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EDF's lower output forecast may threaten France's winter power supply

The EDF logo at the company's headquarters in Paris

By Forrest Crellin

PARIS (Reuters) -A nuclear production cut by EDF could put France's winter power supply at risk if temperatures dip below average in the coming months, analysts said.

EDF lowered its 2022 nuclear output forecast late on Thursday to between 275 and 285 terawatt hours (TWh) and extended the outage at four of its nuclear reactors due to stress corrosion.

"The change in the nuclear outlook for EDF is massive," Refinitiv analyst Nathalie Gerl said, adding that it did not come as a surprise as both the market and national grid operator RTE believed that EDF's previous maintenance schedule was overly optimistic.

EDF has faced an unprecedented number of outages at its fleet of nuclear reactors this year due to a backlog of maintenance work during the COVID-19 pandemic and the discovery of corrosion issues at some reactors last December.

The output cuts have pushed France's nuclear production to a 30-year low just as Europe scrambles to replace Russian gas.

Four reactors with stress corrosion that account for 5.4 gigawatts (GW) of power are now no longer expected to return to operation this month or next, with their restarts moved to late January and February, EDF data showed. [POWER/FR]

Two of the reactors, the Penly 2 and Cattenom 3, were confirmed to have stress corrosion on Friday, which caused their restart to be delayed, the company said.

This is in addition to the Cattenom 1 reactor, which was confirmed to have stress corrosion issues by the nuclear safety authority (ASN) on Thursday evening.

EDF has cut its output forecasts several times this year, and also said it expects a negative hit to its earnings of 32 billion euros ($31.19 billion) because of the decline.

France, long an exporter of electricity to European neighbours, has become a net importer this year.

Grid operator RTE said on Friday that the latest change does not affect its winter energy supply forecast from mid-October.

"We take cautious assumptions in regard to the schedule given by EDF," an RTE spokesperson said.

Several more reactors are expected back online over the next two weeks, which would lift current availability of around 30 GW to about 40 GW.

The return of these reactors will determine if supply is in danger, analysts at firm ICIS said, adding that if temperatures remain high or around average, France's energy supply remains secure.

The current weather forecast points to higher heating demand for December and January, broker Marex said, which they expect to be counterbalanced by weak industrial demand for power and gas across the eurozone.

"We will definitely see a lot of load shedding at industrial companies if it gets cold," said Emeric de Vigan, vice president of power at data and analytics firm Kpler.

($1 = 1.0225 euros)

(Reporting by Forrest Crellin and Tassilo Hummel; Editing by Silvia Aloisi and Louise Heavens)