markets to ease congestion on the transmission
cables and has been subsequently adopted by the wider
European market. The success of N2EX and our aspira-
tions to assist in closer integration of European power
markets show the Nordic market ‘blueprint’ at work in 15
a UK context.
These significant developments paved the way for the
setting of some ambitious targets for N2EX in 2011:
• 10 TWh on the day-ahead auction
• 25 TWh on the prompt
Only time, and some hard work on the part of the
N2EX team, would tell if these goals could be realised.

*The European Union’s Third Energy Package is a legislative package for an internal gas and electricity market in the European
Union. Its purpose is to further open up the gas and electricity markets in the European Union. The package was proposed by the
European commission in September 2007, and adopted by the European Parliament and the European council in July 2009. It
entered into force on 3 September 2009
 powering the uK MarKet
ship to the intraday market, volumes continued to grow. In June, N2EX
recorded its first week where trading topped a TWh.
In September we discussed with our members the potential of offering a
Gross Bidding-type product in the market.
Gross Bidding was a concept introduced in the Nordic markets around
2005. It was designed to encourage vertically integrated utilities (those
■ Intraday market ■ Prompt market ■ Day-ahead market
that both produce and consume power) to put 100% of their buy and sell
8 000 volume into the market. The result was increased trading activity in the
market, with the attraction of new members as companies became more
6 000
confident that electricity was being bought and sold at the market price.
The introduction of Gross Bidding saw volumes on Nord Pool Spot increase
from 150 TWh in 2006 to 250 TWh in 2007 reaching our highest annual
4 000
volume to date in 2010 of 307 TWh.
Under the N2EX proposal these utilities would commit to putting a cer-
2 000 tain amount of volume (both buy and sell) into the market. The purpose
here being to give greater depth in the market to the bid/offer stacks, thereby
bringing confidence to the many smaller participants operating in N2EX,
0
as well as demonstrate to the government and regulator that a robust UK
ST
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Ar

BE

BE

BE
market is evolving.
JU

GU
m

B
UA

JU
Ar

AP

TO
Em

m
NU

AU
Br

VE

cE
Oc
JA

PT
FE

DE
NO
SE

With another successful year behind it, N2EX closed 2011 having traded 45.6 TWh, 18.7 Ground breaking move gives volume boost
TWh on the day-ahead auction and 26.9 TWh on the prompt, with a total of 33 partici- In October we were delighted to welcome a ground breaking move from
pants trading on the market daily.
N2EX member SSE, which entered into this arrangement voluntarily,
before Gross Bidding had been formally introduced. This development
made national newspaper headlines in the UK.
“Attracting key

nord pool Spot annual report 2011

A benchmark for UK futures
2011 started strongly for N2EX; by the end of January NASDAQ OMX
Commodities had launched its UK Futures market, benchmarked against
the N2EX day-ahead auction. Meanwhile Koch Energy Trading and Vat-
tenfall became the first new N2EX members of 2011, getting the year off to
a great start.
And what Koch Energy Trading and Vattenfall had started, a number of
new members continued throughout the year, culminating in a total of 33
members trading on N2EX by year end. Our new members included a mix-
ture of large European utilities and banks, all trading on the physical market.
Intraday market – a major milestone
In April, continuing the goals of innovation and customer service which it
had initially set itself, N2EX launched the intraday market, enabling mem-
bers to balance their positions. This marked the final delivery for Nord Pool
Spot and NASDAQ OMX Commodities of the two companies’ commit-
ments set out in the original Request for Proposals submitted by the UK’s
Power Trading Forum.
This was a major milestone for N2EX, allowing it to deliver a complete
offering for trading in the physical UK electricity market; intraday, day-
ahead auction and prompt.
the UK adopts Gross Bidding
While the N2EX team continued its work to attract volume and member-
The outcome of this massive vote of confidence in N2EX from one of the
UK’s large vertically integrated utilities was a dramatic increase in trading
new members to volumes. As a result N2EX started to see weekly volumes on the day-ahead
N2EX got the year auction escalate, to the point where today the auction alone trades over a
TWh a week.
off to a great start. Now that Gross Bidding has been delivered by N2EX we have seen both
And that growth E.ON and Scottish Power enter into similar arrangements as SSE. All these
in membership members have committed to trade at least 30% of their annual generation
in the market.
continued
throughout 2011.“ UK authorities increase interest in N2EX
The N2EX team also increased its engagement with both energy sector
richard Sarti, Business regulator OFGEM and the UK government’s Department of Energy and 17
development Manager Climate Change (DECC) during 2011. Both of these important bodies
have published consultation papers that look at addressing liquidity in the
market, identifying investment signals and reducing barriers to entry.
Their interest in N2EX stems from the market’s establishment of a robust
index price for UK power, combined with its growing membership and
volumes. Both OFGEM and DECC are looking for ways to address con-
cerns over liquidity and access to the UK market. Nord Pool Spot has much
knowledge and experience to offer in this debate.
Two years on from its foundation, N2EX looks forward to the challenges
of increasing membership and liquidity in 2012, coupled with the drive for
closer links with European markets, with anticipation and confidence.

a blueprint for europe
316 000GWh
norway was one of the first countries in europe to deregulate its power
“With the European market, stepping away from state control and instead introducing free
power market competition. the norwegian power market was formally opened up to com-
landscape changing, petition when the norwegian energy act came into force on 1 January 1991,
2011 was a year of and the market started up in 1993.
intense discussions.“ The purpose of the Act was to ensure that the power
market is organised in a way that efficiently promotes
Marie Thuestad, director Sales
the interests of society, including any public and private
interests affected. In an open power market electricity
prices reflect the market situation, providing strong
signals about where capacity is needed, where produc-
tion needs to be built and where consumption increases
or decreases.
Today three quarters of all power traded in the
Nordic region is traded in the open market and the
73%
day-ahead auction. All large producers and consumers
participate and over the years a robust, efficient and
reliable market has developed. Today there is strong
trust in the Nordic system price, or the reference index
price, and daily prices reflect the market situation.
When prices are high in a well-functioning market,
the market will adjust according to conditions. People
and companies want to be more energy efficient, and
new investment will be made as it becomes economi-
cally profitable to build power plants and increase pro-
45,6 TWh duction capacity.
26,0 growth from 2010
developing the day-ahead auction
The Norwegian Water Resources and Energy Directo-
rate (NVE) has authorised Nord Pool Spot to organise
316TWh and operate the Norwegian power market. NVE is sub-
ordinated to the Ministry of Petroleum and Energy, and
is responsible for the administration of all Norway´s
water and energy resources as well as regulating the
power market. These regulations ensure that electricity
is transmitted at the right delivery quality and price,
and that the network is used and developed in a safe
and rational way.
a blueprint for europe
All the Nordic countries deregulated their power
markets in the early 1990s and brought them together
into a common Nordic market. Estonia and Lithuania
deregulated their power markets in the late 2000s.
It has taken years to develop the Nordic day-ahead
auction into a liquid, transparent and credible market
nord pool Spot annual report 2011
for trading power. A strong belief in this model and
close cooperation with all stakeholders through the
years has made the Nordic power market a target model
for the European Commission’s ongoing integration of
Europe’s power markets. Deregulation creates a more
efficient market, with exchange of power between
countries and improved security of supply. Available
power capacity can be used more efficiently in a large
region compared to a small one, and integrated markets
enhance productivity and improve efficiency.
An important role in the power market
Nord Pool Spot functions as the central hub in the 19
power market. Our role in providing liquid, secure and
transparent power markets is widely recognised. The
years of experience that we have creates a solid ground
for developing European power markets to meet future
challenges. We are determined to be the driving and
transforming force behind the development of an
already well-established day-ahead auction model.
With transmission capacity in place between the Nor-
dic countries, the European continent and the Baltics, the
power market covers large parts of northern Europe. This
means that power from many different sources– hydro,
thermal, nuclear, wind and solar – enters the grid. That in
turn ensures a more ‘liquid’ market, where large volumes
are traded daily, and a more secure power supply.

