This report provides insights into the increasing volatility in the Nordic energy market driven by weather risks and geopolitical uncertainty.
Fragile Nordic energy market signals price risk
The year has started dramatically in the international energy markets in general, and the Nordic power market is no exception.
Among the most noticeable developments is that an extremely cold start to the year has lowered hydro reserves in the Nordics to the weakest level in 10 years. The hydrological deficit has driven up Nordic electricity prices to levels closer to Germany and the rest of Europe.
This report looks into how the current dynamics play into the situation on the Nordic power market, with significant risk exposure for all countries across the region.
It also dives into the implications for businesses.
Lasse Kamp Simonson, Head of Structured Desk
We see a high risk of a buildup of systemic pressure in the Nordic electricity market, as our meteorologists project a high likelihood of a new El Niño weather system this summer, which increases the risk of long warm and dry spells. This will in turn push up prices, draining both the gas storages and hydro levels leaving the power market very poorly prepared for next winter.
What to find in the report
- Prices set to be more than twice as high in the second part of the year in some price areas compared to last year
- Extreme volatility and uncertainty on the gas market coincides with the weakest hydrological situation in nearly a decade.
- Continued risk of periods with extreme price spikes across the Nordic region.
- Weather, structural changes, geopolitics and policies expose the Nordics to big price fluctuations.
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