Snorkelling for negative prices

Norway - and the Nordic power system more generally - have seen fewer instances of negative prices than their continental counterparts in recent weeks. Why has the region been “snorkelling” while others have been plumbing the depths of negative prices.

Norway’s hydropower system is under pressure after one of the coldest winters in 16 years and a prolonged period of low precipitation. Reservoir levels in southern Norway remain well below normal, raising questions about energy security, winter preparedness and the growing role of Europe’s interconnected power markets. 

But is the situation really as serious as headlines suggest?

Joined by some of the foremost experts on Norwegian hydropower and the market dynamics, together, they explore how low snowpack, dry weather patterns and shifting hydrological balances are affecting Norway’s power outlook — and why imported renewable energy from continental Europe may actually help save water in Nordic reservoirs ahead of winter.

The panel also dives into the explosion of negative power prices across Europe, the impact of Germany’s rapid solar buildout, whether batteries and grids can keep pace with renewables growth, and why some analysts believe Europe’s energy transition is entering a period of extreme volatility.

#EnergyMarkets #Norway #Hydropower #PowerMarkets #RenewableEnergy #Nordics #ElectricityPrices #NegativePrices #EnergyTransition #SolarPower #WindPower #EnergySecurity #GridInfrastructure #BatteryStorage #LNG #EuropeanEnergy #PowerTrading #WeatherRisk #HydroReservoirs #PluggedInPodcast

Host:

Richard Sverrisson – Editor-in-Chief, Montel News

Guests:

Katinka Bogaard - Founder, MD and Analyst - Volt Power Analytics

Ivan Føre Svegaarden - Head of Energy Analysis and Weather Risk Management -  TradeWpower AS 

Tor Reier Lilleholt - Head of Analysis - Insight by Volue

Editor: Alexandra Carlon

Producer: Alexandra Carlon

Transcript

Norway’s Hydro Situation Explained

Richard Sverrisson – Editor-in-Chief, Montel News 0:06

Hello listeners and welcome to Plugged In, the Energy News Podcast from Montel, where we bring the latest news, issues, and changes happening in the energy sector. Today we're heading north to Norway, where one of Europe's most important energy systems is under pressure. Hydro reservoirs in the south of the country are running low after an unusually cold winter and a prolonged lack of precipitation. That's already flipped Norway from a major power exporter to a net importer. Something we haven't seen in many years. But this isn't just a local weather story. It goes to the heart of the issue shaping Europe's power markets right now. Too much green power, too little grid, and a lack of flexibility. So, how serious is the situation in Norway right now? And are we heading towards a crunch this winter or will the system rebalance? To set the scene, I'm joined by Gert Ove Mollestad, desk editor for Montel News in Norway. Welcome to Plugged in, Gert. Thank you. We're talking about low hydro, um low hydrological levels in Norway. Can you briefly explain to us why they are so low at the moment in certain parts of Norway?

Gert Ove Mollestad - Desk editor Norway 1:18

The main reason, well, there are two main reasons. We had a very cold winter, the coldest winter in 16 years. So we had a high uh domestic consumption here in Norway and in the Nordic region from the start of the year. And then only in Norway we had 15 terawatt hours less precipitation than normal, uh, only in the first quarter. So we're trying to play in catch up. Yeah, precisely. The nice weather uh has continued in April, so we haven't so we are really short on precipitation this year compared to normal levels.

Richard Sverrisson – Editor-in-Chief, Montel News 1:48

But this is mainly in southern Norway, right?

Gert Ove Mollestad - Desk editor Norway 1:50

We have a lot of water in northern Norway in the right reservoir there from last year. They are not full, but they are really uh at the healthy levels. Uh while in the southern Norway we have really low and uh levels, uh both in reservoirs, and there are very little snow in the mountains. So that usually melts now in in spring, but the the the reservoirs will not receive as much water as they normally do.

Richard Sverrisson – Editor-in-Chief, Montel News 2:12

How serious is this from an energy security perspective, both for Norway and for the region as a whole?

Gert Ove Mollestad - Desk editor Norway 2:19

Well, the governments are not concerned at the moment, and Startnet is also saying that the supply situation is normal, but we saw that we went from export normal export power exports in January to starting importing power, net in power imports both in February, March, and April, and that is quite unusual. You have to go back to 2019 to see something similar. Uh, and you last year Norway exported uh almost 23 terawatt hours net exports for the year, but now as far as we are in the year now, we are uh below zero. So we have gone from being a power supplier to Europe to be a net importer.

