(Montel) Nordic Elcert prices for 2019 crashed to a new record low of SEK 52/MWh (EUR 5.48/MWh) on Friday, further eroding profits for producers in a market oversupplied with new renewables.
The March 2019 contract has fallen 54% since the turn of the year, meaning the amount that producers under the scheme earn from power and Elcerts has deteriorated to EUR 26.08/MWh from EUR 34.76/MWh over the past six weeks.
The spot contract was last seen at SEK 56.50/MWh, down SEK 3.50 on the day and a 51% drop this year, according to data from broker SKM.
“Prices are falling because too many power plants have been built, combined with expectations for more investment decisions to be made,” said analyst Joachim Jernæs at Oslo-based Nena.
Under their shared Elcert scheme, Norway and Sweden aim to bring a total of 28.4 TWh of new renewables production online between 2012 and 2020.
Jernæs said companies had already committed to investments for 29 TWh in production from sources like wind and solar, with more investment decisions pending over the next few years.
However, the low prices should deter investments in new projects that are not really needed, he said. “This is a natural and correct market reaction, even though we have fallen below the long-term marginal cost for the most efficient plants in the system.”
EUR 1 = SEK 9.49
Reporting by:
Gert Ove Mollestad
gert@montel.no
14:55, Friday, 10 February 2017