E.D.F. 2020
ANNUAL RESULTS
APPENDICES
DISCLAIMER
This presentation does not constitute an offer to sell securities in the United States or any other jurisdiction.
No reliance should be placed on the accuracy, completeness or correctness of the information or opinions contained in this presentation, and none of EDF representatives shall bear any liability for any loss arising from any use of this presentation or its contents.
The present document may contain forward-looking statements and targets concerning the Group's strategy, financial position or results. EDF considers that these forward-looking statements and targets are based on reasonable assumptions as of the present document publication, which can be however inaccurate and are subject to numerous risks and uncertainties. There is no assurance that expected events will occur and that expected results will actually be achieved. Important factors that could cause actual results, performance or achievements of the Group to differ materially from those contemplated in this document include in particular the successful implementation of EDF strategic, financial and operational initiatives based on changes in the competitive and regulatory framework of the energy markets, as well as risk and uncertainties relating to the Group's activities, its international scope, the climatic environment, the volatility of raw materials prices and currency exchange rates, technological changes, and changes in the economy ; and this year, more particularly the effects of the health crisis and the pace of business recovery in the various countries where the Group is present.
Detailed information regarding these uncertainties and potential risks are available in the Universal Registration Document (URD) of EDF filed with the Autorité des marchés financiers on 13 March 2020, which is available on the AMF's website atwww.amf-france.organd on EDF's website atwww.edf.fr, as well as in the 2020 half-year financial report available on EDF's website.
EDF does not undertake nor does it have any obligation to update forward-looking information contained in this presentation to reflect any unexpected events or circumstances arising after the date of this presentation.
TABLE OF CONTENTS
2020 ANNUAL RESULTS
STRATEGY AND INVESTMENTS
EDF GROUP: ORGANISATIONAL CHART (1)
Distribution
Island activities Électricité de Strasbourg
(2)
(1) Simplified organisational chart
FRANCE -
REGULATED ACTIVITIES
(2) Shareholdings with significant minority interests
(3) See appendix "Performance of EDF SA's dedicated assets" on p.128
(4)
+ - - - - +
Associates ex. dedicated assets)
Minority interests (Enterprise value at 100%)
Net debt
Holders of perpetual subordinated bonds
Long-term provisions (nuclear, pensions)
Dedicated assets (3)
Equity value
Companies and shareholdings held at different levels by the EDF Renewables group
2030 STRATEGIC TARGETS UPGRADE
To build a net zero energy future with electricity and innovative solutions and services, to help save the planet and drive wellbeing and economic development
Scope: (1) Customers, Services & Territories sector's activities. EDF estimate, including CO2 savings linked mainly to heating and cooling networks, the development of the electric vehicle and energy saving certificates; (2) EDF estimate: France, UK , Italy and Belgium (Residential); (3) Group; (4) Excluding priority countries in Europe (France, Italy, UK and Belgium)
CUSTOMERS AND REGIONS: 2030 OBJECTIVES AND 2023 MILESTONES
Remain the leading player in energy supply in the G4
Excellence in the customer experience
(8-9/10 customers satisfied, trust in EDF, enhanced range, etc.)
Number of contracts per customer (2)
C
(1) Group
(2) EDF estimate: France, UK , Italy and Belgium (Residential)
(3) Customers, Services & Territories sector's activities. EDF estimate, including CO2 savings linked mainly to heating and cooling networks, the development of the electric vehicle and energy saving certificates
Bring to residential customers global solutions for energy, energy efficiency and transition to low-carbon
18 16 14 12 10 8 6 4 2 0
WORLD LEADER IN LOW-CARBON ELECTRICITY GENERATION: 2030 OBJECTIVES AND 2023 MILESTONES
Renewable energies
RE Net capacity (including hydro)
28 GW net
40 GW net
60 GW net
Nuclear
in 2023
100% of milestones for 4th 10-years inspections respected
3 EPRs commissioned (Flamanville 3, Taishan 1&2)
2 EPRs
under construction (HPC)
2014
2023
2030
Réduction of 50 % in CO2eq direct emissions vs 2017
> X2 new renewables capacities (incl. hydro)
vs. 2015 i.e. 60GW NET
New EPRs &
1 SMR
TARGET
30% MARKET SHARE IN THE ELECTRICITY SUPPLY FOR ELECTRIC VEHICLE OWNERS IN 2023
In the Group's four main markets (G4): France, UK, Italy and Belgium
ACHIEVEMENTS AND PROJECTS
Support for EDF's customers and European partners in their shift towards e-mobility:
IZIVIA has taken over the operational control of MObiVE, a network of over 1,200 stations in Nouvelle-Aquitaine, and signed a major contract with PSA to equip 31 PSA sites in Europe
Signature of a strategic partnership with BMW in Belgium enabling BMW customers to subscribe to a green energy contract or a photovoltaic installation accompanied by a charging station
Signature of a partnership between EDF and Volkswagen Group France through the proposal of the EDF Regional Green Electric offering to VW customers in France
+ 100,000 charging stations rolled out by the Group at end-2020
IZIVIA is the leader in public charging in France (26% market share) Pod Point rolled out around 35,000 charging stations in the UK in 2020
+ 5,000 smart charging stations operated by Izivia in France and PowerFlex in California
Vehicle-to-grid: IZIVIA, Dreev, Nissan, the Occitanie region and ADEME have launched the Flexitanie project to test this innovant technology on a large scale
"EV100" project in line with the objective 12.2% of the EDF Group vehicle fleet electrified
(1)The EDF Electric Mobility Plan supplements specific investments made in this field by Enedis, an independent subsidiary of EDF within the meaning of the French Energy Code
THE FRENCH SOLAR PLAN
TARGET
(1)Market share expressed as installed gross capacities
ELECTRICITY STORAGE PLAN (1)
TARGET
ACHIEVEMENTS AND PROJECTS
A PORTFOLIO OF COMPLETED OR SECURED PROJECTS HAVING INCREASED BY OVER 58% IN 2020 TO A TOTAL 950MW AT END-DECEMBER 2020
Results in line with the initial trajectory of the Electricity Storage Plan
The results in 2020 benefited from the contribution of major large scale projects:
Signature of the Chuckwalla PPA (Nevada): storage system coupled with a 200MW solar power plant, to deliver 180MW over four hours
Construction of the first two Pivot Power projects (UK) : 2 x 50MW
Winner of the PV + storage tender in Israel: storage systems coupled with 230MW solar projects, to deliver 90MW over four hours
INVESTMENTS TO PREPARE FOR THE FUTURE:
Acquisition of a stake in Ecosun (PV containers + storage, plug-in ready) to address the small-scale microgrid segment
Participation in the capital increase of start-up PowerUp to develop assessment and optimisation services for stationary batteries
Commissioning of the post-mortem battery analysis R&D lab
(1) The EDF group's business development model is based on partnerships. Not all of these projects will necessarily be fully consolidated
(2)Principally PSHP (Pumped-Storage Hydropower Plants)
FLAMANVILLE 3 EPR (1,650MW) (1/2)
KEY ELEMENTS OF 2020 |
Work on the site was suspended during the first lockdown of March 2020, except for equipment surveillance and preservation activities |
