(Montel) Nordic forward power prices slid in early Monday trading as fresh weather forecasts showed wetter and milder conditions than previous outlooks.
The front-week contract was last seen at EUR 24.45/MWh, down EUR 0.80 from Friday’s close, while the Q4 contract was down EUR 0.52 at 26.10/MWh.
“On Friday we saw dry forecast both on short- and long term. But today they are significant wetter for next week,” said a Finnish trader.
Different models predict rain over the next 10 days that can provide 4.5-10.2 TWh of hydropower output, against a seasonal norm of 6 TWh, according to SMHI. Meanwhile temperatures are set to average 1.6-2.2C above the seasonal norm.
Oslo-based analysis firm Nena has revised its two-week outlook for the hydrological balance – which measures the energy stored in soil, snow and hydro reservoirs – to zero from a deficit of 4-5 TWh on Friday.
Demand for heating is unlikely to rise over the next two weeks since temperatures will stay mild, saidNena chief analyst Sigbjørn Seland.
Further out the 2017 contract traded last at EUR 22.85/MWh, unchanged on the day.
The Finnish trader cited stronger German Cal 17 power prices for lending some support to the Nordic equivalent.
The German 2017 contract was up EUR 0.38 at 26.25/MWh on the EEX exchange.
Spot to drop
Further in, the day-ahead contract traded last at EUR 26/MWh, compared to the current system price of EUR 26.72/MWh.
The Finnish trader estimated the system price for Tuesday to settle below EUR 26/MWh on more wind power output.
Yet Seland said the price should out-turn above EUR 26/MWh amid increased exports to Germany.
Wind power output is set to average at 3.4 GW on Tuesday, compared to 1.6 GW in the current session, according to data from Nena.
Reporting by:
Anton Tigerstedt
anton@montel.no
11:23, Monday, 5 September 2016