EUROPE POWER-Spot prices jump as wind supply ebbs

PARIS, Sept 28 (Reuters) - European spot power contract prices rose on Wednesday as wind power supply is expected to drop by more than half in Germany and French nuclear availability fell.

German baseload power for delivery on Thursday climbed 8.8% to 435 euros a megawatt-hour (MWh) by 1048 GMT.

The equivalent French price rose 10.8% to 440 euros/MWh.

Daily wind power output in Germany was forecast to fall by 2.3 gigawatts (GW) day-on-day to 2 GW on Thursday, while France's wind supply is expected to drop 2.5 GW to 2.2 GW, Refinitiv Eikon data showed.

French nuclear availability fell 0.6 percentage points as the restart of the Gravelines 6 reactor was offset by an unplanned outage at Nogent 1.

Power consumption in Germany is expected to dip 310 megawatts (MW) to 59 GW on Thursday, while demand in France was set to rise 600 MW to 47.2 GW, the data showed.

Along the curve, traded forward prices were mostly up following leaks on two Nord Stream pipelines.

"Both in trading today and yesterday, the response has been relatively muted in the power market, as the leaks on NS1 and NS2 do not change the short-term fundamentals," Rystad energy analyst Fabian Ronningen said.

However, it is still a strong bullish signal as the potential return of NS1 flows are not possible anymore, he said, adding that upside risk for power contracts will be limited by gas contracts.

German baseload for 2023 delivery rose by 1.4% to 498 euros/MWh.

The equivalent French contract was untraded after closing at 572 euros on Tuesday.

European CO2 allowances for December 2022 expiry dropped 3.5% to 80.45 euros a tonne.

E.ON notified the EEX that it is making the Isar 2 reactor available beyond Dec. 31, 2022 involving an as yet unspecified one-week outage at the end of October.

This follows decisions by the government to operate Isar 2 and Necakrwestheim 2 as standby reserve in winter, which it reconfirmed on Tuesday.

Ronningen said nuclear reserves are quite limited in terms of helping with supply tightness. But, he added it is an additional "line of defense" that helps for both supply risk and peak demand prices. (Reporting by Forrest Crellin, additional reporting by Vera Eckert; editing by Kim Coghill)