popular articles

EDF returns to profit after a black year in 2022

Recovery and ambitions: After losses in 2022, EDF returns to profit thanks to key factors, but the future remains marked by financial challenges and crucial projects.
EDF

Please share:

After a dismal year in 2022, EDF returned to profit in the first half of the year, raking in 5.8 billion euros, boosted by the restart of several of its nuclear reactors against a backdrop of sustained electricity prices. This marked increase, for sales of almost 75.5 billion euros, was due to “a good operating performance”, particularly in nuclear power, and also in a context of favorable electricity prices, as the group pointed out in its half-yearly financial results on Thursday.

Results and challenges

The 2022 results had also been weighed down by its forced contribution to the “tariff shield” designed to protect French energy bills. The Group is therefore raising its financial targets for 2023, although still constrained by huge financing requirements and abysmal net debt of 64.8 billion euros. “These results reflect the intensified efforts of all EDF teams,” said CEO Luc Rémont on Thursday, who joined the company in November. “Everywhere in the Group, we have embarked on profound work to improve our efficiency, in order to support our customers ever better in their energy transition. The EDF Group is well on the way to meeting all its future challenges with its industrial partners.”

In the first six months of 2022, the national electric utility suffered a historic loss of 5.3 billion euros, due to the drop in nuclear production caused by a corrosion problem at several power plants and shifted maintenance schedules as a result of Covid. By 2022, its nuclear output had fallen to 279 terawatt-hours (TWh), its lowest level for 30 years, and EDF had ended the year with a loss of 17.9 billion euros. Today, of the 16 reactors most sensitive to this corrosion problem, 11 have been repaired, two are in progress, two will be repaired by the end of 2023, and the other will be repaired when it undergoes its ten-yearly inspection, Luc Rémont told journalists.

Energy challenges and ambitions for the future

EDF has confirmed that it will reach between 300 and 330 TWh this year, aiming for 335 to 365 TWh in 2025. All this will have to come from the 56 existing reactors, commissioned between 1979 and 2002, and the imminent EPR reactor at Flamanville, since the new generation of reactors (EPR2) is not expected until 2035 at the earliest.

The French government, which has renationalized the now delisted group at 100%, is putting pressure on the company and its CEO. Energy Transition Minister Agnès Pannier-Runacher insists on a target of 400 TWh by 2030. “400 TWh in 2030, that’s the target you’ve set yourself now, and that we’ll be using to judge the operational performance of EDF’s senior management,” she said on Monday during a visit to the Bugey power plant in the Ain region, chosen by the government as the site for two future reactors.

The financial challenges of the future of energy

In addition to its ageing fleet, the power company has to manage a pile of complex issues, linked to the launch of new reactor projects and the need to finance the expansion of its renewable production (wind and solar power). EDF will have to boost its investments to 25 billion euros a year, a level “unprecedented” in its history, Luc Rémont has already warned. There’s the bill for the “grand carénage”, the program to modernize and extend the lifespan of power plants beyond 40 years, costing around €66 billion. The government is also planning a program of six to 14 EPR reactors, estimated at €51.7 billion for the first six. How can we finance them? EDF can’t do it alone.

Several options are being put forward, including zero-interest loans and mobilization of the Livret A passbook, the government recently listed, hinting at a decision by the end of 2024. All this with the approval of Brussels, which is generally unfavorable to state aid. Above all, the government and EDF will have to agree on the price of nuclear power, at a time when the former has just decided to end the “tariff shield” on French bills. EDF’s CEO has already made it known that he considers the current system, imposed by Brussels and consisting in forcing him to sell electricity at low prices to his competitors, to be a source of “under-remuneration for the company”. However, the Arenh mechanism is due to expire on January 1, 2025.

Register free of charge for uninterrupted access.

