Sunday, May 28

That France has reached €3,000/MWh is not a nuclear problem, but rather the lack of alternatives

Between 7 and 9 this morning, the price of electricity in France has touched 3,000 euros per megawatt-hour. A completely crazy price that has caused the manager of the French electricity network to activate an “orange alert” and ask citizens to reduce their consumption.

The reason for this record price is a combination of cold weather and the fact that half of the nuclear reactors in French power plants are stopped. A break that has led to the price of energy in France being twice that of Spain and up to seven times more than in Germany. Fortunately, consumers in France will not overly notice this spike.

A combination of madness that can be repeated. French pool prices have been incredible. €2,712/MWh at seven in the morning and €2,987/MWh between eight and nine. The rest of the day has been high, but quite far from this peak. France expected to need a lot of energy to run the heating, but with less than 50% of nuclear energy available, they have had to pay an exorbitant price.

During this period, availability was very low and the auction prices have been growing to almost €3,000/MWh. A combination of factors that is not so difficult to produce and could be repeated in the future.

They ask to moderate consumption, but the French will not see a direct impact on their bill. The French operator RTE has issued a level 3 out of 4 alert, indicating that its electrical system is in a “tense situation”. It has recommended households to slightly lower the temperature at home or limit the number of lights on. There have been no significant cuts, but it is equally important that this increase will not be felt in the pockets of consumers, since the rates are not indexed in the wholesale market.

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Who then pays this price? It will be the semi-public company Électricité de France (EDF) that absorbs the difference in prices. Unlike in Spain, the price of electricity in the wholesale market does not have such a direct impact on private consumers. It is for this reason that the price of €3,000/MWh has not made the front pages of French newspapers as much as it could have here if it reached this level.

Price France

With the nuclear stopped, France pulls the maximum of its interconnections. France needed about 73,000 megawatts, but its estimated output was 65,000. For this reason, it has had to import some 11,000 megawatts through its interconnections with neighboring countries, including Spain. An interconnection with Spain that is being expanded and that today has worked at 100% of its capacity.

In total, Spain has provided some 1,700 megawatts to France; The United Kingdom has given about 2,000 megawatts, Switzerland about 1,700, Italy about 917, and Germany has been France’s biggest ally, giving it up to 4,000 megawatts. Of course, a whole flow of energy that has been arriving at high prices.

The nuclear energy debate reaches its peak due to the inability of the huge French nuclear park to deal with the energy crisis

EDF’s high debt leads one to think about a possible nationalization of the electricity company. 84% of the electric company EDF belongs to the French state. Precisely with movements such as absorbing the price difference, the electric company’s debt has been growing to such an extent that Emmanuel Macron has even announced his intention to nationalize the electric company and reinforce his role as the country’s largest energy supplier.

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The nuclear blackout conditions the entire French electrical system. France depends on nuclear power for more than 70%. Its strategy differs from the rest of Europe, with all that this entails. Although, the country continues to trust in this model and by 2050 they want to continue betting on nuclear energy, maintaining their 12 reactors and they are contemplating building six new generation EPR2 reactors, to which eight more could be added.

Why, if energy is needed, do nuclear plants close? These plants can produce energy all year round, but require planning maintenance tasks and technical corrections from time to time. A calendar that is established years in advance. These stops usually last between a month and a half and two months, but they can be extended.

It is not nuclear, it is 70% dependence on a single source. That France has reached €3,000/MWh is due to the fact that the nuclear power plants are stopped, but something equivalent could also have happened with another type of energy. It is not a question of discussing the particularities of the type of energy, but of the dependence on a single type of energy.

It is not difficult to imagine the problems that Spain would rely on solar energy by 80% would entail. It is an unlikely case, but let’s put the Nordic countries with hydraulics. In an extreme cold wave the rivers could freeze completely and this source of energy would not be as accessible. Or the opposite case, with a lack of water. This is what has happened in Norway, where the swamps are at their lowest level in the last 10 years and they have had to pull the gas.

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Energy is such a necessary good that it is important that there is sufficient diversification, in order to be able to face with guarantees the lack of a specific type. Basing such a large percentage on a single source, like France with nuclear, leads to seeing prices as crazy as today’s.

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