While Germany and France are grappling with record electricity prices amid low gas supply from Russia and low French nuclear power output, the Nordic countries, which rely mostly on hydro and wind power, are enjoying a large drop in prices for the days ahead.
Lower demand due to summer holidays, water filling reservoirs, and windy weather these days led to an 80% slump in day-ahead power prices for the Nordic region on Friday. The average electricity prices across northern Europe for Saturday plunged to as low as $4.24 (4.17 euro) per megawatt-hour (MWh) on the Nord Pool exchange in Oslo, according to Bloomberg's estimates.
To compare, the day-ahead prices in France were at $338 (333 euro) per MWh and at $150 (148 euro) per MWh in Germany.
The day-ahead prices in the Nordic countries hit the lowest since November 2020, on the back of a combination of several factors. These include increased wind power production, people leaving on summer holidays, and sufficient water for hydropower generation.
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The electricity prices for 2023 are also much lower in the Scandinavian countries than in Germany, for example. The contract for the Nordic prices next year was at $112 (110 euro) per MWh on Thursday, compared to a record-high $377 (371 euro) per MWh in Germany, according to Bloomberg.
Water reservoirs in Norway, however, were 59.2 percent full at the end of last week, below the 20-year average, according to data from the Norwegian Water Resources and Energy Directorate (NVE). Hydropower producers have been discouraged in recent weeks to tap more water for hydropower generation and save water for the winter. Operators were also asked not to export too much electricity to the rest of Europe as reservoirs are not as full as in previous years, and not to rely on imports from Europe, which is struggling with energy supply.
By Michael Kern for Oilprice.com
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Michael Kern is a newswriter and editor at Safehaven.com and Oilprice.com, More