With this in mind, we spend a great deal of time
developing forums to meet and discuss with stakehold-
ers – providing an extremely valuable contribution to
our strategic and future development of the Nordic
power market blueprint.
Market development through cooperation
Nord Pool Spot has customer boards set up for the
Nordic and Baltic countries and for the UK. With these
important markets at different stages of development
the topics the boards discuss can differ greatly. Top tier
management from members and Nord Pool Spot are
represented on each board, with emphasis being placed
on lifting the dialogue to a strategic level.
The Customer Advisory Board is Nord Pool Spot’s
high level advisory body comprising power traders and
industry representatives.
“The Nordic/Baltic Customer Advisory Board is a par-
ticularly important tool for improving strategic dialogue
with our core members. It has an essential role in devel-
oping our offer to members and makes a valuable con-
tribution to our efforts to meet our public service goals,”
says Marie Thuestad, Director Sales at Nord Pool Spot.
With the European power market landscape chang-
ing, 2011 was a year of intense discussions with our
Nordic/Baltic Customer Advisory Board. We needed
to explore how to preserve the nature of our blueprint
model – the day-ahead auction – in the long term and
also examine key factors that will impact the market
and model as we see it today.
In the UK we have established a Market Council for
N2EX. This aims to provide greater insight into the
future development of our UK operation in discussion
with N2EX members. N2EX has only been operating
for a little over one year but has already managed to
secure a market share of 12-13 per cent of UK day-
ahead power trading.
“There were important debates at our UK Market
Council in 2011. These revolved around how to intro-
duce the day-ahead auction model to the UK market
and how to increase liquidity and strengthen the cred-
ibility of the day-ahead auction market index price,”
comments Marie.
“Our contribution has been to ensure that those mem-
bers operating with large production and purchasing
portfolios, who are vital to the market, see the benefits of
introducing a day-ahead auction market in the UK.
“We encouraged their involvement by offering them
similar products to those we developed in the Nordic
a blueprint for europe
market, providing incentives for day-ahead auction
trading.
“We have seen the N2EX market share increase from
CoopErAtIoN
2-3 per cent during the summer of 2011 to 12-13 per
Member of European projects such as Price coupling
cent during the final quarter. However, we still need
of regions and integration of North Western Europe
to grow confidence and volumes in our UK market. by 2014.
In 2012 we will be focused on the need to develop
European market coupling company, Emcc, Nordic-
and increase awareness of the day-ahead auction. That German market coupling.
will help us make a stronger impact on the market and Nord Pool Spot operates the N2EX market in the UK
attract new entrants to take part in establishing a trans- together with NAsAdQ oMX Commodities
parent index price for UK power.” Operating a cross-border intraday market together
with APX-ENDEX and Belpex.
Cross-border regulatory dialogue
Also in 2011 we established a Regulatory Council
involving the regulators in the Nordic countries and
Estonia. Regulation of the industry is taking place
nationally, while at the same time an international dia-
logue is also happening.
“The Regulatory Council serves as an important
foundation for our dialogue with national regulators in MEMBErs oWNErs
our domestic area,” says Camilla Berg, General Counsel UK market council Nord Pool Spot is 100 % owned by the Nordic trans-
and Head of Market Surveillance. customer Advisory Board mission system operators: statnett, svenska Kraft-
nord pool Spot annual report 2011
“Its main role is to exchange information between Product groups nät, Energinet.dk and Fingrid
Nord Pool Spot and the regulators concerning impor-
tant issues such as analytical work on market behaviour
and regulatory changes.”
The Council aims to assist national regulators in
the performance of obligations to monitor the energy
markets which evolve from the EU’s third liberalisation
package. In addition, it will help with any new obliga-
tions which might result from the expected EU regula- rEGUlAtors
tion on monitoring, transparency and integrity. Finally, regulated by Norwegian Water resources and
the Council exchanges general information on market Energy directorate (NVE) to organize and operate a
surveillance. market place for trading power
regulated by the Norwegian Ministry of petroleum 21
Improvement through feedback and Energy to facilitate the exchange of energy with
“It is important that we work to ensure that the day- foreign countries
ahead auction becomes understood and is successfully NordrEG: the organization for Nordic regulatory
applied in the Baltic area, the UK, and other new mar- authorities.
kets,” concludes Nord Pool Spot CEO, Mikael Lundin. regulatory Council with representatives from regu-
“The fact that new stakeholders from different regions lators in the Nord Pool Spot area and Nord Pool Spot
are actively taking part in our established dialogue is an executive management
important contribution to this development.
“The Nordic market is established and function-
ing well, but we still need to contribute continuously
towards ensuring that support for the blueprint model
is high. We can best do this by always improving the
services we provide to our members. That is a commit-
ment that we are determined to maintain.”
 how does the day-ahead auction worK?
How does the day-ahead
auction work?
the figure shows how power is traded in the day-ahead, elspot, market.
the power is traded during one day, for delivery on the next day.
12:00-13:00
Based on orders and
transmission capacity
the prices are calcu-
08:00-12:00 lated in the trading
Buyers and sellers enter system. the price is
their bids and offers calculated for each

nord pool Spot annual report 2011

into the trading system hour of the day 03:00 06:00 09:00 12:00 15:00 18:00 21:00 24:00

07:00 08:00 09:00 10:00 11:00 12:00 13:00 14:00 15:00

until 10:00 until 12:00

Before 10:00 Buyers plan how
power transmis- much power they 23

sion capacities are will need. sellers

given by the sys- plan how much
tem operators to power they will 12:00 12:45 13:00-15:00
each bidding area produce auction the prices are the trades are
in the market closes announced to invoiced between
the market buyers and sellers
 a day at the desK
a day at the desk 10:00
power transmission
nord pool spot’s day-ahead market, elspot, is an auction of power for capacities given by the
delivery the following day. this is europe’s most liquid day-ahead power system operators pub-
market, producing a robust and credible reference price. lished to the market.

08:00
There are around 350 buyers and sellers (called ‘members’) on Elspot. Most
trade power every day, placing a total of around 2,000 orders for power
contracts. In the mature Nordic power market, there is a great deal of pub-
lic interest in wholesale power prices, but few appreciate the complexity of Frequent orders
the process behind the formation of tomorrow’s electricity price.
Daily trading is driven by market members’ planning. A buyer, typically are coming in to
a utility, must assess how much energy it will need to meet demand the the trading desk.
following day, and how much it is willing to pay for this volume, hour by
hour. A seller, for example the owner of a hydroelectric power plant, needs
to decide how much he can deliver and at what price, hour by hour. These
needs are reflected through orders entered by buyers and sellers into the Els-
pot trading system. Prices are calculated at noon every day based on supply, Senior Trading Advisor Øystein Os.
demand and transmission capacity (how much power can be moved from
Trading Advisor Ellen charlotte

nord pool Spot annual report 2011

one area to another) and trades are agreed.
Stavseth.
Ensuring the smooth running of the day-ahead market is the job of a
dedicated team of specialists at Nord Pool Spot. Their working day is busy,
intense and complex – we invite you to follow the process at the trading
desk to find out more:

12:00
08:00-12:00 Controlling transmission capacities and orders
At 10:00 two Trading Advisors are controlling the power transmission
capacities given by the system operators to each bidding area in the market.
These capacities are then communicated to the wider market. Until noon Deadline for
frequent orders are coming in to the trading desk. All orders are handled
electronically, but our Trading Advisors are constantly on the phone,
submitting orders.
answering different inquiries.

12:05
25
“In the early days of Elspot we were on call all night,” comments Øystein
Os, Senior Trading Advisor. “Sometimes the phone would ring when I was
fast asleep. I’m glad to say that with greater technical sophistication and
automation that way of doing business is now history!”
order book
“We check hundreds of orders every day. The computer system also warns is sent to
us if the discrepancy in volumes/prices in an order exceeds a certain percent- european
age from one day to another, this is to make sure all orders are correct,” Trad-
ing Advisor Ellen Charlotte Stavseth says. All companies entering orders in Market
the trading system are responsible for the information in their bids being cor- coupling
rect. Mistakes can happen when members are entering orders. “An important
part of our role is to call and check if something looks wrong,” Ellen adds. company.
 a day at the desK
12:00 the day-ahead auction closes
Noon is the deadline for submitting orders for power which will be deliv-
ered the following day. A file with all orders is sent to the European Market
Coupling Company. This is because the Nordic market is connected to

12:45
Europe and the power flow between these markets has to be decided.
It takes up to 20 minutes to complete wholesale power price calculations.
All orders and capacities are fed into a specialised computer system which
calculates the price, based on an advanced algorithm. Put simply, the whole- all prices for the next
sale market price is set where sell and buy price meet.
day are communicated
13:00 prices are announced to the market to the market
Before 1pm all prices for the next day are communicated to the market. “We
publish one price for each hour in the following day,” Ellen explains. “There
is one price for each bidding area. All prices are published on our website
www.nordpoolspot.com where everyone can track Nordic power prices.”
“After the price is published we spend the next hour supporting what-
ever requests customers have,” adds Øystein. This may involve answering
detailed questions about prices and flows, re-sending results and publishing
the system price bidding curves.

14:00 trades are settled

At 2pm invoices are prepared and tasks related to the daily operations of
the Nord Pool Spot market are completed. Every day about 1 TWh is
traded through our trading desk at Lysaker, outside Oslo. When all the
Baltic countries are fully integrated into the Nordic energy market, that

12:15

nord pool Spot annual report 2011

figure will increase.
When our Trading Advisors have completed their daily trading tasks, they
bring their expertise to a number of different development projects, cus-
tomer visits and analysis work. They also closely monitor Nord Pool Spot’s price calculations
Elbas intraday market, where trading takes place around the clock. Annu-
ally energy valued at approximately NOK 140 billion is handled through
our trading system. “On the trading desk there is always something to work
on!” concludes Øystein.

