French energy prices go negative as renewables surge, prompting shutdown of nuclear plants

Analysts had predicted that energy prices would turn negative during the course of this Summer.

French energy prices have reportedly plummeted into negative territory due to an excess of renewable energy production.

Day-ahead prices reached a record low of -€5.76 per megawatt-hour in an Epex Spot auction, prompting several French nuclear plants to go offline ahead of the weekend, Bloomberg reported.

This decrease is attributed to the significant increase in wind and solar power generation, coupled with an anticipated decline in weekend demand.

As a result, Electricite de France, a state-owned utility company, has been compelled to deactivate several nuclear reactors. Already, three plants have been halted, with plans to take three more offline.

According to Bloomberg, this occurrence is not uncommon and often happens on weekends in France, as well as being observed across Europe, including in Spain and the Scandinavian region.

Across the continent, efforts to reduce carbon emissions in energy grids have led to a rapid expansion in renewable energy infrastructure.

However, the lack of advanced battery technology and adequate investment in energy storage solutions has created inefficiencies in pricing during periods of surplus energy.

In related news, SEB Research reported in May that negative prices have also affected Germany, where solar energy supply has surpassed demand.

Energy market researchers and analysts AleaSoft and SolarPower Europe had earlier in April attributed the negative price trend to the pandemic, low demand, insufficient storage solutions, and inadequate energy planning. They had predicted that the situation would likely persist into the summer.

Reuters noted that the situation in France differs from that in other countries in the region due to the slower deployment of renewable energy. Paris has installed approximately 45 gigawatts of wind and solar capacity, which lags behind the targets set by the European Commission.

There could be a further slowdown ahead due to recent political challenges, as the far-right party in France appears poised to win domestic elections.

If the National Rally party secures victory, it has pledged to reduce subsidies for renewable energy and halt