Winter blast puts pressure on UK, Nordic energy systems

Bloomberg

Northern Europe faces freezing temperatures for the next two weeks, with an expected jump in heating demand adding pressure to the region’s stretched energy systems.
Nordic countries will feel the brunt of the cold snap, with a low of -9.5C (14.9F) in Oslo expected next Tuesday, forecaster Maxar Technologies Inc. said in a report. Arctic air will also sweep across the UK and Germany, with temperatures in London sinking to 7.7C below the seasonal average.
Following a mild autumn, which allowed utilities to replenish depleted natural gas reserves, the winter’s first prolonged cold spell will test Europe’s power supplies. The frigid temperatures threaten a repeat of the price jump seen early last week, when UK hourly contracts touched €1,162 a megawatt-hour.
“There is a high probability of spiking prices during Monday morning and afternoon peak hours, both in UK and continental Europe,” said Bengt Longva, an analyst with StormGeo-Nena AS in Oslo.
Britain’s Met Office issued yellow warnings for ice in Northern Ireland, parts of Scotland, Wales and eastern England.
Europe’s power traders have been on edge for months, with lengthy shutdowns at multiple French reactors adding strain to supplies in France and neighboring countries. Wind power generation will also play a crucial role in determining prices as winter rolls in, with calmer conditions tightening the
market further.
German wind generation is forecast to peak at 22,175 megawatts at 9 am this Wednesday, but is currently just over 3,000 megawatts, according to European Energy Exchange AG data and Bloomberg models.
The cold spell won’t stretch across the whole continent, with southern Europe continuing to see unseasonably mild weather. Temperatures in Madrid are expected to hit 5.3C above normal on Tuesday next week.