Setback in France worsens EU power crisis

A steep fall in French nuclear power output in 2022 worsened Europe’s power crisis by forcing French utilities to flip from being power exporters to importers as Russia’s Ukraine invasion hit the continent’s energy markets.

Planned maintenance shutdowns and unplanned shortages of reactor cooling water forced French nuclear power operators to cut power generation 23% in 2022 from the year before to record lows, data from thinktank Ember shows.

France relies on nuclear for more than 70% of total electricity supply. The shortfall in reactor output forced French utilities to adjust their power fuel mix drastically by increasing imports and use of natural gas nearly 30% to record highs.

In turn, France’s higher gas consumption tightened regional natural gas markets at the worst time possible just as other major European gas consumers scrambled for alternatives to Russian pipelined supplies that were being curtailed amid fallout from Moscow’s so-called special operation in Ukraine.

French nuclear output recovery would help cut France’s appetite for power and gas imports, and help utilities export surplus power to other European countries still struggling with tight and expensive energy markets.

In 2019-2021, France’s average annual power exports were about 54 terawatt hours (TWh), or as much as Greece’s total electricity generation in 2021, according to data from energy think-tank Ember and energy technology firm EnAppSys.

But in 2022, due to reduced nuclear output and a fall in hydropower generation because of dry conditions, France slashed power exports to less than 8TWh, and lifted power imports to a record 26.84TWh, EnAppSys data shows.

This flip in French power flows tightened Europe’s power markets and put a big dent in France’s trade balance. The nearly €10bn cost of 2022’s power imports eclipsed France’s total earnings from power exports from the previous three years, EnAppSys data shows.

MAINTENANCE WORK

So far in 2023, France’s nuclear power output remains 17.5% below the averages of 2020 and 2021, Refinitiv data shows, due in part to strikes against pension reforms for unionised workers.

But utilities said previously that nuclear output will climb once maintenance work is completed, though the ailing system may struggle to reach previous annual output levels of about 400TWh as necessary repairs and upgrades drag on.

Even if average output stays below that previous target, any sustained increase in nuclear production from 2022 totals stands to have an effect on local power prices, as well as France’s overall power import needs.

In December, some curtailed reactors resumed operation, boosting national nuclear output 40% from the average of the previous eight months, Refinitiv data shows. In January, average output rose. Even if production in the rest of the year matches the average of the past three years, which includes 2022’s record-low sum, cumulative output by year-end would still be about 14% above 2022’s total.

As a majority of France’s electricity is from nuclear stations, that higher nuclear output total could help utilities curb generation from other sources, such as natural gas, freeing up those fuels for other users.

Higher nuclear output in 2023 may help France resume its status as a net exporter of power, able to charge prevailing record-high market rates that could help the country recoup some 2022 expenses, while alleviating pressure on other power consumers.