...Cash-Flow Pressure: Fitch Ratings expects continued cash-flow pressure in hydro and thermal power production in the Nordic region in 2016-2017 due to the weak outlook for wholesale power prices. This lowers rating headroom for Fitch-rated Nordic utilities with exposure to power prices and reinforces the Negative Outlooks on Vattenfall AB (A-/Negative) and Fortum Oyj (A-/Negative). Very Low Spot Prices: Average spot system power prices in the region fell to EUR13.4/MWh in 3Q15, the lowest quarterly level in 15 years, from EUR31.8/MWh in 3Q14, due to high hydropower production on the back of exceptionally high hydro reservoir levels in 2015 (91% of maximum capacity at end-September) and weak power demand (see Figure 1). High Hydropower Supply: We expect higher-than-average hydropower production in 2016 as well, as some companies with flexible water storage, including Statkraft AS (BBB+/Stable), have scaled back production, but they will ramp it up again in the coming year. A rising share...
