Graphic detail: French nuclear supply crunch fears bolster prices

• Nuclear concerns and high fuel prices have boosted French Q4 ’17 and Q1 ’18 electricity contracts since 9 August and are currently approaching a four-year high, according to ICIS assessments.

• The price spikes were initially due to bullish energy commodities, particularly from coal, which reached a three-year high in August.

• Prices jumped on 16 August by news that France’s nuclear safety regulator ASN requested information from power incumbent EDF about each component in the entire nuclear fleet, amounting to 58 reactors. This was due to suspected discrepancies in manufacturer Areva’s paperwork.

• The market is concerned that if EDF finds irregularities in the dossiers, this could lead to extended outages of nuclear plants throughout the winter, when the French power grid needs electricity the most.

• Market participants are scared of a repetition of the winter 2016/2017 nuclear supply crunch, which caused huge volatility and price spikes across the prompt and the curve.

• ASN has previously said the French power market has to secure supply margins when faced with reduced nuclear supply

• Click here for an ICIS briefing on France’s nuclear power supply. herman.moestue@icis.com