(Bloomberg) -- French power demand is forecast to reach its lowest level in a year as falling temperatures keep prices in check.
Electricity consumption for the week ending Aug. 25 will fall 9% from a peak earlier in the month, when heat waves boosted cooling demand in Europe, according to Bloomberg models. Sunday will be the coldest day in France since mid-July, cutting demand to as low as 27.4 gigawatts, below the power-grid operator RTE’s forecasts.
Low power use can be as difficult to manage as demand spikes, with the grid operator needing to ensure there’s just enough generation to meet customer requirements. When demand drops in France, nuclear sites are often taken offline to balance swings in consumption.
“With the drop in temperatures, day-ahead power prices in France have likely already recorded their summer peak of almost €88 a megawatt-hour, unless there is a sudden unexpected change in nuclear availability,” said Florence Schmit, an energy strategist at Rabobank.
The lower temperatures will also coincide in an increase in wind generation on Aug. 23 and 24, with daily generation levels reaching the highest since mid-July, according to Bloomberg models.
The French day-ahead contract settled at €36.70 per megawatt-hour, the lowest since Aug. 10, data from Epex Spot SE show. The equivalent in Germany settled at €63.04, rising slightly from a 10-day low on Tuesday.
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