French clean spark spreads for third-quarter base-load delivery have risen sharply in recent sessions, supported by lower nuclear power plant availability for the period.
Clean spark spreads for July-September and a 55pc-efficient plant closed at €12.90/MWh yesterday, data based on Argus' OTC assessments of power, PEG gas prices and EU ETS emissions allowances show. This compares with €5.73/MWh on 1 April.
French state-controlled utility EdF yesterday released a new nuclear outage schedule, which included some extensions of current and planned shutdowns for maintenance.
The disruptions caused by Covid-19 led EdF to review the duration and schedule of its outages for maintenance, it said last week. The firm reduced its 2020 nuclear output target to 300TWh from a previous 375-390TWh estimation.
EdF's new calendar shows a large increase in nuclear power plant unavailability for the summer and the final quarter of the year. Operational nuclear power plant capacity will be 61.2GW from 1 July, as the second reactor with a capacity of 880MW at Fessenheim will close a day earlier.
Around 27-28GW of capacity is scheduled to be off line for maintenance in the third quarter of this year. This is around 44-45pc of the country's operational nuclear fleet.
The outlook for gas-fired generation has risen in recent days as market participants priced in expectations of higher gas-fired generation to offset lower nuclear production. But spark levels are still below the €14.53/MWh average level at where spark spreads moved in April last year. This is because of expectations of continuous lower demand on the year.
That said, April 2019 clean spark spreads traded at an average of €10.36/MWh in its last month before delivery, when around 12.7GW of nuclear capacity was forecast to be unavailable in the summer period. Gas-fired generation averaged 3.95GW in the summer of last year.
Firm hydropower conditions have also prevented spark spreads from rising further. French hydropower stocks were at 43.2pc of total capacity at the end of last week, above the five-year average. This compares with around 25.6pc of capacity during the same period last year.
The outlook for coal-fired generation also improved but clean dark spreads for a 40pc-efficient plant widened to just €0.92/MWh yesterday, from being consistently in negative territory since 17 December, Argus' OTC assessments on API 2 coal swaps show.
France is currently under lockdown until at least 11 May but is considering easing restrictions after that date. But grid operator RTE said that power demand would fall by 2pc, or 8-9TWh, this year.
French clean spark spreads have also risen significantly for delivery in the final quarter of the year to €25.88/MWh for a 55pc plant yesterday, from €19.64/MWh on 1 April. Second-quarter ahead spark spreads rose by €4.3/MWh just yesterday, following EdF's new calendar. Clean dark spreads for a 40pc plant also rose and closed at €20.04/MWh yesterday. Around 20-21GW of nuclear capacity is scheduled to be off line during that period.