14:00
27

trades are settled

 directors’ report 2011
316 000GWh

directors’ report

trade on Nord Pool Spot’s markets

350 companies from 20 countries
Financial report
35 Profit and loss account
36 Balance sheet
37 Balance
38 cash flow analysis
39 Notes to the accounts

73%

nord pool Spot annual report 2011

45,6 TWh 29
26,0 growth from 2010

316TWh

directors’ report 2011
the nord pool spot Group organises physical trading of power, offering
day-ahead and intraday markets to its members in all nordic countries,
estonia and in the uK. the intraday market also includes Germany.
The Nord Pool Spot Group comprises Nord Pool Spot
AS, the 100% owned subsidiaries Nord Pool Spot AB
and Nord Pool Finland Oy, as well as Nord Pool Gas
A/S, which is owned jointly 50/50 with Energinet.dk.
Since early 2010 Nord Pool Spot has, together with
its partner Nasdaq OMX Commodities, operated the
power market N2EX, which today is the leading power
market in the UK.
Nord Pool Spot AS has its main office in Lysaker, sub-
sidiaries in Helsinki and Stockholm and branch offices
in London, Copenhagen and Tallinn. Nord Pool Gas
A/S is located in shared offices with Nord Pool Spot in
Copenhagen.
Nord Pool Spot AS is licensed by the Norwegian Water
Resources and Energy Directorate (NVE) to organise
and operate a marketplace for trade in power and by the
Norwegian Ministry of Petroleum and Energy to facili-
tate the exchange of energy between Norway and other
countries. In addition, Nord Pool Spot communicates
with regulators in all Nordic countries, the Baltics, UK
and with the Agency for Cooperation of Energy Regu-
lators (ACER), on topics that concern facilitation and
development of the power market according to govern-
mental requirements.
Nord Pool Spot AS is owned by the transmission system
operators Energinet.dk (20%), Fingrid Oy (20%), Stat-
nett SF (30%) and Svenska Kraftnät (30%).
Nordic market Elspot and Elbas
2011 was a special year for the Nordic power market as
it went from a rather strained situation on the supply
side during the first quarter, to a significantly wet sum-
mer and autumn with surplus in the hydropower reser-
voirs, and lower power prices. Nord Pool Spot holds a
strong position in the Nordic market with a total turno-
ver in Elspot and Elbas of 297.1TWh, including the
Estonian bidding area in which the turnover was 4.6
TWh, an increase of 1.8 TWh compared to 2010.
Nord Pool Spot’s turnover fluctuates with variations
in underlying consumption. In 2011, turnover in the
Elspot market was nearly 3.5 per cent lower than in
in 2010, mostly because of lower consumption in the
Nordic area. The market share of Nordic consumption,
adjusted for export out from the Nordic area, was 73.1
per cent (preliminary) in 2011 compared to 74.4 per
cent in 2010.
The traded volume in Elbas was 2.7 TWh in 2011 com-
pared to 2.2 TWh in 2010.
Statistics 2010 2011
Elspot turnover 305.2 TWh 294.4 TWh
Elspot as share of consumption 74.4% 73.1%
Elbas turnover 2.2 TWh 2.7 TWh
2011 proved to be a significantly different year from
2010, with temperature and water inflow to the res-
ervoirs being the fundamental difference. The filling
season started out with record low reservoir levels, but
a milder and earlier spring coupled with heavier rainfall
later in the season helped replenish these levels from an
average of 20% below the median value by the end of
Bente Hagem
chairman of the Board
Executive Vice President commer-
cial Division, Statnett SF
Bente Hagem was elected substi-
tute to the board in 2002 and mem-
ber of the board in 2007.
Bo Krantz
Board member
Senior Executive Vice President and
cAO, Svenska Kraftnät
Bo Krantz was elected member of the
Nord pool Spot board in 2002.
March to 2% above the median value in early June. In
addition a milder autumn resulted in lower consump-
tion throughout the whole of the Nordic area, leaving
reservoir levels exceeding the previous maximum curve
from the period 1990-2006.
From 1 November 2011 Sweden was divided into
4 bidding areas: SE1 (Luleå), SE2 (Sundsvall), SE3
(Stockholm) and SE4 (Malmö). The implementation
of 4 bidding areas in Sweden was a resource demand-
ing project for Nord Pool Spot, which required a high
level of coordination both towards transmission system
operators and members. A thorough project planning
and system testing phase prior to launch secured the
implementation of 4 bidding areas in Sweden to our
members’ satisfaction.
The average Elspot system price was 47.05 €/MWh in
2011 compared to 53.06 €/MWh in 2010. The number
of hours with common price in Elspot for the whole
Nordic region was 15% of all hours in 2011 compared
to 11% in 2010.
Based on Nord Pool Spot’s statistics for the weeks 1-52
in 2011, compared to the same period in 2010, we can
make the following statements regarding the Nordic
power market:
• Both consumption (-4.8 %) and generation (-1.1
%) were reduced in the Nordic region in 2011
compared to 2010.
• Nordic hydro power generation was approximately
203 TWh in 2011 compared to 194 TWh in 2010.
directors report 2011
Juha Kekkonen
Board member
Executive Vice President, Fingrid Oyj
Juha Kekkonen has been a member of
the Nord Pool Spot board since 2002.
søren dupont Kristensen
Board member
Vice President Electricity market,
Energinet.dk
Søren Dupont Kristensen was elected
member of the board in 2011.
• Total inflow to Nordic reservoirs was as much as 242
TWh in 2011 while in 2010 it was 175 TWh.
• By the end of the year the filling level in the hydro
reservoirs was 78.6% compared to 45.0% in 2010.
The median level is 70.1 %.
• The Nordic region had a net import in 2011 of 5.3
nord pool Spot annual report 2011
TWh while in 2010 the net import was 19 TWh.
The Elspot area prices were on average considerably
lower in 2011 compared to 2010. The highest monthly
system price was 69.62 €/MWh in January and the
lowest system price was 27.96 €/MWh in October. The
highest monthly area price was 72.35 €/MWh in NO5
(western part of Norway) for February and the lowest
monthly area price was 22.36 €/MWh for September,
also in NO5.
During 2011, Nord Pool Spot acquired 35 new mem-
bers in the day-ahead market Elspot and 9 new mem- 31
bers in the intraday market Elbas. In total, Nord Pool
Spot had 338 members at the end of year 2011.
A new Sales Manager was hired in Finland to facilitate
for an even closer cooperation with Finnish members,
new sales in Finland and to secure that the needs of our
Finnish members are taken into consideration in fur-
ther development of the Nordic market.
Nord Pool Spot has a Customer Advisory Board which
in 2011 contributed feedback and advice on Nord Pool
Spot’s strategic and operational activities. The Customer
Advisory Board is chaired by the CEO of Nord Pool
Spot. Three meetings were held in 2011.

