European Energy Prices Spike On Cold Weather And Nuclear Power Woes

Electricity and natural gas prices in Europe jumped on Wednesday amid a cold spell in northwest Europe that could be prolonged and renewed concerns about nuclear power generation in France.    

The European benchmark gas price at the TTF hub rose by 1.7% to $46.50 (44.13 euros) per megawatt-hour (MWh) by 11:45 a.m. in Amsterdam, and British wholesale prices also rose.

Natural gas prices were up for a second consecutive day, due to cold weather in the UK and parts of northwestern Europe, as well as fresh concerns about corrosion at French nuclear sites.

On Tuesday, concerns about the operations at France’s large nuclear power fleet resurfaced after the French nuclear safety authority, ASN, told EDF to review its program of reactor checks, following the finding of another crack at a nuclear power plant.

This led to an 8% surge on Wednesday in French power prices for next year, the biggest jump since the end of January.

For much of last year, France’s nuclear power generation was well below capacity, as more than half of the country’s reactors were offline at one point in the autumn due to repairs or maintenance.

Separately, gas and power prices are also supported by the cold weather in the UK, where an Arctic blast hit the country with snow and ice, driving up demand for gas and electricity. The UK just saw its coldest night in March since 2010, while National Grid ESO issued earlier this week notifications that it would warm four of its five winter contingency coal units for potential use.

Power and gas demand in Europe could be higher at the end of the winter as temperatures in northwest Europe and the Nordic countries are expected to be below normal until the middle of April, per the European Centre for Medium-Range Weather Forecasts cited by Bloomberg.