(Montel) The Nordic Elcert March 2017 contract fell to an 11-month low on Tuesday morning after Norway’s Statkraft announced plans to build Europe’s biggest onshore wind project at 1,000 MW
The contract traded last at SEK 140/MWh (EUR 14.97), down SEK 6/MWh from the previous session, according to broker data.
Preben Klyve Olsen, a trader at Norwegian power firm BKK, attributed the sell-off to market participants keen sell certificates before Statkraft’s Fosen project adds to supply in the market from 2017.
“It’s hard to say how far prices could drop as this is such a vast project,” he said.
Fosen, located in central Norway, is estimated to generate 3.4 TWh a year once it is completed.
“The price fall is clearly connected to Statkraft’s announcement, and SEK 6/MWh is also the effect we expected in our analyses,” said Nena analyst Joachim Jernæs.
March 17 was the only contract traded via brokers at the time of writing.
However, the fact that the Norwegian utility has made its investment decision suggests it expects higher prices further ahead.
“Falling prices at the front end of the curve do not necessarily mean that Statkraft has changed its long-term price outlook drastically,” said Marius Holm Rennesund, analyst at Thema.
The combined Elcert and Nordic power price for 2020 has fallen more than EUR 10 to EUR 35/MWh since the firm initially shelved the wind power plans last summer.
The Elcert market in Sweden and Norway helps promote new renewable electricity production, with producers receiving one certificate per MWh of power generated. These are sold to consumers who are required to obtain certificates equivalent to a certain amount of their power consumption.
The scheme aims to bring a total of 28.4 TWh of new renewable production online in the two countries between 2012 and 2020.
(EUR 1 = SEK 9.37)
Reporting by:
Gert Ove Mollestad
gert@montel.no
11:00, Tuesday, 23 February 2016