France Front Power Widens Spreads to Neighbouring Markets

French front curve power contracts rallied for the second consecutive session today, amid forecasts for hotter weather that is likely supporting cooling demand, while further strike action could disrupt supplies in the coming months.

• France Base Power JUL 24 up 9.4% at 51.42 EUR/MWh
• Italy Base Power JUL 24 down 1.5% at 107 EUR/MWh
• Germany Base Power JUL 24 down 3% at 73.26 EUR/MWh
• France July power has risen to an intra-day high of €51.99/MWh today, the highest since 27 May. On a rolling front-month power basis, price rallied to the highest 8 March.
• The French front-month power discount to the German market narrowed to €21.92/MWh today as of the time of writing, the narrowest spread since 10 May down from the June high of €35.62/MWh.
• On the Italian border, the front-month power discount narrowed to €55.50/MWh today at the time of writing, down from a high of €71.47/MWh on 3 June and the narrowest spread since 17 May.
• While declines in European natural gas prices and carbon allowances weighed on CWE + Italy contracts today, French front-month power rallied for the second consecutive session amid forecasts for hot weather and disruptions due to industrial action in the country’s energy sector.
• The French CGT union called for industrial action in the energy sector for the period between 14 June and 13 September, with the first strike action today, that curtailed the country’s nuclear and hydropower generation capacity.
• Above normal weather in Europe is likely to boost cooling demand next week, especially in France, where demand for electric cooling significantly increases power consumption during hot weather periods.
• Mean temperatures in Paris are forecast to rise as high as 25C on June 25, 7C above the 30-year normal according to Bloomberg.
• France has a daily average of three cooling degree days for the 6-10 day forecast, two days above the 10-year normal.