Europe Commission Launches Consultation Into Nuclear Amid Growing Support For Nuclear Power
Upfront prices have remained relatively stable over the Easter period as the markets settle on the back of the fallout from implementation of the US’ import tariffs and the subsequent reaction and response.
Seasonal temperatures remain at a typical level which therefore sees a reduce in demand, further helping to reduce wholesale cost.
Market Drivers
Gas
Falling
President Trump's tariffs have led to a dispute with the Chair of the Federal Reserve of the United States over interest rate cuts which support views of a global recession.
Europe Council and Parliament are coming to a consensus around relaxing storage targets which could see the November deadline have a target 7-11% lower than currently. Shared purchasing is also being considered, reducing competition within the bloc.
Rising
Falling Asian demand could impact growth in US LNG export capacity in coming years and lead to a slower growth rate.
Whilst storage targets could be relaxed, Europe looks likely to extend the storage targets beyond 2025, maintaining some support from injection demand.
Electricity
Falling
European Commission launches a consultation into nuclear power which could act to improve state support and increase capacity, helping secure prices in the long term.
Bearish sentiment dominating gas markets continues to weigh on power markets despite the recovery in carbon pricing.
Rising
Concerns have been raised over summer wind and hydro output across Europe as a recent study showed decreases over recent years due to changing climate conditions.
Climatisation is leading to higher occurrences of warmer weather across Europe which could impact nuclear availability through lower water levels and heighten power-for-cooling demand.
Market Focus
EU Seeks Input on Nuclear Investment and Energy Security Strategy.
The European Commission (EC) is launching a four-week consultation to clarify investment needs for new projects and extensions to reactors. The trade dispute between the US and EU has reaffirmed to Europe the need to not be reliant on imports for their energy needs, a realisation that the Russia/Ukraine war had first brought to the forefront.
The consultation also looks to address some of the key issues related to nuclear, including how radioactive waste is managed and how they can avoid becoming reliant on one supplier for their nuclear fuel. It is thought that this could improve coordination between European powers on nuclear and inform national policy decisions. This could be advantageous to the French nuclear industry which has been struggling with ageing reactors and financing issues whilst also promoting the growth of capacity across Europe.
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