On Wednesday, Bloomberg reported that in France, as the nation struggles to bring its aging nuclear power stations online, electricity prices are soaring, already hitting twice the cost of power in Germany.
Approximately 70% of French electricity is generated from a fleet of 56 nuclear reactors operated by state-owned utility EDF. Many of the reactors experience recurring issues with corrosion, which have forced them to be shut-down and queued for maintenance, with many presently undergoing it. This reduction in generation capacity has caused a massive spike in the cost of electricity.
For the first quarter of 2024, French electricity prices reached €416 ($455) per megawatt-hour (MWh), more than doubling Germany’s price of €169.
Experts say the enormous difference of almost €250 per megawatt-hour is attributable to traders, who are pricing in risks due to the fact France’s nuclear power generation has been slow to come online, and its output is still well below historical averages.
Analysts at Engie SA’s EnergyScan wrote, “No participants want to risk being short next winter.”
Formerly an energy exporter, France is now expected to be heavily reliant on imported electricity purchased from countries such as Germany this coming winter.
However, in Germany, despite continuing worries over the nation’s energy security following the cessation of Russian gas deliveries, Berlin has just shut down its last three nuclear power plants this past Saturday. It marked the end of over 60 years of commercial nuclear energy generation. The country is still heavily reliant, however, on aging coal-fired generation plants.
Although Germany began unshuttering its aging coal-fired plants as Russia began reducing its deliveries of natural gas, another reason the country shifted to the more antiquated coal-generated electricity was the growing consumption in France, combined with its reduced production.
It is expected in the near future, according to data from German public statistics service Destatis, that Germany may become a net exporter of electricity to France, something not seen since at least 1990.
