European electricity prices soar as France cuts nuclear forecast

Bloomberg

European electricity prices jumped after the region’s biggest producer cut its nuclear output target for a second time in a month, the latest sign that this winter’s energy crisis is far from over.
Electricite de France SA said its nuclear production could fall this year to levels not seen since 1990, and Morgan Stanley says there’s a “meaningful likelihood” of a production cut for 2023. The shortfall has forced France to import electricity at times, tightening supplies in neighbouring countries used to relying on the French nuclear giant to keep the lights on.
EDF’s reactors are the backbone of an increasingly integrated European power system, but the fleet is getting more unreliable because of long periods of planned and unplanned maintenance. A slew of recent outages has worsened the energy crisis in Europe just as Russia is flowing less natural gas to the continent and tensions over Ukraine are running high.
EDF said nuclear output is expected to fall to 295 and 315 terawatt-hours in 2022, down from an earlier forecast of 300 and 330 terawatt-hours. The last time the company’s nuclear production fell below 300 terawatt-hours was more than three decades ago. Further cuts to next year’s output could come when EDF reports results later this month, Morgan
Stanley said in a report.
The French nuclear giant, once a source of national pride, has been grappling with several reactor outages that will hit earnings. Buying back 15 terawatt-hours of power at current prices will cost EDF $2.4 billion, or 8% of the company’s market capitalization, said Ahmed Farman, an analyst at Jefferies Group said.