UPDATING OF SECONDARY CIRCUIT WELDS | In a letter dated 19 June 2019, the French Nuclear Safety Authority (ASN) requested that EDF rework, before the commissioning, the eight penetration welds on the EPR reactor containment building that deviated from the "break preclusion" benchmark. EDF therefore assessed three reworking scenarios. This work led to discussions with ASN. In October 2019, ASN sent EDF a letter discussing the technical acceptability of these three scenarios EDF's preferred scenario for reworking the penetration welds is the use of remote-controlled robots, designed to conduct high-precision operations within the pipes in question. This technology has been developed for the fleet in operation and must be approved for reworking penetration welds. ASN's final decision regarding the approval of the entire remote-controlled robot process was postponed to first-quarter 2021. The decision will determine the start date for reworking the penetration welds. This work is part of the critical stages on the path to finalising the EPR site on schedule In addition, work is moving ahead on the technical investigation of the update of the other non-penetration welds in the main secondary system that fail to respect quality standards or the requirements of the "break preclusion" benchmark defined by EDF. In August 2020, ASN approved repairs on a first batch of five welds, that were successfully reworked. A second batch of 2 welds was authorized in November. The rework is in progress As part of the update works to the main secondary system, EDF also decided to include welds (inside and outside the penetrations) of the steam generator feedwater system (ARE). Qualification of the ARE weld repair process is underway, with the aim of starting repair work in H2 2021. This process has been adapted from the one used to rework VVP penetration welds To date, one hundred secondary system welds are impacted by repairs |
FLAMANVILLE 3 EPR (1,650MW) (2/2)
SCHEDULE AND COST (1) | On 9 October 2019,(1) the Group communicated a new schedule and estimated construction cost(2) for Flamanville 3 EPR. The provisional schedule to implement the favoured scenario for repairing the penetration welds, if the target for ASN approval of the selected repair scenario is met, results in a fuel loading date of end-2022 and reassesses the construction cost at €12.4 billion(2). These additional costs, compared with the previous estimation of €1.5bn in 2015, will be booked mainly as other operating income and expenses(3) and not as capex. For 2020, additional costs recorded as other operating income and expenses amounted to €397 million. If the alternative scenario for reworking the penetration welds (EDF's least favoured scenario) were ultimately to be adopted, this would entail more additional costs and potentially significant delays. Investigations are ongoing relative to other technical issues and remain subject to ASN approval. At end-2020, a review of the first lockdown's impact on site work did not result in a change of targets regarding the fuel-loading date and construction cost announced in October 2019. However, it revealed that the project has no more room for manoeuvre, in terms of schedule or costs. Compliance with these targets depends on multiple factors and particularly the investigations conducted by the ASN. This specifically applies to procedures envisaged by EDF for dealing with the welds in the main secondary system, and in particular, the approval of the use of welding robots for penetration weld repairs. The postponement of the ASN's approval of the penetration weld repair process using remote-controlled robots to first-quarter 2021 is an additional risk with respect to budget overruns and the work schedule. Other risks may also emerge As such, the budget overrun and schedule-related risk is very high |
(1) See press release of 9 October 2019
(2) In 2015 euros, excluding interim interest (see note 10 of the Groupe financial statements)
(3) IAS 16 paragraph 22 on abnormal costs incurred in connection with assets constructed by the Company. These costs will affect the Group share of net income, without any impact on net income excluding non-recurring operations
HINKLEY POINT C
MANAGEMENT OF THE PANDEMIC
• Several measures were implemented (social distancing, fast detection of positive cases through mass testing, etc.) to ensure maximum safety for on-site staff and the local community, while keeping the site operational. These measures have been continuously adapted and strengthened since March 2020
• They made it possible to keep the site in operation throughout 2020, but have considerably impacted productivity
• Despite the impact of the health crisis, major progress was made in 2020 with priority given to works on the critical path to construction
PROGRESS ON SITE
(18 OUT OF 20 MILESTONES REACHED IN 2020)
• Goal achieved in April - First safety-related pipework installed in the Unit 1 nuclear island
• Goal achieved in June - J0 milestone for Unit 2
• Goal achieved in December - Manufacturing of the secondary circuit feedwater tank for Unit 1
• Goal achieved in December - Completion of the design of the Unit 1 reactor building internal structures
(1) Please refer to press release published by EDF on 27 January 2021
(2) Reminder on the costs previously announced in the Press release of 25 September 2019: £2015 21.5 - 22.5bn.
REMINDER ON KEY DATA (1)
• In the context of Covid-19 pandemic, a detailed review of schedule and cost has been performed to estimate the impact of the pandemic so far. This review has concluded the following (1):
• The start of electricity generation from Unit 1 is now expected in June 2026, compared to end-2025 as initially announced in 2016
• The project completion costs are now estimated in the range of £2015 22 to 23bn (2). As a consequence, the projected rate of return (IRR) for EDF (different from the project IRR) is estimated between 7.1% and 7.2% (3)(4)
• The risk of COD delay of Units 1 and 2 is maintained at respectively 15 and 9 months. The realisation of this risk, for which the probability is still high, would incur a potential additional cost in the order of £2015 0.7bn. In this case, the IRR for EDF would be reduced by 0.3%
• The agreements between EDF and CGN include a capped compensation mechanism between both shareholders in case of cost overruns or delays. Considering the new budget overruns incurred by these developments, the need to finance the project will exceed the contractual commitment of the shareholders between now and the end of construction, which could lead, in the event of shareholder misalignment, to difficulties in financing the project and, if necessary, to the Group covering a larger share of these needs between now and the end of construction. EDF's internal rate of return (IRR) factors in this compensation mechanism. These agreements are part of a bilateral shareholders' agreement signed between EDF and CGN in September 2016 and are subject to a confidentiality clause
The 400 tonne liner was successfully lifted into position in Unit 1 reactor building in December
Costs net of operational action plans, in 2015 sterling, excluding interim interest and excluding forex effect versus the reference exchange rate for the project of 1 sterling = 1.23 euro. Costs are calculated by deflating estimated costs in nominal terms using the British Construction OPI for All New Work index
(3) In addition to cost and construction schedule targets, EDF's IRR integrates other structural assumptions. In particular, it is sensitive to inflation rate and electricity price scenarios following after the Contract for Difference (CfD) period. A 0.1% variation in inflation has an impact on the IRR of +/- 0.1%; a variation in post CfD electricity prices of £201510/MWh has an impact on the IRR of +/- 0.1%
(4) EDF's provisional IRR is calculated at the exchange rate £1 = €1.13. Previous IRR of 7.6%-7.8% based on an exchange rate of £1 = €1.15
SIZEWELL C
KEY ELEMENTS
• Proposed new nuclear power station at
Sizewell on the Suffolk coast
• Two UK European Pressurised Reactor
(EPR) for a total generating capacity of 3.2GW
• Supply power to 6 million homes and generate electricity for 60 years
• Replication strategy for Hinkley Point C, which should enable costs to be driven down thanks to a decrease in construction costs combined with lower risks. The project will leverage EPR technology, capitalising on feedback and experience from Hinkley Point C
GOVERNANCE
• During the development phase preceding the FID (1), EDF's stake is 80% and CGN's is 20%. EDF has planned to pre-finance development up to its share of an initial budget of £458M. The FID is likely to be made in mid-2022. In the event of postponement of the decision, an agreement would have to be reached on the financing of the additional costs incurred
• EDF aims to ensure that risk sharing with the UK government in the as-yet un-validated regulatory and financing scheme will make it possible to find third party investors during the FID and avoid consolidating the project (including the economic debt calculation adopted by rating agencies). To date, it is not clear whether the Group will reach this target
• Securing the appropriate risk-sharing mechanism and ultimately the corresponding financing structure ahead of the FID is therefore key for the project, the UK Government and the current shareholders.
