EDF shuts down 4 nuclear units, electricity prices respond to possible capacity shortfalls

At the end of last week, EDF shut down 4 units at the Tricastin nuclear power plant with a total installed capacity of 3.6 GW. Questions are once again hanging over lower electricity supplies ahead of winter, which are feeding through into higher electricity prices in interconnected markets.

Energy company EDF will once again be troubled by several nuclear power plant outages towards the end of the year. This is once again due to an order from the French nuclear safety authority, which requires a high level of safety at all nuclear power plants, something the authority has demonstrated in particular in connection with the scandal involving defective parts from the Le Creusot factory.

This time, it concerns 4 units at the Tricastin plant, which must strengthen protection against the possibility of flooding from a nearby water canal.

As last year, France's EDF must reduce its nuclear electricity generation target before the end of the year. Before the announced outages, the company expected generation of 390-400 TWh of electricity; it has now revised its target to 385-392 TWh.

Contracts for October electricity deliveries in particular responded to the announced outages by rising in price. Surprisingly, the price of deliveries in the first quarter of 2018 also increased, with prices climbing as high as 56 EUR/MWh, according to ICIS.

The price increase for the first quarter of 2018 can primarily be attributed to the fact that some traders expect further extensions of outages in this year's winter and therefore sought to hedge against a potential price rise by buying early.

An extension of the outages is relatively likely, as the nuclear regulator has also discovered further shortcomings at other plants. Given France's high dependence on nuclear generation and the relatively significant electrification of heating, concerns over electricity supplies during the winter months are justified.

Already last year, France significantly relied on electricity supplies from Germany, which under normal circumstances imports electricity from France.

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EDF naturally objected to the authority's claim, but shut down the reactors virtually immediately. EDF management argued that the units could remain in operation during repairs. However, they will remain shut down until the beginning of November, when they should be restarted if approved.

Source: Flickr jean-louis zimmermann