The French President has announced closures at nuclear reactors from 2018, as well as a commitment to a minimum price for carbon emission allowances, resulting in strong upward movement on the power market.
European power contracts, carbon prices and utility stocks have climbed higher following an announcement from the French President, Francois Hollande. It was confirmed that some of the nation's older nuclear power plants are to be shut down from 2018, while a minimum price for carbon allowances has also been agreed.
Bloomberg reports that 2018 and 2019 power contracts have posted record gains, while carbon permits have reached their highest levels since January 2016. December 2016 contracts for carbon have hit a three-month high, rising by as much as 14%.
A number of France's oldest nuclear reactors are to be closed from 2018, including Fessenheim power plant which consists of two 920MW reactors. Fessenheim is located close to the German and Swiss borders and is the oldest nuclear plant in France, having been in operation since 1978. Due to the facility's old age, environmental and safety concerns have been cited as the primary reasons for its closure.
Hollande claims that France plans to reduce its reliance on nuclear power in favour of more sustainable, renewable sources. However, the French presidential elections are due to take place next year which will determine whether these plans will go ahead.
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