EDF Group 2021 financial results: highlights for EDF Energy in the UK
Today EDF Group published its financial results for 2021. These results relate to the operations of the entire EDF Group around the world, not just the UK.
EDF Energy Ltd will provide an external communication with the breakdown of how each part of its business has performed when it publishes its annual segmental accounts before the end of April this year.
A summary of results relating to EDF Energy in the UK is below:
- UK EBITDA -£21million in 2021, vs. £712m in 2020
- UK EBIT -£1.7billion in 2021, vs. -£862m in 2020
- Significant losses reflect the ongoing impact of COVID-19, high global gas prices, and unplanned outages at UK nuclear power stations
- Hinkley Point C schedule remains unchanged with the start of electricity generation scheduled for June 2026, but COVID-19 continues to have an impact on the project
- Strong operating performance in residential business with over 650,000 accounts added and smart metering targets exceeded
- 2021 was a landmark year for progress on the company’s future operations, with legislation for a new financing model to be used by Sizewell C, the signing of the decommissioning agreement with UK Government, and further investment delivered in electric vehicles through the listing of Podpoint on the London Stock Exchange. By the end of 2021 had installed 160,000 chargepoints, up 70% on the year before.
The nuclear fleet produced 41.7TWh in 2021, 4TWh less than the previous year, due to unplanned outages. The lost output had to be bought back at high market prices.
The business confirmed the end of generation at Dungeness B in 2021 and Hunterston B in January 2022. The nuclear decommissioning arrangements signed between EDF and the UK Government provide long term certainty for the Generation business’ important role in UK decommissioning.
Our residential business gained over 650,000 customer accounts in 2021. We stepped in to take on customers of Green Network Energy, Utility Point, Zog Energy. Despite the ongoing impact of COVID-19 on Customers’ operations in 2021, we exceeded our smart meter target and we currently rank second among large suppliers in the Citizens Advice ratings.
The historic increase in wholesale energy prices increased costs for our Customers business in 2021. The energy price cap meant that we were unable to pass on most rising costs and as a result our residential business was loss-making.
Hinkley Point C
Hinkley Point C made good progress in 2021, passing the “halfway” mark of construction – the project is c.52% completed. The schedule for the project remains unchanged with planned electricity generation from Unit 1 in June 2026. Also unchanged is the previously identified risk of ‘high probability’ delays for Units 1 and 2 of 15 and 9 months respectively. Despite industry-leading steps in addressing COVID-19, the schedule remains under additional pressure due to the continuing impact of the pandemic in 2021 and other issues.
Progress on site included completion of the 2500m3 concrete table that will support the turbine of Unit 1, and the first steel ring section was successfully lifted on to the reactor building of Unit 2.
Legislation for the use of the Regulated Asset Base (RAB) model to finance new nuclear is currently going through Parliament. We hope to use the RAB model to finance Sizewell C. The Government also pledged £1.7bn for large-scale nuclear and recently announced £100m to support Sizewell C’s further development.
A decision on the Development Consent Order for Sizewell C is expected by the end of May 2022.
EDF Renewables added two battery sites to its growing portfolio at Kemsley and Cowley, which are providing much needed flexibility to balance electricity supply and demand, stabilise the grid and enable mass EV charging.
We entered the GB grid scale solar market, taking investment decisions on three projects and starting construction on one. We also started construction of three solar sites in Ireland alongside our ongoing development of the Codling Offshore Wind Park.
Work got underway building the 30 MW West Benhar onshore wind farm in North Lanarkshire.
To support our ambitions growth plans, we successfully grew the headcount of the business by adding another 70 people.
Notes / Glossary of terms
EDF Renewables’ accounts are not included in the above as they are consolidated and presented as part of the EDF Renewables Group.
Earnings before interest and tax (EBIT) / Operating profit
This is a company’s operating profits before payments for tax and interest payments are included. The charge for depreciation and amortisation is included in the operating profit figure.
Earnings before interest, tax, depreciation and amortisation (EBITDA)
This is effectively the company’s net income from selling energy minus its operating expenses, but it excludes the significant costs involved in repaying loans, paying tax and the declining value of the assets it owns (e.g. buildings, power stations and equipment).
It also does not include the amount a company must invest to maintain existing assets or build new power stations.