Richard Sverrisson – Editor-in-Chief, Montel News 3:00

That's very interesting. But that also shows the importance of those cables for Norway, doesn't it not?

Gert Ove Mollestad - Desk editor Norway 3:05

Absolutely. They they help in this situation they uh help the security of supply.

Richard Sverrisson – Editor-in-Chief, Montel News 3:10

What are your expectations? What are the market expectations ahead of winter? Are we are we heading for a supply crunch or could the system be alleviated? I mean it's very weather dependent, of course.

Gert Ove Mollestad - Desk editor Norway 3:19

Precisely. So if we get a really wet and to say a bad summer with a lot of rain and a lot of wind, then stocks can be refilled quite quickly. If the dry weather continues, then we will be in a more and more depleted situation. But some weather models now are turning a bitter wetter, so the situation is not that pressed at the moment.

Richard Sverrisson – Editor-in-Chief, Montel News 3:43

As you know, we would like a dry, hot summer, wouldn't we not get? But maybe as as power power customers and and and looking at the energy security situation, maybe that's not the the most ideal situation ahead of winter.

Gert Ove Mollestad - Desk editor Norway 3:54

No, at least for businesses it would be very good to have some really some wet weeks, at least maybe in the summer or to the autumn to get to get a really good uh refill of the reservoirs.

Richard Sverrisson – Editor-in-Chief, Montel News 4:07

Thank you very much for joining Plugged in again. So that's

Expert Panel Joins The Forecast

Richard Sverrisson – Editor-in-Chief, Montel News 4:11

the situation on the ground. Low reservoirs, a weather-dependent outlook, and a system that's already shifting from export to import. But to really understand what happens next, we need to go deeper into the forecasts, the market dynamics, and the structural pressure shaping the Nordic power system. Well, I'm very pleased to be joined by three of the foremost experts on on Norwegian hydropower and the market dynamics. So Katinka Bogaard, the founder and managing director of Vault Power Analytics, a warm welcome to you.

Katinka Bogaard - Founder, MD and Analyst - Volt Power Analytics 4:44

Thanks. Hi, thanks for having me.

Richard Sverrisson – Editor-in-Chief, Montel News 4:46

Ivan Føre Svegaarden, head of energy analysis and weather risk management at TradeW Power, warm welcome to you as well.

Ivan Føre Svegaarden - Head of Energy Analysis - TradeWpower AS 4:53

Thank you so much. Happy to be here.

Richard Sverrisson – Editor-in-Chief, Montel News 4:55

And last but certainly not least, Tor Reier Lilleholt, who's head of analysis at Volue Data and Forecast. Welcome back to the pod, Tor Reier.

Tor Reier Lilleholt - Head of Analysis - Insight by Volue 5:03

Yeah, it's a pleasure to join you. Thank you.

Richard Sverrisson – Editor-in-Chief, Montel News 5:05

If I can start really by looking at we're going to be talking about hydrological levels in in Norway and if that's a concern or not. Now, if I can start with you, Katinka, how how unusual are current current reservoir levels in southern Norway compared to previous years?

Katinka Bogaard - Founder, MD and Analyst - Volt Power Analytics 5:21

Yeah, so it's definitely an interesting situation. I think we're at the one of the most extreme hydrological balance levels for NO2 over the last 10 years and also for Norway as a whole. So it's definitely one of the lower uh levels we've seen, but on the reservoir side the reservoir levels are also low, but and then not necessarily at the supercritical level yet.

Richard Sverrisson – Editor-in-Chief, Montel News 5:42

What what's your view here, Ivan?

Ivan Føre Svegaarden - Head of Energy Analysis - TradeWpower AS 5:45

Well, they will then be low after the snow melting for sure. And they will be larger depend on how summer weather will be, if we are heading into a winter crisis or not.

Richard Sverrisson – Editor-in-Chief, Montel News 5:55

Exactly. So that basically means if it's gonna be a dry or wet summer.

Ivan Føre Svegaarden - Head of Energy Analysis - TradeWpower AS 5:59

Yeah.

Richard Sverrisson – Editor-in-Chief, Montel News 6:00

What are your feelings Tor Reier? Should we be concerned here?

