From Zero Hedge
French ‘Shocked’ As Power Prices Spike To 8-Year Highs On Nuclear Reactor Probe Shutdown
The scale of forced closures in nuclear power-reliant France – 19 reactors offline and 12 more due to shut – is the biggest since the Fukushima disaster in 2011, after French nuclear safety watchdog ASN warned its sprawling probe into forged quality control reports on reactor parts would turn up more irregularities. These deepening setbacks have sent French power prices soaring to 8 year highs and are expected to spike more into the winter…
As Bloomberg reports, French power prices for next-month delivery, already at the highest in eight years, are set for a record increase in October amid expectations that prolonged maintenance at Electricite de France SA’s nuclear reactors will expose further anomalies after manufacturing problems in components came to light.
On Tuesday, a delayed restart at the Civaux-2, Dampiere-3 and Gravelines-2 plants added to nervousness as much as a French government decision to maintain a mechanism under which main utility EDF must sell supply cheaply to rivals.
Apart from facilitating speculative re-selling into the tight market, this also stirs more demand. “EDF is in the market to buy to supply to others,” one trader said.
In addition, there have been more irregularities detected at EDF reactor Gravelines 5.
French wholesale 2017 power prices hit a contract high of 45.6 euros per megawatt hour (MWh) on Thursday amid gains on coming weeks and months.
“Would France stop all the faulty nuclear plants in case it means shutting down factories in the country and have people freezing?” asked one trader.
Prices in Europe’s largest power supplier Germany with its vast installed renewable capacities are also rallying.
Its 33 gigawatt coal capacity can also be revved up to help when other markets are short, thanks to a high level of interconnection.
German Year Ahead power hit a two-year high of 33.65 euros.
“Panic plays a great role today but the question is how many people are really still short,” said a German trader. “Maybe the rallies were exaggerated and will collapse when the winter weather turns out warmer.”
We are sure this will be great for the French economy.