While nuclear power is often presented as the only reliable and stable low-carbon alternative to fossil fuels, the technology can also be subject to long periods of uncertainty, as reactors are taken offline due to safety considerations.
Following a period of extended outages in Belgium in 2014-2015, the spotlight turned to France in 2016 as nuclear components came under increased scrutiny. This had implications across European power markets, due to the country’s traditional export position and the magnitude of investigations, which impacted as many as 22 of the 58 nuclear reactors in the French nuclear fleet.
The unfolding events and gradual dissemination of information raised issues of transparency and adequacy. The sheer body of discoveries make it difficult to distinguish between new and old information, with comments and leaks providing additional fodder to a bullish and nervous market.
ICIS takes a look back at the dizzying series of events, which traders described as unprecedented and impossible to predict, with prices surging to record highs, reaching €262.50/MWh on a Tuesday Baseload contract and €136.00/MWh on both the December ’16 and January ’17 Baseload contracts.
The uncertainty now appears to be coming to an end, but a total of 15 reactors are yet to return to the grid or be examined for anomalies, meaning French nuclear concerns are unlikely to go away completely in 2017.
7 April 2015: Nuclear authority ASN announced the detection of an anomaly impacting the 1.65GW nuclear reactor under construction at Flamanville. Manufacturer Areva informed ASN in late 2014 that mechanical tests on a model of the reactor pressure vessel revealed areas of high carbon content in the steel, which could undermine impact resistance.
Market impact: The impact was not apparent at the time and utility EDF did not revise its construction schedule for Flamanville until 3 September 2015. However, ASN did order EDF and Areva to begin a safety review to determine whether similar anomalies could be present in the country’s 58 operational nuclear reactors.
31 March 2016: An accident occurred during an operation to remove one of the steam generators at the 1330MW reactor Paluel 2, which had been offline since May 2015 as part of an inspection every 10 years. The outage was extended and then extended again to become the first to cover the entire winter period 2016-2017. The end date has since been set to 30 November 2017, extending the outage to a record-breaking two years and six months.
3 May 2016: ASN revealed the first results of Areva’s quality review, which uncovered 400 irregularities in its manufacturing records. Around 50 of these irregularities concern components currently in service in French nuclear power plants. This number will later increase to 87.
23 June 2016: ASN published the results of an initial analysis by EDF, which indicated that similar anomalies to Flamanville could be present in the steel of steam generators in 18 nuclear reactors in the French fleet.
19 July 2016: ASN suspends the serviceability certificate of the 880MW reactor Fessenheim 2, due to an anomaly in the steam generators.
EDF also announces the first revision of its 2016 nuclear generation targets, from 408-412TWh to 395-400TWh, making it the lowest since 2009. The company said extended outages should be expected in the second half of 2016, primarily due to additional controls on steam generators.
2-9 September 2016: The outages of three nuclear reactors are extended to beyond the winter months: 910MW Gravelines 5, 880MW Bugey 5 and 880MW Fessenheim 2. The delivery of a new steam generator to Gravelines 5 is delayed due to an irregularity in Areva’s manufacturing records, while Bugey 5 had experienced issues with leakages since 2011. A total of four reactors will consequently remain offline for the entire winter.
21 September 2016: EDF revises its 2016 nuclear generation targets for a second time, to 380-390TWh, indicating decade-low production. The company warns that further outage extensions should be expected, calling attention to the 915MW reactors Tricastin 1 and 3.
28 September 2016: An article in a satirical magazine reports that EDF expects 12 nuclear reactors to be subject to extended outages. This refers to the anomalies originally announced on 23 June, of which six reactors were allowed to restart.
Market impact: Although EDF had informed the market in its statements on 23 June and 21 September, the reference to 12 nuclear reactors had not previously been specified, and the ‘leak’ was treated as news. The Cal ’17 Baseload contract made its biggest session-on-session gain, by €3.00/MWh, while the Q1 ’17 Baseload contract jumped by €7.95/MWh.
18 October 2016: ASN instructed EDF to take five reactors offline for additional controls within the next three months. The reactors in question were listed in the announcement of 23 June but had not been scheduled for maintenance until next spring.
Market impact: The Cal ’17 Baseload contract increased by €1.625/MWh session on session.
3 November 2016: EDF announced a third revision of its 2016 nuclear targets, down to 378-385TWh. The outages of five reactors are extended to 31 December.
Market impact: The Q1 ’17 Baseload contract made its biggest session-on-session increase, at €9.575/MWh, while the Cal ’17 Baseload contract gained by €2.80/MWh.
15 November 2016: There are fresh doubts about the return of nuclear reactors by the end of the year, following statements by ASN in the French media. The comments indicated that ASN would need a month to analyse EDF’s safety case, which had yet to be finalised. Traders anticipate exceptionally tight supply margins and potential shortages due to a cold spell in the last week of November.
Market impact: With nuclear availability still at under 70%, the Cal ’17 Baseload contract traded at a new high of €50.20/MWh within the session, making it the highest for a front year product since 2012.
15 December 2016: ASN announced that seven reactors are in principle authorised to restart by the end of the year.
Market impact: The Cal ’17 Baseload contract had already lost around 15% of its value since its high on 15 November. It made a record drop of over €5.00/MWh following the announcement.
19 December 2016: Nuclear availability stood at around 77%. Four reactors are still scheduled to remain offline for the entire winter period. One of the seven reactors scheduled to return by the end of the year has already begun ramping up, while two more reactors are expected to return in early January. Two remaining outages have been postponed and will only go offline next year. Nuclear availability was scheduled to peak at 93% on 1 February. The Cal ’17 Baseload contract was last trading at €37.25/MWh.
28 December 2016: Nuclear availability currently stands at around 83%. Two of the seven reactors scheduled to return by the end of the year ramped up, while two other reactors were delayed and expected to return by the second week of January. Nuclear availability was scheduled to peak at 93% on 1 February. The January ’17 Baseload contract was last trading at €61.05/MWh.