Facade of the EDF premises, on February 15, 2019 in Paris (AFP / ALAIN JOCARD)
Electricity giant EDF suffered one of the worst losses by a large French company in recent history in 2022, deepening its debt to an equally record level of 64.5 billion euros, after a black year weighed down by the setbacks of its nuclear fleet but also by its forced contribution to the “tariff shield” of the French.
Its turnover increased by 70% to 143.5 billion euros, driven by the rise in energy prices, but the group went into the red with a very heavy net loss of 17.9 billion, against a profit of 5.1 billion in 2021.
This is one of the most massive losses in recent history in France, behind France Telecom (20.7 billion) and Vivendi Universal (23.3 billion) twenty years ago.
With the general surge in electricity prices, EDF saw many French customers return, but could not produce enough with its power plants: the group had to buy electricity at high prices on the markets.
This result “is historic, and it is the consequence of a year made up of exceptional challenges for the EDF company”, acknowledged in front of some journalists the CEO Luc Rémont, who arrived in the fall and for whom it was the first presentation of results.
“Despite a strong increase in turnover supported by electricity and gas prices, EBITDA (gross operating margin) is strongly penalized by the drop in nuclear production as well as the exceptional regulatory measures put in place. in France for 2022, in difficult market conditions”, he commented.
On the other hand, the manager confirmed “the nuclear production range of 300 to 330 terawatt hours (in 2023), i.e. a gradual exit from the stress corrosion crisis”, a problem of micro-cracks noted on pipes which put shutdown number of reactors since the end of 2021.
“We are in the perspective of a very significant recovery in flows in 2023 and therefore this is what will allow us both to finance the investments which are essential in this moment of energy transition and to meet the group’s financing needs. “, underlined Xavier Girre, the financial director.
– Trust and pressure –
On the announcement of these results, however, the government immediately put pressure on the group, saying “counting on the new CEO and all the employees to restore all of EDF’s electricity production as soon as possible. “.
A reactor at the EDF nuclear power plant in Golfech, seen from Dunes, in southwestern France, on January 3, 2023 ( AFP / CHARLY TRIBALLEAU )
“The recovery of EDF’s finances will go primarily through the increase in the volume of production”, say the Ministers of Economy Bruno Le Maire and Energy Transition Agnès Pannier-Runacher.
“They want the project to be prepared for new [réacteurs] EPR decided by the President of the Republic”, they say again, when the State renationalizes EDF 100% to bring the nuclear recovery plan supported by Emmanuel Macron.
The CEO of EDF assured that the group was doing everything possible to meet the date of 2035 for the start-up of the first new generation nuclear reactor. “There is a lot of work to ensure that the entire industrial sector can ramp up to be there,” he replied, when asked about this during a press conference.
The year 2022 will in fact have been a particularly complicated year for the electrician, which has seen its nuclear and hydraulic electricity production fall to its lowest point in the midst of the global energy and climate crisis.
The Tricastin nuclear power plant, operated by EDF and Areva in four municipalities in the south-east of France, on October 10, 2017 in Saint-Paul-Trois-Châteaux (AFP / PHILIPPE DESMAZES)
EDF has accumulated the problems between this corrosion and the delays in the maintenance of the power plants because of the Covid. In 2022, the average availability of the fleet of 56 reactors thus fell to 54% (compared to 73% over the period 2015-2019), raising the threat of power cuts in the middle of winter.
– System “out of breath” –
In the end, the worst was averted thanks to electricity imports, French sobriety efforts and EDF’s race to reconnect its reactors.
Nevertheless, the note is salty. Never have so few terawatt hours of nuclear origin been produced since 1988: 279 TWh in 2022. Far from the time when EDF was spitting out 430 TWh as in 2005.
The war in Ukraine hit the nail on the head with soaring gas and electricity prices.
Because to contain the bill of the French, the State, majority shareholder and soon sole, forced the group to sell in 2022 more electricity at low prices (42 euros per MWh) to its competitors, alternative electricity suppliers. A measure at an exorbitant cost for the incumbent operator: 8.34 billion euros.
Economy Minister Bruno Le Maire (left) and EDF CEO Luc Rémont (right) during a visit to the Penly nuclear power plant in Petit-Caux, northern France, on December 9, 2022 (POOL / BENOIT TESSIER)
Regularly denounced by EDF and the unions, this mechanism called Arenh was built by France in 2010 to try to stay in the nails of the competition imposed by Brussels.
Luc Rémont said in October that this system was “out of breath”.
The new boss must submit his recovery plan to the Prime Minister, Elisabeth Borne, before the summer.