EDF counts the cost of coronavirus to new build projects

EDF said the risk of delays in the commissioning schedule of the Hinkley Point C plant in Somerset, UK, is "high". The first of its two EPR reactors is scheduled to start up at the end of 2025. In September 2019, the company said the risk of delay to units 1 and 2 - of 15 months and nine months, respectively - had increased. These postponements, it said, would lead to an additional cost of about GBP700 million (USD914 million).

"The impacts of COVID-19 on the schedule and costs are currently being assessed (including impacts on supplier production conditions and associated delivery times) and increase the risk of postponement of planned commissioning dates," EDF said today. "A comprehensive study to assess the need for an updated schedule and costs is currently under way and will be completed in the coming months."

As regards its Flamanville 3 EPR project, all construction activities were temporarily suspended between mid-March and early-May in response to the pandemic. This, EDF said, could result in further delays and additional costs. The loading of fuel into the core of the Flamanville EPR - hot testing of which was completed in February - is currently expected at the end of 2022.

Announcing its results for the first-half of 2020 today, EDF said nuclear output in France amounted to 174.0 TWh, down 29.7 TWh compared to the first half of 2019. It noted that of this reduction, around 13 TWh was due to the coronavirus pandemic. On 2 July, EDF revised its forecast for nuclear output in France for 2020, upgraded to around 315-325 TWh compared with the 300 TWh estimated on 16 April 2020. The postponement of planned outages at French reactors in 2020 will also affect the maintenance programme in 2021 and 2022 (for which the nuclear output forecast is estimated at between 330 and 360 TWh each year).

With regards to EDF's maintenance and investment programme, known as the Grand Carénage, the utility said the feedback from the project to extend the operation of its reactor fleet to more than 40 years, as well as ongoing discussions with the French nuclear safety authority, "could lead to additional investments in the coming years under this programme, which is currently under review".

In the UK, nuclear output during the first six months of 2020 was 22.7 TWh, down 1.8 TWh compared to the first half of 2019. This decrease, EDF said, is due to the schedule of maintenance operations and planned outages. Output was still negatively impacted by the outages of Hunterston B and Dungeness B, it noted.

EDF announced its net income during the first half of 2020 was down 9.6% to EUR1.3 billion (USD1.5 billion), while sales decreased 4.9% to EUR34.7 billion. Its earnings before interest, taxes, depreciation and amortisation (EBITDA) were down EUR1 billion as of the end of June. Core earnings for the first half of the year were down 1.6% at EUR8.2 billion.

To mitigate the impact of COVID-19 on the EDF's financial situation, the company is implementing a cost cutting plan and a divestment plan. They aim at making a further effort to cut costs, with a target of EUR500 million in reductions to operating expenses between 2019 and 2022, and a stabilisation of net investments to around EUR15 billion on average per year over 2020-2022. In addition, EDF said further asset disposals will be initiated, with the aim of approximately EUR3 billion over the period 2020 to 2022.

"Throughout the public-health crisis, EDF's employees poured all their energy into fulfilling their essential duties in support of our customers in all countries where we operate," said EDF Chairman and CEO Jean-Bernard Lévy. "Despite the economic downturn, the impact of the crisis on our main financial indicators remains contained, attesting to the resilience of our Group. These conditions require us to adopt a cost savings and disposal plan enabling us to pursue the deployment of our CAP 2030 strategy and keep our debt under control. The decarbonisation of the economy, which combines the fight against global warming and sustainable growth, is a real development opportunity for EDF."