The already bleak French nuclear outlook worsen

The power spot prices were mixed in northwestern Europe yesterday, up in Germany and the Netherlands on forecasts of dropping wind and solar output, but slightly down in France and Belgium on expectations of higher hydro and solar production. The day-ahead prices averaged 171.25€/MWh over the four countries, +12.82€/MWh day-on-day due to the significant 53.13€/MWh increase of German prices.

The EUAs dropped by 3% on Monday morning, pressured by losses in the gas market and a weak result of the daily auction due to the larger volume sold as a consequence of last week’s cancelled sale. The emissions prices however reversed from midday and gave back all of their early losses in the afternoon as they tracked a similar recovery of gas prices. The EUA Dec.22 eventually closed at 96.70€/t, +25-cent from Friday’s settlement.

But the most important news came from the power market yesterday with EDF revising again its 2022 nuclear output target from 300-330TWh to 295-315TWh and announcing also a downward revision of the 2023 target with the figures communicated at a later stage. This bullish update for the power prices is a result of extra checks on 3 nuclear units (Bugey 4, Paluel 2 and Cattenom 3) and some extension of ongoing stops, implying that the recent corrosion issue discovered on the Civaux, Chooz and Penly reactors concerns all types of units and not only the 1.3GW ones. The initial 5 units affected by the issue have all seen their outages extended with a return not before September at the earliest. This worsen outlook of nuclear availability should impact both the power and carbon markets as it implies a stronger call of the more emitting and expensive thermal power plants. The EUA Dec.22 has already hit a new record at 98.49€/t this morning and a test of the 100€/t is not to be excluded later today, while the French Q2 and Q4 2022 are already presenting a 7% and 11% increase.