U.K. Power, Gas Prices Jump as EDF Delays Reactor Starts

U.K. electricity and natural gas prices climbed after Electricite de France SA delayed the start of four U.K. nuclear reactors it halted last month due to a defect in one of the units.

Two of EDF’s reactors in northern England won’t start until Nov. 30, more than a month after their initial return dates, the Paris-based company said on its website. Electricity output at EDF’s eight U.K. nuclear power stations will decline by as much as 10 percent this year, taking into account the four reactors shut for inspection on Aug. 11.

U.K. power for October rose to a five-month high, while the equivalent gas contract gained for the first time in three days on speculation the nuclear outages may spur demand for electricity generation. October gas prices have climbed 21 percent since July as the crisis in Ukraine increased the risk of supply cuts from Russia this winter.

“Continued nuclear shutdowns, with a backdrop of the evolving political situation in Ukraine, are helping push U.K. gas prices up,” Nick Eagle, director of sales and trading at Clean Energy Trading Ltd. in London, said by e-mail today. “With some nuclear plants offline, there is naturally more pressure on the remaining generation capacity. With the geopolitical risk factors, there’s potential for further spikes and higher volatility.”

The delay means EDF now expects to generate between 57.5 and 60 terawatt-hours of power from its reactors this year, compared with 61 terawatt-hours estimated on Aug. 11, according to a London Stock Exchange filing. That’s down from 63.9 terawatt-hours forecast in July.

Price Gains

The price of U.K. electricity for October rose 5.2 percent to 46.55 pounds ($75.29) a megawatt-hour, the highest since March 17 for a next-month contract, at 12 p.m. in London, according to broker data compiled by Bloomberg.

U.K. next-month natural gas gained 3.3 percent to 52.18 pence a therm on the ICE Futures Europe exchange in London.

Centrica Plc, the London-based utility that has a 20 percent interest in EDF’s U.K. nuclear business, said the reactors’ halt will cut its earnings by as much as 9 pence a share.

EDF’s Heysham-1 unit 1 and Hartlepool-1 reactors in northern England are due to start Nov. 30, the company said. Heysham-1’s unit 2 and Hartlepool-2 will start Oct. 31. The similarly designed reactors were halted after a boiler fault was found in Heysham-1.

The utility previously planned to start the 600-megawatt Heysham-1.1 reactor on Oct. 7; the 580-megawatt Heysham-1.2 on Oct. 8; the 605-megawatt Hartlepool-1 on Oct. 26; and the 605-megawatt Hartlepool-2 reactor Oct. 6.

One gigawatt, or 1,000 megawatts, is enough to power 2 million European homes.

EDF’s U.K. nuclear stations total almost 9 gigawatts, of which only its 1.2-gigawatt Sizewell B, the U.K.’s youngest plant completed in 1995, is scheduled to stay open past 2023. The company has agreed to construct a new $27 billion atomic plant at Hinkley Point in southwest England by 2023.

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