France Faces Rising Risk of Power Failures after 2015

France faces an increasing risk of power failures after 2015 as gas-fired power plants are mothballed at home and across Europe, grid operator RTE said on Wednesday.

RTE expects a shortfall in production capacity in France of 2,000 megawatts (MW) in the winter of 2016-2017 versus the broad equilibrium between supply and demand it estimated for that period in its report a year ago.

The output gap will start in the winter of 2015-2016 in case of a cold snap, RTE said, seeing a 900 MW shortfall that year, which would widen the following winter, before improving in 2017-2018 as EDF's new EPR reactor in Normandy comes on stream.

RTE has been warning for two years that security of supply would weaken from 2016 due to planned closures of old and polluting fossil-fired power plants in line with EU directives.

The shale gas boom in the United States has helped increase U.S. coal exports to Europe, making coal more attractive than gas for power producers and prompting utilities to mothball many gas-fired plants.

"The new development this year is the series of announcements by utilities that they would mothball combined-cycle gas plants," said Dominique Maillard, head of RTE.

"Our role is to raise the alarm when needed, and that's what I'm doing today," he said, adding power producers may have to revise their plans and return gas-fired plants to the grid or upgrade coal-fired ones.

French President Francois Hollande has vowed to reduce France's reliance on nuclear energy to 50 percent of its power mix from 75 percent currently, including shutting its oldest nuclear plant in 2016 and boosting renewable energy production.

But the construction of wind and solar power capacity has been slow and France will have to shut 15 of its oldest coal-fired generators by 2016 to conform with a European directive.

In the winter of 2016-2017, a new capacity mechanism comes into force, helping to maintain thermal capacity on the grid by subsidising plants that are on standby instead of being mothballed, Maillard said.

France will also have to rely more on power imports from its neighbours, including via a new interconnection with Spain that will be completed in 2015, pushing the contribution of imports to French supply to about 10,000 MW in 2017, RTE said.

For the coming winter, Maillard said France still had some margin thanks to imports from Germany and other countries, even with the loss of some Belgian nuclear supply, although he will give a fuller update on the winter outlook in October.

However, Britain, which is linked to France via a 2,000-MW submarine interconnector, risks an electricity crisis this winter, and will also have to rely more on imports from Europe.

(Reporting by Michel Rose; editing by Jason Neely and David Evans)