EDF Group Results 2018 - highlights for EDF in the UK
EDF Financial Results 2018 - highlights for EDF in the UK
Please follow this link to the EDF Group media release relating to the Group’s Annual Results for 2018 which have been published this morning. These relate to the performance of the entire EDF Group and include a summary of EDF Energy’s performance in the UK.
EDF Energy will provide a breakdown of how each part of its business has performed when it publishes its annual segmental accounts before the end of April this year.
- EDF Energy had 4.9 million residential accounts (electricity and gas) at end of December 2018 and installed more than 500,000 Smart Meters over the year.
- All key milestones were reached at Hinkley Point C - more than 3,600 people are working on the construction site.
- EDF Renewables[i] UK acquired the 450MW Neart na Gaoithe offshore windfarm development project in Scotland.
- EDF Renewables UK inaugurated two ground-breaking projects, the 41.5MW Blyth offshore windfarm which uses gravity-based foundations, and the 49MW West Burton B battery storage facility which provides a grid balancing service.
- EDF Energy’s nuclear power stations delivered lower output of 59.1TWh compared with 2017 (63.9TWh) due to maintenance and inspection outages.
- Capital expenditure across nuclear generation, coal and customers was more than £540m. Investment in New Nuclear Build (NNB) was £2.3bn.
- EBITDA for 2018 was £691m, a reduction of 16.5% on an organic basis[ii]. The drop in earnings in 2018 was due to lower generation output and lower realised prices.
- EBIT was -£172m[iii] excluding exceptional items.
At the end of 2018, EDF Energy had 3 million residential electricity accounts and 1.9 million gas accounts, a decrease of around 200,000 since the beginning of the year.
EDF Energy remains committed to offering smart meters to all domestic and small business customers who want to benefit from this new technology by 2020. In 2018, EDF Energy installed 515,000 smart meters. More than 1 million smart meters have been installed by us since the programme started.
New products were launched for residential customers to help them take advantage of innovations in energy technology. These include a range of ‘smart home’ products, including domestic battery storage and a home monitoring service, Howz, to support independent living.
EDF Energy announced a partnership with Nuvve Corporation to install up to 1,500 Vehicle to Grid (V2G) chargers in the UK. V2G chargers allow electricity stored in an electric vehicle to be used in a customer’s home or business or to be sent back to the grid, providing savings on energy costs and generating additional revenues.
The contracting division of our technical engineering company Imtech secured projects worth £450m in the UK and Ireland in 2018 and its maintenance arm retained a number of key contracts. Imtech’s Low Carbon Solutions continued to add to its portfolio of energy saving projects for NHS Trusts. Imtech also helped to develop Powershift, a platform which allows businesses to become more efficient by switching off or reducing consumption, or by providing electricity to the grid.
New nuclear build
EDF Energy, in partnership with China General Nuclear Corporation (CGN), is constructing the Hinkley Point C power station in Somerset (EDF 66.5%, CGN 33.5%) and is developing further new nuclear projects at Sizewell (EDF 80%, CGN 20%), in Suffolk, and Bradwell (EDF 33.5%, CGN 66.5%), in Essex.
All three projects made good progress in 2018.
Hinkley Point C
Construction of the first new nuclear power station in the UK is on track and the project achieved all its key milestones in 2018.
Following consent from the Office for Nuclear Regulation, the first concrete pour for the base of Hinkley Point C’s unit one reactor has been successfully completed. This 4,500 tonne platform provides the stable foundations for the reactor and safety systems. It is made from high quality nuclear concrete, reinforced with steel from South Wales.
More than 3,600 people are now working on site and the project is on schedule to reach ‘J-zero’ in the summer of 2019 when the unit one base will be complete.
380 apprentices are working on the project and the aim is to see 1,000 apprenticeships created over the course of construction. 25,000 employment opportunities will be created during construction.
Hinkley Point C continues to create huge benefits for the South-West. Contracts worth more than £1.5bn have already been awarded in the region.
Replicating the design of Hinkley Point C creates the opportunity for lower construction costs at Sizewell C and makes cheaper financing possible. The project is undertaking its third and final stage of public consultation and has already engaged with more than 5,000 residents and stakeholders.
The benefits to British consumers from replicating Hinkley Point C and using the same trained workforce can be maximised if a final investment decision for Sizewell C is taken at the end of 2021.
The UK HPR1000 design moved into the third stage (out of four) of the UK Generic Design Assessment in November 2018.
EDF Renewables UK continued to develop significant new projects and has more than 1.5GW of renewables capacity in planning or development.
In 2018, EDF Renewables UK acquired the 450MW Neart Na Gaoithe offshore wind farm development project off the coast of East Scotland.
EDF Renewables UK inaugurated the Blyth offshore project which is the first off-shore wind farm to use float and submerge technology.
A new 49MW battery storage project at West Burton B is now operational, providing frequency response services to the National Grid, and further flexibility projects are being explored.
The nuclear generation fleet produced 59.1TWh during 2018, 4.8TWh less than 2017 (63.9TWh).
The reduction in output is largely due to the extended outages at Hunterston B for graphite inspections and safety case work, the extended outages at Dungeness B and other statutory outages in 2018.
Safety is our number one priority and we are committed to maintaining industry leading safety performance.
During a planned outage of Hunterston B Reactor 3 for graphite inspections in March 2018, new keyway root cracks were discovered in the reactor core. Since then, EDF Energy has implemented the most extensive graphite investigation programme ever undertaken.
In May 2018, EDF Energy decided that Reactor 3 should remain offline for additional inspections and to carry out further work with the nuclear regulator. This work will ensure the longer term safety case reflects the findings of recent inspections and includes the results obtained from other analysis and modelling.
A graphite core inspection on Hunterston B reactor 4 planned for 2019 was brought forward to October 2018.
The units are expected to return to service in the second quarter of 2019.
A statutory outage was started on Dungeness B Reactor 22 in August 2018 with an associated outage on Reactor 21 starting in September. These outages have been extended to complete inspections and repairs to steam pipework and the units are expected to return to service in the second quarter of 2019.
Following a judgment of the European Court of Justice, the UK Government suspended the operation of the Capacity Market in November 2018. As a result, EDF Energy has not received capacity payments for October- December 2018 worth £69m. We are confident the Capacity Market suspension will be lifted and that these payments will be made in due course.
Glossary of terms
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.
This reflects the value used of non-physical assets owned by the company such as copyright, IT systems or patents.
[i] EDF Renewables is a joint venture between EDF Renewables Group (EDF’s global renewables subsidiary) and EDF Energy (EDF’s UK generation business).
[ii] Drop in earnings also reflects EDF Energy’s sale of 1% of its share in EDF Renewables to EDF EN, decreasing its shareholding to 49%. This deconsolidates EDF Renewables’ results from EDF Energy accounts for 2018, resulting in a drop in reported EBITDA for EDF Energy of £75m.
[iii] Excluded from underlying EBIT is a one-off impairment charge of £144m and other non-recurring expenses of £37m.