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Norway-South: Low reservoir filling, will prices increase further?

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 water reservoir filling levels in Norway-South (price zones NO1+NO2+NO5) are heading towards an all-time low at around 15% of capacity this spring (the long-term normal is about 33%). In real terms, the current level is about 10 TWh lower than usually expected.

As a result, the market is now very concerned about the reservoir outlooks for the upcoming summer. Expected snowmelt has been delayed and the weather has more generally been very dry since March.

EQ has modeled the inflow scenarios for summer 2022 using 43 years of climatic weather statistics. Based on the inflow scenarios, we have calculated the variation bands for the reservoir curves, hydro production, and the exchange conditions until the end of Q3.


Hydropower production from No-South could be reduced by at least 25% in a dry scenario this summer. Even if precipitation occurs out at normal levels, the production will have to be strongly reduced to partly “normalize” the reservoir filling. Consequently, No-South will most likely be in a moderate export situation this summer, possibly even requiring high levels of power imports in a dry scenario.

This means that spot prices across No-South are likely to rise, getting closer to Continental spot price levels. Even considering the context of stabilizing gas prices, the market situation for No-South remains bullish.

Inflow scenarios No-South until the end of Q3

As explained, we have created a climatic scenario study of the expected inflow levels until the end of Q3 2022 on a weekly resolution. Statistically, the variation band in accumulated precipitation for the period June-Sept is about +/- 9 TWh, which means +/- 15% for the reservoir filling.

43 years of accumulated inflow data is shown in the chart below. The variation band for the 95% - 5% percentiles is about +/- 10 TWh, close to the precipitation variations.  These numbers tell us that in a dry scenario, the reservoir filling deficit will increase from –10 TWh to –18 TWh (52% filling) by the end of September in a normal production scenario.

The next chart details the weekly inflow scenarios. We can see that the average curve meets the long-term normal by the start of June. We will study the accumulated 5th percentile, average, and 95th percentile scenarios in detail to see how the reservoir conditions may come out this summer.

Outlooks for the summer and Q3

Based on the accumulated inflow scenarios and adjusted production profiles (relevant percentages of the long-term normal curve), we have estimated the following reservoir curves until the end of September.

The production curves are downscaled from the long-term normal to avoid both extreme low levels by end of September and to refill the reservoir capacity before the start of Q4.

Several scenarios of the reservoir filling during the summer can be made. We have chosen to focus on those which will not come out lower than last year, and in general, modifying the production to increase the reservoir curve.

In the table below, you find the calculation numbers we have been using. We see from the numbers that to avoid even lower reservoir levels than last year, production must be reduced to about 75% of normal in the dry scenario. This means that No-South would need to import about 2TWh. Comparatively, NO-South tends to export about 6 TWh in the same period (weeks 19-39) during a normal year.

With normal precipitation this summer (average inflow scenario), we estimate around 1.4 TWh of exported power (net) and reservoir fill levels to reach 67% by the end of September. This remains a long way below the long-term normal (84%). The production in this average scenario represents about 85% of normal.

One further conclusion we can draw from the numbers in our table is that even in a particularly wet scenario, we will continue to assume reduced production and limited exports this summer.

Market price outlooks

In the table below, you can see the closing prices from Friday, May 6th. The prices are based on the EPAD-prices and NP-Sys.

As No-South most likely will be in a limited export situation, or possibly even an import situation this summer, we believe the gap between spot prices in No-South (NO-1,-2,-5) and Continental prices will reduce from the latest closing prices (May 6th) as power in No-South becomes more expensive. No-South will therefore need “cheap” imports from SE3 and NO3, but these volumes will most likely not compensate for the expected exports to the “high-priced” areas that are linked through subsea cables to NO2.

Final words

EQ has created this scenario study of the inflows and reservoir outlooks across No-South this summer to assess the impact on power prices in the region. The inflow modeling is based on the SMHI HYPE GWh concept, and the power balance data is based on the database at Energy Quantified AS.

Please contact us at if you have questions about this blog post or other requests concerning our analysis platform at

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