A better kind of energy company

We generate and supply electricity and gas for the UK from a nuclear, coal, gas and renewable energy portfolio. In 2016, we maintained our position as the largest generator of electricity and of low carbon electricity in the Great Britain. We are a wholly owned subsidiary of the EDF Group.

 

Shaped to deliver

 In 2014, we simplified the structure of our business to focus our functions on Customers, Generation, and Nuclear New Build. These businesses are supported by our Corporate and Steering Functions. Our simpler structure means we are better placed to more efficiently deliver our role as the largest producer of low-carbon electricity in the country and as a better kind of Energy Company – one that stands on the side of the customer.

Since 2009, Centrica plc (“Centrica”) has held a 20% shareholding in Lake Acquisitions Limited, the company in which the nuclear generation assets sit (except New Nuclear).

Energy generation

EDF Energy is one of the UK’s largest energy companies and the largest producer of low-carbon electricity. The company produces around one-fifth of the nation’s electricity from its nuclear power stations, wind farms, coal and gas power stations and combined heat and power plants.

In 2016, EDF Energy maintained its position as the largest generator of electricity (by TWh produced) and of low carbon electricity, and overall as the leading electricity supplier in Great Britain (by TWh sold 2). This excellent level of output is driven by our long-term commitment to continuous improvement by implementing best international practices and investment in the fleet. Our existing nuclear power stations continue to provide the UK with safe, secure and reliable low-carbon electricity; we finished 2015 with an overall output for nuclear of more than 65.1 TWh.

This exceptional performance has been made possible through EDF Energy’s continuing investment in its existing power stations which was £529m in 2016.  EDF Energy aims to secure value from its existing nuclear, coal and gas assets through continued safe and reliable generation. A key strategic programme is securing lifetime extensions for existing power stations, when safe and commercially viable, to allow the UK to continue to benefit from nuclear energy until new low-carbon capacity can come online at scale. In February 2016, EDF Energy confirmed a five year life extension for Hartlepool and Heysham 1 nuclear power stations to 2024 and a further seven year life extension for Heysham 2 and Torness nuclear power stations to 2030.

In 2016, Cottam and West Burton A coal-fired power plants generated 2.7TWh of electricity. Although lower than last year, this represented a good performance in a year of particularly low dark spreads, in addition to two major outages. The impact of the lower dark spreads has been largely economically mitigated by income from National Grid for Balancing Mechanism activity and by favourable trading, including power buybacks at a beneficial price, as well as running in peak periods. West Burton B CCGT generated 5.3TWh, driven by improved market spark spreads and continued Balancing Mechanism activity.

Through EDF Energy Renewables (EDF ER), a joint venture between EDF Energy and EDF Énergies Nouvelles, EDF Energy is developing its own onshore and offshore assets. In addition, EDF Energy has signed power purchase agreements with renewable generators and supports independent developers. This ensures a balanced approach for compliance with its Renewables Obligations (RO) and the provision of renewable electricity to its customer base. EDF ER currently operates 35 wind farm sites with a total generation capacity of 673.2MW, including two onshore windfarms, Pearie Law (19.2MW) and Corriemoillie (47.5MW) brought into operation in 2016. Two other onshore windfarms are currently in construction, Beck Burn (31MW), expected to commence operation in 2017 and Dorenell (177MW), EDF ER’s largest onshore wind farm to date, expected to commence operation late 2018.

During the year, EDF ER expanded its scope of technologies and was awarded a contract by National Grid for the provision of a 49MW battery storage facility. This facility will be constructed adjacent to the West Burton coal and CCGT stations.

EDF EN Services UK Limited, a joint venture between EDF Energy and EDF Énergies Nouvelles, which commenced operations in October 2015, continues to expand and now provides operation and maintenance activities for 25 wholly and partly owned wind farms and 2 externally owned wind farms.

Bringing our Generation business together, and ensuring a long-term strategy that puts a low-carbon and renewable energy mix central to our approach, means we are better able to play a key role in delivering a sustainable energy future for the UK.

Customers

During the year, EDF Energy supplied 13.2TWh of electricity and supplied 28.2TWh of gas for the domestic segment. As at 31 December 2016, EDF Energy had 3.2 million electricity accounts and 2.0 million gas accounts on this segment.

Competition from small suppliers remained strong throughout 2016, although increases in wholesale prices put pressure on some, particularly those with short-term hedging strategies.

Business customers

In 2016, the non-domestic segment supplied a total of 33.0TWh of electricity; 2.0TWh to 183,383 Small and Medium Enterprise (SME) accounts and 31.1TWh to 103,926 Industrial and Commercial (I&C) accounts. The business customer electricity market in the UK is c.183TWH in total, making EDF Energy the largest supplier to business customers. Almost half of the business electricity market is serviced by just three main players.

In 2016, large business renewal rates were higher than anticipated. Key customers signed in 2016 (for delivery in 2017 and 2018) include Nissan Motor Manufacturing (265GWh), Coca-Cola (95GWh), Urenco (320GWh) and Fujitsu (92GWh).

Nuclear New Build

We plan to build four new nuclear reactors in the UK - two at Hinkley Point in Somerset and a further two at Sizewell in Suffolk.

EDF Energy is leading the UK’s nuclear renaissance. In partnership with China General Nuclear Corporation (CGN) it has made a final investment decision for the Hinkley Point C power station in Somerset and is developing further new nuclear projects at Sizewell, in Suffolk, and Bradwell, in Essex. On 21 October 2015, EDF and China General Nuclear Power Corporation (CGN) signed a Strategic Investment Agreement leading to co-investment in the construction of two EPR reactors at the Hinkley Point C (HPC) in Somerset. The agreement also includes a broad partnership in the UK to develop nuclear power plants, at Sizewell C (SZC) in Suffolk and Bradwell B (BRB) in Essex.