In 2011, Nord Pool Spot established a Nordic Regula-
tory Council composed of the Nordic and Estonian
regulators. The council contributes to the exchange of
information, is a forum for discussing market develop-
ment and assists the national regulatory authorities in
their work with transparency, integrity and governance
of the market. Two meetings were held in 2011.
transparency
Transparency of market data is an important criterion
for a well-functioning and efficient power market. It
is important that relevant information is available to
the members so that they can efficiently evaluate their
options and have trust in the price formation.
Equal access to relevant market information levels the
playing field for market members and leads to a more
efficient market. Nord Pool Spot strives to operate the
Nordic electricity market as efficiently as possible. In
order to make market and power system data more
accessible, Nord Pool Spot launched a new website on
15 August 2011.
Nord Pool Spot works to increase the amount of market
and power system data that is available to the market
through different services. During 2011 the Power Data
Service department published new data related to the
four bidding areas in Sweden, Estonian power system
data and Interim Tight Volume Coupling (ITVC)
capacities and flows.
UK Market N2EX
2011 has been an exciting year for Nord Pool Spot’s
establishment of N2EX, the UK power market. N2EX,
which is a partnership between Nord Pool Spot and
Nasdaq OMX Commodities, was launched 12 Janu-
ary 2010, thus 2011 was its first full year of operation.
N2EX offers its members trading in a day-ahead mar-
ket, which is based on the Nordic market model, cov-
ering the 24 hours of the following day and intraday
trading in a prompt and spot market. The prompt mar-
ket is a continuous market with trading of blocks up to
6 days in the future, while the spot market in addition
offers continuous trading of half hourly and hourly
contracts for the next 48 hours. The spot market was
implemented in April 2011.
N2EX has during the course of 2011 established itself
as the most important power market in the UK. A
model for submitting gross volume in the auction was
introduced late in 2011 and a majority of the major
UK utilities have indicated that they are considering
submitting gross volumes in 2012. The total volume
traded on N2EX increased from 19.6 TWh in 2010 to
45.6 TWh in 2011.
Statistics 2010 2011
Auction market 2.6 TWh 18.7 TWh
Prompt market 17.0 TWh 26.9 TWh
Spot market - 11.0 GWh
Total 19.6 TWh 45.6 TWh
By the end of 2011, 34 members were registered for
trading in the N2EX market, and there is a large inter-
est from new members in joining the N2EX market.
The result from our member survey in the UK shows
that we are off to a good start in the market and that
our members are satisfied with the service that we
provide.
On 22 September 2011, Nord Pool Spot and EPEX Spot,
the German-French spot power exchange, signed a Letter
of Intent to create a Joint Venture company to build a
common systems platform and later operate the systems.
Annual accounts 2011
The operating profit was NOK 14.8 million (2010:
NOK 11.1 million) for Nord Pool Spot AS and NOK
14.1 million (2010: NOK 12.7 million) for the Group.
The increase in the operating profit is mainly due to
higher revenues from changes in the fee structure in the
Elspot market and higher volume fee revenues from the
UK market (N2EX), due to higher traded volume.
Net income amounted to NOK 24.8 million (2010:
NOK 14.2 million) for Nord Pool Spot AS and NOK
16.4 million (2010: NOK 14.3 million) for the Group.
The main reason for the higher net income for Nord
Pool Spot AS was an extraordinary dividend of €1 mil-
lion from the subsidiary Nord Pool Finland Oy, which
is neutralised in the consolidation of the Nord Pool
Spot Group. By the end of 2011 the total capital of the
group was NOK 746 million (2010: NOK 2,649 mil-
lion). The changes in the total capital are mainly a result
of the price level being lower than last year at the end
of December and lower traded volume due to milder
weather compared with winter 2010.
The equity of Nord Pool Spot AS per 31 December
2011 was NOK 141.2 million (2010: NOK 166.4
million). Free equity as per 31 December 2011 after
allocated dividends is NOK 65.8 million. The Board
of Directors considers the equity to be adequate in
relation to the company’s exposure and the collateral
posted by the participants.
The annual accounts are prepared based on the assump-
tion of a going concern, and the Board of Directors
confirms that this assumption exists.
No events of significance for the 2011 annual accounts
had occurred up to the date they were presented.
liquidity
Group cash and cash equivalents decreased from NOK
1,925.2 mill at the end of 2010 to NOK 423.2 mill at
the end of 2011. The main reason for the NOK 1,503.1
mill reduction in liquid funds is lower net cash from
operating activities due to lower prices and lower traded
volume at the end of December 2011 in comparison
with one year earlier. In addition, a reduction in num-
ber of settlement days for seller with one day, purchases
of intangible assets and a repayment of a loan to Nord
Pool Gas A/S have impacted the liquid funds.
Purchases of intangible assets are mainly investments in
our trading systems for the power markets.
research and development
The Group has software systems developed for trading
and settlement in Nord Pool Spot AS and in Nord Pool
Finland Oy. The trading system in Nord Pool Spot AS is
used in the Elspot electricity market. The trading system
for Elbas is developed by Nord Pool Finland Oy. The
settlement system in Nord Pool Spot AS is used for Els-
pot, Elbas and Nord Pool Gas.
For the Group, the book value related to software devel-
opment and licenses in the balance sheet statement at
the end of 2011 is NOK 25.2 mill and of this NOK
8.8 mill was investments in 2011.
Financial risks
market risk
The company is exposed to changes in exchange rates
since the power trade is settled in multiple currencies.
The company continuously hedges settlement of trades
in foreign currency, and VAT, through spot contracts.
Revenues in foreign currency are settled weekly by using
currency spot contracts.
credit risk
All Nord Pool Spot trades are settled on a daily basis;
invoices and credit notes are dispatched every after-
noon for automatic bank settlement of the next day’s
delivery of energy. Participants post collateral for their
directors report 2011
trade. The collateral requirement equals the sum of the
participants’ net purchases the last seven days includ-
ing VAT. Accounts receivable amounted to NOK
255 million at the end of 2011 (2010: NOK 645
million) for Nord Pool Spot AS. The collateral posted
by the participants as per 31 December 2011 was
NOK 1,037 million (2010: NOK 3,264 million). The
underlying reason for the reduction in collaterals was
the lower prices and volumes at the end of December
compared to the previous year. The counterparty risk
for Nord Pool Spot is regarded as low. There is no
debtor loss registered for 2011.
liquidity risk
The company’s liquidity position is regarded as sound
with a relative high net cash position due to the settle-
ment cycle (buyer debited on T+1, seller credited on
T+2). In 2011 the number of settlement days for sellers
was reduced from T+3 to T+2. This has reduced the com-
pany’s net cash position, but the liquidity position is still
deemed to be adequate for the company. The company
also holds an overdraft account amounting to NOK 100
million which is not utilised as per 31 December 2011.
risk capital
nord pool Spot annual report 2011
The company holds a risk capital of NOK 14 million,
out of which half is covered through ordinary working
capital and the other half through a dedicated credit
facility. The concession granted to Nord Pool Spot
from the Norwegian Water and Energy Directorate
(NVE), requires that the company holds a risk capital
and that the size of this is reviewed regularly.
organisation and working environment
The Nord Pool Spot group had 58 employees at 31
December 2011, including 35 in Norway, 7 in Sweden,
10 in Finland, 2 in Denmark, 3 in the UK and 1 in
Estonia (41 employees in Nord Pool Spot AS). 33
18 of the Nord Pool Spot AS employees are women and
23 men. There are female employees at all Nord Pool
Spot offices.
Nord Pool Spot’s Board of Directors contains one
woman and three men. The Chairman of the Board is
female. The corporate management team consists of
three women and four men.
Health related absence during the year was 1.58 per
cent. No lost-time accidents or personal injuries were
suffered in 2011.
 Profit and loss account

financial report 2011

Nord Pool Spot’s human resources policy is based on Longer term we will emphasise the importance of align-
equal pay for equal work, meaning that women and ment with a changing power market, development
men in the same position receive the same pay, provided in accordance with new EU requirements, structural
that they possess comparable expertise and experience. changes and thereby new wishes from our members
Pay figures for 2011 show that the annual pay of male through changing needs.
employees was on average 19.4 per cent higher than for Nord Pool SPoT aS Nord Pool SPoT GrouP
the company’s female staff. Much work will be dedicated to the integration of the 2011 2010 Amounts in NOK 1000 Note 2011 2010
European power market, in which Nord Pool Spot
The company wishes to encourage employees of both has an active role. An important milestone will be the
21 734 21 201 Fixed fee revenues 22 566 21 886
genders to establish solutions which make it easier to coupling of North West Europe in one price algorithm,
107 155 86 543 Volume dependent fees 107 923 87 496
combine work and family life. One employee was on which requires close cooperation between transmission
9 808 11 447 Other operating income 13 526 14 301
maternity leave on 31 December, when the company also system operators and exchanges in all coupled countries.
138 697 119 191 TOTAl OPErATING INcOmE 3 144 015 123 683
had one part-time employee. Both of these were women.
On 7 February 2012, Nord Pool Spot had an inspection
Nord Pool Spot’s operations have no noticeable impact by the EU Surveillance Authority (ESA) and the Euro- 417 762 Services purchased 4 417 762

on the natural environment. No part of its business is pean Commission competition authorities concerning 11 870 10 568 Depreciation 8,9 14 250 12 590

regulated by environmental permits or enforcement suspicion of market segregation in Europe. The com- 42 630 36 320 Payroll expenses 5,17 57 464 50 522
notices. pany is cooperating fully with the competition authori- 68 985 60 419 Other operating expenses 5,6 57 758 47 073
ties in its investigations. The timing of the results from 123 902 108 069 TOTAl OPErATING EXPENSES 129 889 110 947
Market surveillance the inspection is not yet known to Nord Pool Spot.
The Nord Pool Spot Market Surveillance plays an 14 795 11 122 OPErATING PrOFIT 14 126 12 736
important role in establishing and maintaining market In the UK, Nord Pool Spot will continue the expan-
confidence and integrity by having a strong and visible sion, which will include further development of the 16 929 8 654 NET FINANcIAl ITEmS 7 9 399 7 849
presence in the market. The Market Surveillance contin- market model that we believe is a major prerequisite
uously monitors trading activities and price formation for the UK’s wish to develop a liquid and transparent 31 724 19 776 PrOFIT BEFOrE TAXES 23 525 20 585

nord pool Spot annual report 2011

in the spot and derivatives markets and conducts investi- power market, close cooperation with market members
gations of possible breaches of laws and regulations. and coupling of the UK and mainland Europe. 6 884 5 591 Taxes 19 7 095 6 245

Allocation of profit The profit for 2012 is expected to give a reasonable 24 840 14 185 NET INcOmE 16 430 14 340
The Board is proposing a dividend of NOK 50.0 million return on invested capital.
to be paid out for the 2011 accounting year for Nord
INForMaTIoN alloCaTIoNS
Pool Spot AS, out of which NOK 24.8 million comes
Gardermoen, 21 march 2012 50 000 8 000 Dividend
from the net profit of the year and NOK 25.2 million
-25 160 6 185 Disposal to/from other equity
will be transferred from the equity capital.

outlook for 2012 Bente Hagem

The Nord Pool Spot Group will continue efforts to chairman of the Board
maintain and further develop the power market in 35
the Nordic and Baltic region according to regulatory
requirements, development of member needs as well as Søren Dupont Kristensen
Board member
our target to be a leading and innovative market place
for power.
Juha Kekkonen
Short term this will mean a clear focus on efficient trad- Board member
ing through development of IT platforms, product
development, coupling of markets and a continued close
dialogue with our members. In March 2012, the NorNed Bo Krantz
cable between Norway and the Netherlands is integrated Board member
into the Nordic Intraday trading market Elbas. Nord
Pool Spot is also on track for opening a new bidding area
in Lithuania in 2012 and in Latvia thereafter. mikael lundin
cEO
Balance sheet Balance

financial report 2011

Assets Equity and liabilities

Nord Pool SPoT aS Nord Pool SPoT GrouP Nord Pool SPoT aS Nord Pool SPoT GrouP

31.12.11 31.12.10 Amounts in NOK 1000 NOTE 31.12.11 31.12.10 31.12.11 31.12.10 Amounts in NOK 1000 NOTE 31.12.11 31.12.10

aSSeTS eQuITY aNd lIaBIlITIeS

FIXed aSSeTS eQuITY
Intangibles Paid-in-equity
21 360 24 674 Intangible assets 8 25 181 29 529 50 400 50 400 Share capital 15,16 50 400 50 400
4 631 4 052 Deferred tax benefit 19 4 631 4 052 10 681 10 681 Share premium reserve 16 10 681 10 681
25 991 28 726 Total intangibles 29 812 33 581 61 081 61 081 TOTAIl PAID-IN-EqUITy 61 081 61 081

