French nuclear output concerns drive power prices up

Power prices throughout Europe have surged amid concerns that France might need to reduce its nuclear output, as reported by Reuters.

The country’s nuclear watchdog, ASNR, has reported “hints” of possible stress corrosion in the Civaux 2 reactor in the Nouvelle-Aquitaine region of central France. Although there is no confirmation of corrosion, further testing is necessary.

In response to the news, front-year baseload power contracts in France reached a four-month high in early trading on Wednesday 11 June, later settling at €65.80 ($75.38) per MW hour.

Less than three years previously, operator EDF encountered stress corrosion cracks in the same reactor. This led to a significant drop in nuclear output in France, reaching a 34-year low and causing power prices to soar.

An EDF spokesperson stated that an inspection is currently in progress at Civaux 2 as part of routine annual maintenance, and the results are pending. Meanwhile, benchmark European front-month gas contracts also saw an increase, up 2.3% to €35.58 per megawatt hour (MWh).

A trader speaking to Reuters highlighted the risks to the French nuclear fleet as the primary factor influencing gas demand on Wednesday.

DNB analysts have expressed concerns that the reports about Civaux 2 could trigger renewed tensions in Europe’s power market.

Mind Energy analysts have linked the rise in European gas prices and the European front-year baseload contracts directly to the news of potential defects at the reactor.

However, Kpler analyst Hazma Aourach has downplayed the risks, noting that EDF now has more experience and resources to address any issues related to stress corrosion.

France has 18 commercial nuclear power plants, all operated by EDF, with a total of 57 operable reactors.

The country derives 70% of its electricity from nuclear energy owing to its long-standing policy to establish energy security. 17% of the country’s electricity comes from recycled nuclear fuel.