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2026-07-17 18:32:12
[Nordic Hydropower Deficit Coupled with Stronger Gas Prices Drives Forward Electricity Prices to Two-Year High] ⑴ Nordic forward electricity prices climbed to their highest level in over two years on Friday, marking the third consecutive week of increases. Persistently low hydropower reserves and a stronger European gas market were the main drivers. ⑵ Front-end quarterly baseload contracts rose by approximately 13% this week, while front-end annual contracts also increased, both reaching their highest levels since December 2023, reflecting a more aggressive pricing strategy for regional power shortages. ⑶ Nordic water reserves have been in negative territory since late December, with the deficit widening to approximately 23 terawatt-hours on Friday. Forecasts indicate that subsequent rainfall will remain below seasonal averages, further tightening hydropower availability and compressing supply elasticity. ⑷ External energy linkages are also significant. Wholesale electricity prices in the Netherlands and the UK were supported by escalating military conflict in the Middle East and Iran's threat to block the Red Sea route. German electricity contracts for the following year also rose, while European carbon allowance prices declined slightly.
