Dec. 17 (Bloomberg) -- Shutdowns of unprofitable coal-fired generating capacity in Denmark by the country’s biggest utility will bring power prices in the nation more in line with higher costs in Germany, according to Bixia AB.
Dong Energy stopped power production at the 670-megawatt Enstedvaerket-3 coal-fed power plant in Aabenra, southern Jutland, Denmark, the company said on Dec. 14. The shutdown will boost Denmark’s dependence on electricity imports during cold snaps and peak demand, narrowing the discount of Danish power prices compared with ones in Germany, said Robin Skoeld, a trader at Bixia, Sweden’s fourth-largest power-trading company.
“Danish power prices will more often track the German market,” Skoeld said today by phone from Linkoeping, Sweden. “It may also have a knock-on effect of higher power costs in southern Sweden during low wind output.”
This year’s average price for power for next-day delivery in the Nordic region is the lowest in five years, according to data from the Oslo-based Nord Pool Spot AS exchange, making generation at plants like Enstedvaerket unprofitable.
Electricity in Denmark has averaged 36.85 euros ($48.48) a megawatt-hour this year on mainland Jutland and 38.02 euros on the Island of Zealand, the highest prices in the Nordic region, data from Nord Pool Spot show. That compares with an average baseload cost of 43.66 euros a megawatt-hour for Germany in the same period, according to broker data on Bloomberg.
The plant shutdown will compound Denmark’s power deficit during peakload, with the security of supply depending on a “very high usage of the import capacity” in cold periods, Entsoe, a Brussels-based group of national grid operators, said in a Nov. 19 report on its website.
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