French energy giant EDF’s UK arm posted an annual profit of £1.12 billion despite the state-controlled company having recorded annual losses of around £16 billion.
In the UK, it benefitted from soaring power prices throughout 2022, driven by record high gas prices exacerbated by the Russian invasion of Ukraine. This resulted in a substantial increase on the £21 million loss the business made in 2021.
2022 also saw £2.6 billion invested in EDF UK’s nuclear, renewables and customer businesses with this set to increase to over £13 billion by 2025.
Hinkley Point C, a 3.2GW nuclear power station being developed in Somerset, could see its development costs increase by around 20%. The firm stated its Final Investment Decision will “depend on certain conditions, particularly the ability to raise the required funding and to deconsolidate the project while retaining a stake of less than 20%”.
This has seen the estimated cost of the nuclear project rise from the formerly predicted cost of around £26 billion last year to the now forecasted £32.7 billion. The project has seen several rises in predicted costs since it was first announced.
EDF’s UK-based nuclear generation fleet delivered 43.6TWh of low carbon power throughout 2022 representing a 1.9TWh increase on 2021. This is despite Hunterston B and Hinkley Point B having ceased generation in January and August respectively. Both are now actively delivering a defueling contract for the UK Government.
EDF’s nuclear generation was also boosted last year with the government confirming it became a 50% shareholder in Sizewell C, a 3.2GW nuclear plant in Suffolk, via a £700 million investment. The government stated at the time this historic investment marked the “first state backing of a nuclear project in over 30 years in the UK”.
The firm confirmed in the financial results that its energy supply business made a loss of over £200 million in a bid to protect customers from volatile energy prices. EDF stated “the cost of buying the energy for our residential customers was higher than the prices we charged under the standard variable tariff cap”.
This follows Octopus Energy’s 2022 financial results showing a £161 million loss, predominantly due to its decision to absorb £150 million of wholesale cost increase on behalf of customers, keeping tariffs below the price cap.
EDF Renewables continued to expand throughout 2022 and saw the company benefit due to the increase in demand for green generation. This is set to continue into 2023 with the firm confirming it is constructing three gird-scale solar projects as well as a portfolio of merchant battery energy storage assets.
EDF’s wind portfolio is set to expand via the construction of the West Benhar 29MW onshore wind project situated in Scotland. This will become operational later this year.
The company’s pipeline also includes the construction of a 450MW Neart na Gaoithe (NNG) offshore wind project located 15km off the coast of Scotland. This is being developed alongside ESB and will be operational in 2024.