Soon a collapse in water values: N01-3 and NO5 don’t have any other choice than to start produce significant more than the last two weeks

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)

Actual far above normal – just NO4 keeping it moderate above normal. All dominated hydro areas with significant impact on the SYS-price is reaching a critical surplus in Hydbal
NO1 has to start pushing production up or the risk for a wet and windy late winter and spring will push reservoirs up to max. There is an increased risk that NO1 will see more precipitation in February…
The WWW regime we are seeing this winter will keep inflow high and also precipitation in NO2. 3 more weeks with the same trend and what will they do in case of a wet and windy late winter and spring…
Strong westerly wind with warm-wet air and high NC wind keeps NO3 reserves filling up the next 2-3 weeks? Not unlikely given the companies WRM model…
Even NO5 that at least can empty their reserves in a relatively short time will have to start pushing production up…