French nuclear generation recovery aids power price plummet

France steps into 2023 with nuclear output so far in Jan averaging around 40GW, with availability reaching 45GW over the past few days. While still low by recent standards, the recovery from historic lows in late 2022 has coincided with a significant decline in French power prices led by the front of the curve (Feb peak power prices have plummeted by 800 €/MWh over the past month). This has also been driven by low power demand (led by price response & warm weather), but also declining gas prices as similar dynamics have led to higher than expected European gas storage levels.

France will be keen to get as close to its maximum nuclear capacity of 61GW as possible (subject to corrosion outages), as procuring interconnector flows or peak gas generation proves much more expensive. In 2022 French nuclear output was 279 TWh, down 23% from 360 TWh in 2021. For 2023, EDF is predicting nuclear power output at 300-330 TWh, and 315-345 TWh in 2024.

The level of nuclear and hydro generation recovery in 2023 will play a key role in the level of demand response needed in both power and gas demand to balance the continuing tight market regime.