Vattenfall Locks in 44% of 2014 Nordic Power Sales at 44 Euros

Vattenfall AB, the Nordic region’s biggest utility, locked in 44 percent of its 2014 Nordic power generation volumes at 44 euros ($57) per megawatt-hour at the end of September, the company said.

Some 63 percent of power sales for Germany and the Netherlands in 2014 had been sold in advance at 53 euros per megawatt-hour, the company said in its earnings statement.

“We hedge less in the Nordic region due to volatility in rain and snow volumes,” Oystein Loseth, CEO said in a conference call. “When it comes to the weather in Scandinavia, we never know what will happen.”

The Nordic region gets half its power needs from running water through turbines. There is now 10 terawatt-hours more water available for electricity production than on average for this time of year, according to Markedskraft AS data on Bloomberg.

For next year, 73 percent of Vattenfall’s projected Nordic power sales were sold in advance at 46 euros a megawatt hour, while 77 percent of sales for October through December this year were locked in at 47 euros, the report said.

“We are relatively well hedged at reasonable prices for this year and next in the Nordic region,” Loseth said.

The hedges show that Vattenfall has secured earnings above prices of power derivatives on the Nasdaq OMX Group Inc.’s energy exchange in Oslo, where the 2013 contract traded at 37.50 euros a megawatt-hour at 10:36 a.m., and the 2014 contract traded at 38.80 euros yesterday.

For continental Europe, the company had sold all of its projected output in advance for this year and next, at 55 euros a megawatt-hour.

To contact the reporter on this story: Torsten Fagerholm in Helsinki at tfagerholm@bloomberg.net

To contact the editor responsible for this story: Lars Paulsson at lpaulsson@bloomberg.net

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