French companies ‘crushed’ by power costs, says trade group

The low availability of nuclear plants in France is causing power prices to soar, crushing the competitiveness of the nation’s companies, according to the Uniden trade group that represents energy-intensive industries.

Electricite de France SA this week announced new or extended outages at four of the nation’s 56 nuclear reactors during winter, when demand peaks. Available nuclear capacity in France is already below average for the time of year, and the halts—combined with record natural gas and carbon prices—have pushed power costs to fresh records, with a widening premium over those in neighboring Germany.

“Beyond the jump in gas and CO2 prices, the energy crisis is largely worsened in France by a particular factor: the historical weakness of the availability of the nuclear fleet,” according to Uniden, whose members include makers of chemicals, steel and cement. The competitiveness of companies is being “crushed,” the group said in a statement Thursday.

President Emmanuel Macron’s government has introduced tax cuts and subsidies mostly geared at consumers to help them cope with soaring energy bills ahead of next April’s presidential election. Finance Minister Bruno Le Maire also suggested on Monday that EDF might be forced to sell more nuclear power to rivals at a discount to wholesale prices, a move that would undermine the utility’s finances all the more if its reactor availability remains low.

EDF shares on Thursday tumbled 15%, the most since Jan. 25.