2022 REVIEW | POWER MARKET DEVELOPMENTS
Did nuclear win through in 2022?
Embargoes on using Russian gas shifted the dial on energy prices and costs in 2022. Nuclear should have helped Europe weather the crisis but it was handicapped by continuing unplanned outages in France
Janet Wood
Expert author on energy issues
IN 2021 ENERGY CUSTOMERS SAW their bills mount, as sanctions on Russia, including a halt on its oil and gas exports across Europe, coincided with other factors to drive up power prices. The burden did not fall equally on consumers: some business and domestic customers were able to take advantage of options such as onsite generation or long-term contracts on favourable terms. It also did not fall equally on the energy sector. Upstream energy companies benefitted from the rise in gas prices, as customers and traders sought to secure cargoes from sources other than Russia, whether that was to fuel gas- fired power stations, heat homes and businesses, or fill storage capacity. Some energy utilities with retail and domestic customers
saw their rates capped by governments who needed to ensure both user groups could buy the power they needed, meaning the utilities relied on government to make up the shortfall. While some electricity generators without input costs, such as wind generators, were able to benefit from the high market prices, gas users saw their fuel costs rise dramatically. The hardest hit were utilities who had to go to the
market to fulfil electricity supply contracts. In years of low wind that burden might have been on renewable energy generators. In 2022, the impact was hardest on Europe’s key nuclear generator, EDF.
The company struggled for most of the year with unplanned outages across its fleet as it tried to remedy stress corrosion cracking. At the start of December it still had five nuclear reactors (5.3 GW in total) out of service until the end of the 2022 and it later delayed those restarts until February (Flamanville 1) and March (Penly 1).
Over the year, nuclear power output in France totalled
279 TWh in 2022, which meant it was down 81.7TWh on 2021. EDF was also hit by low water levels, which reduced income from its hydropower business. The cost to the company was more than the loss of
income from those shut down plants. EDF had no choice but to go to the market to replace the power it would have generated, and do it when prices were very high. Between January and September 2022, spot electricity prices averaged €297/MWh, compared with around €70/ MWh for the period in previous years. Overall, the financial impact took a €29.1bn toll on earnings before interest, taxes, depreciation, and amortisation (Ebitda), although consumers responded to initiatives to lower consumption as well as relatively warm weather going into winter. Demand was 5.7 TWh lower than expected. Similarly, but at smaller scale, Ebitda was down 7.2% in Belgium (to €118m) because EDF Belgium had to buy power at high prices to compensate for low nuclear output. U
Above: Reduced nuclear output saw EDF miss out on higher energy prices Photo credit: Spech/
Shutterstock.com
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