EDF posts record loss in France due to reactor outages
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In France, state-controlled EDF's nuclear output dropped by 30% in 2022, to 279 TWh, as more than half of its 56 reactors were taken offline for repairs which had been delayed due to the Covid-19 pandemic. In addition, the 16 reactors most affected by stress corrosion issues (four N4-series 1450 MWe reactors and twelve P4-series 1300 MWe reactors) were identified, 10 of which have now been or are currently being repaired. The company noted that 43 of its 56 reactors are currently operational, compared with 30 reactors as of 1 November.
"The decrease is explained by a lower nuclear fleet availability, mainly attributable to inspections and repairs of reactor circuits after signs of stress corrosion were detected, despite the lower number of unplanned outages, an optimised generation schedule, and a great commitment from the teams in charge of inspections and repairs at the reactors affected by stress corrosion," EDF said.
The outages meant that France became a net importer of electricity for the first time in decades.
In January last year, the French government - in an attempt to limit the rise in people's energy bills - decided to increase the amount of electricity that had to be sold at the below market-level prices of the so-called Regulated Access to Incumbent Nuclear Electricity (Accès Régulé à l’Electricité Nucléaire Historique, ARENH) mechanism. It declared an additional allocation of 20 TWh of electricity to be sold at a regulated price for 2022. It also announced a postponement of a portion of the 2022 tariff increase over a 12-month period starting from 1 February 2023.
The increased ARENH allocation meant that, in order to fulfil contracts for electricity at a fixed price of EUR42 per MWh, EDF had to buy in electricity from other suppliers "at a time when market prices were very high". In August, the company launched a legal claim against the French government for more than EUR8.0 billion in lost earnings resulting from an order to sell 25% of its nuclear electricity at below market-level prices in 2022.
For 2022, EDF posted a loss before interest, tax, depreciation and amortisation (EBITDA) of EUR5 billion, compared with positive EBITDA of EUR18 billion in 2021. The company's net financial debt increased 50% in 2022 to EUR64.5 billion.
"The 2022 results were significantly affected by the decline in our electricity output, and also by exceptional regulatory measures introduced in France in difficult market conditions," said EDF Chairman and CEO Luc Rémont. "Despite all the challenges, EDF actively focused on service and support for all its residential and business customers, and made every endeavour to ensure the best generation fleet availability for the winter period. All the group's employees deserve praise for their dedication and great resilience in a difficult environment."
He added: "2022 also confirmed the new impetus for nuclear in France, and accelerated expansion for renewable energies. The French President, during his speech at Belfort, announced a clear, coherent energy plan and the EDF group's strategy is part of it. Our priority right now is improving EDF's financial position, and I am confident that the benefits of the actions taken will begin to show in 2023."
EDF forecasts that output from its French nuclear fleet will be in the range of 300-330 TWh in 2023.
UK output increases
There was a marked contrast in EDF's 2022 results in the UK, where the company's reactors generated 43.6 TWh of electricity - 1.9 TWh more than in 2021, despite both the Hunterston B and Hinkley Point B plants ending generation.
"This was due to strong operational performance, with delivery of outages broadly in line with plan," EDF said. "It also reflects sustained expenditure on maintenance and upgrades made to the stations in prior years, over GBP1.3 billion (USD1.6 billion) across 2020-22."
It noted that planned investment in the UK across 2023-25 is over GBP13 billion, largely at Hinkley Point C; around GBP2 billion is due to be invested in the existing nuclear fleet and renewables projects.
For the UK, EDF reported EBITDA for 2022 of GBP1.124 billion, compared with a loss of GBP21 million in 2021, due to stronger operational performance in the nuclear fleet and higher realised prices.
For 2023, EDF will operate five nuclear power plants, with four of these subject to statutory outages each lasting around 60-70 days. It said investment and maintenance expenditure of around GBP1 billion is planned over the next three years "to help sustain output levels and help UK energy security, decarbonisation targets and the preservation of scarce nuclear skills".
