French power giant EDF posts record loss
February 17, 2023
The largely state-owned French power producer EDF reported a record net loss of €17.9 billion (roughly $19 billion) for 2022 on Friday. The loss pushed the company's overall debts up to €64.5 billion.
The dire 2022 performance was caused by a combination of an unprecedented number of outages at its reactors in France, one of the world's most nuclear-dependent countries, and the French government's cap on electricity prices as market prices soared as a result of Russia's invasion of Ukraine.
"The 2022 results were significantly affected by the decline in our electricity output, and also by exceptional regulatory measures introduced in France in difficult market conditions," chief executive Luc Remont said in a statement.
"Today, our priority is to put EDF back on track," Remont later told a press conference, having been appointed last November to right the ship.
COVID causes major delays compounded by Russian invasion
Major repairs to France's large fleet of nuclear reactors had been postponed during the COVID-19 pandemic, owing to both economic and health concerns.
But as it transpired, waiting for the pandemic to pass ultimately made the problem far worse, not better.
For the first time since 1980, France became a net importer of electricity in 2022, during the year when prices in Europe spiked to never-before-seen levels amid Russia's invasion of Ukraine and restrictions on imports of Russian gas and oil and coal.
A summer drought also led to further reductions in nuclear power output, with too little water available for cooling at some French reactors.
The final factor was President Emmanuel Macron's swift move to cap energy prices. In some cases, this left EDF buying in electricity at roughly double the price it was then obliged to charge when selling the power on to other French providers.
Further demonstrating the unusual climate for the company, EDF's revenue actually increased by roughly 70% year-on-year in 2022 — again a result of the sky high electricity prices — and yet still the company booked the mammoth net losses.
EDF hoping for rapid recovery after exceptional year
Remont said last year's output of 279 terawatt hours, EDF's lowest in any year since 1988, should recover to between 300 and 330 terawatt hours in 2023.
He also said the company was reckoning with "significantly higher" 2023 profits than the €18 billion euros booked in 2021, as prices remain high, forecasting a relatively rapid improvement in the balance sheet as a result.
In the meantime, 43 of EDF's 56 nuclear reactors are back at full functionality, the company said, compared to just 30 as recently as November.
France's strategy to achieve carbon neutrality by 2050 rests on a combination of renewable energy and investment in next-generation nuclear reactors. The country plans to construct six new nuclear power plants and is considering another eight besides that.
msh/es (AFP, dpa, Reuters)