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EDF: Historic 5 billion loss due to nuclear problem

Posted July 28, 2022, 8:12 AMUpdated on July 28, 2022 at 11:55 am

At a time of rising electrical energy costs, the primary half could possibly be the supply of historic income for EDF, which owns one of many world’s largest nuclear reactors. But the exorbitant invoice to shut down the group’s reactors affected by corrosion, quite the opposite, has precipitated an enormous loss.

In the primary six months of the 12 months, EDF definitely elevated its turnover by 66%, to 66 billion euros. But its earnings earlier than curiosity, taxes, depreciation and amortization (Ebitda) actually fell to 2.7 billion euros, from 10.6 billion euros a 12 months earlier. Group share of EDF’s internet earnings moved largely into detrimental territory with a loss of 5.3 billion euros.

“Has there ever been a semester within the historical past of EDF the place the statistics have been so detrimental? I doubt it very a lot,” admitted group CEO Jean-Bernard Levy, who offered his last half-year accounts on Thursday earlier than handing over to his seemingly successor.

Electricity is purchased at excessive costs out there

The closure of twelve reactors affected by corrosion resulted in an working earnings loss of seven.3 billion euros. Government measures (growing the quantity of nuclear energy bought at regulated costs, worth caps, and so forth.) additionally led to an working loss of 6.2 billion euros. Finally, the drought precipitated a discount in hydraulic manufacturing and one other working loss of 1.4 billion euros.

In the primary half of the 12 months, nuclear energy era fell by 15% and its dams by 23%. For EDF, the shortage of nuclear manufacturing mixed with the Ukrainian disaster and hovering costs are creating hellish mechanics. Due to the shortage of ample era to serve clients, EDF buys electrical energy in the marketplace each month. However, payments proceed to rise as costs rise within the wholesale electrical energy market.

(*5*), the second half must be worse for EDF’s accounts. “We count on considerably decrease EBITDA than within the first half,” mentioned Xavier Geer, the group’s chief monetary officer. In whole, for the 12 months, the influence of the shortage of nuclear manufacturing on EBITDA is estimated at 24 billion euros, in contrast to the anticipated 18 billion up to now.

The group continues to be concentrating on nuclear energy era of between 280 and 300 terawatt-hours (TWh) in 2022, then between 300 and 330 TWh in 2023. A big a part of this might once more be mobilized to decrease electrical energy costs in France, by growing the amount bought at regulated costs offered by the “Arenh” mechanism.

Infernal spiral

“It appears to us that an Arenh cap of 135 TWh for 2024 and 2025 could be an inexpensive compromise. We hear considerations expressed within the National Assembly and Senate. I can desk an modification to this impact,” Energy Transition Minister Agnes Panier-Ranachar mentioned within the Senate on Wednesday. Currently, the utmost ceiling of nuclear energy that EDF can promote to its rivals is 150 TWh.

To cease the infernal spiral, EDF will begin its restore and management plan for its energy crops affected by corrosion. It has simply been verified by the Nuclear Safety Authority. The get together has to depart the inventory market and return 100% to the state bosom very quickly. The first step in a restructuring that could possibly be way more in depth.

3 issues to know concerning the French nuclear fleet

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