W2 2023: price dashboard

According to the statistics from our data partners, this week saw a significant increase in trading volume, with a weekly growth rate of 44% compared to the week prior. This was likely due to the approaching electricity disclosure deadline.

Trading activity this week was still focused on 2022 and 2023 contracts, with around 31.2% and 35.2% share of total volumes, respectively. Notably, we witnessed rising liquidity in the forward GOs market compared to the previous week, especially for 2024 vintages (30.4%). Trades even further along the curve were seen, with 2025 and 2026 production contracts comprising 1.6% of the trading volume.

W2 2023: NH price

In Week 2, the prices of Nordic Hydro GOs increased for all vintages, with the highest price witnessed for 2023 Nordic Hydro GOs, closing at around 767 Eurocents/MWh. The average weekly prices for 2022 and 2023 Nordic Hydro GOs were 648 and 690 Eurocents/MWh, respectively - up by 36 and 14 Eurocents/MWh in comparison to the previous week.

Despite the persistent backwardation, the prices for 2024 Nordic Hydro GOs saw an increase of around 100 Eurocents/MWh compared to the end of 2022, with an average weekly price of 523 Eurocents/MWh. The 2025 and 2026 Nordic Hydro GOs were traded between 360 to 370 Eurocents/MWh, similar to the previous week.

W2 2023: Nordic hydrobalance and reservoir levels

In spite of the increasing hydro reservoir level fed by increases in snow and groundwater volumes in the past few weeks, the overall reservoir level was still around 5% below the historic normal level. According to the latest forecasts, this deficit is expected to persist for the next two weeks. Meanwhile, precipitation levels are expected to be 23% and 13% below the normal for Week 3 and 4, respectively, with corresponding inflows at 55% and 82% compared to normal. However, thanks to the above-normal precipitation energy in the past three weeks, the hydro production in Week 3 is expected to return to the historical average level.

W2 2023: EU Hydro price

In the EU market, the average weekly price for Hydro GOs witnessed a downward trend amidst lower-than-normal hydro production this week, with 2023 EU Hydro GOs closing at around 672 Eurocents/MWh, decreasing by 33 Eurocents compared to the last week while trading at 17 Eurocents/MWh discount to its Nordic Hydro counterpart. Meanwhile, 2024 EU Hydro GOs closed at an average price of 526 Eurocents/MWh, at a 3 Eurocents/MWh premium in comparison to the corresponding Nordic Hydro GOs.

Notably, driven by the increasing demand for the 2023 vintage, we also witnessed rising trading activities for 2023 EU Wind GOs and 2023 EU Renewable Unspecified GOs, with average weekly prices closed at 667 and 657 Eurocents/MWh, respectively. The average weekly prices for 2022 EU Renewable Unspecified GOs were on par with the corresponding 2023 vintages, closing at 656 Eurocents/MWh, in line with the average price the week prior.

W2 2023: EU reservoir levels

The Iberian Peninsula (Spain & Portugal) hydro reservoir level given in the first slide shows continued above-normal status since the end of 2022. Compared to Week 1, the reservoir level increased by 3%, and this upward trend is expected to continue in Week 3, while slightly decreasing over Week 4 and 5. Moreover, the inflow level in Week 2 decreased compared to the past weeks, while still 93% above normal. Although the precipitation energy in Week 2 was 56% below normal, the precipitation energy in the upcoming two weeks is anticipated to grow, with 41% higher than normal hydro production expected in the coming weeks.

Similar to the Iberian Peninsula, the hydro reservoir levels in Central Western Europe have continually outperformed the historical average levels. For the coming two weeks, due to the decreasing and lower-than-normal snow and groundwater levels, the hydro reservoir level is expected to decrease. However, thanks to the improving inflow and precipitation energy conditions, the hydro reservoir level is anticipated to be 1.2 to 1.8 TWh higher than normal. Meanwhile, precipitation energy is expected to be 17% above the norm in Week 3, while decreasing to 57% of the norm in Week 4. Notwithstanding, the hydrological inflow is expected to maintain at 95% of normal level in Week 3, with hydro production expected to improve to 9% above normal.

This week's market activity was trending to normal as market participants have been returning from extended new year's vacation. End-of-the-week GO closing prices increased across the board - reflecting a prevailing buying interest in the market and sellers taking a bit of a sit-and-wait approach. The expected round of GO issuance during next week may change the activity level on the selling side for 2022 vintage. This week, we released a forecast which shows a drop of GO issuances in 2022 (base case) by almost 55 TWh across the EECS market area compared to 2021 – largely based on the decrease of hydropower output across Europe in the spring and summer of 2022. This may also affect the views of market participants for the 2023 supply–demand balance projection and reinforce the importance of hydropower production in Europe as prevailing technology in the EECS market area and its dependency on weather conditions. For 2024 contracts we expect market activity to continue with the price likely to converge towards 2023 levels – demand continues to rise on a long-term tenure reflecting increasing corporate demand and the transition to green electrification, especially production of hydrogen, and decarbonisation targets of all economic sectors towards 2030. On the supply side, the installation of new capacity needs to be commissioned, and hopes are high based on the recently released 

EU legislation for shortening permitting times for renewable capacity

In the UK, Crop RGGOs moved well above 16.5 GBP/MWh, an increase close to 10% compared to the first week of the year. The spread remains below 50 p, so it appears both sides of the market have similar price expectations in a scarce market.

All other products have shown little movement, perhaps reflective of a sluggish start of the year coming out of the holiday period, and the market adopting a wait-and-see approach on the resolution of the 

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Prices for Nordic Hydro vintages increased by more than 1 EUR/ MWh for 2022 production towards the end of the trading week, while 2023 and 2024 production followed this price trend.

Recorded transactions have been similarly evenly distributed among 2022, 2023 and 2024 production reflecting market activity picking up after the new year.

 in the EECS market area, which shows 55TWh lower than GO issuances in 2021

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