French utility EDF was hit by a strike on Thursday over annual wage negotiations - French electricity company EDF said in a regulatory filing that it had received a strike notice that would last from Wednesday night to 9pm on Friday.
As France is the euro zone's main electricity exporter, a drop in electricity generation from EDF could lead to a reduction in the country's power exports to neighboring countries.
The negative impact of the strike was felt quickly. That morning, EDF's hydroelectric power generation was reduced by 150 megawatts due to the strike, and the power generation of the Belleville 2 nuclear reactor also showed a significant decline. On the same day, EDF also warned that power generation could be further reduced due to insufficient flows in the Rhône. On October 12, the European benchmark Dutch TTF natural gas futures price rose by more than 16.87% to 53.175 euros/MWh.
EDF said in a statement that some workers first went on strike on Wednesday night, and Thursday's strike action should be limited to the energy production sector. On Friday, there will be a nationwide strike that transport workers, teachers and other professions will also join.
Recently, European natural gas has been hit hard.
First, many gas fields were closed one after another. Under the influence of the Palestinian-Israeli conflict, energy giant Chevron has ordered the shutdown of a major natural gas field in Israel, exacerbating market concerns about natural gas prices. Australia, another natural gas exporter, is also worried about a decline in production due to the strike.
Before the Palestinian-Israeli conflict, Europe's largest gas field had entered a "dormant state." According to a report on the French "Echo" website on October 1, the closure plan of the Groningen natural gas field has finally been implemented after long-term deliberation and delay. On the 1st, the Netherlands officially stopped mining activities in this natural gas field in the north of the country. It is the largest natural gas field in Europe, making the Netherlands one of the most prosperous countries on the continent.
The gas field was closed first because of the frequent earthquakes in the surrounding areas, which made mining more difficult; and secondly, because after a long period of mining, the gas field’s reserves were insufficient. In October last year, the Groningen gas field's annual production fell to 3 billion cubic meters - the minimum level required to maintain operations - a drop of nearly 17 times in five years.
In addition to falling gas production in the Netherlands, gas production in the North Sea is also declining as reserves in Norway and the United Kingdom are gradually depleted, which will make Europe more dependent on LNG imports.
What is even more shocking is that on the first anniversary of the Nord Stream pipeline explosion, European natural gas pipelines were hit again.
According to a report on the website of the German weekly Die Zeit on October 10, the pressure of the "Baltic Connector" natural gas pipeline between Finland and Estonia suddenly dropped. The Finnish government believes that the damage was caused by "external factors." Meanwhile, Norway's Nosal Seismological Observatory recorded a "suspected explosion" on the Baltic Sea coast in the early hours of last Sunday.
Finnish President Sauli Niinistö said: "The damage to natural gas pipelines and telecommunications cables was most likely caused by external influences." The pipeline carrying natural gas from Estonia to Finland was shut down on October 8 due to a drop in pressure.
So far, the cause of the leak has not been identified, but the price of European natural gas futures has been greatly affected. On the day of the report, it rose 11.2%.
After imposing sanctions on Russia and reducing its dependence on fossil fuels, Europe's energy security has been one of the key issues of global concern. Europe now still relies on natural gas and nuclear energy to get through the winter, as renewable energy capacity is not yet sufficient to meet electricity demand.
Ember released Europe's 2022 energy statistics and stated that in 2022, solar and wind power stations will account for 22.3% of Europe's electricity share, nuclear energy will account for 21.9%, and natural gas will account for 19.9%. Although dependence on fossil fuels has dropped significantly, natural gas and nuclear energy still account for a large part.
As a nuclear energy power, France has also become the EU's largest electricity exporter again this year. Data show that in the first half of this year, France’s net electricity exports totaled 17.6 terawatt hours, of which 8 terawatt hours were provided to the United Kingdom and 9 terawatt hours to Italy.
However, according to analysis by Kpler analyst Emeric de Vigan, the impact of this strike on the power market is expected to be minimal. He added that there was currently sufficient power supply to meet demand and that French weather was expected to remain warm until the weekend.
What needs to be vigilant is that if the subsequent negotiations between the labor and management departments are still not smooth and strikes become frequent, it may have a more obvious impact on the French energy sector.