Publicite

Recently published in

SBM Offshore announces the launch of its €141 million ($150 million USD) share repurchase program, following the completion of the €130 million program, as part of its strategy to reduce capital and support employee programs.
Air Liquide anticipates a limited direct impact from global tariff hikes, while expecting an increase in its operational margin for 2025, despite weak demand in certain industrial sectors.
Air Liquide anticipates a limited direct impact from global tariff hikes, while expecting an increase in its operational margin for 2025, despite weak demand in certain industrial sectors.
Eni announces a 3% drop in its net profit for the first quarter, with savings planned to offset falling oil prices and uncertainty surrounding tariffs. The company expects reduced investment spending in 2025.
Eni announces a 3% drop in its net profit for the first quarter, with savings planned to offset falling oil prices and uncertainty surrounding tariffs. The company expects reduced investment spending in 2025.
Channel Tunnel operator Getlink reported a 17% drop in its revenue for Q1 2025, primarily due to the interruption of its ElecLink cross-Channel cable, and maintains its targets for the year.
Channel Tunnel operator Getlink reported a 17% drop in its revenue for Q1 2025, primarily due to the interruption of its ElecLink cross-Channel cable, and maintains its targets for the year.
Chinese giant Sinopec publishes its first international global energy outlook, forecasting a peak in primary energy consumption by 2045 and a rise in non-fossil energy sources.
TotalEnergies’ Antwerp platform plans to end operations of one steam cracker by late 2027, while continuing investments in green hydrogen and sustainable fuels.
TotalEnergies’ Antwerp platform plans to end operations of one steam cracker by late 2027, while continuing investments in green hydrogen and sustainable fuels.
Shanghai Electric has secured strategic partnerships with Masdar and Mawarid Group for large-scale solar and wind projects, strengthening its industrial presence in the Middle East.
Shanghai Electric has secured strategic partnerships with Masdar and Mawarid Group for large-scale solar and wind projects, strengthening its industrial presence in the Middle East.
Weaker North American market conditions weighed on Halliburton's quarterly results, despite strong international activity and revenues exceeding analysts’ expectations.
Weaker North American market conditions weighed on Halliburton's quarterly results, despite strong international activity and revenues exceeding analysts’ expectations.
The global artificial intelligence market applied to the energy sector is expected to grow at an annual rate of 36.9% between 2024 and 2030, according to a report published by MarketsandMarkets™ on April 22.
Xavier Huillard departs from Vinci’s executive leadership after two decades of major transformations, handing over to Pierre Anjolras following Thursday’s general assembly.
Xavier Huillard departs from Vinci’s executive leadership after two decades of major transformations, handing over to Pierre Anjolras following Thursday’s general assembly.
Technip Energies has secured a contract with Jet Zero Australia for the engineering of a project aimed at producing sustainable aviation fuel in Townsville, Australia, with an annual capacity of 102 million litres by 2028.
Technip Energies has secured a contract with Jet Zero Australia for the engineering of a project aimed at producing sustainable aviation fuel in Townsville, Australia, with an annual capacity of 102 million litres by 2028.
South African group Eskom has issued a call for tenders to establish an independent entity focused on renewable energy, as part of its strategic restructuring.
South African group Eskom has issued a call for tenders to establish an independent entity focused on renewable energy, as part of its strategic restructuring.
France Chimie warns that 47 industrial sites in France and up to 350 across the European Union could shut down without an emergency response to the escalating trade tensions with the United States and China.
A master agreement between ExxonMobil and Rice University initiates a series of joint energy research projects focused on technological innovation in water treatment and resource recovery.
A master agreement between ExxonMobil and Rice University initiates a series of joint energy research projects focused on technological innovation in water treatment and resource recovery.
Dutch group SBM Offshore has secured a new USD1.1bn revolving credit facility from an international banking consortium, extending and enlarging a previous financing agreement.
Dutch group SBM Offshore has secured a new USD1.1bn revolving credit facility from an international banking consortium, extending and enlarging a previous financing agreement.
Equinor restructures operations to enhance earnings in growing power markets by merging its renewables and flexible generation assets into a single business unit.
Equinor restructures operations to enhance earnings in growing power markets by merging its renewables and flexible generation assets into a single business unit.
According to the International Energy Agency, artificial intelligence will drive a global rise in data centre electricity consumption, reaching the current level of Japan’s national use by the end of the decade.
Sinopec and Saudi Aramco have signed a framework agreement to expand the Yanbu complex, aiming to establish an integrated refining and petrochemical platform with high industrial capacity.
Sinopec and Saudi Aramco have signed a framework agreement to expand the Yanbu complex, aiming to establish an integrated refining and petrochemical platform with high industrial capacity.
Fusion Fuel has signed a letter of intent to acquire a UK-based fuel distribution company valued at £50mn, as part of its strategy to expand its presence across the energy value chain.
Fusion Fuel has signed a letter of intent to acquire a UK-based fuel distribution company valued at £50mn, as part of its strategy to expand its presence across the energy value chain.
SBM Offshore finalises a non-recourse leaseback agreement worth $400 million for FPSO Cidade de Paraty, transferring ownership to a consortium of Chinese lessors for an eight-year period.
SBM Offshore finalises a non-recourse leaseback agreement worth $400 million for FPSO Cidade de Paraty, transferring ownership to a consortium of Chinese lessors for an eight-year period.
Mining companies are turning to copper production to drive growth from 2025, marking a strategic shift in capital allocation, according to Wood Mackenzie.
Swedish manufacturer Autoliv signs two 12-year renewable power purchase agreements with Alight and Eurowind Energy to ensure stable supply and anticipate volatility in European energy markets.
Swedish manufacturer Autoliv signs two 12-year renewable power purchase agreements with Alight and Eurowind Energy to ensure stable supply and anticipate volatility in European energy markets.
Avangrid brought together over 150 energy stakeholders in Cambridge during its annual forum to accelerate the development of technological solutions involving artificial intelligence, storage, and infrastructure resilience.
Avangrid brought together over 150 energy stakeholders in Cambridge during its annual forum to accelerate the development of technological solutions involving artificial intelligence, storage, and infrastructure resilience.
British oil group BP has confirmed the planned departure of its chairman of the board Helge Lund, launching a transition process expected to conclude in 2026.
British oil group BP has confirmed the planned departure of its chairman of the board Helge Lund, launching a transition process expected to conclude in 2026.

Advertising