France’s stricken nuclear power sector has become a key driver of European power prices, fuelling gains across markets and pushing coal back into the limelight as winter nears. Data shows France burned more coal, oil and gas in September than at any time since 1984 while utilities in Germany continue to lean heavily on coal-fired electricity production.
Nuclear power-reliant France is siphoning electricity away from markets it usually supplies such as Germany, Italy, Spain and the Benelux states in response to mass reactor outages at home as utility EDF conducts safety tests.
Twenty of France’s 58 reactors are now shut for tests and EDF expects to halt four more in the coming months, sparking concerns over supply tightness as lower temperatures lift demand.
France’s close ties with neighbouring countries’ power grids via links to Britain, Belgium, Germany, Switzerland, Italy and Spain means domestic problems are rippling out across the region.
In Italy, which is pumping more power across the Alps to France, new export demand has revived long dormant or under-used gas-fired power plants, a source with knowledge of the matter said.
Caught off-guard by low wind output in north Germany and tight hydroelectric reserves across the Nordics, Europe is also witnessing an unlikely coal renaissance that has seen physical prices hit two-year highs.
“(French outages) are having a big impact as they are driving more thermal demand at the moment … Needing to cover that shortfall of power in the market with thermal is pushing up fuels and carbon,” said Energy Aspects analyst Trevor Sikorski.
European coal futures have jumped 33 percent to their highest level since December 2014 due to renewed demand, raising the cost of pumping carbon into the atmosphere.
EU carbon prices have hit a four-month high of 6.14 euros/ tonne.
Data shows France burned more coal, oil and gas in September than at any time since 1984 while utilities in Germany, Europe’s biggest power market and economy, continue to lean heavily on coal-fired electricity production.