Nowhere on earth embraced nuclear power as enthusiastically as France. In 2019, 70pc of its power output was fuelled by uranium rather than gas, coal or renewable sources. But French nuclear power is not without problems. The two-decade long travails of new EPR technology has almost entirely stalled the build-out of new capacity to renew the country’s ageing fleet. The need for greater flexibility in thermal power as renewable capacity increases, as well as changing public opinion towards nuclear power, also raises questions for the future. But France still assumes 50pc of its power output will come from nuclear plants in ten years’ time. The challenges posed by Covid-19 could change all that. “Nuclear generation is taking the majority of the hit” in reduced French power output, which cannot then simply be tied to a response to lower demand due to Covid-19 restrictions. Nuclear output from the country’s largest generator EdF—in which the state still holds a stake of well over 80pc—in March was down by 13.8pc compared with a year earlier. The company predicts that its reactors’ output will fall by more than a fifth year-on-year over 2020 as whole. It has also withdrawn all financial targets for 2020 and 2021. And it is facing open revolt from buyers of its nuclear power under the so-called Arenh contracts. This mechanism allows competitors to EdF to buy output from nuclear plants at a price fixed at an auction. But the current auction price, set late last year, of over €40/MWh is well above the wholesale market price—leading buyers to make force majeure declarations and pursue court action against EdF for seeking to honour the contracts.
Petroleum Economist 26th May 2020 read more »
A French court ruling on Wednesday ordered state-controlled utility EDF to accept Gazel Energy’s suspension of supply contracts under a force majeure clause prompted by the coronavirus pandemic. In the decision, seen by Reuters, the president of the Paris commercial court said conditions for force majeure in ARENH nuclear power contracts between the two companies were “evidently met”. The verdict followed a similar ruling last week that ordered EDF to accept Total’s suspension of supply contracts. Total and Gazel Energy have sought to invoke the force majeure clause in contracts after the pandemic cut electricity demand by around 20% and pushed prices far below that specified in their existing agreements.
Reuters 27th May 2020 read more »