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Renewables help balance ‘unfavourable’ factors for EDF in 2019

Image: EDF.

Image: EDF.

Strong performance from renewables helped balance other struggles for EDF in 2019, both in the UK and elsewhere.

The French major’s earnings before interest, tax, depreciation and amortisation (EBITDA) was £684m last year, compared with £685m in 2018, while its operating profit was down by £294 million.

The company cited a reduction in nuclear power generation following outages at two sites, and the introduction of the cap on residential tariffs for electricity and gas for the downturn. Such concerns echo those of Big Six competitor British Gas, which released its results yesterday.

These “unfavourable” factors were somewhat counterbalanced by growth in capacity revenue, which stood at €309 million in 2019.

The company currently has a portfolio of 36 wind farms in the UK and is planning to double this by 2030. During the last year it moved forward with this ambition, in particular with the start of the construction of the 450MW Neart na Gaoithe offshore wind farm.

Within nuclear generation, EDF remained strong, stating that it hit all its key milestones for the year at new build project Hinkley Point C. However, it did announce a significant increase in cost, with total costs now expected to be between £21.5 billion and £22.5 billion.

EDF sought to strengthen its energy storage offering, acquiring Pivot Power in November. Together, the companies plan to build 50MW battery storage units at more than 40 locations.

As well as holding a strong position in the renewables sector, EDF is playing an increasing role in the electric vehicle market in the UK, acquiring charging network company Pod Point yesterday (13 February).

Pod Point, one of largest UK charging companies, currently has 62,000 chargers, which will now be combined with EDFs energy solutions to reduce costs for customers.

Simone Rossi, UK CEO of EDF said EVs will be “crucial” to reducing carbon emissions and fighting climate change.

“With the addition of charge points, we can help our customers to reduce their carbon footprints and benefit from lower fuel costs by going electric. The additional electricity demand from EVs will require urgent investment in low carbon generation from renewables and nuclear.”

EDF launched its ‘Go Electric’ bundle in 2019 also, which it says allows customers to lease an EV while benefiting from a lower cost electricity tariff.

Other significant acquisitions in 2019 include Breathe, a provider of Energy Performance Contracts, in December.

During 2019, EDFs customer base in the UK grew by approximately 98,000 bringing the total to just over 5 million. This was in large part because it was the ‘Supplier of Last Resort’ assigned by Ofgem when Solarplicity and Toto ceased trading.

Jean-Bernard Lévy, EDF’s chairman and CEO, welcomed the results, which saw similar strengths in renewable generation in France and elsewhere. He called EDF a profitable company that has achieved its financial targets, praising the “unwavering commitment” of the Group's employees to decarbonisation and meeting its CAP 2030 strategy.

“We are forging ahead in all renewable energies, moving ahead with our commercial offensive in France and making strong progress with the implementation of our Solar, Electricity Storage and Electric Mobility plans and we are investing in nuclear existing assets and projects.

“By capitalising on our expertise and our transformation capacity, we are determined to play a leading role to meet the French and European objective of becoming carbon neutral.”

Overall, the Group saw its core profits rise by 12% in 2019, and expects this to continue to rise through 2020. Based on the 2019 results, the company is expecting core earnings of between €17.5 billion and €18 billion in the coming year.

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