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Nordic peak prices strongly connected to the European market after New Year

Eylert Ellefsen
Archived blog post. This blog post has been transferred from our previous blogging platform. Links and images may not work as intended.

The times they are a-changin'.

Bob Dylan's well-known lyrics can be used to describe what is happening in the Nordic power market after the New Year. After a very bearish 2020, everything is currently bullish: Hydrological balance is declining, the forward prices are increasing, temperatures are below normal, and the spot prices have skyrocketed.

EPEX spot's spot price map shows the spot prices for 17:00-18:00 on Thursday 7 January, the Nordic prices at 100 €/MWh coupled with the Continental prices (see below).

In the blog post, we focus on the market coupling between Norway-South (price areas NO1, NO2, NO5) and the Continent/Denmark. 

Spot prices on for 17:00-18:00 on 7 January. Nordic prices coupled with Continental prices. Source: EPEX Spot.

Key findings

Increased border capacity between NO2 (southern Norway) and Denmark/Germany (1000-1500 MW) can be described as a regime shift in Norwegian-Continental power exchange:

  • The Nordic peak prices will be determined by the Continental prices already from normal temperatures at wintertime.
  • The hydropower production in Norway-South (price areas NO1, NO2, NO5) reaches its limit at peak hours during week 1.
  • Norway must import from the Continent at peak hours with temperatures below normal as seen during the first week of 2021.

Power exchange and prices week 1-21 compared to week 51-20

We have compared the power exchange and prices from week 51, 2020 and week 1, 2021, to illustrate the changes we see during week 1.

Week 51 was relatively mild, temperatures at about 0 °C in NO1 (Oslo), and we saw Nordic peak prices strongly decoupled from the Continental- and Danish prices.

Week 1 turns out at about -8 °C, with Norway-South consumption about 2 GW higher than for week 51, and peak prices coupled to Denmark/DE.

Why do we see this difference? Have the Norwegian hydropower producers raised their bidding curves/water values during peak hours after New Year?

That's not the reason. However, we believe that decreasing hydrological balance means somewhat increased water values. The shift in peak prices has a different fundamental background:

During week 51, 2020, the border capacity limited the production because of the low consumption.

In week 1, 2021, we see that southern Norway's hydropower production reaches its max level due to increased consumption. Thus Norway-South cannot support max export flow on the southbound borders. Also, the border flow NO1-SE3 is important to consider: Increased consumption in SE3 and Finland, as well the closure of Ringhals 1 nuclear plant (880 MW), is now, to a high degree, covered by hydropower production in southern Norway.

Spot prices NO2, DE, DK1, Monday-Thursday, week 1, 2021.
Spot prices NO2, DE, DK1, Monday-Thursday, week 51, 2020.

During week 51, 2020, the border capacity was fully utilized at peak-hours, while for week 1, 2021, we see clearly that the border capacity is not fully utilized during peak hours. The difference is increasing from Monday until Thursday as the consumption level is rising. The resulting effect is that the Continental- and DK1 prices are determining the Nord Pool prices.

Total exchange Norway-South (MW), Monday-Thursday, Week 1, 2021.
Total exchange Norway-South (MW), Monday-Thursday, Week 51, 2020.

The Dutch connector's exchange clearly shows how NO2 imports power at peak hours on Thursday 7 January as the Norwegian hydropower has reached its max level.

Exchange NO2 to Netherlands Monday-Thursday, week 1 2021.

The chart below shows how the hydropower production in Norway-South is limited at about 18 000 MW during week 1, even though spare export capacity is available.

For week 51, 2021, the border capacity limits the production level; about 1500 spare production capacity is available in Norway-South that could not be utilized due to the border limitations and a low consumption level.

Hydropower production in Norway-South, week 1 2021 vs week 51 2020.


During week 1, 2021, we have seen a change in the Nordic peak prices that can be described as a regime shift. However, the connection between the Nordic and the Continental peak prices is temperature-dependant and is influenced by the Swedish/Finnish power balance, as well.

Week 1 has been colder than normal, but our general conclusion is that the stronger connection between the Nordic and Continental peak prices will occur by normal temperatures and lower. Normalized hydropower level will even support the peak price connection.

Finally, we show the average spot prices for Monday-Thursday during week 1, 2021 for the different price zones and DE/NL. The DK1 price has been the best reference for NO2- and SE3 prices and the NL price is close to DK1.

Average spot prices Monday-Thursday for Week 1, 2021.

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