3 592 1 913 Tangible fixed assets 9 4 081 2 574 Earned equity

80 126 105 285 Other equity 16 64 917 98 127
Financial assets 80 126 105 285 TOTAl EArNED EqUITy 64 917 98 127
17 827 17 827 Investment in subsidiaries 10 0 0
Investments in associated companies and joint 141 207 166 366 TOTAl EqUITy 125 998 159 208
8 211 8 211 ventures 10 203 0
1 939 9 953 loan to associated company 11 1 939 9 953
lIaBIlITIeS
27 977 35 991 Total financial assets 2 142 9 953
Allocations for liabilities
16 312 14 319 Pension liabilities 17 16 312 14 319

nord pool Spot annual report 2011

57 560 66 630 TOTAl FIXED ASSETS 36 035 46 108
16 312 14 319 TOTAl AllOcATION FOr lIABIlITIES 16 312 14 319

CurreNT aSSeTS
Current liabilities
receivables
0 28 Derivatives 13 0 28
259 723 649 138 Accounts receivables 12,13 260 485 656 469
523 989 2 295 058 Accounts payable 13,18 524 634 2 310 818
23 343 6 649 Other receivables 25 876 21 492
7 462 5 982 Tax payable 19 7 602 6 546
309 0 Group receivalbles 0 0
2 655 123 697 Fees to authorities 3 558 124 361
283 375 655 787 Total receivables 286 361 677 961
50 000 8 000 Dividend 16 50 000 8 000
12 408 12 548 Other current liabilities 17 481 25 953
413 098 1 903 581 Bank deposits 14 423 189 1 925 164
596 514 2 445 313 TOTAl cUrrENT lIABIlITIES 603 275 2 475 706

696 473 2 559 368 TOTAl cUrrENT ASSETS 709 550 2 603 125
612 826 2 459 632 TOTAl lIABIlITIES 619 587 2 490 025
37

754 033 2 625 998 TOTAl ASSETS 745 585 2 649 233
754 033 2 625 998 TOTAl EqUITy AND lIABIlITIES 745 585 2 649 233

Gardermoen, 21 march 2012

Bente Hagem Juha Kekkonen Mikael lundin

chairman of the Board Boardmember cEO

søren dupont Kristensen Bo Krantz

Boardmember Boardmember
Cash flow analysis Notes to the annual accounts

notes
Accounting principles

Nord Pool SPoT aS Nord Pool SPoT GrouP

The annual accounts have been prepared in accordance down to market value if the decline in value is viewed
2011 2010 Amounts in NOK 1000 2011 2010 with the Norwegian Accounting Act of 1998 and gener- as non-transitory in nature and it is deemed necessary
Cash flow from operating activities
ally accepted accounting principles. according to generally accepted accounting principles.
24 840 14 185 Net income 16 430 14 340
Write-downs are reversed if the conditions for the write-
11 870 10 568 Ordinary depreciation 14 250 12 590
Consolidation principles down are no longer present.
The Group accounts include the parent company, Nord
434 0 Gain/loss on sale of operating assets 434 0
Pool Spot AS, and the subsidiaries Nord Pool Finland Joint Venture
389 415 -268 995 change in accounts receivable 395 984 -272 927
Oy, Nord Pool Spot AB and the 50% owned joint ven- With a Joint Venture enterprise the definition is that
-1 771 069 57 872 change in accounts payable -1 786 184 66 008
ture Nord Pool Gas A/S. The Group accounts have been this is a Group company who together with one or
1 993 1 203 change in pension liabilities 1 993 1 203
prepared as if the Group were a single financial entity. more companies, together controls the enterprise.
-137 297 178 684 change in other current receivables and liabilities -132 636 184 909
Intercompany transactions and balances have been
-1 479 814 -6 483 NET cASH FlOW FrOm OPErATING AcTIVITIES -1 489 729 6 123 eliminated. The Group accounts have been prepared on A part of assets, liabilities, revenues and expenses in
the basis of similar principles, the subsidiary applying the Joint Venture are consolidated based on the gross
Cash flow from investment activities the same accounting principles as the parent company. method according to the preliminary Norwegian stand-
8 000 0 Income payment of loan from associated company 8 000 0 ard on participating in a Joint Venture enterprise.
-3 287 -492 Payment for purchase of tangible fixed assets -3 489 -561 A purchased subsidiary is recorded in the Group
-7 382 -8 756 Payment for purchase of intangible fixed assets -8 757 -9 785 accounts based on the parent company’s acquisition power turnover
0 -8 000 Payment for loan to associated company, Joint Venture 0 -8 000 cost. The acquisition cost is based on identifiable assets Purchases and sales of electrical power and gas are set-
-2 669 -17 248 NET cASH FlOW FrOm INVESTmENT AcTIVITIES -4 246 -18 346 and liabilities of the subsidiary, which are recorded in tled at the same price. Consequently, the monetary

nord pool Spot annual report 2011

the Group accounts at market value at the time of pur-
Cash flow from financing activities chase. If the acquisition price exceeds (or is less than)
-8 000 0 Payment of dividend -8 000 0 amounts attributable to identifiable assets and liabilities,
-8 000 0 NET cASH FlOW FrOm FINANcING AcTIVITIES -8 000 0 the excess is recorded in the balance sheet as goodwill
(or negative goodwill) and amortized on a straight-line
-1 490 483 -23 731 Net change in liquid assets -1 501 975 -12 223
basis over the expected useful lives of the purchased
1 903 581 1 927 312 liquid assets as of 1 January 1 925 164 1 937 387
assets.
413 098 1 903 581 lIqUID ASSETS AS OF 31 DEcEmBEr 423 189 1 925 164
Associated companies are valued in the Group accounts
in accordance with the equity method. The allocated
proportion of the profit of the associated company is
based on the after tax results of the associated company,
after deducting any internal gains and any depreciation
on any excess value caused by a higher acquisition price
of the shares than the acquired part of equity recorded
in the balance sheet. The allocated proportion of the
profits is recorded in the profit and loss accounts as
“Income from associated companies”.
The exchange rate of 31 December has been applied for
consolidation of branch accounts in local currencies.
value of trading has no effect on the profit level of the
Nord Pool Spot Group.
Income from fees
The income base of the Nord Pool Spot Group consists
of:
• annual fees
• volume-dependent fees
• FX fees
Volumes fees in the physical market relate to power
traded (MWh) and are invoiced together with the
power following delivery. FX fees were introduced in
2011 and becomes for customers buying or selling of 39
electricity in other currencies than EUR. It is calculated
as a % of invoice value.
Classification and valuation of balance sheet items
Current assets and short-term liabilities include items
that fall due within one year of the acquisition date.
Other items are classified as fixed assets/long-term
liabilities.

subsidiary Current assets are valued at the lower of acquisition cost

The company’s subsidiary is valued according to the and market value. Short-term liabilities are recorded in
cost method in the company accounts. Investments the balance sheet at face value at the time of recording.
are valued at acquisition cost for the shares unless a
write-down has been necessary. Investments are written Fixed assets are recorded at acquisition cost, but are

written down to market value in the event of a decline
in value, which cannot be expected to be transitory in
nature. Long-term liabilities are recorded in the bal-
ance sheet at face value at the time of assuming such
liabilities.
receivables
Accounts receivable and other receivables are recorded
in the balance sheet at face value after provision for bad
debts. Provisions for bad debts are based on an assess-
ment of individual accounts. In addition, a general pro-
vision for bad debts is made covering assumed losses for
other accounts receivable.
Foreign currency
Accounts receivable and accounts payable in foreign
currencies are valued at the year-end exchange rate on
31 December 2011.
Financial instruments
Nord Pool Spot uses financial instruments to manage
foreign exchange exposure. Spot exchange contracts
are used solely to hedge currency exposures incurred
in connection with the settlement of physical trad-
ing. Gains and losses on spot exchange contracts are
benefits (defined benefit plans). Benefits are based on
the number of years of employment and salary at retire-
ment age.
Nord Pool Spot books pensions in accordance with the
international Accounting Standard (IAS) 19.
Accrued pension rights are primarily secured through
pension plans with Statnett SF’s pension fund. In addi-
tion, Nord Pool Spot AS has an early retirement plan
(AFP), which is financed by operations.
Contributions to the pension fund are made in accord-
ance with the actuarial method of calculation. Pension
assets in the pension fund are primarily invested in
securities. Pension liabilities are calculated in accord-
ance with the Norwegian accounting standard (NRS)
for pension costs.
Pension obligations are valued at the present value of
future pension liabilities earned as at the balance sheet
date, which are to be paid through the company’s own
pension fund or financed by operations.
Net pension liabilities in the balance sheet are shown
are treated as investments in pension funds.
taxes
Tax expenses in the profit and loss account consist of
tax payable for the period and changes in deferred tax.
Deferred tax is calculated at a rate of 28 per cent on the
basis of the temporary differences between accounting
and tax values, as well as the tax deficit at the end of
the year to be carried forward. Tax-increasing and tax-
decreasing temporary differences, which are reversed
or reversible in the same period, have been eliminated.
Any net deferred tax benefits are recorded in the bal-
ance sheet to the extent they are expected to be utilized.
As of 31 December 2011, net negative temporary dif-
ferences between accounting and tax values have been
recorded by the Group. The associated deferred tax ben-
efit is recorded in the balance sheet under assets.
Cash flow
The cash flow analysis has been prepared using the indi-
rect method. The model is based on an adjustment of
the after-tax net income resulting in the net cash flow
from operating activities. Cash flows from investment
and financing activities are presented as gross figures.
notes
way accepted by Nord Pool Spot in accordance with the
Rulebook for the Physical Markets.
As of 31 December 2011, outstanding balances in the
physical market totaled NOK 255.4 million, while the
collateral requirement in respect of participants totaled
NOK 1,037 million.
At the end of the year, all participants in the physical
market had posted satisfactory collateral in accordance
with the Settlement regulations.
Settlement and collateral in the UK for N2EX is car-
ried out by NASDAQ OMX which also acts as the
counterpart.
Nord Pool Spot also carries out settlement and collateral
call for the VPP market (Virtual Power Plant) in Den-
mark and the gas market of Nord Pool Gas A/S. For
the VPP market, the customers have to establish bank
guarantee for assigned volume current quarter. For the
gas market the members provide collateral by the means
of an on-demand guarantee. Base collateral determined
by Nord Pool Spot must be established and met prior to
the commencement of trading. The base collateral shall

