France faces a winter challenge as the nuclear fleet does not recover as quickly as hoped, with interconnections to neighboring markets under strain due to ongoing issues at several facilities.
This diagnosis was presented on Tuesday by RTE, the French grid operator, which warned that prolonged strikes at nuclear plants could threaten the country’s power supply.
RTE stressed in its statement that the situation will have serious consequences in the middle of winter, though there is still short-term risk. Electricity supply is expected to shift from very weak to medium levels in the coming weeks.
French nuclear reactors once supplied about 70 percent of the country’s electricity, but currently only 30 of the 56 reactors are in service. Ongoing maintenance and corrosion concerns in some units have forced import reliance, notably from Germany, Spain, the United Kingdom and Belgium.
The disruptions at EDF, which operates France’s fleet, have delayed the restart of several reactors by two to three weeks. This delay raises questions about the government’s plan for EDF to lift nuclear output to around 45 gigawatts in December and 50 gigawatts in January, with total capacity near 61.4 GW/h.
By November 1, nuclear output is projected to reach 29 gigawatts, increasing to 38 gigawatts a month later and to 45 gigawatts in January, according to RTE estimates.
In response to the shortfall in nuclear energy, France is increasingly purchasing electricity from its neighbors, particularly Germany and Spain, and intends to operate interconnections to the maximum to meet demand.
Spain is in a relatively secure position in terms of supply, unlike many European peers, thanks to the Iberian market framework which also benefits Portugal. The Iberian market generally features lower prices due to this regime.
Interconnection capacity between Spain and France is currently limited to 2,800 megawatts and is planned to rise to about 5,000 megawatts by 2027, driven by a new submarine line that will cross the Bay of Biscay.
The Iberian exception, endorsed by the European Commission, enables a cap on the price of gas used to generate electricity. By contrast, price futures in the French wholesale market for late 2022 and early 2023 rose in a manner that RTE calls disproportionate.
For the grid operator, those prices, exceeding 1,000 euros per megawatt hour on some occasions, represent an excessive risk premium that increases uncertainty around the energy outlook for France.