Nordic power-Market tumbles on warm trend, supply boost

OSLO | Fri Feb 10, 2012 8:44am EST

http://www.reuters.com/article/2012/02/10/market-nordic-electricity-idUSL5E8DA3SM20120210 Nordic power prices <0#ENOALL:> dropped on Friday on the prospect of warmer weather, lower German prices and a return to service of a major Swedish nuclear power reactor. The March 2012 contract on the pan-Nordic Nasdaq OMX Commodities exchange fell 6.28 percent to trade at 39.55 euros per MWh at 1318 GMT while the benchmark second-quarter 2012 was off 3.25 percent at 35.70 euros. "The market turned down largely because of warmer temperatures in the forecast, especially next week, and somewhat wetter conditions," said a Norway-based trader. "Nordic prices are also affected by the German market, which is falling because of higher temperatures and better wind conditions into next week," he said, adding that fossil-fuel prices were also down. He said an additional factor was the scheduled return to the grid this weekend of power from Sweden's Oskarshamn 3 nuclear reactor, which has been shut down due to technical problems since January 24.

PRICE DRIVERS * Spot price: Point Carbon, a Thomson Reuters company, said it expects Saturday's average spot price to be delivered at 46.7 euros, Sunday's at 43.3 euros and Monday's at 68.9 euros. * Weather: Forecaster Georg Mueller of Point Carbon saw unsettled conditions and near-normal temperatures early next week in the south with rain and snow in the west. He added: "This general pattern with moderate Atlantic low pressure influence seems to last until the end of the period with no new major cold dry spells in sight." * Hydro balance: the total amount of snow and water available across Norway, Sweden and Finland 15 days from now was seen at 6.8 terawatt hours above normal, according to Point Carbon. * Oil: a barrel of Brent crude was worth 116.80 dollars at 1311 GMT, down 1.53 percent. * Carbon: The front-year European Union Allowances permit was down 2.62 percent to 7.79 euros. * Nuclear: Sweden's Oskarshamn 3 reactor was being tested at loads of 750 MW in preparation for a potential return to full-scale production of 1,270 MW late in the weekend. * Coal: the short-run marginal cost of coal is expected to be 40 euros per megawatt hour in the second quarter of 2012, down 0.4 euros compared with the prior close, according to Point Carbon. (Reporting by Walter Gibbs; Editing by Alison Birrane)