Aug. 27 (Bloomberg) -- Nordic power for the fourth quarter dropped to the lowest in three sessions as forecasts of wet weather boosted the likelihood of an oversupply of hydropower.
“The forecasts are much wetter, and look very reliable, showing a low-pressure area coming in from the end of next week,” Phong Le, senior power trader at power-trading company Energi Danmark AS, said by phone from Arhus, Denmark. “The front quarter contract was slightly overbought last week, and could drop further, tomorrow and on Wednesday.”
Precipitation equivalent to 2.9 terawatt-hours more than the seasonal average is expected for the next 15 days, up 0.7 terawatt-hours from last week, the company said in a report on its website. That means hydropower producers are eager to lock in profits by producing electricity now, rather than save the water for later and risk lower earnings, Le said. About half of Nordic power demand is met by running water through turbines.
Nordic power for the fourth quarter dropped as much as 2.6 percent to 38.77 euros ($48.57) a megawatt-hour on Nasdaq OMX Group Inc.’s energy exchange in Oslo. The contract traded at 38.90 euros at 2:16 p.m. Oslo time. Month-ahead electricity lost as much as 7.7 percent to 28.60 euros, while the contract for 2013 declined 1.4 percent to 38.95 euros.
A lower-than-expected spot price for tomorrow on the Nord Pool Spot AS exchange in Oslo contributed to the weakening of front-curve forward prices, Le said. Nordic power for delivery tomorrow rose 1.6 percent to 32.74 euros, the highest level in 15 weeks. That’s still 26 cents short of market expectations of 33 euros, as reflected by the the day-ahead contract on the Nasdaq OMX exchange.
EON AG will run tests at its 1,400-megawatt Oskarshamn-3 reactor starting tomorrow, with production falling as low as 200 megawatts, the company said in a filing via Nord Pool Spot on Aug. 24. A test on the turbine on Aug. 30 will cut output completely, with full production expected the next day, EON said. The company also plans tests on Sept. 3, Sept. 6 and Sept. 21, it said.
Vattenfall AB will cut power output at its 865-megawatt Ringhals-1 reactor in Sweden to 400 megawatts from today to Aug. 30 for maintenance on a turbine, the company said on Aug. 20 in a filing via the exchange.
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