EDF's ability to make a FID on Sizewell C and to participate in the financing of this project beyond the development phase could depend on the operational control of the Hinkley Point C project, on the existence of an appropriate regulatory and financing framework, and on the sufficient availability of investors and funders interested in the project. To date, none of these conditions are met
• Failure to obtain the appropriate financing framework and appropriate regulatory approval could lead the Group not to make an investment decision or to make a decision in less than optimal conditions
PROGRESS
• The Development Consent Order (DCO) study would start in April 2021. A decision is expected by April 2022 from the UK's Secretary of State. The construction cost included in the DCO is given for illustrative purposes and is non-binding
• UK government announcements in Q4 2020 to prepare for carbon neutrality in 2050 with the aim of taking a final investment decision on at least one high-power nuclear power station project by the end of current legislation (2024)
• The UK government has stated that it will enter talks with EDF on the Sizewell C project as it reviews options for achieving this ambition
• The UK government also stated that it continues to review financing options for new nuclear power, including the regulated asset base (RAB) nuclear financing model
• Moreover, given the scale of the financial challenge, the UK government could consider participating in financing during construction, provided there is a benefit to the consumer and the taxpayer
(1)Final Investment Decision
Announced in late 2019 and launched in May 2020, the objective of the excell plan is to enable the French nuclear sector to attain the highest levels of rigor, quality and excellence in order to succeed in major new projects and the existing nuclear fleet
In 2020, the Group led 10 transformation projects, enabling it toimplement the commitments made in December 2019 and make 25 new commitments for mid-2021 based on five main pillars :
SOME FIRST ACHIEVEMENTS IN 2020
Governance: implementation of new nuclear Major Projects Control to ensure maturity at each milestone
Skills: more cross-cutting engineering/operational courses and four to six month-long field courses for all beginner engineers. Commitment and by-laws defined for the Nuclear Occupations University. Framatome's creation of a Welding Excellence Centre
Manufacturing: road map for EDF ISO 19443 certification. Implementation of an "excell in quality" plan at Framatome
Supplier chain: profit-sharing contracts based on simplified specifications. Initiatives taken with "France Relance" to consolidate the sector
Standardisation: streamlining of equipment references, with initial results visible at EPR2
JAITAPUR
Through the Jaitapur project, the EDF group has been involved in Franco-Indian civil nuclear cooperation since 2010 within the framework of bilateral agreements signed between France and India. It is directly based on the energy transition objectives of the Indian government, set out during the Paris Conference in 2015, which aim to drive forward the increased share of renewable and nuclear energies in the country. Jaitapur is in Maharashtra state and will be the largest nuclear power site in the world
Acting as head of the French nuclear power sector, EDF entered into exclusive negotiations with NPCIL in 2016
• In March 2018, EDF signed a non-binding industrial cooperation agreement with
Indian national electricity firm Nuclear Power Corp. of India Ltd. (NPCIL) for the construction of six EPR reactors in Jaitapur. This agreement sets out the industrial plan, the roles and responsibilities of partners, and the next steps in the project
• In this regard, EDF and its partners would be supplying all the studies and equipment for the nuclear island, the conventional island, the auxiliary systems, and the cooling sources and galleries
• EDF will not be investing in this project
• In its capacity as owner and future operator of the Jaitapur Nuclear Power
Station, NPCIL is expected to be responsible for obtaining all authorisations and certifications required in India, and for constructing all six reactors and site infrastructures. EDF and its industrial partners would assist NPCIL during the construction phase
• In accordance with the schedule set out in the IWFA, EDF submitted a non-binding complete technical-commercial offer to NPCIL on 14 December 2018. The technical and commercial convergence process continued in 2020 with the customer, NPCIL, in order to enable EDF to submit its binding and conditional offer in H1 2021. At end-2020, some significant technical-commercial issues still need to converge
• EDF plans to sign a General Framework Agreement in the months following the submission of the bid, which would kick-start the project's operations
NACHTIGAL HYDROELECTRIC DAM IN CAMEROON (1)
MAIN ASPECTS OF THE PROJECT |
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FINANCING STRUCTURE |
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420MW run-of-the-river hydropower plant
TIMELINE |
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(3) IFC (International Finance Corporation) - member of the World Bank Group
(4) Including: AfDB, IFC, CDC, European DFI coordinated by Proparco (AFD, DEG and FMO), EIB, OFID,EAIF, AFC. Local banks include: Attijari/SCB, BICEC, SG Cameroun and Standard Chartered
EXISTING NUCLEAR FLEET AND "GRAND CARÉNAGE" PROGRAMME
A COMPETITIVE ENERGY MIX | Industrial strategy to continue the operation of plants after 40 years for a competitive energy mix:
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GRAND CARÉNAGE PROGRAMME |
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€49.4bn
Current figures
(1) The figures presented by the French Cour des comptes in its report of 10 February 2016 cover a longer time horizon, up to 2030, and included, beyond the investment, operating and maintenance expenses. Both assessments are consistent, as stated by the Cour des comptes in its report. Indeed, among the overall estimates calculated by the Cour des comptes and amounting to close to €2013100 billion for the 2014-2030 period, the investment -expenditures estimated at €201374.73 billion should be distinguished from the operating expenditures estimated at €201325.16 billion. Within the €201374.73 billion of investment expenses between 2014 and 2030, €201355 billion are dedicated to the 2014-2025 period, which allows the two estimates established by the EDF group and the Cour des comptes to be connected
(2) See press release of the 29 October 2020
(3) This does not, therefore, include any new lockdown measures or other measures restricting business
EDF, ACTOR IN THE HYDROGEN SECTOR
Hydrogen is a key vector in the energy transition: it could meet 20% of worldwide energy demand in 2050 (1)
Complementarity with the EDF's low carbon mix
• EDF group's positioning on this market in the line with the objective of carbon neutrality
Favourable context
• Government incentives in several European countries
(France €7bn)
Ambitions :
• €220m gross investments (2) for the 2021-2024 period for mobility (help collectivities in the supply for buses, trucks, etc.) and industrial projects (refinery, chemistry, cement work, etc.)
