By Gavin Maguire
LITTLETON, Colorado (Reuters) – The collapse of France’s government on Wednesday could have far-reaching consequences for Europe’s energy markets and send regional electricity costs soaring.
Record French Electricity Exports
France is by far the largest electricity exporter in Europe, accounting for roughly 60% of net electricity exports so far in 2024, according to energy data service energy-charts.info.
Budget Busting
French utility EDF (EPA:) is closely entangled in the country’s political system, with the government’s collapse calling into question whether the country can sustain its high levels of electricity output and exports.
Record Exports Now in Jeopardy
France’s wholesale power prices have averaged around 25% less than those of Germany and The Netherlands, and 45% less than Italy’s, motivating French power traders to export surplus supplies at a profit. However, any forced cuts to France’s power generation could curtail electricity exports.
Gridlocked
Germany and Italy are two of Europe’s largest electricity importers and will be particularly impacted by any loss of French power flows. If France’s power system loses steam, electricity importers may face a drop in available supplies and surging power costs, igniting a fresh regional energy crisis.
Analysis:
The collapse of France’s government could lead to higher electricity costs in Europe as the country, a major electricity exporter, faces uncertainty over its energy output and exports. This could result in a ripple effect across the region, impacting energy generation, distribution sectors, and potentially leading to a regional energy crisis. Consumers and industries relying on electricity should monitor the situation closely as it could affect their energy costs and supply stability.
