French month-ahead prices dropped 4.3% as the heat waves that stressed the country’s reactor fleet this summer gave way to cooler weather. The German equivalent has risen 6.6%, tracking gas and carbon prices higher as optimism wanes over US President Donald Trump’s efforts to end Russia’s war in Ukraine.
That’s pushed up the German premium to the French month-ahead power contract by 28% this week, according to data from EEX.
The spread between two of Europe’s biggest markets is an important metric for traders who make money exporting power across its borders. France’s reliance on nuclear power versus Germany’s pivot to a mix of renewable energy and fossil fuels has loosened the relationship between the two, giving more opportunities for arbitrage.
Forecasts from Atmospheric G2 show temperatures in France hovering around or below the 30-year normal in September. That contrasts with the extreme heat earlier this month that forced Electricite de France to curb output from some of its nuclear reactors.
“It is difficult to make a bullish argument for French power currently, with high nuclear, a mild end to summer and now even rain returning,” said William Peck, a senior power analyst at Energy Aspects Ltd.
Intermittent solar and wind energy means Germany periodically needs to fall back on gas-fired plants when power demand peaks. Concerns about the near-term outlook for wind generation is also underpinning price gains.
“The risk that late summer will also bring below-average wind power generation” is now being priced into the German front-month contract, said Sabrina Kernbichler, lead power analyst at Energy Aspects Ltd.
(Bloomberg, August 22, 2025)