Tor Reier Lilleholt - Head of Analysis - Insight by Volue 6:04

I was more concerned in the middle of the winter because the spring culmination could go low, but now we are starting filling the reservoirs already. So what's going on in the summer is not that important. I think that uh we could go even 10% lower in the spring culmination before we are at a very low level. That has been the minimum before. So uh I think we are at uh okay place, but as Yvonne mentioned here, the next six months will be crucial for what we'll face for for the next winter, because that will be actually the next spring 2027 will be the key point if we have a difficult situation or something in the future.

Richard Sverrisson – Editor-in-Chief, Montel News 6:42

Absolutely. As ever, it all all it's all dependent on on weather. And Katinka, what are the key weather and inflow assumptions that are driving current forecasts?

Katinka Bogaard - Founder, MD and Analyst - Volt Power Analytics 6:53

Yeah, so from our perspective or from our forecast now, we have about a snow deficit across all of the Nordic price zones for the hydro areas. And we expect that the the next few weeks also and during the melting season that we'll have below normal inflow and also for the summer, like it's been mentioned already. So we are seeing an interesting situation for the snow for sure. And also if there's any uncertainty around how much snow we actually have stored in the different zones, I think that is either if it's underestimated or overestimated, I think that'll have a quite important impact as well. And also for precipitation and looking ahead on that, I think we also have the situation is close to normal, but normal right now in this period isn't doesn't mean much precipitation. So the chance of kind of compensating for this large deficit that we have on the hydrological balance is quite limited and low for this time of year, I would say.

Richard Sverrisson – Editor-in-Chief, Montel News 7:43

So are you concerned, Katinka?

Katinka Bogaard - Founder, MD and Analyst - Volt Power Analytics 7:45

No, I mean I have the same perspectives as both Tor and Ivan. I think it's we it looks okay now and next winters and the next spring or the next year is the most interesting. And when we get that far, there's a lot of dependency on the weather over the next half a year.

Richard Sverrisson – Editor-in-Chief, Montel News 8:01

Absolutely. And if I could just ask you to explain one concept that's snow storage. I mean Katinka, if because for the the listeners who are not based in Norway or other mountainous regions may may struggle to understand what you mean by that.

Katinka Bogaard - Founder, MD and Analyst - Volt Power Analytics 8:15

Yeah, I don't know if I'm the most qualified of maybe Ivan would be more qualified to answer that, but at a high level, I think a lot of different analogies have been used. But, for example, that power and the energy is stored as snow that would run into the reservoirs, like some type of I think some of the analogy of a battery that there's stored energy there, and when the temperatures pick up in the mountains above zero, then it melts and runs into the reservoirs, for example. So there's energy stored in the snow.

Richard Sverrisson – Editor-in-Chief, Montel News 8:41

That's very helpful, Kaninka. Thank you very much. I think it's a kind of concept. So it's basically not just snow lying on the ground, is it Ivan, but it's also you know, basically that's that's frozen underground and also in the lakes and and rivers in the mountains, right?

Ivan Føre Svegaarden - Head of Energy Analysis - TradeWpower AS 8:55

Yeah, soil ground and everything. Yeah, and that will be so interesting because my calculations are that we are probably overestimating snow a little bit, that it's less snow than what is actually in the mountains. And that will be seen within some few weeks when we get some milder and low pressure activity into late May and June when the snow melting in higher latitudes altitude starts, you will probably see lower inflow than expected, which would be a good early sign uh of that models are probably overestimating snow pack.

Richard Sverrisson – Editor-in-Chief, Montel News 9:28

That that's I want to return to that Ivan. But Tor, do you want to come in with a comment on it?

Tor Reier Lilleholt - Head of Analysis - Insight by Volue 9:33

Actually, I won't comment on that because uh see a lot of the analysis starting at zero when they start a new accumulation of the snow pack in September. But we saw that in the end of the autumn last year it was almost five terawatt hours surplus in the solar groundwater. So if you start a model at the wrong starting point, you actually get some surprises there as well. Because in Sweden, for example, you have seen very high inflow through the whole winter, so that has contributed to the reservoirs uh in Sweden at least. So I agree with you. We could see less snow melting, but I think there's a good soiling groundwater back from last autumn that is supporting us.

Richard Sverrisson – Editor-in-Chief, Montel News 10:12

But Ivan, if I can just return to you and you can and ask you about the regional variations. I mean, we're talking Kantinka mentioned NO2, which is uh southern Norway, but is what's the situation like in the rest of Norway, potentially even in into Sweden?

