Swiss hydro stocks accelerate toward all-time lows, April-May premium widens

London — The rate of decline of Swiss hydro stocks accelerated through Week 14 as levels edged closer to all-time lows for this time of the year, data from the Swiss Federal Energy Office showed April. 15.

In the week to April 11 reservoir levels fell 178 GWh on the week, which followed a decline of 40 GWh recorded the prior week. Reservoir levels for Week 14 stand at 916 GWh, or 10.3% of total nominal capacity.

Reservoir levels were down in all regions of Switzerland, with Cantons Grisons and Ticino particularly tight, standing at 6.6% and 6.7% of capacity respectively.

Reservoir levels have consistently remained below the 10-year average following an extended winter season. Stocks for Week 14 are less than half of levels recorded in the previous two years and stand only 1.5 percentage points above the long-term minimum recorded for the week in 2013.

Hydro stocks follow a seasonal trajectory with snowmelt typically seen in the second half of April and May serving as the inflection point for reservoir levels to begin rising after the winter season.

"Finally snowmelt should start in May. [Temperatures] until the end of April are below average so it will be postponed a little...mid-May is more likely," a Switzerland-based power trader said.

Delayed hydro replenishment from snowmelt suggests a tight Swiss supply-demand balance for April. According to EEX data, the premium for April baseload over May power contracts stood at Eur8.56/MWh April 14.

In addition, Swiss baseload day-ahead prices settled at a rare premium to the North Italian biding zone for delivery April 7-8, which caused net flows for Switzerland to Italy across Week 14 to ease around 25% on the week.

On the Swiss-German border, Rhine river levels rose on healthy precipitation, rising to 79% of seasonal norms, up 3 percentage points compared with the previous week, the data showed.

According to the Swiss Meteorological Office, temperatures for the week-ahead are forecast to average a high/low range of minus 3 to plus 18 degrees Celsius, with minimal precipitation expected across all regions of Switzerland.

France

In neighboring France, hydro reservoir levels reserved its seasonal descent, climbing 37 GWh on the week to 999 GWh, marking 27.8% of nominal capacity, according to data from French grid operator RTE.

Despite the week-on-week increase, reservoir levels remained below the 10-year average for the week. Since 2012, reservoir levels have averaged 1.22 TWh in Week 14.

RTE data also showed weekly French hydro output averaged 6.37 GW, down around 2% on the week, despite strong power demand and limited nuclear availability. Instead, the generation shortfall was met by France becoming a net power importer across the week.

French power demand averaged 54.76 GW in Week 14, up 13% week on week as colder temperatures gripped Northwest Europe after the Easter weekend. Data from CustomWeather showed temperatures are forecast to briefly rebound above seasonal averages before slumping to cooler climates for the remainder of April.