INDUSTRIAL AND COMMERCIAL
PARTNERSHIP WITH McPHY
(14.1% OWNED TO DATE BY EDF)
Leading player in the hydrogen sector A complete range of solutions:
• Electrolysers
• Hydrogen charging stations
• Storage
(1) McKingley report - Hydrogen Council 2019
(2) So €65M net investments
GROUP'S SUBSIDIARY PRESENT
ACROSS THE VALUE CHAIN
2020 achievements
• 1st commercial contract for Hynamics : to install a production and distribution station for green hydrogen produced by electrolysis to power urban transport network buses
• Hynamics, key partner in a 30 MW electrolyser project in Germany: H2 production from offshore wind power for a refinery
World presence
In Italy, green hydrogen projects in partnership, of which refineries or steelworks decarbonation and hydrogen distribution and alimentation in public transport (trains and buses)
POD POINT
ONE OF THE UK'S LARGEST ELECTRIC
VEHICLE CHARGING COMPANIES
• Acquisition of Pod Point (1) performed through a joint venture with Legal & General Capital which took a stake of around 23% in Pod Point alongside EDF
• EDF Group's largest investment in the EV market forms part of its plan to become the leading energy company for electric mobility in France, the UK, Italy and Belgium
POD POINT IN A NUTSHELL (2)
• Operates 86,000 charging point in the UK and a further 9,000 in Norway
• c.35,000 charging points installed or sold during in 2020
• Developed an extensive public network connecting EV drivers with 3,000+ charging bays
• Offers smart home charging points for individual customers
TWO SIGNIFICANT ENABLERS FOR THE UK'S
GOALS TO REACH NET ZERO BY 2050
• Enhancing the flexibility and reliability of the electricity grid to facilitate the integration of renewable energies
• Developing electric vehicles as a substitute for petrol thanks to a network of rapid and smart charging stations throughout the country (across Home, Work, Public and En-route charging solutions)
(1) Please refer to press release published by EDF on 13 February 2020
(2) Data as of 31/12/2020
FRENCH GOVERNMENT STIMULUS PACKAGE
ENERGY RENOVATION OF BUILDINGS |
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INDUSTRY DECARBONISATION |
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NUCLEAR |
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EDF entities benefiting from the government plan
HYDROGEN |
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ELECTRIC MOBILITY |
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INTERNATIONAL - 2020 HIGHLIGHTS
PROGRESS ON HYDROELECTRIC PROJECTS
PROJECTS AND POWER PLANT CONSTRUCTIONS
Nachtigal construction in Cameroon, nearly 37% of the civil engineering work carried out, consortium including EDF (commissioning planned in 2024)
Mpatamanga project (350MW) in Malawi: prequalification of the consortium including EDF, as exclusive developer
Projects under development in the Andean region, Sub-Saharan Africa and South-East Asia
ENGINEERING ASSISTANCE FOR PSHP (1) PROJECTS
Hatta (250MW) in United Arab Emirates: construction site kick-off, supervised by EDF
Mont Gilboa (300 MW) in Israel: commissioning of the first PSHP of the country
(1) Pumped-storage hydropower plant.
DEVELOPMENT IN ENERGY TRANSITION
ELECTRIC MOBILITY
Signature of a strategic partnership BMW in Belgium, enabling BMW customers to benefit from the Luminus charging offer accompanied by a green energy supply contract or even a PV installation
GREEN HYDROGEN
Participation to the construction project of an electrolyser in Germany, powered from offshore wind energy
OFF-GRID
Continued development in the sale of solar kits, solar water pumps (sub-Saharan Africa) and the installation of micro-grids (Africa and South-East Asia)
Luminus: more than 250,000 customers equipped at end-2020 (with an ambition of 450,000 customers by end-2023)
ENERGY EFFICIENCY
Development projects in networks and smart meters, notably in India (100,000 smart meters), as well as in the fields of self-consumption and energy efficiency, particularly in the Middle East
2020 ANNUAL RESULTS
ESG
CARBON NEUTRALITY TRAJECTORY
CARBON NEUTRALITY & CLIMATE: AT THE HEART OF THE EDF'S RAISON D'ÊTRE
In line with it raison d'être, EDF's ambition is to achieve carbon neutrality by 2050
In 2020, EDF group announced a commitment to move away from coal-based generation by 2030 in all geographical areas
In 2020, the Group fixed new objectives of reduction of greenhouse gas emissions by 2030, covering both direct (scope 1) and indirect (scope 2 and 3) emissions. On 7 December, these objectives were validated as part of a "Well Below 2°C" by the Science-Based Target initiative
In coherence with these objectives validated by STBi, EDF group set objectives for 2030:
• 25 MtCO2eq for Group's scope 1 emissions in 2030 with an intermediary milestone in 2023 of 28-30MtCO2eq. This range takes into account the uncertainties related to post health crisis scenarios
• 35gC02/kWh Group carbon intensity (heat and electricity generation) by 2030
• Reduction of 28%, compared to 2019, of all the scope 3 emissions by 2030
The continuous reduction in Group CO2 emissions, with a Group intensity carbon of 51g/kWh at end-December 2020, confirms EDF'S commitment to carbon neutrality
(2)
2013
2017
2018-2020
2023
2030 2050
2023 milestone
2030 2050
milestone
objectives (1)
(1) Carbon neutrality would be achieved in 2050 thanks to almost zero direct CO2 emissions, as much as possible a reduction in indirect emissions and offsetting of residual emissions by projects with negative emissions
(2) Average emissions from 2018 to 2020
CSR COMMITMENTS ACCORDING TO THE 4 CHALLENGES OF THE COMPANY
RAISON D'ÊTRE
To build a net zero energy future with electricity and innovative solutions and services, to help save the planet and drive wellbeing and economic development (1)
PLANET RESOURCES PRESERVATION
• Biodiversity
• Responsible land management
• Integrated and sustainable water management
• Waste and circular economy
CARBON NEUTRALITY & CLIMATE
• An ambitious carbon trajectory
• Carbon offsetting solutions
• Adapting to climate change
• Development of electricity and energy services
