French Premium Narrows on Warmer Weather

• Temperatures to rise in France, demand seen down
• German wind power output seen down by 4.3 GW

The French premium over German spot prices narrowed on Tuesday, following forecasts of warmer weather in France and a drop in German wind power output.

German baseload (24 hours) power for delivery on Wednesday was up 3.60 euros at 35.60 euros ($44.9) per megawatt hour (MWh).

The French spot contract for day-ahead baseload power delivery dropped 6 euros to 43 euros/MWh.

Temperatures were expected to rise by 1.7 degrees Celsius in France on Wednesday, according to Thomson Reuters Point Carbon data, while a 0.5 percent rise was forecast for Germany.

As a result, French power demand was expected to drop by 410 MW, while German consumption was seen broadly stable.

Georgi Slavov, head of basic resources at research group Marex Spectron said a low pressure system over Britain would bring cold temperatures and rain next week, while an inflow of southern air would reach Germany and Poland.

"This suggests heating may not be required for large areas of Germany over the next week, ultimately affecting electricity demand," Slavov said in a note.

"Since both wind speed and solar production tend to increase for short-term warm spells, they add to the oversupply of electricity when demand decreases during warm spells," the analyst added.

On the supply side, German wind power output was seen falling 4.3 GW between Tuesday and Wednesday.

In France, EDF's 1,300-MW Belleville 1 nuclear reactor, expected to the return to the grid on Tuesday, had yet to restart by 1345 GMT.

French nuclear power availability remained stable at 72.65 percent of the total, data from grid operator RTE showed.

The power forward curve was broadly unchanged, as a fall in oil and gas prices was offset by a rise in European carbon.

German Cal '15 power, the annual delivery contract for next year's baseload supply, remained unchanged at 34.40 euros/MWh .

The same position in France, Cal '15 baseload, was down 5 cents at 43.40 euros.

Brent crude oil was down 0.99 percent at $91.88 per barrel, while UK gas prices fell 2.63 percent to 48.10 pence per therm.

EU carbon prices edged up however, rising 0.18 percent to 5.69 euros per tonne.

(1 US dollar = 0.7930 euro)

(Reporting by Michel Rose, additional reporting by Henning Gloystein in London; editing by David Evans)