Meteorologist to Hire Planes, Skiers for New Power FundBy
Seeks to raise at least 1 billion kroner from investors
Proprietary snow surveys to give advantage over competitors
A Norwegian meteorologist plans to beat the Nordic power market by hiring airplanes, skiers and snowmobiles to help him get the best weather data possible.
At a time when peers are sputtering, Ivan Fore Svegaarden is seeking to raise at least 1 billion Norwegian kroner ($120 million) for an energy fund called Tradenrdpower AS that he plans to start in the second half of next year.
With more than 50 percent of power generation in the Nordic region coming from rain and snow, the most accurate data on how much water there is as snow in the mountains is key when trading electricity. By surveying snow depth from both the air and on the ground, Svegaarden, a former military officer and energy meteorologist at Norwegian utility E-CO Energi AS, will seek to gain an edge.
“We plan to send out field excursions on snowmobiles and skiers to take snow samples parallel with use of airplanes,” Svegaarden, chief executive officer of the fund, said in an interview. ”Then we can compare our data from a large-scale area with existing models to see where the market view is wrong and trade on that strategy,” he said by phone from Lillehammer, Norway.
Power prices on the Nasdaq Commodities exchange in Oslo slipped for five of the past six years as a surge of renewable energy created a glut. That led to less buying or selling power in advance, cutting overall volume in the world’s oldest market.
At least four funds focusing on Nordic power left the market in the past three years as they failed to deliver stable returns. In February, Sector Asset Management AS in Oslo closed its Euro power hedge fund after investing in the market for more than a decade.
Most of the Nordic companies providing extensive weather data and analysis are often providing inaccurate snow estimates, Svegaarden said. The company will try to make the most out of their own surveys by targeting areas that today have few data measure points, but are still important for the market.
Svegaarden aims to raise at least 30 million Norwegian kroner for necessary approvals and to set up the fund structure, before marketing his fund to mainly Norwegian retail investors. He also plans to set up two European power funds and two green energy stock funds within 4-5 years.
The few Nordic energy funds that remain have had mixed results this year. Nordic Power Trading, managed by Bjarne Walbech in Kolding, Denmark, is up 14 percent by end of April, heading for its third successive year with positive returns. In Sweden, Shepherd Energy AB’s power fund in Stockholm was down 7.2 percent by the end of April, while its Energy Portfolio lost 4.8 percent so far this year.