For Norway-South we currently see the lowest reservoir filling for at least 20 years. We expect Norway South to present historical minimum levels for their hydro reservoir before the melting season start next year, provided that weather follows normal patterns during Q4 and Q1.
As such, the probability for a supply squeeze in April for Norway South is obvious should we see less precipitation than expected. The UK-Norway interconnector coming online from October 1st will increase the level of electricity imported to Norway-South this winter too, meaning that hydro production will be lower than normal. Overall, Norway South is expected to need a net import of about 2000MW on average during January and February.
The Nordic hydro balance is forecasted to be about -27TWh by the end of September (week 38), close to the lowest level seen in the past 20 years. Even with normal precipitation levels during Q4, hydropower production will most likely will reduced as inflows need time to recover back to “normal” levels.
The variation band for accumulated precipitation in Q4 is estimated to be about +/- 20TWh, based on EQ's 40 years of climatic statistics, which means that a dry scenario could see the hydro balance end close to - 50TWh by New Year, nearly 10 TWh lower than seen the past 20 years.
We see from the hydro balance curve below how the level has decreased during the summer.