Nordic power demand slumps on back of wider economy
A spate of industrial closures and short-term production cuts in the Nordic region led to a fall in power consumption during 2008. The final quarter was the hardest hit, according to Nordic energy company Fortum’s periodical energy market review.
Nordic power demand fell by 5TWh during Q4 ’08 compared with the previous year. Finland and Sweden were the main contributors to the crunch in demand, as Finnish demand dropped by more than 8% and Swedish consumption fell by nearly 6%.
The slump was driven by the current economic slowdown, which put pressure on a number of pulp, paper and metal firms to cut production.
Reduced power demand led to a downward trajectory of wholesale power prices in the region. “Electricity prices have been going down for almost half a year…. The prices for electricity futures have decreased to levels last seen over three years ago,” Fortum said.
The region’s energy exchange NordPool closed its March ’09 contract at €33.25/MWh on Monday. This is a €10/MWh drop from levels earlier this year (see graph).
Fortum reported that continental European prices currently held a €10–20MWh premium to Nordic levels.
Nordic spot prices were said to be holding their ground better than longer-dated contracts. Current “spot market prices are higher than the levels at the beginning of 2007,” according to the review.
“[But] even during cold winter days, there have not been significant increases in spot prices. This week’s reservoir levels would have normally resulted in a hike in spot prices,” said a Fortum spokesperson.
Reservoir levels are currently below the long-term average reference level. Last week, Nordic reservoirs stood at a 44.8% fullness (see EDEM 13.034). This is equivalent to a power generating capacity of 54.254TWh, which is 15.6TWh less than the reservoir generation capacity for the same period in 2008. CA
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