France to Increase Presence on the Spot Market, Security Weakened

France will increase its share of supply indexed to the spot market from 36 to 45%, said Philippe de Ladouchette, head of the Commission de Regulation de l’Energie in a parliamentary hearing on Wednesday.

“This level is relatively high and if it goes any higher we will have to ask questions about our security of supply,” said de Ladouchette as reported by Bloomberg.

The head of the regulator added that this change could prompt backlash. Security of natural-gas supply may be weakened as a consequence.

European utilities are increasingly buying fuel on the sport market, abandoning the traditional long-term contracts that ensured more security at higher prices. Russia's Gazprom said in May that European gas buyers risk paying huge sums when demand surges if they want Gazprom to sell at spot prices rather than via long-term deals linked to oil.