Vasa Vind AB’s Askalen is a new Swedish wind farm. It began commercial operation in a power marketplace that was already overloaded with a huge surplus of water available for hydropower generation. The two hundred eighty-eight-megawatt wind farm in northern Sweden will add more power to the grid after a fifty percent surge in wind power generation due to increased winds in the region over the last winter.
    Oliver Metcalfe, lead analyst for onshore wind research at BloombergNEF in London said “This could mean more frequent periods with rock bottom power prices, forcing conventional generators off the grid, especially when windy conditions coincide with high hydro output.”
    The glut of electricity sent Nordic power prices to their lowest level ever reported in March. The slump is a benefit to all the industries where the consumption of electricity is a major part of their cost of operation. Although power producers have already pre-sold a lot of electricity at higher prices, the price drop will hurt their current earnings.
    The benchmark day-ahead power prices for electricity averaged about nine dollars and seventy-two cents per megawatt hour last month. This month the price is down to four dollars and eighty-one cents per megawatt hour. The nuclear power plants in the region need to have a price between eleven dollars and thirteen dollars per megawatt hour to even cover their operating cost.
     Two days after the start of operation for the new wind farm, two reactors at the Vattenfall Ab’s Forsmark nuclear plant north of Stockholm, Sweden cut their output by around fifty percent. Two reactors at Vattenfall’s Ringhals nuclear power plant are currently shut down because of low power prices.
     Henrik Svensson is a Vattenfall company spokesman. He said that Vattenfall is continuously reviewing its operations and power output with respect to the variable operating costs at its plants. He added, “Right now, we’re in a period where availability of electricity is very good and prices in the market are extremely low.” 
    While the lockdowns throughout Europe caused by the coronavirus pandemic are severely reducing demand for electricity, the fall in the price of electricity in the Nordic states started long before that. The combination of excess water for hydropower and the mildest winter in memory caused the price to drop sharply.
     Hydropower is a major staple for energy generation in the Nordic region. It has been a reliable source for over a century although the actual price has varied over time. The extra water this year is the biggest glut since at least 2011. BNEF predicts that the global onshore wind capacity with expand by nine percent to over sixty-six gigawatts this year. The original prediction was a twenty four percent gigawatt increase this year. This expansion of hydropower and wind power will increase pressure on coal, oil, gas and nuclear power generation to vanish from the marketplace. German and U.K. coal power industries have been severely impacted by the surge in green power generation.
    Sweden plans on the installation of four thousand two hundred megawatts of new onshore wind power installations this year and next year. The Nordic region’s largest economy will relay mainly on wind power to replace old nuclear reactors as they are retired.
    For now, the biggest nuclear power reactor in the region is operating at full capacity. Oskarshamn-3 is the only reactor left at the site on the east coast of Sweden following the decommissioning of two reactors in the past five years. Torbjorn Larsson is a spokesman for Oskarshamn operator Uniper SE. He said in the long run, that’s worrying for all power producers, no matter the source.”