French nuclear woes stoke Europe's power prices

French nuclear woes stoke Europe
# 25 August 2022 15:50 (UTC +04:00)

European power prices are surging to fresh records as France grapples with lower nuclear output, adding further pressure to wholesale energy markets already struggling with vastly lower Russian gas supply, APA reports citing Reuters.

Technical problems have hampered French nuclear reactors along with summer maintenance and drought has curbed hydroelectric production, another of its key sources of electricity generation.

Power from neighbouring countries is needed to help France handle its nuclear shortage. With gas making up the majority of the deficit, the extra demand is driving prices higher again.

"In France, only half the reactors are running," said German state secretary in the economy ministry, Patrick Graichen.

"France is buying elsewhere even if power is expensive," he said, adding Germany and gas-heavy Italy are sending power to France.

France and Germany account for two thirds of western Europe's power consumption within an interconnected market.

The benchmark German front-year baseload power price on Monday set a record high of 709 euros ($708.01) a megawatt hour (MWh) and has gained 50% over the past fortnight.

The Dutch front-month gas contract set a record of 292.5 euros Monday and is nearly 40% up from two weeks ago.

The soaring electricity prices are feeding back into gas, which is burnt for power in competition with coal, and raises costs of permits to emit CO2.

"Gas is still needed (for power), and in an increased degree as well, since hydropower and nuclear power is so low," Rystad analyst Fabian Ronningen said.