Nordic electricity for next quarter fell after weather forecasts indicated lower demand and carbon prices declined.
The benchmark Nordic next-quarter contract fell as much as 0.8 percent to 35.90 euros ($47.38) a megawatt-hour on Nasdaq OMX Group Inc.’s energy exchange in Oslo and was at 36.05 euros at 10:20 a.m.
Temperatures in Norway will average minus 1.5 degrees Celsius (29 Fahrenheit) through March 3, up from an earlier forecast of minus 2.1 degrees, MetraWeather data using the ECMWF model show. Higher temperatures damp the demand for electric heating.
EU carbon permits for December declined as much as 3.2 percent to 4.82 euros a metric ton on the ICE Futures Europe exchange in London. Emission prices can influence generation costs at coal-and gas-fed plants. German power for baseload delivery next quarter retreated as much as 0.4 percent to 37.10 euros a megawatt-hour, according to broker data compiled by Bloomberg.
“Carbon prices need to rise to 15 or 20 euros per ton in order to have the intended impact, requiring a permanent withdrawal of permits” to fix a glut, Magnus Reitersjoe, head of financial trading at Bixia AB, Sweden’s fourth-largest power trading company, said today in an e-mailed statement.
The European Parliament’s environment committee approved measures to tackle the oversupply in a vote on Feb. 19. Prices in the world’s largest cap-and-trade program fell to a record 2.81 euros a metric ton on Jan. 24 as the financial crisis hurt industrial production and cut demand from industry for emission permits. The surplus of allowances is almost half of the average annual pollution limit in the system.
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