New cables lift energy prices in Nordic market
Updated: Aug 24
As predicted, the new cable between Norway and Germany lifted the prices in the Nordic market as it went into operation. The prediction is that Norway will import energy via the cable when prices are low in Germany due to large wind and solar production, Norwegian hydro plants reducing their production and keeping water in the magazines. When prices rise in Germany, Norwegian energy producers get an extra profit by selling at the higher prices. For the consumer in the Norwegian market, this is predicted to cause a permanent shift upwards in the electricity prices. Conservative estimates is that this cable alone might give 3-5% increase in the longterm prices.
What will also happen, is that the Nordic markets will experience increased intraday price volatility, following the much larger variation experienced in Germany. Wintertime, the price may have a variation up to 1000% during a single day.