Due to France nuclear reactors the cost of electricity in France has jumped, adding to Europe’s gas woes, as depressed nuclear output squeezes the market.
The cost of electricity in France has jumped, adding to Europe’s gas woes, as depressed nuclear output squeezes the market.
Located at the heart of Western Europe’s power grid with its fleet of nuclear reactors, France has been the continent’s largest electricity exporter for decades, supplying the UK, Spain, Italy, Switzerland, Belgium, and Germany.
However, France’s nuclear reactors are currently operating at less than half their full capacity. This week, they have produced the least electricity at this time of year since at least 2008, according to data compiled by international media. The country is importing power from neighbouring countries like the UK, since warm weather is making it tougher to cool reactors. Historically, the UK has taken energy from France.
Electricity generation from state-run Electricite de France SA, the continent’s largest producer of atomic energy, is struggling under lengthy maintenance of its aging fleet and risks heightening the continent’s dependence on gas, which is in short supply. The company may now need to import power from neighbours in winter, straining wider European supply and burdening consumers with higher costs.
According to Sabrina Kernbichler, a power analyst at S&P Global Commodity Insights, the market is pricing in a large risk premium to electricity early next year because of the low nuclear forecast. Energy markets are also bracing for Germany to step up its emergency energy plan following recent gas cuts to Europe, she said.
France nuclear plants is getting less gas from Germany than normal, tightening availability for its gas-fired power stations and compounding the risks facing its energy supply and economy. The country has received no gas from Germany since June 15, French transmission operator GRTgaz has reported.
For next week, French power jumped almost 8% to €243/MWh, according to broker data. In longer-term markets, French power has risen over 12% for the first quarter of 2023, to trade as high at €570.