It may be difficult to get someone to enjoy a wet and windy autumn start, but chief analyst Sigbjørn Seland at StormGeo believes the stormy weather could at least lead to lower electricity prices.
– LOWER PRICES: Chief analyst at StormGeo Sigbjørn Seland believes people can expect lower electricity prices in the future Photo: StormGeo
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– Already when it went from dry to wet weather forecasts, the price fell by 30 øre per kWh in Norway, says Seland.
He explains that the vast majority have a spot price agreement. They will notice that the bill in October will be more moderate.
– Two weeks ago, one could expect the price to increase to 1 kroner and 20 øre per kWh, but now the expectation is 90 øre per kWh.
Seland believes the price is still high.
– But it is less terrible than you could assume a week ago, he says.
He points out that the amount of precipitation is not alone in influencing the price.
– When the wind is good in the Nordic countries, wind power can account for 15 percent of power production, compared to hydropower, which accounts for 17 percent, so it is important to point out, says Seland.
Great importance
The Norwegian power market is linked to the rest of the Nordic and European power markets. So there are several factors that affect electricity prices, explains Stina Johansen from Nord Pool.
– Although many things affect prices, we do not escape the fact that the weather is of great importance, says Johansen.
– DEFICIENCY: Stina Johansen in Nord Pool says that there has not been so little water in the reservoirs for a long time. Photo: Nord Pool
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Right now, the levels in the reservoirs are 20 percent lower than the average at this time of year.
– But there are big differences within Norway. In southern and western Norway, the level is 30.5 percent below normal, compared with the level in central Norway where the level is only 1.5 percent below, says Johansen.
Lowest since August
On Friday, trial operation began on the North Sea Link power cable between Norway and the United Kingdom. Beforehand, analysts had feared that the price would go up, but the opposite happened.
– The price actually went down compared to the day before and is actually at the lowest since August, says Henrik Glette, communications director at Statnett.
He emphasizes that the lower prices are not due to the cable, but that the weather and wind conditions for once play on a par with Norwegians’ wallets.
How prices will develop over the autumn is too early to predict, and Glette believes Norwegians should be prepared for large variations in the time to come.
– I think we should expect that with renewable energy on the way into all markets, we will have more fluctuations. Both in short and long periods, but this has been a very special situation, Glette concludes.
Must rain a lot
Market analyst John Andrew Brottemsmo at World Kinect Energy agrees that a lot of precipitation will affect prices in southern Norway, but he says that twice as much rain is needed than normal in October to have a significant effect on the bill.
– Precipitation is important and necessary to replenish the reservoirs after a dry period as it has been. If we are to look at the long term, however, it should rain quite heavily throughout October for the consumer to see a big change in the bill, says Brottemsmo.
– Where in the country must it rain for it to be felt in the wallet?
– Unfortunately, it must rain a lot in Western Norway and Southern Norway, says Brottemsmo who is from Bergen.
Brottemsmo points out that electricity prices in southern Norway are relatively more volatile than they are north of Stad.
– The northerners are lucky to have lower and more stable prices. The reason for this is that they have stored more water in the reservoirs than in southern Norway, which has had a dry period, says Brottemsmo.
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