The best way to sell the Nordic market internationally is to focus on the differences in the price drivers. Being different by design and regulatory framework adds complexity and is not a value added – the result is a costly unattractive barrier for new entrants.
Regardless of compliancy with continental Europe, the current structure of the Nordic market seems to struggle to deliver adequate hedging opportunities. To overcome this the market participants may need to “crack a few eggs”:
1st egg: The Systemprice and the calculation method
2nd egg: The Systemprice and the geographical scope
3rd egg: Geographical scope of basis risk hedging instruments
Looking forward to a fruitful debate at the NAET Autumn meeting.