Ivan Føre Svegaarden - Head of Energy Analysis - TradeWpower AS 10:25

Well, NO4s have plenty of water and often have very wet and windy weather uh during this time of the year. So I don't think there will be any issues at all with north. They will have to supply south. The main issue is how much snow is it in south Norway and the soil ground situation there, and what will receive us be after the spring months. And a dry and hot summer this year will be, as I see it, quite painful for uh waterballers because they have to be up to winter price levels. But if we get a wet and winter summer, then I don't think it will be any crisis this year, but it depends on how the situation are into the autumn and before the winter starts.

Richard Sverrisson – Editor-in-Chief, Montel News 11:03

Absolutely. I mean, I know Tor, you're based in in southern Norway, and obviously a wet and dry summer would be very nice for your summer vacation, but maybe not so good for the security of supply for the coming winter. But Katinka, can you talk us a little bit about your forecast in terms of the sort of rainfall or the weather that you have at the moment? What's your current outlook?

Katinka Bogaard - Founder, MD and Analyst - Volt Power Analytics 11:27

I mean we're mainly looking at like the front, like the 46 day ahead and the that or up to the 46 day ahead, we have a quite normal, like I said, situation with precipitation for actually all of the south and also this also Sweden. So but then like I said, the for the normal isn't that helpful, or there's not that much precipitation. The normal in the May in these days, so it's not necessarily going to bring a lot of precipitation to help the deficit that we have right now. But it looks close to normal, slightly above for the zones.

Richard Sverrisson – Editor-in-Chief, Montel News 11:58

So is that is that a view you share here, Tor Reier?

Tor Reier Lilleholt - Head of Analysis - Insight by Volue 12:01

Yeah, it's not difficult to use more on the 46 days. I've looked into the uh seasonal weather forecast, of course. That is not good. Looking at the they didn't hit the temperature in February, they didn't hit the temperature in March. So I think that is difficult. But we have some viewers on the El Nino, uh, and that could be interesting. Of course, this more focus on the Pacific, extreme weather conditions there. Don't know how important it will be for for the European market, but it could be some signs but it could be a dry summer and it could also be a cold winter. Dry summer means also high temperature, so a lot of solar production during summer could be nice, but uh also a cold winter that is could be expected. But uh that is very long time, and to be honest, I've seen this weather for and six months ahead of us, it could everything can happen. It

Weather Models And Snow Uncertainty

Tor Reier Lilleholt - Head of Analysis - Insight by Volue 12:52

could be wet, it could be dry.

Richard Sverrisson – Editor-in-Chief, Montel News 12:53

Exactly. So and seasonal forecasts are notoriously difficult, aren't they Ivan?

Ivan Føre Svegaarden - Head of Energy Analysis - TradeWpower AS 12:58

Well, that actually depends because I've developed an AI model that I have researched over the last 40 years. I used energy quantified inputs and also read all the um traditional forecasts. And I mapped every week the last 40 years and see what was causing those weather events per week, and then I look at what is now, and it's pretty clear that we are heading towards a wet and windy accumulatedly summer for Q3 Nordics, which typically means some windy and wet pairs down to Germany as well, which means we'll have plenty of renewables and the reservious levels will gain some levels on import and also through inflow. So this summer won't be that tight. But typically in these summers when you have a Q3 that is wet and windy, which has been seen the last six years often that you have this kind of a cold, wet, windy Nordic flow, and that means also you don't get very stable hot spell down in Europe, definitely not for Germany and down to France and periods, is that there typically falls a dry spring, autumn after. If you have a wet summer, you typically have a dry autumn. So, in sum, if you look at the statistical correlations with yeah, the last 40 years, and you I rule out like 25 years for the Q3 outlook, and as you see what is happening in all those years, it's heading to a wet one and a windy one, which will be okay, no disaster, but then you follow typically with a dry and calm Q4. So, in sum, you will still undo before December in these methods quite tight.

Richard Sverrisson – Editor-in-Chief, Montel News 14:29

And and what does El Nino, what does that mean for European, you know, weather or European power markets, if you like energy markets, what's the impact? As Tor Reier said, it was mainly focused on the Pacific.

