The system operator is responsible for his area to be electrically stable. Technically, this means that the frequency must be kept at 50 Hz. The system operator is also responsible for the security of supply in his area. In other words, the system operator is responsible that the physical commodity (power) arrives at the end users.

It may happen that the consumption in one area exceeds the production. In this case, the frequency of the alternating power will fall to less than 50 Hz. When this is happening, the system operator for the area in question will immediately have to call up a producer, asking him to pour more power into the grid. In the opposite case, the system operator in the area concerned, will immediately have to call a producer, asking him to reduce the power entering into the grid. Thus, the regulating power is the power that the system operator deals in order to regulate the frequency to keep it at 50 Hz.

The system operator has to be a non-commercial organization, neutral and independent with regard to the market participants.

In the Nordic countries, the system operators are also responsible for the high-voltage grid (the transmission grid). Therefore a system operator in the Nordic area is called a “Transmission System Operator” (TSO). The Nordic system operators have the responsibility for both the security of supply and the high-voltage grid. In Norway, the system operator is the state-owned grid company Statnett SF. In Sweden, the system operator is the state-owned grid company Svenska Kraftnät. The system operator in Finland is the grid company Fingrid. Fingrid is owned partly by the Finnish state. In Denmark, the system operator is the state-owned grid company Energinet.dk. Energinet.dk and Svenska Kraftnät are also system operators for gas.