nord pool Spot annual report 2011

reported and evaluated in tandem with the hedged
item. Gains and losses on hedging instruments rolled
over prior to their expiry are recognised in the balance
sheet and income statement over time along with the
hedged item. Financial derivatives are booked at market
value.
tangible fixed assets
Tangible fixed assets are recorded in the balance sheet
and linearly depreciated over the expected useful lives
of the assets. Direct maintenance costs related to
tangible fixed assets are currently expensed as operat-
ing expenses, whereas upgrades and improvements
are added to the cost base of the operating assets and
depreciated at the same rate as the assets to which they
refer.
Intangible assets
Intangible assets are recorded in the balance sheet to the
extent a future financial benefit relating to the intan-
gible asset can be identified. If such benefits cannot be
identified, the expenses are recorded as costs on a cur-
rent basis.
pension costs and liabilities
Nord Pool Spot AS has pension plans which provide
the employees with the right to defined future pension
after adjustments for postponed P&L recognition of
changes in estimates and pension plans as well as the
difference between actual and expected returns on the
pension plans investment assets that have as yet not
been recognized in the P&L. Net pension liabilities are
shown as an allocated liability. Pension schemes that are
in a surplus of funds where the funds cannot be trans-
ferred to schemes that are in deficit of funds are shown
as fixed assets.
The Group applies the principle of corridor reporting in
respect of changes in pension liabilities.
Changes in liabilities and pension assets arising from
changes to and variances in assumptions applied to
calculations (changes in estimates) are distributed over
the remaining expected average earnings period if the
variances 1 January exceed 10 per cent of whichever is
greater of gross pension liabilities and pension assets.
The Group has in addition a contribution-based pen-
sion plan for employees, where the current year’s pen-
sion costs correspond to the current year’s premium
payment.
Net pension costs for the year are included as a salary
expense in the profit and loss account. Premiums paid
cover sum collateral call for the instruments traded, but
not yet settled.
Note 1: CollaTeralS
Security requirements for Elspot/Elbas, VPP, and the
physical trade gas market are not netted.
Participants are obliged to post appropriate collat-
eral for their spot market trade in accordance with
the Rulebook for the Physical Markets. The security
requirement included in the section ”Clearing Rules
Appendix” of the rulebook reflects Nord Pool Spot’s
settlement risk and is calculated on an ongoing basis
as the last seven days of the participant’s daily net pur-
chase in Elspot inclusive of VAT. Variation in days can 41
occur.
Collateral for Elbas market follows the same security
requirements as for Elspot. For customers in Elspot act-
ing in Elbas the security requirement of Elbas is netted
into Elspot collateral.
The minimum trading requirement is a collateral base
of NOK/SEK/DKK 240,000 or EUR 30,000. The col-
lateral must be registered with Nord Pool Spot before
any trade is initiated.
Collateral can be posted as an on-demand bank guar-
antee, as cash in an escrow bank account or in another
Note 2: Power TurNover Note 4: CloSelY relaTed ParTIeS

notes
All transactions with Nord Pool Spot AS owners are conducted at market value.
Amounts in NOK 1000 Nord Pool Spot aS Nord Pool Spot Group

Geographical distribution - power sales 2011 2010 2011 2010 services and tasks performed by Nord pool spot As for Nord pool Gas A/s
Norway 30 516 763 40 197 039 30 516 763 40 197 039 Administrative services
Sweden 49 146 970 64 772 108 49 146 970 64 772 108 Nord Pool Spot AS provides no administrative services for Nord Pool Gas A/S.
Denmark 14 273 792 14 630 820 14 440 038 14 917 559
Finland 18 441 993 22 804 243 18 441 993 22 804 243
services and tasks performed by Nord pool Finland oy for the Nord pool spot Group
Marketing services
Germany 365 469 224 056 365 469 224 056
Nord Pool Finland Oy supplies marketing and consultancy services to the Nord Pool Spot Group. The total income
Estonia 1 567 043 1 099 559 1 567 043 1 099 559
for 2011 amounts to NOK 14.2 million against NOK 14.3 million in 2010.
TOTAl 114 312 029 143 727 825 114 478 274 144 014 564

services and tasks performed by Nord pool spot AB for Nord pool spot Group
Nord Pool Spot aS Nord Pool Spot Group
Marketing services
Geographical distribution - power purchases 2011 2010 2011 2010 Nord Pool Spot AB provides marketing, market data- and consultancy services to the Nord Pool Spot Group. The
Norway 30 249 544 37 837 312 30 249 544 37 837 312 total income for 2011 amounts to NOK 9.6 million, against NOK 8.7 million in 2010.
Sweden 50 643 788 63 217 543 50 643 788 63 217 543
Denmark 13 349 163 17 075 339 13 515 409 17 362 077 services and tasks performed by statnett sF for Nord pool spot As
Finland 17 785 389 23 968 792 17 785 389 23 968 792 Pension plan
Germany 284 259 190 956 284 259 190 956
Nord Pool Spot AS is a member of Statnett SF’s pension fund and thus assumes certain pension liabilities. In addi-
Estonia 1 999 886 1 437 883 1 999 886 1 437 884
tion, Statnett SF’s pension fund acts as the depositary of the pension funds. See the section on pension costs and
liabilities under accounting principles.
TOTAl 114 312 029 143 727 825 114 478 274 144 014 564

services and tasks performed by Nord pool Gas A/s for Nord pool spot As
Administrative services
Note 3: oPeraTING reveNueS

nord pool Spot annual report 2011

Nord Pool Gas A/S supplies administrative services and letting of premises. The agreement on letting of premises
and administrative services remains in force until terminated by either party. Total expenses for 2011 amount to
Amounts in NOK 1000 Nord Pool Spot aS Nord Pool Spot Group NOK 0.4 mill against NOK 0.3 million in 2010.
Geographical distribution 2011 2010 2011 2010
Norway 42 482 41 562 42 482 41 562
Sweden 34 927 25 886 35 589 26 549 Note 5: PaYroll eXPeNSeS, NuMBer oF eMPloYeeS, reIMBurSMeNTS, eMPloYee
Denmark 18 019 19 526 19 917 21 306 loaNS eTC.
Finland 21 001 18 320 23 760 20 369
Germany 1 522 3 150 1 522 3 150 Amounts in NOK 1000 Nord Pool Spot aS Nord Pool Spot Group
UK 11 638 3 640 11 638 3 640
Payroll expenses 2011 2010 2011 2010
Estonia 3 492 2 324 3 492 2 324
Salaries 31 621 27 599 43 117 38 920
lithuania 4 774 4 783 4 774 4 783
Social security contribution 4 901 4 071 6 622 5 629 43
France 843 0 843 0
Pension expenses 5 300 4 145 5 300 4 145
TOTAl 138 697 119 191 144 015 123 683
Other benefits 808 505 2 425 1 828
TOTAl 42 630 36 320 57 464 50 522

During the financial year, Nord Pool Spot AS has had an average of 38 employees (38 man-years) against 34
employees (33.7 man-years) in 2010. The Nord Pool Spot Group had an average of 58 employees (57.8 man-years)
against 47 employees (46.8 man-years) in 2010.
remuneration of excecutives Ceo Board of directors
Salary 1 307 0
Other remuneration 466 0
Accrued pension 0 0
 Note 7: NeT FINaNCIal ITeMS

notes
The CEO form 1.12.2009 is covered by the Swedish pension plan.

