OREANDA-NEWS. French calendar year contracts plummeted in Monday's trading session with the front year hitting a six-week low and shifting into backwardation to the 2018 product for the first time in more than three weeks after the French energy ministry said it would introduce a carbon floor price for coal-fired power production but would exclude gas plants from the system.

The 2017 base-load price was down as much as €2.30/MWh day on day to close at €31.20/MWh, its lowest level in more than six weeks since 27 May when it stood at €30.85/MWh. Yearly contracts have recently received some strong support after France announced its plans to introduce a carbon floor price on power production from 1 January 2017, a move that was expected to lift power prices. But following the publication of the final report by the French carbon price task force on Monday (see separate story), the energy ministry announced a carbon floor price would apply only to coal-fired plants, which weighed on the French power curve as the costs of peak gas-fired generation was expected to remain unchanged.

The 2018 base-load partially resisted the losses in the front year product to close €1.40/MWh lower on the day at €31.50/MWh – its weakest point since 1 June – to shift into a premium to 2017 for the first time since 17 June. The 2019 base-load shed €1.10/MWh to finish the day at €32/MWh, leaving the end of the curve in contango.