France's Lowest Hydro Levels for 10 Years Add to Nuclear Woes

  • Power prices are trading at 50 percent above 2015 levels
  • Hydro generation seen falling as reactors return to grid

France’s lowest water reservoir levels in a decade are helping to bolster power prices that are 50 percent above last year’s levels even as a reduction in nuclear supply is expected to ease.

Hydropower generation is forecast to be the lowest for 10 years this month, according to consultants Pira Energy Group. It’s already 1.4 gigawatts below last year’s levels.  

“You have to keep an eye on the hydro situation in case it gets worse,” Ricardo Klimaschka, a power trader at Energieunion GmbH, said by phone. Forecasts show “we should have reached the low already.”

French month-ahead power prices soared to the highest since 2009 last week amid concerns about extended maintenance at Electricite de France’s reactors, which has cut nuclear availability to 66 percent from 78 percent a year earlier. While six of EDF’s atomic units are due to return next week, prices for this time of year are still the highest since 2011.

Hydropower could meet as much as 15 percent of France’s total electricity demand in a “relatively wet” winter month such as December or January, said Bruno Brunetti, a managing director of global power at Pira in New York.

Nuclear power, which is generated round the clock, is producing about 40 gigawatts on Friday, RTE data show. That compares with a forecast for maximum demand next week of 60.2 gigawatts, leaving a gap that needs to be covered by other forms of generation, Brunetti said. One gigawatt is enough to power 2 million European households.

October got off to a cold start in France. The first five days were 1.5 degrees Celsius (2.7 Fahrenheit) below average, according to Meteo-France. The forecaster predicts heavy rain in the south of the country on Friday and Saturday with a weather warning in place.

EDF is scheduled to start its Cattenom-4, Flamanville-1, Cruas-3, Cattenom-1 , Paluel-1 and Dampierre-3 units next week, according to data from French grid operator RTE.

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