Amounts in NOK 1000 Nord Pool Spot aS Nord Pool Spot Group
No loans or collaterals have been granted to the CEO, the Chairman of the Board of Directors or other related par-
ties. No individual loan or collateral exceeding 5 per cent of the equity of the Group companies has been granted. Financial income 2011 2010 2011 2010
revenues related companies 0 0 310 0
Directors’ fees are only paid to external board members. Board members who are employed by the owners of Nord Dividend subsidiary 7 774 0 0 0
Pool Spot or in the Nord Pool Spot Group do not receive any remuneration. Interest revenue 10 600 10 641 10 699 10 852
Other financial revenues (agio) 47 0 47 0
Bonus
TOTAl FINANcIAl rEVENUES 18 421 10 641 11 056 10 852
Nord Pool Spot AS has a bonus scheme for the employees with bonuses being paid on the basis of different param-
eters such as profits. The maximum bonus per year corresponds to 15 per cent of the annual pay. The average bonus
Nord Pool Spot aS Nord Pool Spot Group
obtained for 2011 amounted to 11.25 per cent.
Financial expenses 2011 2010 2011 2010
Auditors Expenses related companies 0 0 0 751
Compulsory auditing for the parent company amounts to NOK 200,000, other certification services NOK 2,550, Interest expenses 1 492 1 699 1 657 1 965
tax and VAT consultancy NOK 49,168 and other services NOK 49,155. Compulsory auditing for the Group Other financial expenses (disagio) 0 287 0 287
amounts to NOK 262,021, other certification services NOK 2,550, tax and VAT consultancy NOK 85,538 and TOTAl FINANcIAl EXPENSES 1 492 1 986 1 657 3 003
other services NOK 54,583. The amounts are exclusive of VAT.
NET FINANcIAl ITEmS 16 929 8 654 9 399 7 849

Note 6: oTHer oPeraTING eXPeNSeS

Note 8: INTaNGIBle aSSeTS
Amounts in NOK 1000 Nord Pool Spot aS Nord Pool Spot Group

2011 2010 2011 2010 Amounts in NOK 1000

nord pool Spot annual report 2011

Outsourced services 33 707 28 976 11 098 6 484 Nord Pool Spot Trade systems Total
Operation and maintenance of software 21 512 19 168 23 154 23 620 Acquisition cost as of 01.01.2011 62 814 62 814
miscellaneous administrative expenses 13 766 12 275 23 506 16 969 Additions 7 382 7 382
TOTAl OTHEr OPErATING EXPENSES 68 985 60 419 57 758 47 073 Acquisition cost as of 31.12.2011 70 197 70 197
Accumulated depreciation as of 31.12.2011 -48 836 -48 836
The group has entered into a tenancy agreement on rental of office facilities at Granfoss Næringspark, Lysaker. The BOOK VAlUE AS OF 31.12.2011 21 360 21 360
agreement was entered into on 1 July 2011 and will terminate on 31 March 2019. The yearly rent for 2011 amounts
to NOK 2.1 mill. The rent is adjusted on a yearly basis in accordance with the development in the CPI. The year’s depreciation 10 696 10 696

Nord Pool Spot Group Trade systems Total

Acquisition cost as of 01.01.2011 73 854 73 854
Translation differences 380 380
45
Additions 8 757 8 757
Acquisition cost as of 31.12.2011 82 991 82 991
Accumulated depreciation as of 31.12.2011 -57 810 -57 810
BOOK VAlUE AS OF 31.12.2011 25 181 25 181

The year’s depreciation 12 706 12 706

Both the parent company and the group make use of straight-line depreciation for all intangible assets. The useful
lives of the intangible fixed assets are estimated as follows:
• Computer software: 5 years
Note 9: TaNGIBle FIXed aSSeTS

notes
european Market Coupling
Nord Pool Spot Group Company GmbH
Amounts in NOK 1000
Investments valued in accordance with the equity method
Nord Pool Spot aS vehicles edP and office equipment Total Amounts in NOK 1000
Aquisition cost as of 01.01.2011 416 5 346 5 762 calculated share of net profit
Additions 0 3 287 3 287 Share of net profit 310
Acquisition cost as of 31.12.2011 416 7 846 8 262 SHArE OF NET PrOFIT 310
Accumulated depreciation as of 31.12.2011 -229 -4 441 -4 670
BOOK VAlUE AS OF 31.12.2011 187 3 405 3 592 Book value at 31 dec 2011 is calculated as follows:
Opening balance of 1 Jan 11 -107
This year’s depreciation 83 1 091 1 174 capital contribution 0
reclassified from 1 Jan 11 0
Nord Pool Spot Group vehicles edP and office equipment Total This years part of profit 310
Acquisition cost as of 01.01.2011 416 9 758 10 173 clOSING BAlANcE OF 31 DEc 11 203
Translation differences 0 23 23
Additions 0 3 489 3 489 The following amounts are included in the Groups profit and loss account and balance sheet from joint ventures
Acquisition cost as of 31.12.2011 416 12 403 12 818 who are incorporated with pro rata consolidation:
Accumulated depreciation as of 31.12.2011 -229 -8 509 -8 738
BOOK VAlUE AS OF 31.12.11 187 3 894 4 081 Nord Pool Spot Group Nord Pool Gas a/S
2011 2010
This year’s depreciation 83 1 461 1 544 Operating income 1 898 1 781
Operating expenses -2 933 -2 617
The useful life of tangible fixed assets is estimated as follows: Operating profit -1 035 -836
• EDP and office equipment: 2-10 years PrOFIT BEFOrE TAXES -1 140 -906

nord pool Spot annual report 2011

• Vehicles: 5 years
Fixed assets 10 42
currents assets 4 285 27 984
Total assets 4 295 28 026
Note 10: SuBSIdIarIeS, aSSoCIaTed CoMPaNIeS aNd JoINT veNTureS Total alloccation for liabilities 118 487
currents liabilities 3 023 25 697
Amounts in NOK 1 000 TOTAl lIABIlITIES 3 141 26 184
acquisition Share of Equity 1 154 1 842
Company date Headquarters ownership voting rights
TOTAl EqUITy AND lIABIlITIES 4 295 28 026
Nord Pool Finland Oy 01.07.02 Helsinki 100 % 100 %
Nord Pool Spot AB 18.12.07 Stockholm 100 % 100 %
Nord Pool Gas A/S 01.12.07 Brøndby 50 % 50 %
European market coupling company Gmbh 29.08.08 Hamburg 20 % 20 %
Note 11: loNG-TerM reCeIvaBleS 47

The long-term receivables refers to a loan to European Market Coupling Company GmbH on EUR 250 000.

Investments valued in accordance with the cost method The conditions for this loan are an annual rate of interest on 8% of the loan amount outstanding at any time.
Total share Shares Total par acquisition
Company capital owned value cost Book value
The loan amount is due and payable without any requirement for the lender to give notice on March 31, 2011, in
Nord Pool Finland Oy 01.07.02 4 978 40 000 4 978 000 17 742 240 17 742 240
an amount of 20 % of the retained profit of the Borrower for the financial year 2010, in any, and on March 31,
Nord Pool Spot AB 18.12.07 85 100 000 SEK 100.000 84 670 84 670
2012, in an amount of 20 per cent of the retained profit of the Borrower for the financial year 2011, if any. The
remaining loan amount is payable sixty days after the lenders written request, but not before the 2nd of January
Joint venture 2013.
Nord Pool Gas A/S 01.12.07 DKK 10.000 10 000 2 000 5 386 500 5 386 500
The borrower is entitled to repay the loan amount at any time in whole or in part without premium or penalty by
associated companies giving five days notice.
European market coupling company Gmbh 28.01.09 € 1 600 000 € 1 600 000 2 824 760 2 824 760
 notes
In addition, it provided a loan to Nord Pool Gas A/S for a total of NOK 8,000,000. It was first granted a loan of The credit facility is based on the requirements of the licensing conditions set by NVE regarding regulatory capital
NOK 2,600,000 16 April 2010 to 3.48% interest rate that is 27 September was increased by NOK 5.4 million to related to the licensed business.
3.9% interest rate. The loan was repaid by Nord Pool Gas A/S on 14 January 2011.
Regulatory capital is estimated at NOK 14 million and according to the licensing conditions to an amount equiva-
lent to at least half of the subordinated capital consist of deposits or unconditional drawing rights in a credit
institution.
Note 12: aCCouNTS reCeIvaBle
Amounts in NOK 1000 Nord Pool Spot aS Nord Pool Spot Group
Note 15: SHare CaPITal aNd SHareHolder INForMaTIoN
2011 2010 2011 2010
Power sales 255 413 644 947 255 413 651 982
Amounts in NOK 1000
Other accounts receivable 4 311 4 191 5 072 4 487
Nord Pool Spot aS
BOOK VAlUE 259 723 649 138 260 485 656 469
The share capital comprises Number of shares Par value Book value

Accounts receivable have been recorded at face value as of 31.12.2011. A-shares 14 400 3 500 50 400 000
TOTAl 14 400 50 400 000

NOrD POOl SPOT AS HAD 4 SHArEHOlDErS AS OF 31.12.2011. All SHArE HAVE EqUAl rIGHTS.
Note 13: ForeIGN CurreNCY
Foreign curency risks Shareholders overview as of 31.12.2011 Number of shares held ownership Shares of voting rights
The development in currency rates imposes both a direct and an indirect financial risk for the Nord Pool Spot Statnett SF 4 320 30,0 % 30,0 %
Group. Hedging of currency income and assets denominated in foreign currency is done using hedging instru- Svenska kraftnät 4 320 30,0 % 30,0 %
ments, such as foreign exchange forward contracts. Fingrid Oyj 2 880 20,0 % 20,0 %
Energinet.dk 2 880 20,0 % 20,0 %
Nord Pool Spot AS maintains spot market accounts receivable and accounts payable in SEK, DKK, EUR and TOTAl NUmBEr OF SHArES 14 400 100,0 % 100,0 %

nord pool Spot annual report 2011

NOK. These are secured continuously using hedging instruments, such as foreign exchange forward contracts.
Accounts receivable and payable in foreign currencies are valued at the year-end exchange rate on 31 December
2011.

