European power prices surged to record highs over the past couple of days after France announced the closure of four of its largest nuclear reactors. The crisis is further exacerbated by already very high prices of natural gas and cold temperatures. By the end of the month, most of the continent will endure below average temperatures, further increasing power demand.
French power giant EDF found two faults close to the welds on the pipes of the safety injection-system circuit in two reactors of the Civaux power plant last week. The company had stopped one reactor at the Civaux plant for a routine 10-year checkup in August and in November it also halted its second reactor at the site protectively, previously planning to restart it on December 24.1
However, as a result of the fault discovery, an outage at the plant will now last longer than expected, the company said, adding that it would also halt production in its plant in Chooz because it uses the same kind of reactors.
The two facilities make up almost 10% of the French nuclear capacity and they are the biggest and newest units of 56 in the country. Nuclear power accounts for around 70% of the country's electricity mix.
The shutdowns will make the market even more jittery just as temperatures are set to plunge way below average for much of the continent, Bloomberg reports.2
Peak demand in France alone is set to jump 7% to above 80 gigawatts next week, according to Bloomberg's model.
"The market is already very nervous and extremely sensitive, and the timing of this info could not have been much worse for market participants hoping for a drop in power prices," said Bo Palmgren, chief operating officer at MFT Energy, a trading company in Aarhus, Denmark.
Since France is a key exporter of electricity to neighboring countries the effects of the shutdowns will reverberate in Germany, Spain, Italy, and Britain.
German 2022 power jumped to as high as 230 EUR a megawatt-hour on the European Energy Exchange AG. The January contract surged as much as 52% to a record 600 EUR, closely followed by power for February adding 33% to 570 EUR.
"Day-ahead electricity prices across much of Europe set fresh and frightening record highs. Germany jumps to an incredible €431 per MWh. At current prices, energy-intensive industries will rather shut down and re-sell their power on the spot market," Bloomberg's Javier Blas said.
EUROPEAN ENERGY CRISIS: Day-ahead electricity prices across much of Europe set fresh and frightening record highs. Germany jumps to an incredible €431 per MWh. At current prices, energy-intensive industries will rather shut down and re-sell their power on the spot market pic.twitter.com/GZFaxLEJei
— Javier Blas (@JavierBlas) December 20, 2021
EUROPEAN ENERGY CRISIS: Wow, wow, wow… I'm running out of words to describe the European short-term electricity market. Multiple records breached for Monday. With the exception of Poland and Scandinavia, all Europe is above €300 per MWh (France and Switzerland near €400) pic.twitter.com/yRTKA9Jskp
— Javier Blas (@JavierBlas) December 19, 2021
UPDATE: Russian natural gas flows via the Yamal-Europe pipeline have dropped even further early on Sunday to just a a trickle (a huge drop compared to December 2020). The chart is flows at the Mallnow metering station on the Polish German border #EuropeanEnergyCrisis #Russia https://t.co/tBjYUj6JTj pic.twitter.com/vFDOBLfLdd
— Javier Blas (@JavierBlas) December 19, 2021
1 European Markets France's EDF takes more nuclear reactors offline after faults found – Reuters
2 Europe Power Prices Surge to Record on French Nuclear Halts – Bloomberg
Featured image: Full moon and nuclear plant cooling towers. Credit: ines s. (Flickr)
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