Nordic electricity for delivery in the first week of December rose to the highest price in almost three weeks as forecasts of falling temperatures and less rain indicated higher demand and less water for hydropower output.
Electricity for delivery from Dec. 3 through Dec. 9 gained 3.7 percent to close at 40.70 euros ($52.13) a megawatt-hour as of 3:21 p.m. on the Nasdaq OMX Group Inc.’s energy exchange in Oslo.
That’s the highest closing price since Nov. 1, and compares with a price of 32.89 euros a megawatt-hour for power for around-the-clock delivery tomorrow as set by auction today on the Nord Pool Spot AS exchange in Oslo. The higher forward price indicates traders may expect the average day-ahead baseload price to rise in the coming weeks.
Temperatures in Oslo may drop to minus 2 degrees Celsius (28 Fahrenheit) on Nov. 29 from 8 degrees today, according to yr.no, the joint website of the Norwegian Meteorological Institute and the Norwegian Broadcasting Company.
Power for next month gained 2.1 percent to close at 39.35 euros a megawatt-hour, and the contract for delivery in January through March rose 0.4 percent to 40.30 euros.
Hydropower assets in excess of the seasonal average may fall by 34 percent to 6.19 terawatt-hours in the next two weeks, Markedskraft AS data on Bloomberg show.
The Nordic region meets more than half its power needs by running water through turbines, which is why rain affects electricity prices. Norwegian water reservoirs were 85.1 percent full on Nov. 18, which is 1.6 percentage points more than the seasonal median and corresponds to 70 terawatt-hours of output, Norway’s water and energy directorate said today on its website.