Bidding Zone

A bidding zone is the area within which wholesale electricity trades at a single market price for each hour, used across Europe's day-ahead markets. Most zones follow country borders, but a few countries are split into two or more zones (Norway and Sweden, for example), and one zone spans two countries (Germany and Luxembourg). Trading inside a zone assumes the grid underneath can move power freely between any two points; between zones, only a fixed cross border capacity applies, which is why prices can differ from one zone to the next.