France's electricity grid is coming under strain, and the next cold snap could be devastating for the country as energy-intensive manufacturers would experience reduced power, according to a new report published by French power grid operator Reseau de Transport d'Electricite (RTE).
RTE said due to the lack of wind and nuclear power generation. The next cold snap would force it to cut electricity to energy-intensive companies to stabilize the grid. There's even the possibility widespread rolling blackouts could be implemented for two hours to mitigate grid collapse during peak energy demand.
The good news is that weather forecasting models provided by Bloomberg don't show an imminent cold blast for the first half of January.
"Based on the latest forecast for January, such meteorological events -- including a severe cold snap -- seem very unlikely for the start of the month, and less likely for the rest of the month," RTE said. "Hence, the risk of power cuts is essentially ruled out at least for the start of January."
Mild temperatures and a flotilla of liquefied natural gas tankers have been a temporary relief for Europe, sending Dutch TTF natural gas and power prices lower in the last week.
France's grid remains under pressure but not as bad as last week when day-ahead power prices rose to the highest level since 2009 and have since halved. Prices remain at extremely high levels.
Energy inflation is a politically sensitive issue for President Emmanuel Macron ahead of April's presidential elections. If renewable power generation lags, nuclear reactors remain halted for maintenance, and natural gas prices remain elevated, then higher power bills into January and February could create more unpopularity for Macron.
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