Electricity Price Area Differentials (EPAD)

The reference price for Nordic DS Future and futures contracts is the Nordic system price. Actual physical delivery purchase costs are determined by actual area prices. An area price differs from the system price when there are constraints in the transmission grid; Electricity Price Area Differentials (EPAD) allows members on the exchange to hedge against this area price risk.

A perfect hedge using DS Future or futures instruments is only possible in situations when there is no transmission grid congestion in the market area, that is, area prices are equal to the system price. Hedging in DS Future or futures implies a basis risk equal to the difference between the area price at the member’s physical location and the system price.

Nasdaq Commodities lists for trading Nordic EPAD contracts for the nearest two months, three quarters and three years. The market price of a EPAD during the trading period reflects the market’s prediction of the price difference during the delivery period.


Electricity Price Area Differentials

EPAD Price area No of months No of quarters No of years


Oslo, Tromsø, Copenhagen, Århus, Tallinn, Riga
Stockholm, Luleå, Sundsvall, Malmö, Helsinki





Difference between the area price and the Nordic system price



An EPAD is a DS Future contract with reference to the difference between the area price and the Nordic system price.

Example: SYOSL= Norway ΔP = Oslo area price - system price