WELLBEING & SOLIDARITY
• Health and safety for all
• Equality, diversity and inclusion
• Ethics and human rights
• Energy precariousness and social innovation
RESPONSIBLE DEVELOPMENT
• Dialogue and consultation
• Responsible regional development
• Development of industrial sectors
• Sustainable and inclusive digitalisation
GREEN BONDS: EDF'S COMMITMENTS
EDF IS A LEADING ISSUER IN THE GREEN BOND MARKET
- 1st company to issue a Green Bond in 2013
- Active member in the governance of Green Bond Principles
- Co-founder of the Corporate Forum on Sustainable Finance
- 2 updates to the Green Bond Framework in order to help create market best practices
GREEN BOND FRAMEWORK 2013
- November 2013: 1st issue of a Green Bond by EDF
€1.4bn, 7.5-year maturity
- October 2015: 2nd issue
$1.25bn, 10-year maturity
Construction of new wind power and PV projects
GREEN BOND FRAMEWORK 2016
- October 2016: 3rd issue
€1.75bn, 10-year maturity
- January 2017:4 th issue, in 2 tranches
¥19.6bn, 12-year maturity
¥6.4bn, 15-year maturity
Construction of new wind power and PV projects
Modernisation and improvement of existing hydropower facilities in France
GREEN BOND FRAMEWORK 2020
- Applicable starting January 2020
- Update of the Framework in line with the CAP 2030 strategy
- September 2020: 5th emission
€2.4bn, 4-year maturity
New generation projects in renewable energiesModernisation and improvement of existing hydropower facilities in France and abroad
Energy efficiency projects
Biodiversity preservation projects
EDF'S GREEN BOND FRAMEWORK FOLLOWS BEST MARKET PRACTICES AND GREEN BOND PRINCIPLES (GBP)
1 - USE OF FUNDS
- Development of new renewable generation capacities
- Renovation and modernisation of existing hydroelectric assets with the aim of:
improving their efficiency, flexibility and ability to contribute to meeting the needs of electricity systems that evolve as the share of intermittent means of generation increases in the energy mix,
adapting the existing hydropower assets to changes in climate
- Energy efficiency solutions to allow all EDF customers to make better use of energy, mainly through its subsidiary Dalkia
- Biodiversity, to enable EDF to continue to pursue its goal of having a positive impact on biodiversity, from simple prevention measures to measurable improvements
4 - REPORTING
- At half-yearly intervals: allocation of funds
- Annually: allocation of funds + list of projects financed by the Green Bond and aggregated impacts (at the level of each green issue)
2 - PROJECT SELECTION PROCESS
- A internal organisation dedicated to the evaluating and ensuring that only Eligible
Projects as defined in the Use of Funds section are eligible to receive Green Bond financing
- Respect of specific environmental and social criteria
- Investments may include:
tangible or intangible assets
Investments (including acquisitions mainly related to new developments/technologies)
certain operating expenditures such as R&D and investments in the maintenance of green assets
3 - FUND MANAGEMENT
- Funds are managed and monitored separately until they are allocated to eligible projects
- They are invested in SRI funds until their allocation
5 - EXTERNAL REVIEW
- External ex-ante opinion: "reasonable" level of assurance delivered by Vigeo Eiris on EDF's Gren Bond Framework (their highest level),
- Ex-post certification: annual report issued by an external auditor, Deloitte, on the allocation of funds and the compliance of Green Bond issues with the Green Bond Framework and the Green Bond Principles, and the conformity of the CO2 emissions determination modality
GREEN BONDS: PROCEEDS ALLOCATION
Nominal
Issue date (1)Maturity
(in years)
amount
(in million of currency units)
Currency
New renewable capacities (2)
Investments in hydro facilities (2)Energy efficiency projectsBiodiversity projects
Total
(% of raised funds)
Nov. 2013 7.5 1,400 EUR 1,400 | Not applicable Not applicable Not applicable 1,400 | (100%) |
Oct. 2015 10 1,250 USD 1,250 | Not applicable Not applicable Not applicable 1,250 | (100%) |
Oct. 2016 10 1,750 EUR 1,248 | 502 Not applicable Not applicable 1,750 | (100%) |
Jan. 2017 12 19,600 JPY 8,149 | 11,451 Not applicable Not applicable 19,600 | (100%) |
Jan. 2017 15 6,400 JPY 5,872 | 528 Not applicable Not applicable 6,400 | (100%) |
Sept. 2020 4 2,400 EUR 2,246 | 110 - 28 2,384 | (93%) |
EUR Green Bond issued in September 2020: 93% of the funds allocated at end-December 2020 on the net proceed total of €2,559M | ||
Breakdown (in €M) |
Look-back amount 1,477
Country United States England France Luminus Israel Canada Total
BiodiversityHydroRenewablesTotal
869 869
728 728
28
110
518 656
7 7
74 74
50 50
28
110
2,246
2,384
(1) Date of funds reception
Entity
Total
EDF ENR 3
Luminus 7
EDF Hydro 138
EDF Renewables 2,236
Total
2,384
o/w renewable capacities 1,461
o/w biodiversity projects 16
(2) Since 2019, the Green Bonds funds are financing eligible investments of Luminus in Belgium: construction of wind farms and renovation of a hydroelectric power plant; and also for EDF ENR: installation of solar awnings
GREEN BONDS: AVOIDED CO2 EMISSIONS
Issue dateFunds Funds raised allocated
Part of the totalProjects financed by the Green investments
Bond financed by the
Green Bond
Nov. 2013
€1.4bn
€1.4bn
13 EDF Renewables projects (3)
Oct. 2015
$1.25bn
$1.25bn
7 EDF Renewables projects (3)(4)
59% 58%
Gross total capacity of GB funded projects (in MW) Expected output (in TWh/year) | Expected avoided CO2 emissions (in Mt/year) |
Gross (1) Net (2) Gross (1) Net (2) | Gross (1) Net (2) |
1,529 1,107
976 815
6.0
4.6
4.1
3.3
2.21 2.53
1.55 1.83
)
Oct. 2016
€1,248m €1.75bn
10 EDF Renewables projects (4)(5)
54%
€502m
Jan. 2017
¥14,021m
600 EDF Hydro operations 5 wind projects (5) (2 EDF renewables, 3 Luminus)
100% (6)
1,450
903
962
903
5.3
15%
3.5
2.42
1.61
137
86
0.2 (7) | 0.01 (7) | 0.01 (7) |
0.17 | 0.12 |
0.2 (7)
0.4
0.26
¥26,000m
¥11,979m
206 EDF Hydro operations + 1 Luminus hydro project
87%
142
133
0.1
0.05
0.01
0.01
Sept. 2020 | €2,246m 14 projects (5) + 4 portfolio purchases by EDF Renewables, 77% 1,355 1,088 4.0 3.1 1.59 1.15 €2.4bn 2 EDF ENR projects, 2 Luminus projects €138m 200 EDF Hydro operations 100% 123 123 0.03 0.03 0.001 0.001 |
