OSLO- The pan-Nordic power market recorded negative hourly prices for the first time in its history on Monday, as a bout of mild, windy and rainy weather led to significant oversupply, data from the Nord Pool exchange showed.
The average Nordic power prices, reflecting physical power deliveries, were negative between the hours of 0100 and 0400 GMT, hitting a low of minus 0.93 euros per megawatt hour (MWh).
That means that power producers were paying consumers to buy surplus energy as they could not hold back production.
While hourly prices have from time to time dropped to negative values in Denmark due to a large share of wind power, it is the first time the whole Nordic region has seen a negative level.
In Norway, which is dominated by hydropower from reservoirs and where producers can usually control output to avoid having to generate electricity at times of oversupply, prices turned negative for four hours in its two southern-most price zones.
Norway's reservoirs are currently on average 92.7% full, according to data from regulator NVE, making it harder for utilities to adjust production.
In addition, mild weather reduced electricity demand for heating, while windy weather boosted output from wind power turbines, Tor Reier Lilleholt, head of analysis at Wattsight, told Reuters.
Sigbjoern Seland, chief analyst at Storm Geo Nena, said negative prices were likely to occur more often in the future due to new wind power developments in the Nordics.
If the mild and wet weather was to continue into 2021, the system price could fall below 2020 levels, which is expected to be at a 20-year low of 11-12 euros per megawatt hour, analysts said.
(Reporting by Nora Buli, editing by Terje Solsvik) ((Nora.Buli@thomsonreuters.com; (+47) 21 04 05 56; Reuters Messaging: nora.buli.thomsonreuters.com@reuters.net))
