Olkiluoto delay may see Nordic power prices jump – analyst

(Montel) Friday’s announcement of another delay to the start-up of Finland’s 1.6 GW Olkiluoto 3 nuclear reactor could see Nordic power prices jump this winter to near German levels, an analyst told Montel on Monday.

The Nordic market was already buoyed by rising fuel costs and low hydropower reservoir levels, with the latest news set to add more bullish pressure, said Volue’s Tor Reier Lilleholt, referring to TVO’s announcement late on Friday that the commissioning of Olkiluoto 3 was postponed by another three months to June.

“This [delay] could impact the Nordic system price by EUR 2-5 [this winter] and Finnish area spot prices considerably more,” said Lilleholt, though added the price impact could be even larger on waning hydropower reservoir levels.

Q1 doubles

Q1 Nordic power had almost doubled to EUR 60.10/MWh since the start of the year in response to the rising fuel and carbon costs and a weakening hydrological balance – a measure of energy stored in reservoirs, snow and soil.

Previous plans to start-up Olkiluoto 3 from April next year would have brought much needed supply to the region.

The delay therefore “could be the single marginal factor that leads to a considerable alignment between Nordic and German power prices”, said the analyst.

German Q1 power was last seen at EUR 95.80/MWh, EUR 36 above its Nordic equivalent, while Finnish Q1 prices were currently around EUR 70/MWh.