Total 6,746 5,084 20.6 14.6 8.94 6.27 |
The detailed list of EDF Renewables projects and hydraulic investment operations by category will be published in the 2020 EDF URD document
(1) Sum of the gross impacts of each project funded by the corresponding Green Bond
(2) Sum of the impacts of each project weighted by the share of total investment funded by the corresponding Green Bond
(3) Of which one project received funding from both Green Bonds of November 2013 and October 2015
(4) Of which one project received funding from both Green Bonds of October 2015 and October 2016
(5) Of which two projects received funding from green Bonds of October 2016,January 2017 and September 2020
(6) Share of investments funded by EDF taken in full, including half of Romanche-Gavet investment amount
(7) Only linked to additional output expected from development investments, including half of the additional output expected from the Romanche-Gavet project
NON-FINANCIAL RATINGS
Constant progression of the rating: SAM (+4 points), V.E (ex VigéoEiris) +5 points in 2020 and 3rd in the sector instead of 6th, Ecovadis (+5 points in 2020 and obtaining of the platinum medal)
increase compared to 2019
maintenance of the rating compared to 2019
Sector average
C
A
Climate Change 2020
2020
A-
B
Water Security 2020
86
61
Maintenance in the major non-financial indexes (non-exhaustive list): DJSI World, STOXX ESG Leaders, FTSE4Good, MSCI: CLIMATE CHANGE, ESG SCREENED, ESG UNIVERSAL, WORLD CLIMATE CHANGE, CLIMATE CNG EU PARIS ALIGNED… Euronext VE : WORLD120, EUROZOE 120, EUROPE 120, France 120
2020
EDF major international coalitions
2020
2020
78
49
2020
2020 ANNUAL RESULTS
RENEWABLES
EDF, THE EUROPEAN LEADER IN RENEWABLE ENERGY
NET INSTALLED CAPACITY: 33.3GW (1)
25.9GW
4.7GW
0.8GW
1.1GW
CAPACITY BY SECTOR
0.8GW
(1) Installed capacity shown as net, corresponding to the consolidated data based on EDF's participation in
A DIVERSIFIED MIX WITH 33.3GW IN OPERATION |
|
HYDROPOWER | - Leading European producer from hydropower - More than 400 production sites worldwide |
A GLOBAL LEADER IN WIND AND SOLAR ENERGY | - 2.5GW gross commissioned in 2020 - 8.0GW currently under construction (2.5GW in onshore wind power, 1.6GW in offshore wind power, 3.9GW in solar power) |
Group companies, including investments in affiliates and joint ventures
(2)Including sea energy: 0.24GW
A PORTFOLIO OF WIND AND SOLAR PROJECTS OF ~60GW (1)
A PROJECT PORTFOLIO THAT IS DIVERSIFIED GEOGRAPHICALLY…
(1) Pipeline excluding capacities under construction. Gross data corresponding to 100% of the capacity of the projects concerned.
(2) All the projects in prospection phase included in the pipeline, starting 2020
(3) 2020 portfolio start of construction potential, not probability-based
… AND BALANCED BETWEEN WIND AND SOLAR
8.2 GW (14%)
Wind offshore
Portfolio of projects (2) in GW
Secured ***
Under development **Prospection phase *
* Start of land identification and preliminary studies ** Sufficient land securisation and start of technical studies *** Securing a power purchase agreement (following a call for tenders, auction, OTC negotiation)
Pipeline breakdown by date of start of construction in GW (3)
60
26
Total
2021-2022
2023-2025
>2025
STRONG GROWTH EXPECTED THANKS TO MORE THAN 14GW OF PROJECTS ALREADY SECURED
NB: This financial communication contains forward-looking data based on targets. Although management believes that this data is reasonable, investors are cautioned that such data is subject to numerous risks and uncertainties that could cause actual results and developments to differ materially from those expressed herein 2020 - 2024 Gross capacity
2024 GROSS CAPACITY TARGET (GW) (1)
+20GW
5.4
37 (2)
NB: situation at end-2020
(1) Solar and wind. Gross data corresponding to 100% of the capacity of the projects concerned
(2) As a reminder, the 2023 objective fixed in 2019 was 32.4GW, raised in 2020 at 33.5GW
BALANCED ACCELERATION ACROSS GEOGRAPHIES AND TECHNOLOGIES
NB: This financial communication contains forward-looking data based on targets. Although management believes that this data is reasonable, investors are cautioned that such data is subject to numerous risks and uncertainties that could cause actual results and developments to differ materially from those expressed herein
2024 NET INSTALLED CAPACITY TARGET (GW) (1)
(1) Solar and wind. Installed capacity shown as net, corresponding to the consolidated data based on EDF's participation in Group companies, including investments in affiliates and joint ventures
2020 - 2024 Net capacity + 10GW x2 vs 2020
21
18
10.6
6.8
2015
2020
2023
2024
REVENUE SECURED BY LONG-TERM CONTRACTS
CONTRACTUALISATION OF 2021 CONSOLIDATED REVENUE FROM RENEWABLE GENERATION (in %) (1)
(1) Based on the estimate of 2021 revenues from fully consolidated assets
(2) Weighting according to estimated 2021 revenues of fully consolidated assets
AVERAGE RESIDUAL DURATION OF LONG TERM CONTRACTS (in years) (2)
THE AVERAGE REMAINING TERM OF THE CONTRACTS IS ~13 YEARS
OFFSHORE WIND DEVELOPMENTS IN FRANCE: 5 PROJECTS FOR A TOTAL CAPACITY OF MORE THAN 2GW, INCLUDING ~ 1GW UNDER CONSTRUCTION
Ongoing construction of Saint Nazaire offshore windfarm (started in 2019, expected commissioning in 2022, ~€2bn total investments, partnership with Enbridge)MAJOR ACHIEVEMENTS IN 2020:
• Fécamp offshore wind farm
Further developments:
• Expected start of construction of Courseulles-sur-Mer offshore wind farm (~€2bn total investments, partnership with Enbridge and WPD) in 2021 for commissioning by 2024
• Ongoing development of Dunkirk offshore wind farm (~1bn€ total investment, partnership with Enbridge and Innogy) : public consultation in H2 2020
Development in progress of Provence Grand Large, a floating wind pilot project: contract awarded to EDF Renewables for the installation of three 8MW turbines on floating foundations off the coast of Fos-sur-mer
• Start of construction in June 2020
• Expected commissioning in 2023
• ~ €2bn total investment, partnership with Enbrigde and
WPD
