From before Christmas, there have not been any bull solid weather signals. After the first massive drop in futures and water-values, there have been no stable bull weather signals either, mostly temporary hold-neutral given shifting signals for an SSW-Hi-pressure. But, the Polar Vortex keeps surviving and that means warm, wet and windy winter as things are now. The latest incoming data from NVE shows that hydro producers are forced to increase their production significantly compared to the last two weeks. Inflow will still be far above normal and combined with high wind and even risk for lower continental prices a biding fight will take place. There is little evidence that weather will turn to “winter” until March and in case of new massive warm, wet and windy (WWW) regime in February a significant drop in water values will take place. As for now its crazy beeing bull and for those of you that have the last two weeks turned bull – most likely given the massive drop in futures and that weather “will turn soon” – may have to consider your positions… Even 2021 will be affected by this. If the warm and wet winter weather last one more month it’s not unlikely that some hydro producers have to dump water into the sea during a wet and warm spring – producing hydropower less than about 7 Euro is not profitable given tax-costs of running…
(Source figures: NVE.no)




