HVDC loss factors in the Nordic power market

Andrea Tosatto*, Spyros Chatzivasileiadis

*Corresponding author for this work

Research output: Contribution to journalJournal articlepeer-review


In the Nordic countries (Sweden, Norway, Finland and Denmark), many interconnectors are formed by long High-Voltage Direct-Current (HVDC) lines. Every year, the operation of such interconnectors costs millions of Euros to Transmission System Operators (TSOs) due to the high amount of losses that are not considered while clearing the market. To counteract this problem, Nordic TSOs (Svenska kraftnät - Sweden, Statnett - Norway, Fingrid - Finland, Energinet - Denmark) have proposed to introduce linear HVDC loss factors in the market clearing algorithm. The assessment of such a measure requires a detailed model of the system under investigation. In this paper we develop and introduce a detailed market model of the Nordic countries and we analyze the impact of different loss factor formulations. We show that linear loss factors penalize one HVDC line over the other, and this can jeopardize revenues of merchant HVDC lines. In this regard, we propose piecewise-linear loss factors: a simple to implement but highly effective solution. Moreover, we demonstrate how the introduction of only HVDC loss factors is a partial solution, since it disproportionately increases the AC losses. Our results show that the inclusion of AC loss factors can eliminate this problem.

Original languageEnglish
Article number106710
JournalElectric Power Systems Research
Publication statusPublished - Jan 2021
EventXXI Power Systems Computation Conference - ONLINE EVENT, Porto, Portugal
Duration: 29 Jun 20203 Jul 2020
Conference number: 21


ConferenceXXI Power Systems Computation Conference
Internet address


  • Electricity markets
  • HVDC losses
  • HVDC transmission
  • Loss factors
  • Nordic countries


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