Europe faces a volatile winter with electricity prices soaring.
According to Mind Energy, low water levels in hydropower reservoirs and rising natural gas prices are putting upward pressure on electricity prices in the Nordic countries heading into winter, writes Reuters.
In a review held in November, the company said: "Winter is upon us and panic prevails in the energy markets in Europe, after having clearly underestimated the severity of the situation at the beginning of the year." An increase in natural gas prices in Europe in October and "strong hydrological pressure on the Nordic countries ahead of winter" could lead to a sharp increase in electricity prices in the coming months, analysts said.
The Nordic countries will enter the heating season with significantly less water in the system than usual for this time of year. "This obviously puts additional pressure on already vulnerable southern price zones in the Nordic countries," analysts said.
"The Nordic countries have undoubtedly been hit hard by the tight gas market situation and its impact on Europe as a whole, but another important factor contributing to the significant price increase in October is the difficult hydrological situation," said Karsten Sander Nielsen, senior market analyst at Nefesh Energy.
Peter Nicolai Krebs, vice president of customer services at Mind Energy, said: "When the wind calms down, prices in Denmark, southern Sweden and southern Norway are set by German gas-fired power plants."