(Montel) The Nordic system price will average below EUR 30/MWh for the next three years amid a large surplus of power, Oslo-based analysts Nena said in a fresh forecast on Wednesday.
The analysts estimate an average spot price of EUR 29/MWh in 2018 and 2019, and EUR 28/MWh in 2020.
The equivalent futures contracts on the Nasdaq Commodities exchanges last traded at EUR 28.35/MWh, EUR 27.66/MWh and EUR 28.46/MWh, respectively.
The system price has averaged EUR 28.98/MWh so far this year.
The region will have an annual power surplus of 16 TWh from 2018-2021 as more new renewables come online, more than compensation for the phasing out of 1.8 GW of Swedish nuclear output.
Further ahead, Nena expects prices to rise, although the increase will be curbed amid falling costs for renewables and financial support for new developments.
Subsidies via the Elcert system would likely help bring about 41 TWh new production in Sweden alone between 2025 and 2045, with an additional 11 TWh wind power in northern Norway likely even without subsidies, Nena said.
As much as 100 TWh new renewables could come online in the Nordic region as a whole by 2045, while power consumption will increase by 0.4-0.5% per year on average, or by a total 50 TWh by 2045. Most of this increase will come from data centres and the electrification of the transport sector, the analysts said.
Even so, much of the new power generation will have to be exported, requiring an additional 12 GW of interconnector capacity to the UK, Netherlands, Germany and the Baltic states, compared to 5.7 GW currently.
Reporting by:
Gert Ove Mollestad
gert@montel.no
11:21, Wednesday, 8 November 2017