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(Bloomberg) — French power prices have traded below zero for more hours this year than during all of 2024, reducing returns for investors in power generation.
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As of Monday morning, Europe’s second biggest power market has had 363 hours of negative prices this year, according to a Bloomberg analysis of EPEX Spot SE data. Neighboring markets like Germany and Spain have also seen record numbers for the season.
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Negative prices are becoming a more frequent phenomenon across the region as renewable power floods the network. While that’s welcome news for many consumers, it’s decimating returns for investors. As the energy shift gathers pace, grid operators need to address the supply swings whipsawing the market.
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“The expectation is that there will definitely be more solar generation driven by increased installed capacity and therefore more negative prices this summer,” said Mbongeni Dube, a BloombergNEF power analyst.
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It’s also a problem for France’s nuclear fleet as reactors frequently are forced to dial down output. Utility Electricite de France SA has modulated nuclear generation by about 8 gigawatts in the second quarter on a daily basis, more than double the five-year average for the same period, according to grid data.
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The constant ramping up and down to account for an explosion in solar power is fueling a debate in France about whether renewables should be curbed to safeguard the viability of nuclear reactors, which account for more than two-thirds of the nation’s output.
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However, with hotter weather now setting in, higher air conditioning needs could result in more solar power being absorbed by the grid, which could limit the periods of negative prices.
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