French Nuclear Expansion Helps Europe Combat Energy Crisis

France is increasing the availability of its state-owned fleet of nuclear reactors after months of extended outages, in a sign of relief for Europe as it battles a historic energy crisis.

Electricite de France SA's 56 reactors were available at 73% on Friday, according to grid data compiled by Bloomberg. This is the highest since February and a significant increase from lows around 40% in August.

The return of the units gives the region another means to fight the energy supply crunch amid lower natural gas flows from Russia. Mild weather in recent weeks has helped to curb demand for both power and gas, helping to reduce prices as Europe seeks to escape winter without severe shortages.

EDF's reactors have been plagued by persistent issues, including corrosion, which have led to France importing more power from some of its neighbors. This has in turn led to the country having the highest wholesale prices in Europe. German power exports to France have hit their highest in 30 years, while Britain has become a net exporter for the first time on record.

French power prices have dropped significantly from their summer highs, when wholesale costs for mid-winter electricity surged past €2,000 per megawatt-hour. Power for February rose 4% to €225 on Friday, as the contract followed gas prices higher. This is an anomaly in recent weeks, as power prices have been much lower than normal.

The trend for greater availability of reactors is expected to continue as the government focuses on fixing the reactors. Nuclear generation is expected to hit 324 terawatt-hours in 2023, which is about 16% higher than last year's level, according to Sabrina Kernbichler, power analyst at S&P Global Commodity Insights. EDF is targeting an output of 300 to 330 terawatt-hours, although that's still far below the average between 2015 and 2019.

France's atomic fleet may offset lower output from Germany and Belgium, where plants are scheduled to close this year. The average nuclear output of ten of western Europe's largest power markets is expected to remain unchanged from last year, at around 55 gigawatts, Kernbichler said.