Fortum's energy market review Keilaniemi 27 May 2009

Transcription

1 Fortum's energy market review Keilaniemi 27 May 9 Lotta Forssell Vice President, Communication Fortum Portfolio Management and Trading Timo Liiri Customer Manager Fortum Markets 27/5/9 1

2 Background of the energy market review The goal of Fortum's energy market review is to give information about the Nordic electricity market and factors behind price development Information in this review is based on data from Nord Pool, Nordel, SMHI, Reuters and Fortum's own data Similar review is held 2-4 times a year both in Finland and Sweden 27/5/9 2

3 Development of market indicators Electricity future prices Economic indicators Impact of the global economic crisis on energy markets Electricity consumption Fuel price development Emission allowance price development Development of electricity wholesale prices Fundamentals: hydro reservoirs, production Spot and future prices 27/5/9 3

4 Nordic electricity futures price development Daily closing price EUR/MWh 5 3 Year 5 Year 6 Year 7 Year 8 Year 9 Year Year 11 Source: Nord Pool Year 12 Year 13 Year 14 1 / 4 1 / 5 1 / 6 1 / 7 1 / 8 1 / 9 27/5/9 4

5 Global equity markets getting stronger Improved, positive momentum and renewed optimism in the equity markets lately have supported surrounding financial markets Nord Pool S&P 5 Global credit market conditions are improving following government stimulus measures and bank stress tests in the US, but remain challenging Worldwide governments have decreased benchmark interest rate levels to zerolevels during the first quarter in order to support and improve the difficult financial environment EUR/MWh Index Moderate corporate Q1 reports reflecting a weak economic quarter. Mixed corporate outlooks as companies are still struggling with low demand and the outlook remains uncertain Nord Pool YR Frwd contract S&P 5 Index Source: Bloomberg 27/5/9 5

6 Industrial production is slowly stabilizing on low levels 2 US industrial production fell less than expected in April indicating the recession is loosening in the US Eurozone industrial production fell in March as the recession has forced manufacturers to cut output as the recession worsened in Q US Industrial Production, 6-9, mom % change The US economy is ahead of the Eurozone recovery as the US economy came in first in the recession EuroZone Industrial Production, 6-9, mom % change Source: Bloomberg 27/5/9 6

7 Temperature and electricity consumption in the Nordic Nordic average temperatures and historical averages Nordic electricity consumption 25 Electricity demand in EEA, week /9 5 C Warmer than average Colder than average Week Weekly Demand (TWh/wk) cum. 7 cum. 8 cum. 9 5 Cum Demand (TWh) Source: SMHI and Nordel 27/5/9 7

8 Decrease in electricity consumption continued Electricity consumption in the Nordic countries has decreased by almost 5% during the start of this year compared to last year (with temperature correction about 6%). Industrial electricity consumption decreed by about 17% during the fist quarter compared to the previous year. Consumption decrease accelerated in April partly due to warmer than normal weather and Easter. 2 % % -2 % -4 % -6 % -8 % - % Electricity consumption development (* Sweden Norway Finland Denmark Nordic 8 vs. 7 Q4 8 vs Q4 7 Q1 9 vs Q vs *) Partly based on preliminary statistics 27/5/9 8

9 Oil and coal price development USD / bbl Crude oil price (ICE Brent) USD / t Coal price (ICE API2) Brent Crude USD / bbl 8 Rotterdam Coal USD / t /2/9 26/3/9 26/4/9 26/5/9 5 26/2/9 26/3/9 26/4/9 26/5/9 Soure: ICE ; market prices 26 May 9; 9- future quotations 27/5/9 9

10 CO 2 Emission allowance price development CER 3 25 /t CO Source: Nord Pool 27/5/9

11 Nordic water reservoirs close to normal levels snow situation weaker than normally 1 reservoir content (TWh) reference level week Source: Nord Pool 27/5/9 11

12 Spot-price development Day Avg Price EUR / MWh Source: Nord Pool 27/5/9 12

13 Common market price in Nord Pool No significant area price differences 9 8 System and area price development in the Nordic market system Oslo Stockholm Helsinki Odense Copenhagen 7 EUR / MWh Source: Nord Pool 27/5/9 13

14 Continental and Nordic spot prices on same level large difference in future prices EUR/MWh Spot prices Forward prices Dutch German Nordic Russian* 25 May * Including capacity tariff estimate. E.g 9 11 /MWh Source:, ATS 27/5/9 14

15 Nordic price history and future quotations until EUR/MWh Source: Nord Pool, Future prices /5/9 15

16 Energy market review, 27 May 9 Fortum publishes a current energy market review two to four times a year. Topics covered in the review include fuel price development, electricity price development on the Nordic power market and factors influencing the development. Summary: Oil prices have increased the past months. Coal prices have remained on low levels. Nordic electricity consumption has continued to decrease. During this year the consumption has decreased by almost 5% compared to same time last year. There are positive signals in economic indicators. Nordic electricity future prices have turned upwards during the past months. Physical spot-prices have been above the prices seen at the same time the past two years. The Nordic water reservoirs are at the long term average levels, but the spring floods have been small due to low snow accumulation and low precipitation. Spot prices in Continental Europe and Nordic are on the same level, but future quotations are - /MWh higher in the Continental Europe compared to Nordic. Further information: Lotta Forssell, , lotta.forssell@fortum.com 27/5/9 16

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