Nordic power prices are facing significant upward pressure as winter approaches, driven by low water levels in hydropower reservoirs and surging natural gas prices. Denmark-based energy trader Mind Energy warns that these factors could lead to price spikes, especially if wind speeds remain low. The company's November recap highlights panic across European energy markets, which underestimated the severity of the situation earlier this year.
The Nordics are entering the heating season with unusually low water reserves, particularly in southern Norway. In the NO2 price area, reservoir levels are the lowest in 30 years, exacerbating the pressure on already vulnerable southern price areas. The strained hydrological situation, combined with high gas prices, is expected to create a volatile winter with frequent price spikes.
Karsten Sander Nielsen, Senior Market Analyst at Mind Energy, emphasized the dual impact of the gas market strain and the hydrological challenges. Peter Nikolaj Krebs, vice president of customer trading at Mind Energy, noted that when wind speeds drop, power prices in Denmark, southern Sweden, and southern Norway are influenced by German gas plants. With gas prices at their highest since the end of 2022, the outlook for Nordic power prices remains uncertain.