Yes, that's fundamentally it. By making the marking more liquid, different types of entities can adjust for their specific predictability/risk needs.
Also note that though these markets are "free" they are still extremely highly regulated. I don't know much about the Finnish market but I've built trading algorithms for CAISO and PJM, and it is by no means a free-for-all. The rules about what types of entities can participate in which aspects of the market are quite strict and detailed.
Especially post-ENRON there is a strong focus on avoiding even any possibility of appearance of market manipulation. Basically the guidance from our lawyers was: every trade needs to have a strong, explicable economic rationale (apart from the market.) In our case we didn't even want to use neural-network based trading algorithms, since they (at the time) weren't sufficiently explicable for us to have a "rationale" for a trade that might later be called into question.
The market is mainly regulated by having some restrictions on pricing by requiring the sellers to be able to prove that their price roughly matches your their costs + some profit margin (to stop a big player from buying all the cheap electricity and relisting it for massive profits) and forcing producers to put money into escrow/buy insurance for the case that they fail to deliver what they sold.
This latter one led the government having to open a line of credit for tens of billions euros last winter when the prices were high just so the actual producers could afford to sell their (historically highly priced) electricity as the money you have to leave in escrow/insurance price is tied to the SPOT price.
Also note that though these markets are "free" they are still extremely highly regulated. I don't know much about the Finnish market but I've built trading algorithms for CAISO and PJM, and it is by no means a free-for-all. The rules about what types of entities can participate in which aspects of the market are quite strict and detailed.
Especially post-ENRON there is a strong focus on avoiding even any possibility of appearance of market manipulation. Basically the guidance from our lawyers was: every trade needs to have a strong, explicable economic rationale (apart from the market.) In our case we didn't even want to use neural-network based trading algorithms, since they (at the time) weren't sufficiently explicable for us to have a "rationale" for a trade that might later be called into question.