Outlooks before the winter
French nuclear production is expected to reach its lowest production level since 1991 this year. This is mainly because of extended technical inspections and a large number of outages, but reduced production during the heat waves this summer has also played a part.
By the end of August, we see that 25 out of 56 French nuclear plants are out of operation, resulting in a production output of 26 GWh/h – which is about 10 GWh/h lower than for the same month last year.
EDF has announced production targets of 280-300 TWh for 2022, and 300-330 TWh for 2023. Based on these targets, EQ has studied the power balance outlook for 2022/23 and the nuclear production estimates for the winter.
Findings
During Q4-22 and Q1-23 between 18-20 nuclear plants out of the total 56 will (on average) be offline. This means that nuclear power production during Q4 + Q1 is expected to be somewhere between 6-8 GWh/h (15%) lower than when compared to a normal situation.
France will, on average, be in a moderate net import situation this winter. However, if the country were to experience a cold spell this winter, consumption could rise by just under 10 GWh/h in a worst-case scenario. This level of consumption could be reduced, however, owing to the strength of power prices in the current market.
Yearly power balance 2021-2023
Based on the actual power balance so far this year estimates based on normal weather scenarios, the expected capacity development of wind/solar, and the EDF targets, we have calculated the following power balances for France for the years 2021 – 2023.
We assume that France will be a net importer for 2022 (12.8 TWh imports), but the power balance will be positive in 2023 despite limited nuclear production. This will be helped by increased deployment of renewable generation (hydropower included). Owing to the drought affecting much of Europe right now, hydropower production is extremely low this year, so we have also assumed a return to almost normal levels in 2023.
However, this overview does not indicate the severe supply situation we expect to see for the coming winter, particularly when available nuclear capacity is set to be very low during Q4-22 and Q1-23. By studying the nuclear availability (REMIT-data) and modifying the capacity to fit the yearly EDF targets, EQ has assumed 290 TWh of nuclear production for 2022 and 315 TWh for 2023 as shown in the table.
Nuclear production profiles 2022 and 2023
The chart below displays the monthly nuclear availability levels (REMIT), actual production data so far, and EQ-forecasted production until the end of 2023. The EQ forecasted curve is based on an adjusted REMIT profile and the yearly production targets from EDF.
The table below includes EQ’s estimates of the figures that will be required to fulfill the yearly EDF targets. For instance, the current REMIT curve (22.08.22) is based on 12 plants being unavailable during Q4 (as an average), while the estimation from EQ indicates about 20 plants to be offline during Q4. Correspondingly, in Q1-2023, 5 plants are out on the REMIT curve, whereas EQ estimates about 18 plants to be out on average throughout the period.
The estimated monthly production curves for 2022 and 2023 can be seen in the chart below. Notice that Q4-22 is estimated to be about 7 GW lower than last year, and Q1-22 is set to be about 3 GW lower than Q1-22.
Power balances winter 2022/2023 – Quarterly GWh/h
The tables below present a comparison of the estimated quarterly average capacity balance for France's winter 2021/22 and winter 2022/23. Our estimates suggest that nuclear production for Q1 2023 will come out at 39.3 GW - which is 5 GWh/h higher than during Q4 (34.2 GWh/h). The net power balances (net export) for Q4 and Q1 remain quite close to each other, something which is partly indicated in the power market too, as Q4 and Q1 are traded fairly equally.
The other conclusion we can draw from these figures is that the numbers show Q4 will likely become a sort of “test-period” before Q1, as we probably will see spot prices at all-time high levels during Q4. At the same time, nuclear production will be around 7.5 GWh/h lower than last year, and hydropower may come out even lower than estimated for the last quarter of 2022. The Q1-23 level meanwhile is about 6 GWh/h lower than Q1-21, which is a better “normal” reference than Q1-22, which included some unexpected and prolonged outages.
As a summary of these numbers, we can conclude that nuclear production during the coming winter will be 6-8 GWh/h lower than normal (15% lower than normal).
Variation band consumption scenarios
Power for Q4 and Q1 in France is currently being traded at around 1200 €/MWh which is higher than ever before. The uncertain factors creating such a situation are not only gas prices and available French nuclear capacity, but also the fear of a cold spell and increasing consumption is, naturally, proving a very important fundamental driver in the market too.
To show the impacts, EQ has made an example of consumption for weeks 4-23 2023, using 41 years of historical weather scenarios to indicate the variation band.
The variation band is anywhere between +/- 10 GWh/h - and if a further 7 GWh/h of nuclear capacity goes offline this winter (as was previously suggested in this blog) a deficit of 16 GW could emerge in the French power balance this coming winter.
Put in simple terms, France does not have the thermal capacity to cover this difference in the event of a cold spell, so the power supply is facing notable risk in the coming winter.
In all likelihood, we will see reduced consumption due to the explosion of power prices which will help the situation somewhat. Until then, EQ will continue to follow the consumption numbers for the upcoming period closely. We would expect to see industry, households, and the service sector reduce consumption in this scenario, but that will be a topic for another blog…
Final words
EQ will follow the power balance and nuclear situation in France closely this winter. The extraordinary need for plant inspections will reduce nuclear availability between 6-8 GW compared to a normal level, meaning the normal supply situation is definitely at risk should France see a particularly cold spell this winter.
Please contact EQ if you have questions about the French situation at support@energyquantified.com.
