Different market models are developed for this market based on a physical description of the production, transmission and consumption, as well as costs. The models utilize expertise within production planning and operation of thermal power plants, wind power plants, transmission system and consumption characteristics.In a well-functioning electricity market electricity is produced and utilized in the best possible way. Hence these analyzes can be performed using optimization models. The most famous market model developed by SINTEF is EMPS. The model finds an optimal strategy for hydropower based on stochastic and dynamic programming.
On the power exchange Nord Pool power prices are calculated every hour in different areas on daily basis. Through Nordel transmission system operators in Scandinavia are cooperating closely, and there exists a common market for balancing services during operations.