French energy prices for next November rose by 4.2%, after the French electricity company announced an unplanned shutdown at two nuclear plants over the weekend.
The French electricity company explained in its notices that it’s facing two separate technical challenges at the Plée 4 stations near Bordeaux and Dampierre 4 stations south of Paris.
The units will resume operations on November 1 and November 6, respectively.
This pause poses a major challenge for France’s largest energy provider, especially with the approaching winter and increased demand for heating in the country.
In the coming months, France is expected to increase its electricity imports from other countries, including the UK, where energy prices are cheaper.
Although electricity production from nuclear plants was well below average over the weekend, it was still above the record lows seen last year, as a large portion of the fleet faced maintenance issues at the same time.
Electricity production from renewable energy sources such as wind has increased, which has contributed to reducing some of the losses resulting from the shutdown of nuclear plants.
The energy costs rose by 4.2% to 104 Euro per MWh on the European Energy Exchange (AG), re-correcting a 5-day downtrend.
On parallel, natural gas prices in Europe rose Monday by an estimated 4.5%.
This came as a result of the cessation of Egyptian gas imports, which negatively affected the chances of resuming exports to Europe.
This situation has increased the risks of gas supplies in the region, according to a report by Bloomberg.
In addition, prices increased by approximately 30% compared to the previous week.
This highlights the weakness of the European market in the face of geopolitical risks after the energy crisis witnessed last year.
Given the halt in gas flows from Israel to Egypt, it’s not clear when tanker exports from North Africa can resume.
Although the share of Egyptian exports to Europe is usually limited, the greatest threat lies in the possibility of the conflict spreading to other countries in the region and disrupting the Strait of Hormuz, which is a vital sea lane for transporting crude oil and liquefied natural gas.
Given that most gas flows through Russian pipelines have been halted as a result of the ongoing conflict with Ukraine, the European market is in urgent need of obtaining LNG from any available source to maintain its balance.
It has also seen supply disruptions due to internal problems on the continent, including a drop in gas flows from Norway, the largest gas supplier, over the weekend as a result of a compressor malfunction at the gas processing plant in the city of Nyhamna.
Currently, December futures contracts, the most actively traded, are up 3.4% to 54.82 Euros per megawatt hour.