Ivan Føre Svegaarden - Head of Energy Analysis - TradeWpower AS 14:40

I don't find very strong correlations with Europe weather, especially not Nordics. But what you can say is that the potential for extremely hot spells and especially in Asia is high and also in South Europe is high this uh summer. But since I see these respectfully lows passing by Scandinavia, they will pull cold air masses south down to Germany and France and cut off hot spells. So hot spells will probably develop, but they won't be that long, they won't last so long. So cooling demand will not be that stable high this summer, based on this thinking. So any cooling demand and heating issues will come from very hot US and hot Asia and South Europe based on certain analysis. But the problem will be then that you get our surplus of hydro into the summer, post three precipitation, probably import will be a lot, you will have a lot of negative prices from Germany, but you get the pain back in Q4, then it shifts. And this total amount of precipitations during this thinking is not actually strongly surplused because you get the deficit in Q4 and the surplus in Q3.

Richard Sverrisson – Editor-in-Chief, Montel News 15:43

No, very, very interesting, fascinating weather, weather patterns, weather developments there. But , you know, I think obviously a very hot summer in Asia and and the US and potential southern Europe will have impacts on general power prices in Europe through through the through the key factor of LNG, will it not? And other aspects as well. But very good points.

How Hydro Producers Adapt

Richard Sverrisson – Editor-in-Chief, Montel News 16:06

So Katinka, if we come back to Norway and have the discussion around hydropower producers in the country, how would they optimize their reservoir usage in the weeks and months ahead? What's your view here?

Katinka Bogaard - Founder, MD and Analyst - Volt Power Analytics 16:21

I think we've seen a few examples of it over the last few weeks and months or month in and or in southern Norway with how the solar is coming online or really ramping up on the continent, and that we're seeing periods with imports from um from Germany and the continent into NO2, and maybe full imports, and then we're actually decoupling. I think that's something that we'll see more and more of. And as we look ahead towards 2030, we actually see a lot of this or a lot more active usage of this, these interconnectors switching between imports and exports from NO2, especially during the solar peak hours. Looking at the other, I think that naturally would shape or change the shape of the production or how the hydropower producers are choosing to produce, and also how they need to plan into the future as well, and how the much uncertainty or how if the volumes on the renewable side increase as quickly and ramp up as quickly as it seems to be over the next few years, based on our analysis, that there will be a need to really shift in the way that they are uh choosing to produce now or in the winter because they might actually risk a bit more spillage than before and have a lower water value in the front of the curve, at least in our analysis.

Richard Sverrisson – Editor-in-Chief, Montel News 17:25 Richard Sverrisson – Editor-in-Chief, Montel News 17:25

So I think, you know, I think the key that power interconnectors will include increase the complexity, but also will come to the rescue in some hours and some days potentially for Southern Europe in particular. Tor Reier, do you think the markets and maybe politicians, maybe us journalists, I think overreacting to hydro deficits for example?

Tor Reier Lilleholt - Head of Analysis - Insight by Volue 17:47

Yeah, I think so, because I think there's a pattern here that we are underestimating the new renewable onboarding I think compared to last year. I think we this year we might see 150 terawatt hours more solar and wind in in Europe in total. And if you add that into capacity in the middle in the midday hours, actually, Germany alone will add 5,000 megawatts of solar peak. You will add more than 1000 megawatts of uh wind power during the middle of the summer. So, in total, all over the continental area, you will add a lot of new renewables and you will see more negative hours, more snorkeling hours, what they call it, in the in the middle of the day. And that will also affect the Nordic hydro producers because they will save all the hours and every day through the summer. Now, I think five to eight to ten hours, we'll be importing from Germany. And if you have normal wind, you also import from UK. So the change in UK wind is also extreme. And based on that, you see now that the hydro producers should lower the hydro reservoir more during the summer or during the spring because they need to make room for more production from from continental low-priced hours, and then you will actually save water during the summer, and you have a better hydro surplus or less surplus, no, less deficit in the autumn permeation, and also during the winter time you have to produce more at fewer hours to empty the reservoirs because new renewable take hours from the hydro. So the change will be a pattern here that will be more and more evident year by year in the next future. And batteries might be something that could limit it, but I think the changes will be there. So in during the next three, four months, we actually halve the deficit in hydro due to this effect. So we're down to 10 terawattows deficit.

Richard Sverrisson – Editor-in-Chief, Montel News 19:50

It's very interesting Tor Reier. So you know the huge amounts of subsidized or still remaining subsidized German solar is coming to the rescue here and helping out hydro producers save for save for the winter. I think that's very interesting in terms of how the cable's utilized and how that's really coming to the aid of southern Norway, something that's maybe not often reported.

