(Montel) Internal German grid bottlenecks will limit the potential for higher Nordic power prices in the next eight years, Oslo-based analyst Nena said on Wednesday, expecting an average cost of EUR 23-27/MWh in the period.
“We don’t envisage a sharp price rise until the German bottlenecks have been fixed. This means there will be a large surplus which the Nordic region is unable to export,” said Nena managing director Christian Sjødin.
In years with above average rain and snowfall, Nordic prices could still be “well below” EUR 20/MWh, he added.
The grid congestion would mean planned new interconnectors have little effect, Sjødin said.
Ageing German grid
Nordic power producers have lost millions of euros due to Germany closing its borders for power imports in order to avoid overloading its ageing grid, particularly during times of strong wind and solar generation.
Sjødin did not expect the problem to be resolved until 2025, after which Nordic prices could rise above EUR 30/MWh.
Swedish traders Modity presented a more bullish scenario last week, saying power for 2020 and beyond would be delivered EUR 10/MWh above current market prices of EUR 22-26/MWh.
The 1,400 MW Nordlink interconnector between Germany and Norway is due to come online in 2020.
The front-year contract for Nordic power was last seen down EUR 0.11 at EUR 20.85/MWh.
Reporting by:
Øystein Meland
oystein@montel.no
12:41, Wednesday, 18 November 2015