Main analysis: 04.02.2020

Warm, Wet and Windy (WWW) is the main trend onwards until the middle of March. The Polar Vortex (PV) recovers and both WRM (Weather Regime Model) + PV shows a strong WWW development into next week and onwards. We could see some forecasts volatility later in week 6 but the start of week 7 back to strong WWW again, before a new period of less WWW. Some discuss a late winter SSW but that is crazy betting on now…2021 contracts will see more weather pressure into March – reservoirs will peak. As expected a small bull correction took place but it will be shortlived. Some virus concern on China internal coal production but that will fade off…

To readers: The companies proprietary WRM is developed to foresee when weather forecasts changes and the upcoming forecasted trend. The WRM does not give the deterministic weather forecasts per day that most of the market players focus on. By foreseeing forecasts development and persistence of weather systems deterministic assumptions are made for the upcoming weeks. Therefore, the discussion below is how forecasts will trend in week 6+7 and do not discuss the weather for specific dates.

The successful trading and hedging strategies are then adjusted to upcoming market outlooks – what will the market see the following days and weeks: It much is easier to predict when will the market players change their outlook on the “weather-effect” on the futures and spot price rather than predicting the daily deterministic weather.

Main weather-strategies week 6+7

  • Gradual stronger bearish pressure from the weather for NC+DE+FR

  • Back to bearish after a short correction that may last up to Thursday

  • Very low risk (15%) for SSW and the models fade off the effect of the last WaF = solid WWW is coming after some modest indications of some CDC (cold, calm, dry)

  • As expected, more wind is seen for FR+DE and incoming long-range models support WWW over FR+DE that will also pull NC down

  • Long-range: EC46 WWW will follow EC14. Also, WWW for FR+DE. Expect next EC46 similar or more WWW

  • But, there is a risk that  around Wednesday week 7 forecasts will take a short CDC turn before backing to WWW again: so bearish up to then

WRM+PV (WRM updated tomorrow):

  • WRM has a moderate signal early this week and as soon we enter stronger WRM-WWW days forecasts (ens mean) will most likely peak again

  • PV is showing strong WWW development later into February

  • We could see some volatility until we are in stable WRM-WWW forcing later in the week but in total strong WWW week 6+start of week 7

  • Later into week 7 forecasts can turn less WWW which could have a bullish effect, but it is only a temporary forecasts phenomena

  • GFS MJO shows strong phase 6-8 that normally means cold winter and increased risk for SSW but EC shows neutral MJO, so I rule out GFS for now

Market intel:

  • Most meteorologists have turned from neutral (small bull) to WWW the last weeks

  • Some analyse companies believe in a turn later in February, which could affect several decision-makers, but as evidence of a turn fades off they will all “throw in the towel”…

  • Several companies will have to adjust their outlooks as the forecasts again will show a week with massive WWW – many think “this will turn soon…”, well it won’t – only an SSW can do that as things are now!

  • In total there is a likelihood that many will adjust their outlook to “super bearish” the following two weeks. In case of WWW forecasts towards the middle of February and no signs of an SSW then a new massive sell-out (Q3-Q4 and 2021…) may take place since all hope of a turn will fade off again, and again and again, until an SSW or death of the PV

  • Thermal power is bearish in total, but some small corrections and hops of less coal supply in China may cause some volatility this week

Synoptic confirmation (SC): WRM+PV shows the path further on

  • EC and GFS in line with expectations  – only a short cold dip and then back to WWW

  • Some GFS opr did show some CDC days but that is some delayed effect of last weeks weak WRM-CDC days = it will fade off and GFS opr will show more stable massive WWW

  • Low uncertainties for surprising stable cold-dry weather according to a detailed analysis of the last forecasts – solid WWW is coming – low risk (20%) for many CDC days to show up in forecasts

  • We could see “short colder and calm dips” as described before but they are not game-changer in weather

Synoptic risk analysis (SRA):

  • Only 15% probability for an SSW (winter..)

  • Every time an SSW shows up in models it fades off

  • GFS shows now 1 ensemble with SSW and 3 with something developing, EC shows zero development (I keep you updated)

  • The PV survives all attacks = more WWW forecasts after short cold-calmer dips

  • High risk for more extreme WWW (ens mean) days in the forecasts – timing is uncertain – but during later part of week 6 and into next week

  • There is s small risk (30%) for a surprising short cold dip showing up in forecasts but that will only cause less Inflow for some day – not changes the path into March

  • In late February/March an “SSW” can take place but that is too far out to consider now – but if it takes place and if it has an effect on the surface it can turn forecasts fast dry and calm lasting for months

Low-pressure anomaly keeps being the main part of the forecasts. This is a strong bearish signal.. More Gwh will be seen later this week when we enter stronger WRM-WWW days. Source: MetDesk
After some bumpy days PV recovers the attack by the WaF and comes back strong = massive WWW is coming again given current PV-Jet configuration. Source: MetDesk


