Electricity traders and balancing services

Traders buy electricity from producers, via the electricity market and/or from other traders and sell it under different contract terms to users in competition with other traders. An electricity trader can have several different roles including being responsible for balancing and acting as a retailer. A trader can also offer portfolio management services and other trading-related products and services. About 120 traders, who can be differentiated between both in terms of their actions and the focus of their activities, compete for end-customers on the Swedish electricity market. There are large, vertically integrated power utilities, municipally owned companies and co-owned electricity trading companies (often municipalities that have merged and formed a joint trading company) active on the market. There are also a number of independent electricity traders that are not part of a sphere in which other activities are pursued on the electricity market. According to the Swedish Electricity Act and the "balancing responsibility", there must be a company that is legally responsible for balancing all the electricity that is produced or consumed at the input and outlet points of the grid. A balancing responsibility means that the company has a financial responsible to ensure that there is always a balance between electricity production and consumption with regard to its undertaking. Before a company can have a balancing responsibility, it must first have a balancing services contract with Svenska Kraftnät.