October 18, 2016 / 5:35 PM / 3 years ago

UPDATE 1-French winter forward power prices rally on fresh nuclear concerns

* EDF to test five more reactors by year-end

* The five reactors represent 5,100 MW capacity

* Market concerns over timely outage reporting (Adds detail, context, trader and EDF quotes)

By Vera Eckert and Bate Felix

FRANKFURT/PARIS, Oct 18 (Reuters) - French forward power prices hit fresh highs on Tuesday on persistent worries over further nuclear power reactor downtime in coming months at five plants, which could tighten European electricity supplies in winter.

Nuclear watchdog ASN has told state utility EDF to conduct tests on the five nuclear reactors before their scheduled maintenance period, potentially adding further pressure to the country’s already tight supply situation.

ASN said in a statement that the five reactors to be tested were: the 1,500 MW Civaux 1 (no maintenance date set); 900 MW Fessenheim 1, scheduled to go offline on Oct. 22; 900 MW Gravelines 4, scheduled for planned outage in April 2017; 900 MW Tricastin 4, scheduled for statutory outage on Oct. 22, and the 900 MW Tricastin 2 scheduled for outage in April 2017.

“We absolutely want these five reactors to be back in service at the start of the year even if they are halted in November and December,” a spokesman for EDF said.

“We are perfectly confident. The tests done so far show slightly higher carbon concentrations at the bottom of the steam generators, but these remain within the margins for that equipment,” he said.

The spokesman added that it will schedule four more closures between November and December as one was planned for this weekend.

“It will take a few weeks of outages for each of these four reactors. The impact in TWh is limited and allows us to confirm our 2016 nuclear output target (380-390 Twh) as said on Sept. 21,” the spokesman said.

First-quarter French baseload power was up 8.21 percent at 68.50 euros ($75.30) a megawatt hour, while French Cal ‘17 baseload power for next year delivery, was up 4.9 percent at 43 euros.

Traders said market participants were factoring in the risk of supply gaps if reactors cannot be started up again for the first quarter.

“People are betting on delays of the (nuclear plant) inspection, so first quarter ‘17 is well bid,” one said.

“It is quite bullish, as if they don’t get them back up again in winter, this problem could spill into the next summer,” one trader said.


French grid operator RTE said on Tuesday that French nuclear power production in September fell to its lowest in 18 years due to the issues with French reactors. Output has been on a steady decline since May.

France is having to import power from Germany which itself has unusually low wind farm output in the north and so coal has roared back into Europe with physical API2 prices at 2-year highs because Europe has no other choice but to burn coal for power generation. That is also affecting carbon and gas markets.

Traders said coal prices into Europe were boosted by the developments because Germany is the default supplier of power to neighbouring Europe if export levels from France, a net yearly power exporter, fall.

Germany, which shares big interconnector capacity with France, can derive more than 40 percent of its power from hard and brown coal while also having massive renewable capacity.

North Europe delivered coal was up $4.2 on the day hitting $70 a tonne, which traders attributed to coal’s own market dynamic but also as a reflection of the power market strength.

Benchmark European carbon prices touched a four-month high of 6.14 euros/tonne.

Traders questioned France’s seemingly patchy outage reporting standards compared with their northwest European peers, who update the market of any slight changes in production outlook, especially since French power markets are exerting such a big pull over the broader European energy complex.

“Why is the market mover of all European commodities not saying a word about its own nuclear problems?,” a trader said.

French energy market regulator CRE said separately that it was paying attention to the reasons for the sharp rise in French forward power prices, and was paying particular attention to transparency obligations under European Union REMIT regulations. ($1 = 0.9098 euros) (Additional reporting by Oleg Vukmanovic and Geert De Clercq; Editing by Mark Potter and Adrian Croft)

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