Forward exchange contracts are used solely to hedge currency exposures incurred in connection with the settle-
Note 16: eQuITY
ment of physical trading. The table set out below shows the currency exposures and the market value of the forward
positions. Amounts in NOK 1000
Share premium
off-balance Net foreign Market value Nord Pool Spot aS Share capital reserve other equity Total equity
amounts in NoK 1000 Balance sheet exposure sheet exposure exchange position derivatives in NoK
Equity as of 01.01.2011 50 400 10 681 105 286 166 367
currency
Net income 24 840 24 840
DKK -12 984 14 491 1 507 2 Dividend -50 000 -50 000
SEK -24 119 28 435 4 316 -1 EqUITy AS OF 31.12 2011 50 400 10 681 80 126 141 207
49
EUr 363 -105 258 -1
SUm 0 Share premium
Nord Pool Spot Group Share capital reserve other equity Total equity
Equity as of 01.01 2011 50 400 10 681 98 127 159 208
Translation differences 360 360
Note 14: BaNK dePoSITS Net income 16 430 16 430
Dividend -50 000 -50 000
Amounts in NOK 1000 Nord Pool Spot aS Nord Pool Spot Group
EqUITy AS OF 31.12 2011 50 400 10 681 64 917 125 998
restricted funds for tax withholdings 2 915 2 915

Nord Pool Spot as a bank guarantee have above “DNB Næringseiendom” on NOK 1.5 million with expiration date
September 30, 2019.
Nord Pool Spot has a credit facility of NOK 7 million in Nordea. The credit facility is not utilized as of December
31, 2011.
Note 17: PeNSIoNS

notes
Nord Pool Spot Group Nord Pool Spot Group

The company has pension plans covering a total of 29 persons. The plans entitle the beneficiaries to defined future 2011 2010
benefits. On the whole, benefits depend on the length of employment, salary level at achieved pension age, and pen- current value of this year's pension earnings 4 960 3 844
sion paid by the National Insurance Fund. The pension plans are statutory. The plans comply with the provisions of Interest cost for pension liabilities 1 417 1 510
the law. yield on pension funds -979 -768
changes on estimates and deviations recorded in the profit and loss account -98 2 488
The former CEO’s of Nord Pool Spot is entitled to a supplementary pension scheme. The pensionable age of the sup-
Shortening 0 -2 929
plementary scheme is 62 years. From the age of 62 up to and including 74 years the CEO is entitled to a supplemen-
NET PENSION EXPENSES (NET INcOmE) 5 300 4 145
tary yearly payment equivalent to NOK 400,000 (2008 value) in addition to the general scheme. The supplementary
scheme is indexed to the average increase in the wages of the company both during the period of employment as well
as after the pensionable age has been attained. The rest of the executive management is covered by Nord Pool Spot’s 2011 2011 2010 2010
group pension plan, and have no rights beyond those associated with that plan. Nord Pool Spot aS Insured unsecured Insured unsecured
Estimated pension liabilities as of 31.12. 44 626 4 770 29 336 4 927
Allocations for pension liabilities are based on estimated pension liabilities as of 31 December 2011.
Estimated pension funds as of 31.12. -18 370 0 -16 900 0
Effect of changes in estimates and deviations not recorded in the
The actuarial assumptions are based on common actuarial principles and demographic factors. profit and loss account -18 457 -632 -4 884 -608
Social security contribution 3 702 673 1 753 695
The company is taking part in an early retirement pension agreement through Spekter. This agreement implies that NET PENSION lIABIlITIES 11 502 4 810 9 305 5 014
all employees have the possibility to choose an early retirement pension from the age of 62. The early retirement
pension agreement through Spekter was decided to be phased out based on a new pension reform from the Nor-
2011 2011 2010 2010
wegian authority from 1 January 2011. It was only possible to retire according to this early retirement agreement
Nord Pool Spot Group Insured unsecured Insured unsecured
until 31 December 2010. The gain on the termination of the arrangement is recognized in 2010, and presented as
Estimated pension liabilities as of 31.12. 44 626 4 770 29 336 4 927
a reduction in labor costs. There is a remaining appropriation of company’s liabilities as per 31st of December 2010
Estimated pension funds as of 31.12. -18 370 0 -16 900 0
which regards persons already engaged in the old early retirement pension plan.
Effect of changes in estimates and deviations not recorded in the
profit and loss account -18 457 -632 -4 884 -608

nord pool Spot annual report 2011

The group has a contribution-based pension plan for employees in Sweden. This pension plan comprises five Social security contribution 3 702 673 1 753 695
employees. The pension costs for the year for employees in Sweden total NOK 1.0 million.
NET PENSION lIABIlITIES 11 502 4 810 9 305 5 014

Employees in Denmark have a contribution based pension plan. This pension plan comprises three employees and
Financial assumptions 2011 2010
pension costs for the year equal 12.5 % of gross salaries per employee.
Discount rate 2,60 % 4,00 %
Expected growth in salaries 3,50 % 4,00 %
Employees in Finland have a contribution based pension plan. This pension plan comprises eight employees and
Expected growth of social security base amount 3,25 % 3,75 %
pension costs for the year equal 17.1 % of gross salaries per employee.
Expected growth in pensions 3,25 % 3,75 %
Expected yield on pension funds 4,10 % 5,40 %
Average social security payment 14,10 % 14,10 %
Nord Pool Spot aS Nord Pool Spot aS

2011 2010 51
current value of this year’s pension earnings 4 960 3 844 Note 18: aCCouNTS PaYaBle
Interest cost for pension liabilities 1 417 1 510
yield on pension funds -979 -768 Amounts in NOK 1000 Nord Pool Spot aS Nord Pool Spot Group
changes on estimates and deviations recorded in the profit and loss account -98 2 488
2011 2010 2011 2010
Shortening 0 -2 929
Power purchases 512 639 2 293 241 512 639 2 307 963
NET PENSION EXPENSES (NET INcOmE) 5 300 4 145
Other accounts payable 11 350 1 817 11 995 2 855
BOOK VAlUE 523 989 2 295 058 524 634 2 310 818
Note 19: TaXeS
auditor’s report

auditor’s report
Amounts in NOK 1000 Nord Pool Spot aS Nord Pool Spot Group

Taxes for the year are distributed as follows: 2011 2010 2011 2010
Taxes payable 7 462 5 982 7 674 6 636
change in deferred tax -578 -391 -578 -391
TOTAl TAX EXPENSES 6 884 5 591 7 096 6 245

Calculated payable tax basis for the year:

Pre-tax profit 31 724 19 776 23 525 20 640
Dividend from Subsidiary -7 774 0 0 0
Other items 233 0 0 0
Total profit before tax 24 183 19 776 23 525 20 640
Permanent differences *) 401 192 401 192
change in temporary differences 2 065 1 395 2 065 1 395
BASIS TAXES PAyABlE FOr THE yEAr 26 649 21 363 25 991 22 227

overview temporary differences: Nord Pool Spot aS Nord Pool Spot Group
Fixed assets -225 -126 -225 -126
Allocations in accordance with generally accepted
accounting principles -1 -28 -1 -28
Pensions -16 312 -14 319 -16 312 -14 319
TOTAl -16 538 -14 473 -16 538 -14 473

28 % deferred tax benefit -4 631 -4 052 -4 631 -4 052

nord pool Spot annual report 2011

explanation why tax for the year does not constitute 28% of the pre-tax profit:
Nord Pool Spot aS
28 % tax on pre-tax profit 6 771
Permanent differences (28%) 112
calculated tax expense 6 884

Nominal taxation rate **) 28,5 %

*) Not including non-deductible expenses, such as entertainment.

**) Tax cost as a percentage of pre-tax profit.

53
 Nord Pool SPoT'S valueS

together
We enjoy working together and have a high team spirit that
keeps us energized and motivated to deliver results.
We develop solutions in close cooperation with our customers.
We achieve success together.

With integrity
Our integrity is founded on a sense of high ethical and moral
values which we regard to be the core of our business.
We act with quality, intuition, honesty and truthfulness.
People trust us, because they know we act with integrity.

towards excellence
Excellence is not a state, it is a dynamic goal. We are bold when
faced with challenges and humble when successful.
We aim to have a broad competence level in order to meet the
needs of our customers.
We work together to achieve excellence every day.
Norway sweden Finland denmark Estonia UK
Nord Pool Spot AS Nord Pool Spot AB Nord Pool Finland Oy Nord Pool Spot AS Nord Pool Spot AS Nord Pool Spot AS
P.O. Box 121 Gustavslundsvägen 141 B ruoholahdenkatu 8 Industrivej 9-11 Tornimäe 5 Tel +44 (0) 7825 3000 98
NO - 1325 lysaker SE - 167 51 Bromma FI - 00180 Helsinki DK - 2605 Brøndby Petrasol Business center E-mail: rs@npspot.com
Tel +47 67 10 91 00 Tel: +46 (0)8 555 166 00 Tel: +358 9 6840 480 Tel: +45 29 46 37 78 EE - 10145 Tallinn www.N2EX.com
Fax +47 67 10 91 01 Fax: +46 (0)8 555 166 02 Fax: +358 9 6840 4860 E-mail: denmark@npspot.com Tel: +372 50 40 273
E-mail: norway@npspot.com E-mail: sweden@npspot.com E-mail: so@npspot.com E-mail: estonia@npspot.com

DESIGN AND cONcEPT: rEDINK, www.redink.no PHOTO: Tine Poppe, caroline roka IllUSTrATION : Terje Tønnesen PrINT: rK Grafisk
www.NordPoolSPoT.CoM