Tor Reier Lilleholt - Head of Analysis - Insight by Volue 20:10

Yeah, I think so, and I think that is something we might look at this, but we are just uh knocking on the door to the summer now, so it's just started, and through the whole winter we actually saw this pattern in Spain. We have already now 600 hours close to that negative. And before June is set, I think we set a new record in new negative zero hours in Spain, and that will be the same effect for France, for Germany, and also actually Poland now have a lot of negative hours, so it will be the whole Europe that will see the same effect.

Richard Sverrisson – Editor-in-Chief, Montel News 20:44

I think that's that's I'd like to move on to that in a minute.

Negative Prices And Binary Power

Richard Sverrisson – Editor-in-Chief, Montel News 20:48

But first of all, Tor Reier, can you explain what you said? Did you say a snorkel pattern? What did you say?

Tor Reier Lilleholt - Head of Analysis - Insight by Volue 20:53

Uh we've seen a pattern actually that there's a lot of hours just below zero or above zero, so you're just snorkeling the surface there, and that has been the trend. We actually saw a trend that you see less very deep negative prices. So that surprised me a bit now. Last week in the first of May, we actually didn't manage to avoid the minus 500 record low prices, and now we have limit the lower the limit for negative bids down to 600 euros. So I think that is also interesting that the batteries and all the other effects, the what call it this the bidding strategy and everything has not avoided the very deep prices this spring, and could be even worse in during summer. But it was extreme days with what we it was public holiday, a lot of wind, a lot of solar at the same time. So definitely, but we see pattern already next week, weekend, Saturday, Sunday, same situation. So we will repeat itself During the whole summer.

Richard Sverrisson – Editor-in-Chief, Montel News 22:03

That's an astonishing change and quite amazingly low prices. I think Ivan, I mean, we we saw minus 500, for example, across continental Europe. You know, what my first question would be: what's driving this? And and the second one would be why are the Nordics been unaffected largely, or they're just snorkeling, as Tor Reier says.

Ivan Føre Svegaarden - Head of Energy Analysis - TradeWpower AS 22:26

I think that is all agrees, renewables. Solar and wind, especially solar, it's knocking out. So when you have wind, you still have solar, and then that gets an oversupply, they can produce on negative prices, and boom, you get negative uh sewage price. And I think that is something that you will experience. But as soon as wind is shutting down and you get low wind, you see winter prices. Then SRMSA and water values are setting on winter price levels. And as soon as wind is back, boom, you get the collapse, especially in the daytime when you have the solar, which benefits Nordic power because you can import during that time. And this summer, I think that will be a helpful a lot of the deficit you see in the Hydro situation as long as summer is then accumulately wet and windy. This disconnect of water values and and I said I'm saying when it's solar and and and wind, it's gonna be very hard to set the average prices, but we have to shut it down so much base load supply. So if the prices are gonna explode when it's like one and a half week calm, or are they gonna be crushed if it's one and a half week windy with some solar, that sets the entire uh setup and that sets how much import hydroproducers in Nordics will get. And you see prices in Germany plus 300 to minus 800 depending on wind and solar. And that's gonna be very challenging with this Iran war if it escalates and you have some LNG issues and cooling demand in Asia and some fighting of LNG, let's say more LNG facilities will be taken off the market by the war and so on. So this is gonna be a little bit navigate, and it's gonna be huge volatility depending on how much renewables you will have, and like a switch on off. I call it more like binary pricing. If it's wet and windy, it collapses. If it's calm, preferably below the 25% of the wind, prices boom, follow winter prices on water values and asset MSA.

Richard Sverrisson – Editor-in-Chief, Montel News 24:12

But then and then if you have the solar as well, in and in combination with that, that adds the complexity, but also to the driving them down, right?

Ivan Føre Svegaarden - Head of Energy Analysis - TradeWpower AS 24:20

Yeah, yeah. Solar is the tipping point. If you didn't have solar, vice pricing wouldn't be that low. When wind comes, you always have some solar, even though it's cloudy, and the solar add-on is the one that breaks prices as I see it.