INTERNATIONAL OFFSHORE WIND DEVELOPMENTS: NEARLY 4GW IN DEVELOPMENT, 450MW UNDER CONSTRUCTION IN SCOTLAND
Codling project in Ireland
• Ongoing developments off the coast of New
Jersey
• Joint-venture with Shell
• Secured a 742 km2 Lease Area 12-16 km off the shoreline in shallow water depth (~20m)
• New Jersey RFP bid submitted on
10 December 2020 for a maximum of 2.3GW
• Equity investment of 50%
• Project under development in South Dublin, located on 2 adjacent sites
• Irish CfD ("RESS") auction targeted for 2022
• Total capacity: ~1GW
Dongtai IV and V projects in ChinaNeart Na Gaoithe project in Scotland
• Start of construction in 2019
• Total capacity: 450MW (54 turbines)
• Commissioning scheduled for 2023
• Partnership with the Irish utility ESB at 50%
• Total investment: ~£2bn
• Contract for Difference (CfD) over 15 years
(£114.39/MWh in 2012£)
• Joint-venture with China Energy
Renewables (ex-shenhua Renewables), a subsidiary of China Energy Investment Corporation
• Total capacity: 502MW (Dongtai IV:
302MW, Dongtai V: 200MW)
• Commissioning of Dongtai IV in
December 2019, Dongtai V under construction (commissioning planned for 2021)
AL DHAFRA PROJECT: CURRENTLY THE WORLD'S LARGEST SOLAR PROJECT (2GW) AWARDED TO EDF-JINKO CONSORTIUM
2020 achievements :
• July : EDF Renewables and Jinko Power have been awarded the Al
Dhafra solar project in Abu Dhabi (UAE) by EWEC (Emirates Water and Electricity Company)
• December : Financing secured
Al Dhafra project key features
• Location: 35km south of Abu Dhabi City.
• Capacity: 2GW (largest single-project solar plant in the world, equivalent electricity to power over 160,000 local households)
• Shareholding: Public-Private Partnership (PPP). EDF Renewables and
Jinko Power will hold 20% each. The 60% remaining shares will be owned by TAQA and Masdar
• Technology: bifacial modules
A SUSTAINABLE BUSINESS MODEL BASED ON KEY COMPETITIVE ADVANTAGES
employees
DEVELOPMENT ~1,300 |
|
(1) ENGINEERING & CONSTRUCTION |
|
O&M AND ASSET MANAGEMENT | - Integrated skills in O&M supporting operational excellence, optimised production, technological expertise |
FINANCE | - Maximised value creation via an acquisition and selective asset rotation approach |
(1) EDF Renewables Development, Engineering and Construction internal teams. Excluding contractors and partners capabilities
VALUE CREATION:
+150-200 bps
DIFFERENCE (2) BETWEEN THE EXPECTED RETURN RATE AND WACC
(2) Historical average performance estimated as part of a profitability analysis of EDF Renewables projects (scope: 81% of installed capacity, 6.6GW net, 118 projects, 14 countries). The IRR calculation takes into consideration the various assumptions, in particular the evolution of market prices, excluding volumes and periods covered by the PPAs
TECHNOLOGICAL INNOVATION: A KEY COMPETITIVE ADVANTAGE
PHOTOVOLTAIC SOLAR |
|
OFFSHORE WIND |
|
STORAGE |
|
~ 18GW OF O&M: STRONG EXPERTISE, DIFFERENTIATING FACTOR
-
- 10 countries
18GW of O&M contracts
(+ 2.1GW compared to 2019)
-
- Remote control and optimisation in
3 technologies (PV solar, onshore wind, offshore wind)
real time via a state-of-the-art operations control centre and technical teams in the field
- Digitalisation and supervision in real time, continuous innovation and predictive maintenance
-
Ongoing data lake creation for asset performance optimisation
- Continuous feedback on technical issues via O&M monitoring strengthening knowledge and understanding of industrial technologies
A strong credibility vis-à-vis turbine manufacturers and third-party investors
- Optimised price positioning in competitive processes
- Contract optimisation thanks to the competition between turbine suppliers for initial or renewal O&M contracts
- Early stage project optimisation
(development, construction, etc.)
NET INSTALLED AND UNDER CONSTRUCTION CAPACITY - 31 DECEMBER 2020
INSTALLED CAPACITY AND CAPACITY UNDER CONSTRUCTION, WIND & SOLAR, AS OF 31 DECEMBER 2020
Gross (1)
(in MW)
31/12/2019 | 31/12/2020 | 31/12/2019 | 31/12/2020 | |
Wind | 12,416 | 13,266 | 7,827 | 8,379 |
Solar | 2,900 | 3,876 | 1,750 | 2,199 |
Total installed capacity | 15,316 | 17,142 | 9,577 | 10,578 |
Wind under construction | 3,531 | 4,126 | 2,131 | 2,680 |
Solar under construction | 1,525 | 3,865 | 1,166 | 1,928 |
Total capacity under construction | 5,056 | 7,991 | 3,297 | 4,608 |
NB: The values correspond to the expression to the first decimal or integer closest to the sum of the precise values, taking into account rounding
(1) Gross capacity: total capacity of the facilities in which EDF Renewables has a stake
(2) Net capacity: capacity corresponding to EDF Renewables' stake
Net (2)
2020 ANNUAL RESULTS
REGULATED
A REGULATED BUSINESS MODEL IN A SOLE AUTHORIZED STATE CONCESSION OPERATOR MODEL
Regulated activities represent over €5bn EBITDA
Key assets in France
‒
The biggest distribution grid in Europe
Breakdown of EBITDA for EDF's regulated activities in 2020
(1)French island electrical activities include Corsica, Martinique, Guadeloupe, French Guiana, Reunion and Saint Pierre and Miquelon, Saint Barthélémy, Saint Martin and Ponant islands
French island activities (1)
‒ The main distribution grid in France: connected to 95% of the mainland metropolitan population (the remaining 5% covered by ~170 local distribution companies)
‒ A regulated business model: ENEDIS has the national monopoly on 421 concession contracts. A large majority of contracts have already been renewed for a period of 25 to 30 years
‒ Represents about a quarter of EBITDA, investments and headcount of EDF Group
‒ Integrated business model including generation, electricity purchases, distribution (via concessions) and supply at the regulated tariff
‒ Grid activities: similar remuneration to that of Enedis
‒ Generation activities: for assets commissioned before 06/04/2020, remuneration of 11%. For assets commissioned after 06/04/2020, between 7% and 12%
‒ Grid of around 15,000 km (Strasbourg region)
‒ 560,000 delivery points
‒ Around 70% of EBITDA from regulated distribution activities
ENEDIS(1) : DISTRIBUTION NETWORK LEADER IN EUROPE
WELL POSITIONED VS
PEERS...
