European energy prices rose amid fresh concerns about corrosion in France’s nuclear fleet, against a backdrop of strikes across the country and a cold snap elsewhere in the region.
French power for next year rose to 7.9%, the highest since late January. Benchmark Dutch natural gas for the first month also advanced.
Electricite de France SA must review its nuclear reactor controls program after a crack was found in its Penly-1 unit earlier this year, the country’s nuclear authority said. It’s unclear how the overhaul will affect production, which the company hopes to pick up after multiple disruptions in 2022.
Separately, strikes over pension reform have upended France’s energy markets, disrupting operations at ports, refineries and power plants. They have also had knock-on effects in neighboring countries. The situation, combined with a blast of wintry weather in the north, is a sign that Europe’s energy crisis may last longer than expected this season.
On Wednesday, roughly 11 gigawatts of capacity were pulled from the grid due to strikes at nuclear, hydro and fossil fuel plants, according to Sebastien Menesplier, secretary general of the energy branch of the CGT union.
EDF’s French hydro capacity cuts again for striking workers
All four of France’s LNG terminals are blocked due to strikes, the union said separately. The interruptions in three of them may continue until the next general assembly of the union scheduled for March 14, according to the operator Elengy.
Shipments from TotalEnergies SE refineries also remained halted on Wednesday morning due to strikes, a representative of the French oil major said.
frozen uk
Elsewhere, wind power has surged in the UK after a frost still forced the grid to use its back-up coal stockpile for the first time on Tuesday. This was partly triggered by France’s demand for imported energy due to lower available energy capacity there.
Heating demand is expected to increase in parts of the region this week. Britain is dealing with snow and ice, a relatively unusual occurrence this late in the season. Scandinavia will see unusually cold temperatures next week, according to forecaster Maxar Technologies Inc.
While European gas stocks remain well above seasonal levels, traders are closely watching weather developments and LNG flows. Any prolonged disruption to shipments could raise concerns as inventories can quickly deplete, making it harder to fill through the summer.
For now, competition between North Asia for spot LNG is likely to remain low in the coming months, according to BloombergNEF. This should result in a continued high flow of fuel to Europe, the researcher said in a note on Wednesday.
First-month Dutch futures, Europe’s gas benchmark, rose 1.7% to 44.13 euros per megawatt-hour at 11:44 a.m. in Amsterdam. The UK equivalent also advanced.
–With the assistance of Elena Mazneva.
