OSLO: An expected restart of two paper mills in the region and colder weather lifted Nordic spot power prices on Wednesday, analysts said.
The spot price for physical power delivery on Thursday was set at 36.71 euros per megawatt-hours (MWh)on the Nord Pool Spot exchange, up from 36.56 euros/MWh on Wednesday.
The day-ahead power contract on Nasdaq OMX Commodities was last traded at 37.00 euros/MWh, indicating that traders expected a higher delivery price.
"Expected higher consumption due to colder weather and restart of several paper mills helped the spot price," Kristoffer Uppheim, an analyst at Thomson Reuters Point Carbon, said.
Paper mills are one of the biggest power consumers in the Nordic market, and have to report to the power exchange about their closure and restart plans.
The price for delivery in the fourth quarter fell by 30 cents to 35.30 euros/MWh, extending losses from the previous day.
The latest forecasts showed Atlantic lows moving to southern Scandinavia on the weekend, bringing wetter and windier weather towards the end of the next week.
Meteorologists said it was still uncertain whether it will evolve into a longer lasting wet period.
Point Carbon estimated the Nordic water balance the level of water stored in reservoirs, soil and snowpack to be equivalent to 15.7 terrawatt-hours (TWh) below normal.
Taking into account the latest weather forecasts, it is expected to improve to 15 TWh below normal by Oct. 1.
The Nordic market generates about half its electricity from hydropower, meaning that changes in precipitation are an important factor for prices.
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