Europe Power Prices Surge to Record on French Reactor Halts

(Bloomberg) -- European power prices soared to records after Electricite de France SA said that two nuclear reactors will stop unexpectedly and two will have prolonged halts -- just as the continent heads for a cold snap with already depleted gas inventories.

German electricity for next year jumped more than 10% as EDF is set to shutter two reactors at its Chooz nuclear plant this week and extend halts of two units at its Civaux site until spring after agreeing with the safety regulator to replace faulty pipes. The facilities make up almost 10% of the French nuclear capacity. 

The shutdowns will make the market even more jittery just as temperatures are set to plunge way below average for much of the continent. Peak demand in France alone is set to jump 7% to above 80 gigawatts next week, according to a Bloomberg 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 is Aarhus, Denmark. 

The four reactors at Chooz and Civaux are the biggest and newest units of France’s 56 reactors. They were built in the 1990s and have a capacity of about 1,500 megawatts each. That’s enough to supply millions of people around the clock. 

After a fault in a pipe was detected during a routine inspection in one of the units, the inquiry was extended to the whole series. EDF now sees no other option that to replace the part in all four reactors. 

EDF will halt the Chooz-2 reactor at 11 p.m. on Thursday and and Chooz-1 at the same time on Saturday. Both units are then scheduled to be offline until Jan. 23, the company said in filings on its website. 

Both Civaux units were already offline for maintenance since earlier this autumn. The halt of the second reactor, which had been scheduled to restart next week, was extended by more than 3 months to March 31. Civaux-1’s outage was extended by two months until April 30.

The company’s shares fell the most in more than 10 months after the outages signal it could miss its 2021 profit target. The outages related to repairs and checks in the four reactors will result in a loss of about 1 terawatt-hour of electricity output by the end of 2021. 

EDF Risks Missing Profit Target Due to Faults in Reactors

France is also a key exporter of electricity to neighboring countries through huge cross-border cables, meaning that the effects of the shutdowns will reverberate in Germany, Spain, Italy and Britain.

Most of Europe will get below to much below-average temperatures next week, with mild weather limited to Iberia, meteorologists at Maxar said in an emailed report. Paris will be as much as 5 degrees Celsius below average over Christmas. Lower demand over the holidays will curb the temperature impact on prices. 

German 2022 power jumped to as high as 230 euros a megawatt-hour on the European Energy Exchange AG. French week-ahead soared 20% to 485 euros in broker trading, while the January contract surged as much as 40% to a record 550 euros. 

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