EDF Group Results 2022 – highlights for EDF in the UK
Please follow this link to the EDF Group media release relating to the Group’s Annual Results for 2022 which were published this morning. These relate to the consolidated performance of EDF Group and include a summary of EDF’s performance in the UK.
With a strong operational performance by our nuclear fleet, our overall financial performance has improved from the very challenging results we experienced in 2021.
Key points for the UK
- EDF continues to invest strongly in bolstering the UK’s current and future energy security, investing over £2.6billion in 2022 in its nuclear, renewables and customer businesses.
- Planned investment in the UK across 2023-25 is over £13bn, largely in Hinkley Point C; around £2billion is due to be invested in the existing nuclear fleet and renewables projects.
- EBITDA for 2022 recovered to £1,124 million (vs. -£21 million in 2021), due to stronger operational performance in the nuclear fleet and higher realised prices; operating profit (EBIT) remained in negative territory at -£998 million, (vs -£1.7billion in 2021) due to depreciation and one-off impairments.
- The Customers (energy supply) business made a loss of over £200million, as the cost of buying the energy for our residential customers was higher than the prices set under the caps imposed on Standard Variable Tariffs.
- The Nuclear fleet performed well, with output up 1.9TWh at 43.6TWh – despite Hunterston B and Hinkley Point B ending generation.
- Nuclear Generation
The UK nuclear generation fleet delivered 43.6TWh of low carbon power during 2022, 1.9TWh higher than in 2021 despite finishing generation at the two oldest stations in the fleet. This was due to strong operational performance, with delivery of outages broadly in line with plan. It also reflects sustained expenditure on maintenance and upgrades made to the stations in prior years, over £1.3billion across 2020-22. 43.6TWh of nuclear generation means the UK has avoided consuming 9billion cubic metres of gas and emitting 15million tonnes of CO2 compared to gas-fired power generation.
Hunterston B ended generation in January 2022 and Hinkley Point B in August, each after 46 years of safe and reliable operation and combined output of over 600TWh (enough to supply all UK homes for over 5 years). Both stations are now actively delivering on the defueling contract for Government, with Dungeness B making good progress with its defueling preparations.
As the operator of the fleet, EDF values predictable revenues to ensure costs and investment can be covered and the majority of planned output is sold up to three years in advance, rather than at day ahead wholesale market prices. Looking ahead, the new Electricity Generator Levy will see a levy of 45% paid on revenues from low carbon generators, charged on generation revenues above £75 per MWh.
For 2023 EDF will operate five generating stations, with four of these subject to statutory outages each lasting around 60-70 days. Investment and maintenance expenditure of around £1billion is planned over the next three years to help sustain output levels and help UK energy security, de-carbonisation targets and the preservation of scarce nuclear skills.
- New Nuclear/UK EPR programme: Hinkley Point C and Sizewell C
At Hinkley Point C the final liner ring was lifted onto Unit One and the six cooling intake and outfall heads have been placed on the seabed. The first reactor pressure vessel has been completed and the target of creating 1,000 apprenticeships has been reached.
There are plans to replicate Hinkley Point C at the Sizewell C project in Suffolk. On 29 November 2022, the UK Government announced it would invest circa £700m in Sizewell C to become a 50% shareholder in the project’s development with EDF and that it will work together with the project company to raise capital investment for the project. After financial close, EDF’s shareholding in the project will be no more than 19.9%.
EDF’s energy supply business made a loss of over £200million. In short, the cost of buying the energy for our residential customers was higher than the prices we charged under the SVT cap. Performance in the B2B segment saw an increase in the number of customers supplied with energy (+ 13% meter points on supply).
Despite the challenging market conditions, EDF maintained focus on improving customer service, ranking first in successive Citizens Advice surveys of energy suppliers. EDF also continued to support residential customers facing significantly higher energy costs, creating a £10m customer support fund and bringing forward £20m investment in energy efficiency measures for households in fuel poverty.
EDF Renewables has continued to grow across all renewables technologies in 2022. With our JV partner ESB, we have continued construction of the 450MW Neart na Gaoithe (NNG) offshore wind project, 15km off the coast of Scotland, which will be operational in 2024. Development of the Codling offshore wind project continues in the Republic of Ireland with our JV partner, Fred Olsen. EDF Renewables has largely completed the construction of the West Benhar 29MW onshore wind project in Scotland which will become operational in 2023.
We are constructing three grid scale solar projects with expected operations in 2023 and continue to build our portfolio of merchant battery storage assets. Alongside our project partners we have opened Europe’s most powerful electric vehicle (EV) charging hub, the Energy Superhub Oxford. This is the first of a nationwide network of Energy Superhubs which combine transmission-connected batteries and power infrastructure for EV charging to enable more renewables and accelerate the decarbonisation of transport. Final Investment Decisions were also taken on three battery storage projects - Tye Lane, Sundon and Bredbury.
Imtech saw a 25% increase in revenue compared to 2021, up to £705m. In December, Imtech finalised the acquisition of SPIE UK. The divestment of Suir Engineering was signed in December 2022, the closing being finalized in January 2023.
Notes / Glossary of terms
EDF Renewables’ and Imtech's accounts are not included in the above as they are consolidated and presented as part of the EDF Renewables Group and Dalkia respectively. This along with other required consolidation accounting adjustments means that the subsequently published UK Group financial statements values do not always directly correspond to the amounts presented in EDF SA announcements.
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.
EBITDA / EBIT and Net Investment numbers in last 5 years – 2018-22