Paris faces an even colder, darker winter than Berlin

In the European energy crisis, all of the attention is focused on Germany and gas from Russia. But France and its fleet of struggling nuclear reactors are at least as important. Indeed, the first European city to suffer a blackout as temperatures drop toward the end of the year may well be Paris rather than Berlin.
As winter approaches, the outlook in France is increasingly dire. Electricite de France SA, the state-owned utility, is running only 26 of its 57 reactors, with more than half of its chain undergoing emergency maintenance after the discovery of cracked pipes. With atomic reactors generating the lowest share of the country’s power in 30 years, France faces an electricity ‘Waterloo.’
The slump in nuclear availability is forcing France to rely more than ever on gas-fired plants, intermittent wind and hydro as well as imports. That’s pushing up the cost of electricity in the wholesale market for the whole of Europe, with French forward prices surging to almost 1,000% more than their decade-long average through 2020.
In the middle of the summer, when French electricity demand hovers around 45 gigawatts per hour, that’s not an insurmountable problem. But on a cold winter evening, when French households can push consumption above 80 or 90 gigawatts, it could be catastrophically expensive. Although the French economy is smaller than Germany’s, Gallic power demand surges well above that of its neighbor during the winter as households there rely more on electricity for heating and hot water.
While EDF has promised that at least some of its reactors will be back online in time for the colder months, the company has a nasty habit of over-promising and under-delivering. The severity of the winter could be key: Each degree Celsius the temperature drops below normal, French power demand surges by about 2.5 gigawatts an hour — equivalent to the output of two nuclear power stations.
During a late cold snap last April, the French grid was forced to issue a rare orange alert — the second highest — asking households and companies to “moderate their consumption.” Those alerts will become a staple this coming winter, and very likely will escalate to “red alerts” that indicate a risk of blackouts unless families and businesses reduce demand.
Electricity traders are taking the risk seriously. In the wholesale market, the benchmark one-year French baseload power contract has jumped to a record high of 507 euros ($512) per megawatt hour, well above German prices of 350 to 370 euros for the parallel contract. French retail consumers are protected for now thanks to a price cap, but businesses are fully exposed.
Come winter, it will get much worse. For December, baseload French power is trading above 1,000 euros, almost double German prices, while peak load power — typically in the evenings when families gather for dinner and the heating is on — is changing hands at more than 2,000 euros. In practice, that means traders expect French power demand may be so high relative to supply that so-called hourly prices will bump against the 4,000-euro limit set by the exchange many times in December.
—Bloomberg