1. Nord Pool Spot update 11th Baltic Electricity Market Mini-Forum October 01, 2010 Hando Sutter, Nord Pool Spot AS

2. Our function ?  Provide a liquid market for electrical energy  Provide information to the market  Provide equal opportunities for all participants  The central counter party in all trades guaranteeing settlement for trade 2

3. ESTONIAN price area There are 13 participants trading in ESTONIAN area presently, continuous interest On 25 July Estlink cumulative volume reached 1 TWh Average daily volume has increased from 4,5 GWh in April to 14 GWh in August Estonia-Finland average price differences have decreased from 7,92 € in April to 0,65 € in September Estlink has had during first months the most bottlenecks in the Elspot-market area. There is need for Estlink 2. EE - LV border has been congested during summer 2010 3

4. ESTONIAN price area Average daily price in August was EUR 56,6 (EUR 43,1 excl. August 24th Average daily price in September was EUR 50,6 Monthly traded volume in August was 432 GWh Monthly traded volume in September was 393 GWH In September purchased volume first exceeded sold volume by 8,1 GWh Total traded volume in first 6 months was: 1,93 TWh 4

5. 5 Price dynamics from April 1st

6. 6 Daily trading volumes; MWh

7. Latvian cross-border optimization in Elspot-market 7

8. 24.8. 2010 Situation 8

9. 9

10. 10 24.8.2010 situation  “Normal “ planned consumption level  Unplanned outage at TG 12 (160MW) –Start at 23.8. at 11.08 –End 24.8. at 21.35  EE - LV capacity optimization. Congestion. –Optimization is not based on “Nordic” model –Rules might impact bidding behaviour  Curtailment, special procedures  Russian import

11. 11 24.8.2010 situation, way forward  Implementation of increased transparency –Urgent market messages –TSO data publication  Authority and NPS market surveillance investigations  Timetable for implementation of new price areas?  Review of internal procedures at TSO’s and market players

12. 12 Baltic PM`s statement on 24.09 The Prime Ministers agreed to continue work, according to the BEMIP objectives and time-lines, on the creation of a fully functioning electricity market in the Baltic States and its integration within the Nord Pool Spot Price Area during 2011.

13. 13 NPS BEMIP project status  July 2010 the project delivered letters to all Baltic countries stating on main findings so far: –Estonia: No needs for major changes –Latvia: Role of power exchange must be regulated, RES scheme should not limit trading possibilities –Lithuania: No needs for major changes  Project continues towards it’s goal: –To support opening of new bidding areas as soon as national conditions are ready –Establishment of intraday markets

14. 14 Nord Pool Spot view  Nord Pool Spot is ready to establish new price areas as soon as local conditions are ready  6 months time of notice to the market in Latvia is needed due to connection to existing price area  For Lithuanian price area will not have similar 6 months notice time  NPS can establish new price areas independently or simultaneously

15. 15 Baltpool integration  Existing set up will be revised during 2010 in order to agree future roles, cooperation and possible integration between NPS and Baltpool.  According to current legislation NPS must have the license to operate in Lithuania. Baltpool is the current license holder  Transparency during the process will be as high as possible

16. 16 Development in Estonia Additional interconnection capacity  From September 20th all Estlink capacity 350MW is operated by NPS Transparency Advanced transparency in Estonia during September – October 2010  Information publication agreement between Elering and NPS  Start up of Urgent Market Messages in Estonia from October 1st  Price area to be called as “Estonia” instead of Estlink from October 1st Intraday market  Elbas launch in Estonia in October 19th, 2010

17. Thank You! Hando Sutter hando.sutter@npspot.com