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According to Oilprice, France, Europe’s largest electricity exporter, is planning to curb its electricity exports to neighboring countries. This could lead to higher electricity prices in other European markets such as Italy, Switzerland, Belgium, and Germany.
Analysts at Montel EnAppSys stated earlier this year that France, which produces about 70% of its electricity from nuclear energy, regained its position as Europe’s top net electricity exporter in 2023. Their nuclear fleet was back in operation after a period of maintenance and lower domestic demand.
Montel EnAppSys’ analysis, published in February, showed that France exported nearly 50 TWh more than it imported in 2023, after becoming a net importer in 2022 for the first time in over 40 years.
However, France’s grid operator, RTE, has faced unprecedented operating constraints on its network this year due to record-high exports to the neighboring bidding zones to the east of France, exacerbated by planned and unplanned outages.
As a result, RTE restricted electricity exports in the spring of 2024, leading to a widening and record-high spread between French day-ahead electricity prices and those in neighboring countries.
RTE announced this week that it expects a ‘new tense situation’ from July 29, 2024, to mid-October 2024, during which it will restrict exports at 8 gigawatts (GW).
The reasons behind this are similar to the export restrictions in the spring, namely the combination of low consumption, abundant electricity production, and competition combined with high transit flows through France’s power grid and network.
Florence Schmit, energy strategist at Rabobank, said: “Due to the new planned export restrictions in August and September, the price spread between France and its eastern neighbors could widen again during the cuts.”
According to RTE’s estimates, the neighboring markets most affected by France’s electricity export cuts will be, in descending order, Italy, Switzerland, Germany, and Belgium.
European energy prices soared to record highs in 2022 after Russia reduced its gas supplies to Europe. The energy crisis forced industries and consumers to use less energy to save costs. To date, some sectors have yet to recover production to pre-crisis levels.
According to Oilprice
