French Power Prices Surge as Temperatures Are Set to Decline
French power for next month rose to a record as colder-than-usual temperatures are poised to boost electricity demand for heating and Electricite de France SA (EDF) delayed the start of two nuclear reactors.
Baseload electricity for November climbed as much as 3.4 percent as the similar Nordic contract gained 2.1 percent to a record and power in Germany advanced to a six-month high, according to broker and exchange data compiled by Bloomberg. Weather forecaster Metraweather cut its outlook for France next week by 5.4 degrees Celsius (9.8 degrees Fahrenheit) to 8.9 degrees, according to data using the GFS model compiled by Bloomberg at 1241pm Paris time.
“From Thursday on, we will see significantly colder weather, especially in France,” Ricardo Klimaschka, a power trader at Energieunion GmbH in Schwerin, Germany, said today by e-mail. “And the market is worried that France can’t bring its plants back in the market on time.”
Colder weather increases demand for electricity to heat buildings. France gets about three-quarters of its power from EDF’s nuclear reactors, a bigger proportion than any other country, and President Francois Hollande has vowed to cut the share to about half.
Baseload French power for November, for delivery around the clock, climbed as high as 56.60 euros ($76.78) a megawatt-hour, a record for the November contract and the highest for next-month delivery since March 28. It was at 56.15 euros at 3:54 p.m. Paris time.
In Germany, power for delivery in November climbed as much as 4 percent to 44.55 euros a megawatt-hour, the highest price since April 16. The next-year German contract, a European benchmark, gained as much as 1.5 percent to 38.60 euros a megawatt-hour, the biggest increase since Sept. 12.
“Temperatures in most of central Europe will cool, up to 2 or 3 degrees below normal for the second half of this week,” Byron Drew, MetraWeather’s lead forecaster, said today in an e-mailed report. “In Germany, temperatures remain up to 1 or 2 degrees below normal for most of next week.”
Polish power for next year increased 0.2% to 156.30 zloty a megawatt-hour, the highest level since Sept. 18. Czech power for November gained as much as 4.1% to 43.50 euros a megawatt-hour, the highest level since it started trading Sept. 2.
Nordic baseload power for November rose as much as 2.1 percent to 43.50 euros a megawatt-hour, the highest price since the contract started trading May 3, according to Nasdaq OMX Group’s energy exchange data in Oslo.
In Sweden, the region’s biggest economy, temperatures next week are forecast to average 7.8 degrees Celsius compared with an earlier forecast for 10 degrees and a seasonal average of 8.4 degrees, the MetraWeather data show.
Gas for next month in the Netherlands, mainland Europe’s biggest market for the fuel, rose 1.1 percent, the biggest jump in 16 weeks, to 27.27 euros a megawatt-hour before falling to 27.25 euros, broker data show. That increases costs for power stations burning the fuel.
EDF delayed the start of its 880-megawatt Fessenheim-1 nuclear reactor by 23 days to Oct. 31, according to data on the website of French grid operator Reseau de Transport d’Electricite. The company pushed back the start of its 1,330-megawatt Paluel-1 unit by four days to Oct. 13, the data show.
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