During the week ending August 24, new unplanned extensions of French nuclear outages that began in July ignited fear in surrounding markets. The unplanned outages are set to impact 2.37 TWh of nuclear output between 20 August and 19 September, according to Platts estimates. This news came with tight fundamentals (above-seasonal temperatures, low wind, and carbon prices up 10 percent at a 10-year high), which took power prices to new highs:
- On 22 August, Spanish delivery prices hit an eight-month high at EUR 68.52/MWh
- On 21 August, German delivery prices hit a year-to-date high of EUR 66.45/MWh
- French baseload day-ahead price on 21 August rose to a five-month high at EUR 68.02/MWh
Neighboring countries Spain and Italy were directly impacted by the lower French export and had to rely on higher fossil fuel generation. The spreads between France and Italy verses France and Spain were narrowing, causing the cross-border power flows to change direction. The French-Spanish power flow balance flipped at 22 GWh net exports from France on 20 August, to 5 GWh net imports into France on 22 August (source: Red Electrica); The reverse flows are visualized in Graph 1.
France also reduced its exports to Italy, which faced strong domestic demand at the time. This pushed gas-for-power demand to hit a 10-day high at 67.6 million cubic meters on 20 August, or approximately 404 GWh (source: Platts). After all, the unplanned outages pushed power prices higher, resulting in a more attractive clean spark spread.
Genscape’s analysts will continue to analyze the impacts of the French nuclear outages to give a clear picture into the market for clients. The EPSI platform provides an understanding of the supply and demand fundamentals of European power markets to help industry players seize opportunities and to manage risks. To learn more about the EPSI platform, please click here.