Tor Reier Lilleholt - Head of Analysis - Insight by Volue 24:32

Actually, this week is a good example because next couple of days we will have only 30 gigawatt solar production in Germany, but in two days after that it'll be 60. So you double the solar capacity or solar production in the middle of the day. So you see the amount of megawatts that will shift uh back and forth. In that is only one example from Germany, but you see that for the whole European area, so it really matters, and I'm a bit concerned about how to capture all this energy because looking at the UK offshore wind, more than 10 terawatt hours curtailment last year, and it's more than 10% more than for all the production that is not been able to utilize. You see the same in solar, you see the same in in wind all over Europe now. So the hydropower is actually something that is uh helping this uh system now a lot, and we have a benefit to be flexible, definitely.

Richard Sverrisson – Editor-in-Chief, Montel News 25:32

I think that's a very good point, Tor Reier, that you know that this energy is going to waste. And you know, we need to find ways of capture it to make sure that we we use it. But , you know, and question before I turn to Katinka, Tor Reier, in terms of negative prices, but we see them mostly at weekends, right? Or when there's a national holiday. Can you foresee a situation where you'd have them on a working day, normal sort of Monday to a Friday, in the same extent as we see on Saturdays and Sundays?

Tor Reier Lilleholt - Head of Analysis - Insight by Volue 26:01

I see that pattern already now. You will see it every day, unless it's low wind scenario. So low wind scenario, then you don't have it, then you will see more uh need for gas. But also on weekdays we will see low patterns every day. And actually the night hours still are up at gas production, but I think that could also be set at a test closer to the summer because consumption will go down in the next couple of months as well. So I feel it very strange if you look at the prices in Germany, it's picking up in the market now every month from April, May, June, and July, August, up to more than 90 euros. In my pattern in my trend, it should go down in compared to the prices you have seen the past month.

Richard Sverrisson – Editor-in-Chief, Montel News 26:47

Because there's a disconnect between the financial market and the physical reality. Yes, yeah, yeah, yeah. That that's interesting as well. Katinka, what's your view on negative prices? Do you think we're only just seeing the beginning and that we can expect to see more going forward?

Katinka Bogaard - Founder, MD and Analyst - Volt Power Analytics 27:00

Uh yeah, so I mean that we're already seeing records for 2026. I think obviously the battery development or the capacity build-down on batteries is we need a lot in order to get account for these negative 500 hours and bring them up above zero. So I think for most of the markets we do expect that it will increase. And then obviously, given, for example, the hydro situation and the Nordics, obviously not necessarily relevant for records in NO2, but for other really renewable solar wind uh heavy systems, then we do expect it to increase from our perspective at least. At least for the front years. Yeah.

Richard Sverrisson – Editor-in-Chief, Montel News 27:33

So and Ivan, are we at the critical stage now in terms of of negative prices? Because we're, you know, this is the massive influx of solar. It's happening now in May, potentially in June. This is this is where it's sort of peak solar, if you like, May and June. So this is where we're likely to see these patterns that you you three have been talking about for the coming weeks in terms of extreme volatility and the deep prices and the very high prices when there's low wind.

Ivan Føre Svegaarden - Head of Energy Analysis - TradeWpower AS 27:57

Yeah. Wind sets the levels, how negative

Grid Bottlenecks And NO4 Frustration

Ivan Føre Svegaarden - Head of Energy Analysis - TradeWpower AS 28:00

it would be because solar alone is not enough. But when you have wind and solar, you get the very strong negative prices. And I think also over time I'm curious about if this will destroy part of the market, that this will self-regulate, because solar and wind making money, but if these are getting too negative prices through this summer, it could even uh affect investments and profitability of a lot of energy companies the next four, five, six, seven years if this continues and the willingness to invest. So I'm also talking to myself that I'm not sure if this is actually will be a benefit in the long term. I think it will mess up the investment appetite. It could be too negative if you have a very bearish summer, this Q3, and you have a lot of negative prices, and also traders they need to focus further closer in on their decision making because making a call next year, who knows what happens, you know. So it would change the the entire structure to a little bit more nervous meteorological nightmare scenario where if you had one week wet and windy and then you have one week very dry and calm, you're gonna have exane volatility.

Richard Sverrisson – Editor-in-Chief, Montel News 29:03

What's your view Tor Reier? Do you think then that this would scare away investors are already seeing that, or would it incentivize you know investors into what Katinka talking about, like the you know, increase batteries and flexibility and industries that can use that power when it's available in that sense?

