Key Insights from the French Market Analysis
Analysis of the French energy market is key to understanding the dynamics and trends affecting the sector both locally and internationally. In this detailed analysis, we address the important factors influencing energy prices, supply and demand, and the latest regulatory policies. This comprehensive overview will allow you to keep up to date with weekly changes and anticipate possible market variations, both in France and in other relevant markets such as Spain.
Table of Contents
February 2025
Key figures of the month
Energy demand and generation mix
In February 2025, electricity consumption in France during peaks in demand averaged 68.8 GW. The peak in electricity demand in February was reached on Tuesday 04 February, with 79 GW, below the levels seen the previous month (87GW).
In terms of the generation mix, average nuclear generation in the second month of the year was 48.2 GWh. The average maximum output was reached in mid-February (50.6 GWh), and the average minimum output was reached on Sunday 23rd, coinciding with an increase in wind generation due to strong winds at the end of week 8. In addition, 14 reactors in the French nuclear fleet were on scheduled shutdown (the Flamanville 3 reactor, which has been on forced shutdown since Saturday 15 February).
In terms of renewable energy sources, as you can see from the graph, hydro energy comes second in the total energy mix and first in the renewable energy category. This ranking has remained unchanged since October 2024. Hydroelectric stocks fell from 1,849 GWh (at the end of January) to 1,334 GWh (at the end of February), below last year’s level (1,729 GWh). In February, the days were sunnier than in previous months, as can be seen from the graph (solar production represents 10.6% in the energy mix). What’s more, solar generation was positioned ahead of wind generation, which was not the case in January 2025.
According to the RTE press release of 20/01/2025, in 2024 low-carbon production (nuclear and renewable) reached the threshold of 95% of the electricity produced in France for the first time.
Source: Haya Energy Solutions
Energy prices & market panorama
Average electricity prices for day-ahead base contracts in France reached €112.86/MWh, similar to January’s levels (€112.28/MWh) and still lower than German contracts (€125.16/MWh), a trend observed in recent years. As the graph shows, prices fluctuated considerably throughout the month with the minimum price for the day-ahead base contract being €63.90/MWh on 20 February, and the maximum price €154.37/MWh on 11 February, when spot prices rose as a result of two key factors: increased demand due to lower temperatures and the upturn in economic activity.
Regarding imports and exports, in February, France was in a position of net exporter with all its borders, except for Spain, for which France imported more than it exported. The maximum level of exports for the month was 14 091 MW.
Gas prices: the TTF spot contract closed at €46.10/MWh on 27 February. Since the beginning of the year, the trend has been upwards, until mid-February when it reached its peak price (€58.98/MWh 10/02/2025), after which prices then fell. At the end of February, the TTF spot contract reached its lowest level since the start of the year.
At the end of February, France’s gas storage levels were at 23%, well below 2024 (44%). European gas stocks were depleted faster than expected this winter, but levels are close to the 2011-2021 average (27%).
Gas prices stability depend on various factors that are under tension currently. Minor unforeseen disruptions on the supply side, such as LNG shipments shifting to Asia, or on the demand side, like an exceptionally cold end to winter, or an increase in gas consumption for power generation due to reduced renewables could trigger significant price spikes.
Source: Haya Energy Solutions
Source: Haya Energy Solutions
Market trends and futures
Source: Haya Energy Solutions
Levers that will have an impact on the security of gas supply in the short term:
- Uncertainty over gas supply
Winter is ending, but a cold snap, combined with low renewables and high demand, could further deplete gas stocks, putting pressure on the summer filling season. - Difficulties for re-filling gas storages for next winter
As an exceptional situation, future summer prices are higher than winter price. The concern is how much natural gas will be needed to re-fill gas storages in Europe. Summer gas storage re-fill season is putting pressure on prices. A new mandate will be published by the European Commission to extend its gas storage regulation by the end of March, proposing different storage levels for 2025. - Price forecasts
Price variations further complicate the situation, with market fluctuations driven by supply chain instability, geopolitical events, and speculative trading, making it difficult for consumers and industries to plan for energy costs. - Origin of gas exports
Diversification of LNG gas suppliers in Europe but impact on competition on LNG demand due to economic expansion in the Asia-Pacific region. - Geopolitical tensions
Geopolitical tensions continue to shape the global gas landscape, with ongoing conflicts, sanctions, and strategic policy shifts potentially leading to supply restrictions or redirections.
Brent month-ahead oil contract prices fell slightly, from $76.87/b on January 30 to $75.05/b on February 27. Oil prices have fallen significantly since the inauguration of Donald Trump, as his support for increased domestic and OPEC production, as well as his threats of a trade war, have raised concerns about a decline in world trade.
According to IEA, in the long term, global oil demand is set to grow steadily, driven by emerging Asian economies, while supply is expected to rise, primarily from non-OPEC+ producers.
At the end of December, the EPR nuclear reactor at Flamanville was finally connected to the electricity transmission grid (although it has been undergoing maintenance since mid-February). According to EDF’s estimate, the range for nuclear generation in France is now estimated at between 350 and 370 TWh (versus 335 et 365 TWh in the press release of 26/07/2024) for 2025 and 2026. This includes output from Flamanville 3. If this reactor operates as expected, it could supply a significant amount of decarbonized electricity (itcould produce up to 14TWh/y), contributing to the stabilization of French energy prices. The nuclear park in France might face new challenges to meet the target as modulation needs are gradually increasing due to greater RES penetration.
Regulation
The French Finance Act 2025 has been published in the Journal Officiel on 15 February 2025.
On the energy part the main elements are:
Post-Arenh Mechanism
Article 4 establishes a post-Arenh mechanism based on an agreement between EDF and the government. A new tax on nuclear fuel use will limit nuclear plant revenues by capturing a share of margins beyond defined thresholds (50% above the taxation threshold and 90% beyond the capping threshold). The revenue from this tax will be redistributed to consumers through a «universal nuclear payment,» adjusted annually based on forecasted calculations by CRE. Implementation is set for January 1, 2026, but current market conditions may render the mechanism irrelevant.
Capacity Mechanism (from November 2026)
A new centralized capacity mechanism will be introduced, with RTE managing purchases. Article 6 establishes a levy on electricity suppliers, covering RTE’s acquisition costs and distributed based on each supplier’s consumption share. This levy functions as a redistribution tax. The goal is to ensure an adequate and balanced electricity supply.
Energy and Electricity Excise Duties (Article 7)
In 2025, normal excise rates are set at €10.54/MWh for natural gas and €25.09/MWh for household electricity, with reduced rates for SMEs and high-power consumption. A surcharge similar to the former CSPE will be applied. No new taxes like CRIM are introduced, and the previously planned tax on installed power is not included.
