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Germany/France: French spot at record high on nuclear outage

10 Feb 2012 20:05:52 | edem

French prompt contracts spiked on Friday above the highs touched during the week, as an unplanned nuclear outage sparked panic among market participants.

Far curves in both France and Germany ticked lower, pressured by a bearish fuel complex and weakening emission prices.

EDF's 1.3GW Cattenom 2 nuclear reactor went off line on Friday, French grid operator RTE said (see separate story). The TSO did not specify a reason for the outage, and did not say when it expects the reactor to restart.

As a result, French Day-Ahead Baseload closed the session at €220.00/MWh - the highest level since December 2001, according to ICIS Heren records − while its Peaks equivalent touched an all-time high of €380.00/MWh.

"Usually nuclear outages like this would not have a big impact on the French system, but with the current low temperatures the supply picture is already tight and so there is a big fear of price spikes," one French market participant said.

"Nobody likes to be short in France these days. Everything can happen, as we have seen recently."

For Monday, temperatures in the country are still expected to be 10 degrees below seasonal average - French grid operator RTE forecast demand at 95.4GWh.

Skyrocketing spot levels for Monday also supported French Week 7, although for the second part of the week milder temperatures are expected and RTE forecast that the demand will gradually settle below90GWh/day.

The only French prompt contract which ticked lower on Friday was the Weekend, which was very volatile and traded between a low of €83.00/MWh and a high of €115.00/MWh.

Market participants said that healthy supply for Saturday and Sunday was the reason Weekend closed higher.

"All the plant operators want to be ready to sell power at that mad price on Monday and they are keeping the plants online in the weekend, making the supply situation more comfortable, given the lower demand in the weekend," one said.

Across the border, in Germany, the prompt moved to the opposite direction, as next week's temperatures are expected to increase and wind levels to spike.

According to forecasts from Eurowind's Spotrenewables data, Germany will see 13.8GW of wind generation on Tuesday on average per every hour. The country is also using "cold" reserve capacity in Austria to stabilise its electricity system in the south of the country, grid operators confirmed on Thursday (see EDEM 9 February 2012).

Further out, the near and far-curve contracts in both countries ticked downwards.

The German Calendar Year 2013 Baseload closed €0.20/MWh lower day on day after the European benchmark coal contract CIF ARA Year 2013 shed $0.60/tonne and the EUA Year 2013 weakened by €0.20/tCO2, according to ICIS Heren data.

Traders agreed in seeing in the losses the start of a bearish trend: "The recent curve contracts' gains were weather-related, and now they are starting to correct," one said. SM

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