LONDON (Reuters) - French power exports to Britain have more than doubled in three months as ample supply due to strong nuclear power production and two-year highs in water reservoir levels kept French spot electricity prices below British equivalents.
France exported more than 1 terawatt-hour (TWh) of power to Britain last month, around one eighth of annual electricity produced by Britain’s largest nuclear plant, Heysham 2.
In June last year French imports came to 0.8 TWh.
In March 2010, when UK exports to France were still higher than imports, the figure was 0.4 TWh, according to French grid operator RTE.
Availability of French nuclear power plants, which provide around 80 percent of electricity for the country, has improved compared with one year ago. Reuters estimates show that last month’s percentage of unavailable nuclear facilities ranged between 26-28 percent, compared with 31-35 percent in June 2009.
“Hydro reserves are much better this year thanks to higher temperatures. The snow melt went very quickly,” one French power trader said.
French hydroelectric reserves jumped to a two-year high last week at 83 percent filling capacity and remained at this level this week, according to weekly data released by RTE.
France produced 61.8TWh of hydro electricity in 2009, around 12 percent of total annual generation.
In Britain, high gas prices kept power contracts at a premium over France, and less profitable spark spreads have led producers to fire fewer gas plants.
Spark spreads, or gas profit margins, are the relative difference between the price of gas and the price of power.
“The past years showed nice margins for power producers, then more assets are built to capture those margins and now the margins are very low as many assets are chasing them,” one power trader said.
Over the past seven months, two new gas-fired power plants came on line in Britain, the 885-megawatt (MW) Langage station and the 840-MW Marchwood plant.
Month-ahead clean spark spreads have lost close to forty percent since a high reached at the end of May, as power and gas prices have risen, diminishing the profit from burning gas for electricity generation.
Reporting by Karolin Schaps; Editing by Alison Birrane