The report of defects in the French nuclear reactor Civaux 2, lifts European energy market
On Wednesday, the price of front-year baseload contracts in France increased by 8.3% to 68 Euros ($77.76). This was due to a possible report that stress corrosion may have returned at a central France nuclear reactor.
The contract reached a new four-month high.
The French newspaper La Tribune reported on Tuesday that the nuclear watchdog ASNR found "hints" of stress-corrosion at the Civaux 2 plant run by EDF, which is owned by EDF.
The watchdog didn't immediately respond to an inquiry for comment.
EDF had to deal with stress corrosion cracks within the same reactor less that three years ago. At that time, corrosion across multiple reactors caused France's nuclear output to drop by 34 percent and sent prices soaring.
EDF spokesperson said that an inspection is underway at Civaux 2 in order to perform annual maintenance. The utility has not yet received the results.
Analysts and traders have expressed concern about potential defects at the Civaux 2 facility, which could lead to extended shutdowns.
A trader said that the news of the risk to the French fleet was the main driver behind the gas prices on Wednesday. There is so much risk in the potential for outages.
The French nuclear operator EDF was forced to close some of its fleet between 2022 and 2023 due to stress corrosion problems found in the pipes of safety systems at multiple reactors. This led to an increase in the power market price at that time.
Analysts at DNB warned that the latest reports "risk a revival of tensions" on Europe's electricity market, while Mind Energy analysts said the news was responsible for the growth in European gas markets as well as the European baseload contracts signed during the first year.
The benchmark European gas contract for the first month was also higher at 35.4 euros/MWh, an increase of 1.7%. $1 = 0.8745 euro (reporting and editing by Richard Lough in Paris, Nora Buli and Vera Eckert, in Frankfurt, and Jan Harvey in Oslo).
(source: Reuters)
