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Nordic Power Retreats After Carbon, German Electricity Decline

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Feb. 19 (Bloomberg) -- Nordic electricity for next quarter fell with German power and carbon permits, and after the price for power delivered tomorrow declined.

The benchmark Nordic contract lost 1.7 percent to 35.75 euros ($47.73) a megawatt-hour as of 2:15 p.m. on Nasdaq OMX Group Inc.’s energy exchange in Oslo. The March contract retreated 2 percent to 37.25 euros.

EU carbon permits for December declined 11 percent to 4.56 euros a metric ton after sinking as low as 4.09 euros 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 1.6 percent to 37.15 euros a megawatt-hour, according to broker data compiled by Bloomberg.

The European Parliament’s environment committee approved measures to tackle a glut of carbon permits in a vote today, as proposed by the EU Commission. It also postponed for about a week a decision on whether to authorize negotiations with governments in a bid to fast-track an agreement on amending the bloc’s emissions trading directive, to reaffirm the regulator’s right to alter a supply schedule to prop up carbon prices.

Electricity for delivery around the clock tomorrow will cost 39.70 euros a megawatt-hour on average, following today’s auction on the Nord Pool Spot AS exchange in Oslo. That’s less than the financial contract for tomorrow on Nasdaq OMX, which closed at 40.25 euros. Forward contracts frequently track movements in prompt prices.

The Nordic region gets more than half of power use from hydroelectric plants. The amount of water and snow available to generate electricity in the region may be 15.5 terawatt-hours below normal for the time of year in two weeks, down from 14.6 terawatt-hours today, Markedskraft AS data on Bloomberg show. That indicates the deficit will narrow by 1 terawatt-hour compared with yesterday’s forecast for the period.

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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