Nordic Power Prices Fall as German Contracts, Carbon Prices DropTorsten Fagerholm and Rachel Morison
Nordic electricity retreated for a second day as German prices and costs for carbon permits fell.
The March contract dropped 0.9 percent to 37.80 euros ($50.49) a megawatt-hour as of 4:08 p.m. on Nasdaq OMX Group Inc.’s energy exchange in Oslo. The benchmark next-quarter contract fell 0.8 percent to 36.25 euros.
EU carbon permits for December declined as much as 3.2 percent to 5.08 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 fell as much as 0.8 percent to 37.50 euros a megawatt-hour, broker data compiled by Bloomberg show.
“A soft CO2 market weighs on German power and also on Nordic electricity,” Antti Salonen, portfolio manager at Finnish energy trading company EM Finance Oy, said today by phone from Kerava, Finland.
The European Parliament’s environment committee is scheduled to vote on Feb. 19 on an European Commission proposal to amend the bloc’s emissions trading directive, to reaffirm the regulator’s right to alter a supply schedule to fix a glut and prop up carbon prices.
“Next week will offer direction for carbon prices, which together with power markets, are currently driven by politics,” Salonen said.
The Nordic region meets more than half its power needs by running water through turbines. Nordic hydropower reservoirs were 50.9 percent full on Feb. 10, 4.2 points below the seasonal average, according to data compiled by Bloomberg. Reserves may decline by 10 percentage points by Feb. 24, Swedish power-trading company Bixia AB said yesterday in an e-mailed report.