France risk: Alert – Electricity supply shortages may prompt rolling blackouts

NEW SCENARIO

Risk Briefing's risk scenarios are potential developments that might substantially change the business operating environment over the coming two years. We analyse the drivers, provide the context and conclude with recommended action. The following scenario has been added to the latest country update.

INFRASTRUCTURE RISK

Electricity supply shortages prompt rolling blackouts

High probability; Moderate impact; Risk intensity = 12

About 70% of France's electricity is generated from nuclear power, but nuclear output has fallen sharply this year as about half of the country's 56 plants have gone offline or have cut output for maintenance work. This includes scheduled maintenance delayed by the pandemic, and repairs needed for widespread issues with corrosion. Risks to electricity supply during December are low, owing to high gas stocks and an unusually mild autumn. However, there is a high risk of stress on the French power network in January, according to the electricity grid operator, because energy use typically rises much more sharply, while nuclear power plants that had been shut for maintenance work are coming back online more slowly than scheduled. The state-owned Electricité de France (EDF), which runs the nuclear plants, has revised down its expectations for how many will be back online by January from 50 to 46. Should this timeline slip further, and if the winter is unusually cold, there is a risk that power generation capacity will be unable to cope with demand in early 2023. In this scenario, the grid operator would implement controlled two-hour blackouts, geographically spread out to ensure that areas were not repeatedly affected, and ensuring that provision to critical infrastructure, including hospitals and prisons, was not affected. Even handled in a controlled manager, this would suppress business and consumer confidence, and potentially damage productivity, contributing to the economic downturn. Businesses should have contingency plans in place to deal with rolling blackouts.