Gas to help cushion French winter power crunch, say operators

Reuters News
Posted: Nov 22, 2016 9:16 AM

By Bate Felix

PARIS (Reuters) - A record output increase from gas-fired electricity generators since the start of the month could enable France avoid rolling outages this winter amid reduced supply from the country's aging nuclear reactors, gas network operators said on Tuesday.

France's grid operator RTE warned earlier this month that power shortages could force outages this month, an unprecedented step in one of the world's wealthiest economies that would expose its dependence on nuclear power. France has stepped up power imports from neighboring countries.

GRTGaz, majority-owned by gas group Engie, and gas storage company TIGF, said in their 2016/2017 winter outlook that extra capacity and adequate stock levels meant gas supplies were sufficient to cover the higher output levels.

"In the event of a cold spell, existing gas infrastructure should allow suppliers to cover French (gas) consumption with a surplus of 680 gigawatt (GW) hour per day of gas, equivalent to a daily average of 28 GW of electricity," the companies said in a statement.

French nuclear safety regulator ASN has ordered state-controlled utility EDF to shut down and carry out safety checks on 12 of its 58 reactors.

Market worries over tight supplies this winter have pushed spot and forward power prices to record highs.

Thierry Trouve, Director General of GRTGaz, told reporters that output from France's 14 gas-fired power stations was now regularly exceeding 6.5 Gigawatts (GW) and hitting 8.5 GW at peak demand periods.

"This morning for example, we are at 7 GW," Trouve said.

Government plans for a carbon floor price plan had prompted investors to hesitate over financing new projects that would add more gas-generated power to the grid.

That carbon floor price plan has now been shelved because it could potentially run foul of European Union state aid regulations and hurt jobs.

Even so, Trouve said government policy lacked clarity five months ahead of presidential and then legislative elections in which the Socialist government looks likely to be kicked out of power.

"There are a lot of policy uncertainties. A few months ago when the government was thinking about a carbon floor price on coal and gas-fired power plants, some operators told us they will shut down if the plan went ahead," Trouve said.

France, normally a net power exporter, typically derives 75 percent of its power from nuclear plants.

Gas-fired power stations currently account for over 11 percent of output.

(Reporting by Bate Felix; editing by Richard Lough and David Evans)