Tor Reier Lilleholt - Head of Analysis - Insight by Volue 29:19

It would trigger battery investors, it will definitely scare the solar and wind investors for sure. And I can see the capture price rates will go down, it's down to 50% already. And, but what I want to comment as well you talked about the Nordic. I'm not scared about the southern part of Norway due to the hydro situation. Don't think a lot of negatives prices will accure there. But look at NO4, actually, not due to a lot of surplus aver, but they have grid konst that definitely are based or kreat med flowbase market koppling. So that is a total different situation that they are now more negativer hours than Germany. And they are going very deep because they have a social benefit of not producing. So Sweden Posenvindpark is petting power into NO4 and they are drowning i power. So that is actually a situation that they are not satisfied with the Statnets decision that they will lock out the industry in the future because there are a lot of power there. They have the lowest prices in in Europe and still they don't need they can't connect more consumption in the future. So it's a desperate situation for NO4. Yeah.

Richard Sverrisson – Editor-in-Chief, Montel News 30:36

There's NO4. Can you explain to those listeners that are not familiar with the the area codes, the price zones in the Nordics Tor Reier?

Tor Reier Lilleholt - Head of Analysis - Insight by Volue 30:44

Yeah, it's from the the upper north in Norway, and of course it's a situation there's a surplus there, and that's totally different from the deficit that we have in the south of Norway, and they have a lot of power, had seen surplus now for five years, so the prices have been close down to between like 10 and 20 euros now for five years, so in a desperate situation and not earning money for for their production. They had a break in January, February. Suddenly they have the same price as southern part of uh Norway, and that was surviving a lot for the income in that area. So they struggled to actually earn money on any production in the northern part of Norway.

Richard Sverrisson – Editor-in-Chief, Montel News 31:23

Certainly very concerning, Tor Reier. And that's also that the you know linked to this is the fact, as you mentioned, the TSO Statnet has has placed restrictions on new grid connections in the area for industry, who could potentially utilize this power surplus. So that's obviously a massive concern and a very different situation.

Tor Reier Lilleholt - Head of Analysis - Insight by Volue 31:40

We need more grid for sure, more grid for all this production, and then you can utilize more of it. Uh so grid is as much as important as batteries, I guess.

Richard Sverrisson – Editor-in-Chief, Montel News 31:49

Do you agree there, Ivan? More grid, more grids?

Ivan Føre Svegaarden - Head of Energy Analysis - TradeWpower AS 31:52

Yeah, we saw Nordkraft bars came out and was very frustrated in the papers here recently, and I agree to that. That if you add renewables and you don't expand the grid and flexibility, then you will sooner or later, as I see it, mess up the entire system because this would cause a chaos that is really hard to navigate as a producer, as a trader, as an analyst, investment, and so on and so on. And if this starts rolling negative, it's going to be hard to turn around. So I think we are in a very exciting time for energy safety and investments and opportunities and so on the next few years. I think we'll get an answer within 2030. And also, since we have shut down so much baseload supply, if you have one really dry and calm year, like minus 30, 40 terawatt hours a year, and you don't have base load in Europe, and you get a huge deficit in Nordics, let's say this summer ended up 20 terawatt hours deficit, a really hot summer, like 2018 or something. Yeah, what then we don't have power then. We really have to turn off. So for me, this I call it a little bit like the EU green madness. I love the renewables betting. I agree to all of it, but for me, it's not completely evaluated overall implementation plan. The chaos is already starting and it's gonna get worse.

Richard Sverrisson – Editor-in-Chief, Montel News 33:10

It's a fascinating discussion and debate. So I'm gonna have to draw it to a close. But but do you think, you know, it's not just about installing renewables, whether it's solar, wind, hydro, whatever it may be, Katinka. It's also about everything that comes with it, flexibility options and grid primarily. Is that something that you'd share?

Katinka Bogaard - Founder, MD and Analyst - Volt Power Analytics 33:28

Yeah, I think also, I mean, when these types of challenges arise, a lot of exciting new opportunities also arise for businesses and different solutions. So let's see what happens over the next few years. It's definitely exciting times, I agree with Ivan.

Richard Sverrisson – Editor-in-Chief, Montel News 33:42

Absolutely. So I think it's going to keep all of us busy anyway. So Ivan, Tor Reier and Katinka, thank you very much for being guests on Pluggedin' Podcast this week.

Final Takeaways And Listener Requests

Richard Sverrisson – Editor-in-Chief, Montel News 33:53

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