  • Expected to be above normal levels onwards and increasing after some colder dips

  • Into late February we can see above 1 Twh inflow levels per day in case of strong WWW days – especially during 12-24 of February where WRM+PV shows the risk for massive 5-7 TWH surplus precip lows

  • NO1-2-5 and SE2-3 is expected to get more precipitation putting more pressure on the reservoir that already is above normal levels and with significant snowpack


  • EC46 came in according to EC14 and similar WWW as the last EC46 thereafter: Thursdays EC46 is expected similar or more WWW

  • Some modest indications of a turn of forecasts to less WWW and some CDC days that could trigger (…) as we enter the middle of week 7 – but too soon and weak signals for now

  • Only an SSW can turn weather to normal or CDC for weeks as things are now – only short less WWW periods and cold dips are expected as things are now

  • No SSW is conformed and very low risk (15%) for now = more WWW is coming

  • Crazy: First signs in the WRM that April+May becomes dry and sunny before a cold, windy and wet summer over NC

  • Without an effective SSW confirmed soon then Feb-March will be brutal hard for the NC power market

Oil, Gas, Coal and CO2:

  • Full storages, healthy supply, warm temperatures and high wind, trade war, economic concerns, and coronavirus keeps pressure on thermal power (oil, gas, coal)

  • The main signal is bearish but some small technical corrections and short hopes/dreams off a turn can take place

  • Coal rises given speculations in China internal production can reduce given virus: only short-timeframe speculations and nothing is confirmed

  • CO2 will be pulled down by bearish thermal outlook and more allowance into the market

  • Several comments on downside risk for March+April+May in case of WWW late winter for FR+DE areas

  • Next EC46 and continuous high wind into EC14 forecasts (not seen now at endings) will put continuous pressure on France+German power pulling NC further down

The weakness in fundamental market models:

  • From Christmas, fundamental market models keep “running after the market”

  • Significant changes and dominated weather periods are not seen by typical Hydro produces tools (Samkjøring-VanSim-Prodrisk-Shop-Excel…)

  • This is mostly given that many only use 10-15 days forecasts and normal levels thereafter

  • Thus, the market keeps stepwise adjustment to the persistence of weather systems – most don’t use skilled energy meteorologist

  • Also, as seen the water values adjust significant faster and lower than expected by many players because of the new energy-climate and significantly increased wind production in NC: higher weather sensitivity

  • Thus, the downside is still there with the next week WWW forecasts and in case of no turn before late March to cold and dry we are up for a “flood” of water that needs to get out in the models

  • Intake capacity limitations and restrictions will result in that many hydro producers must soon produce at maximum: I believe that many have awaited the extreme development (see reservoirs filling vs production) up to now: “still months of winter left and this will turn soon + model weaknesses…” will crush the market if no SSW shows up soon

Water values (WV): 12-14 Euro is coming at peak hours

  • Based on the current reservoirs and Hydbal most hydro producers must produce far more than average production up to spring

  • Hydro producers must fight the persistent WWW weather and also low continental prices

  • Expected down later in the week and onwards  – the producers will see continuous significant WWW forecasts

  • Most producers have no energy meteorologist and I think many have believed in: ” it will turn soon… it still many months until spring…”: they don’t see what we see… 🙂

  • Hydro producers will be forced to keep water values low and even turn them lower – stable very high wind in NC and Germany (DE-up to 40-50 000 MW per hour) can push hydro producers partly “off-market” for 3-4 weeks before the spring arrives increasing the need for higher hydro average production before spring

  • Thus, continuous high to extreme wind, low consumption and increasing Hydbal keeps pressuring WV down, and soon also inflow/unregulated far above normal levels

  • Long-range reservoirs fillings will increase significantly towards the summer and that will put pressure on 2021

  • See blog: WV

  • Negative prices can be seen in NC as soon as high inflow with high wind is observed in NC+DE (negative prices in DE during the weekend)…

Weather trend in forecasts into next week:


  • Mostly WWW to strong WWW, endings will turn more WWW towards the weekend and at the start of week 7

  • Some shifting ens mean will take place before massive WWW towards the start of week 7

  • Temps above normal, some days with normal temps can show up in forecasts, but wet

  • High wind seen for a long period in forecasts can take place in NC+DE+FR during the same days


  • Wind above to fare above normal – the calmer endings will turn back too far above normal again into week 7

  • Temps above normal, short periods with normal temps can show up in forecasts, but wet and windy


  • Wind above to fare above normal – the calmer endings will turn back too above normal again, but in less degree, than DE

  • Temps above normal, some days with normal temps can show up in forecasts, but wet and windy

Some shifting start before a solid WWW period after 8 of Feb. The risk for massive lows as we move into the week. Thus, Opr is according to WRM+PV too dry. A similar trend for ens mean is seen over DE+FR. Source: Eikon – Refinitiv