The French baseload electricity contract for the front year is at a three-year high

On?Thursday the French baseload year-ahead?electricity contract reached its highest level since December 20, 2023, at EUR90.65 ($105.39), tracking higher gas prices.

Over the past 10 days, the French wholesale front-year electricity contract has been rising continuously as it follows the spiraling gas prices.

France's nuclear fleet of 57 reactors is responsible for 70% of its electricity. However, European markets are interconnected, so that high gas prices, which determine the price?of electricity?in Europe, could drive French costs up.

In recent months, the strong gas price coupled with a reduced nuclear availability has also driven spot electricity to winter levels. This is because Europe was battling heatwaves which forced nuclear reactors off-line and reduced hydropower supplies.

French nuclear production is also threatened by labour strikes next week. A heavy maintenance schedule will likely cut the supply in 2026's fourth quarter.

Analysts at Energy Aspects stated in their weekly update that the fourth quarter power balance is particularly 'exposed' due to heavy French nuclear work, which will reduce?exports from Germany, requiring gas to make up for much of the shortfall, with little coal generation available.

Analysts said that a heavier stockdraw during the fourth quarter will leave Europe with fewer inventories in 2027 than currently predicted, causing storage to be more difficult and forcing Europe's bids for liquefied gas to increase.

(source: Reuters)