Competition and contracts in the Nordic residential electricity markets

The main Nordic residential electricity markets (Norway, Sweden and Finland) effectively opened to retail competition around 1998. They have not been subject to regulatory controls on prices or other contract terms. Competition is developing well. Between 11% and 32% of residential customers have switched to other suppliers, and a further 19% or more have chosen new terms with their local supplier. Terms available include fixed-price contracts ranging from 3 months to 5 years duration and spot price-related terms, in addition to the standard variable tariffs. The use of these new products is increasing over time, and there is considerable product innovation. This raises questions about the ability of regulation to substitute for retail competition.