Nordic electricity for the next quarter rose for a third day after lower temperatures and drier weather indicated higher power demand and reduced supply.
The benchmark Nordic next-quarter contract advanced 0.6 percent to 36.50 euros ($48.29) a megawatt-hour on Nasdaq OMX Group Inc.’s energy exchange in Oslo at 9:35 a.m. The March contract gained as much as 0.7 percent to 38.40 euros.
Temperatures in Norway will average minus 1.1 degrees Celsius (30 Fahrenheit) through March 4, down from an earlier forecast of minus 0.4, MetraWeather data using the ECMWF model show. Lower temperatures boost demand for electric heating.
The Nordic region gets more than half of its power from hydroelectric plants. The amount of water and snow available to generate electricity in the region may be 16.7 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.
Cold weather has resulted in higher demand, which has depleted reservoirs faster than average for the time of year. An unusually dry winter period has triggered a deficit in snowpack and soil water, which will cause low runoff at hydropower plants during the spring thaw, Swedish power trading company Telge Kraft AB said yesterday in an e-mailed report.
“Given a normal weather development, power prices for around-the-clock supply be slightly below 300 Swedish kronor per megawatt-hour from April through September,” the company said. That’s equivalent to 35.49 euros, less than today’s prices for the second and third quarters on the Nasdaq OMX exchange. The July-September contract gained 0.7 percent to 36 euros, the highest since Feb. 14.
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