… as in quality of supply
… in terms of number of customers …
In millions of delivery points
37
31
22
e-distribuzione
Endesa distribucion
Data from operators' 2019 annual reports
(1) Enedis is an independent EDF subsidiary as defined in the French Energy Code
(2) Corresponds to the number of delivery points
ANNUAL RESULTS 2020
SAIDI - Outage time, excluding exceptional events, in minutes per customer per year
116.0
12
11
France(3)
German(4y)
2016 CEER data including transport outage time
Portugal
(3) Indicator including transport, excluding local distribution companies. The outage time in ENEDIS scope was 64 minutes
(4) Specific to Germany, whose network is much denser than in other countries
ENEDIS(1) : TOP-TIER OPERATIONAL PERFORMANCE … which means it is frequently awarded the
Top-tier operational performance...
regulatory incentive bonus
Outage time (2)
The regulatory incentive bonus has been systematically obtained since 2014 (in €m)
2014
2013
2015
2016
2017
2018
2019
2020
50
25
0
-25
-50
TURPE 4
TURPE 5
Outage time stable since 2014 at around 64 minutes
(1) Enedis is an independent EDF subsidiary as defined in the French Energy Code
(2) Excluding exceptional events and transport grid incidents
Increase in MIN/MAX from TURPE 5, from €80m for TURPE 4 to €194m for TURPE 5: this increases the remuneration potential in the event of good operational performance.
ENERGY TRANSITION AT THE SERVICE OF THE TERRITORIES
2020-2025 INDUSTRIAL AND HUMAN PROJECT BASED ON EIGHT COMMITMENTS ALIGNED WITH UN OBJECTIVES
• Achieve 70% of the employeecommitment index by 2024 (vs 58% in 2019)
• Aiming for zero serious or fatal accidents for teams and service providers
• Create 20 new activities
(energy communities, electric transport solutions, data services, etc.) as part of projects and/or partnerships
• Enabling 100% of customers to monitor their consumption so as to better control it thanks to the smart meter, as well as to benefit from an innovative offer from their supplier.
• Reduce Enedis' carbon footprint by 20% by 2025 and achieve carbon neutrality in 2050
• Have one of the best value-for- money propositions in Europe
• Halve the time it takes to connect customers by 2022 compared to 2020
• Reconnecting 90% of customers within two days in the event of a major climate incident on the grid
ENEDIS: TURPE 6, A MATURE REGULATORY FRAMEWORK
Key elements of the remuneration: A cost + remuneration approach
In €bn
(2021 estimated figures from the CRE deliberation)
14
12
4.9
10
8
4.6
6
4
2
2.9
0
1.8
ReEgBuIlTatreédgEulBéIT
DD&&AA
Capital costs
NCehtaorgpesranteintgtes
edxp'eexnpsloeistation
(1)
(1)
CEhlaercgteriscadlu
system système électrique expen(2s) es (2)
Tariff indexation principle (TURPE 6)
CRCP balance (3):Change in the consumer price index (criteria: inflation)difference for non-controllable expenditure between forecast and actual + incentive regulationInflation rate for the year + 0.31%Calculating the k factor (5)
capped at +/-2%
(1) Net revenue excluding transport
(2) Power system charges = transport purchase from RTE + purchase of network losses
(3) CRCP = expense and income adjustment account; CRL Linky = Linky regulated levelling account (Compte Régulé de Lissage [CRL])
0.1
Adjustment for exceptional items (both upward and downward) vs. authorised EBIT
CRCLRLLinLkiynkeyt aCnRdCP
CRCP (3)
(3)
14.1
CA acDhelmivienreyment reve(n4)ue (4)
No exposure to variations in distributed volumes (number of customers, TWh distributed including weather impact) vs trajectory defined by the regulator
Incentive regulation: productivity gains, quality of service and continuity of supply, R&D and smart grids
Income and expense (6) largely secured by the mechanism of the Income and Expense Adjustment Account (CRCP):
% of revenues | % of expenses |
covered by the | covered by the |
CRCP: | CRCP: |
(4) French standard data. The difference with IFRS mainly corresponds to Enedis' contribution to the Electricity Equalization Fund
(5) k factor = percentage change in the fee table resulting from the clearance of the CRCP balance
(6) Capital charges + operating charges + electric system charges
TURPE 6 REMUNERATION STRUCTURE: A FAVOURABLE RISK PROFILE
A remuneration mechanism based on a guaranteed return
01/01/2021 figures
ENEDIS remuneration structure in 2020 according to the TURPE 6 (6)
(1) Asset margin = Asset beta x Market risk premium / (1 - tax rate) = 0.36 x 5% / (1 - 26.47%) = 2.5%
(2) Additional rate of remuneration applied to RE = Risk-free rate/ (1 - Tax rate) = 1.7% / (1 - 26.47%) = 2.3%
(3) Remuneration rate for Linky assets = Base rate + expected remuneration bonus = 7.25% + 3% = 10.25%
TURPE 6 in continuity with the previous TURPE
‒ Return on capital depends little on interest rate trends: stable at 2.5% since TURPE 4
‒ Return on regulated equity: decrease from 4 to 2.3% to take into account the reduction of the risk-free rate and the corporate tax rate in France
‒ CRCP: mechanism globally validated. The entry CRCP of
TURPE 6 represents a receivable of €588m (7) to be spread over the four years of TURPE 6
‒ Incentive regulation: targets raised, notably quality of service
‒ Main new features: annual tariff indexation includes 0.31% remuneration above inflation.
(4) Assuming award of the expected remuneration bonus
(5) Capital costs + operating costs + electrical system costs
(6) Applicable from 1 August 2021
(7) CRE deliberation
STEADY GROWTH IN RAB AND REGULATORY EQUITY
(in €bn)
Annual change in RAB
60
56
52
48
44
BRARB aut 01/01/2024
BRARB aut
01/01/2020 01/01/2020
CAPCEAXPEmXis enservice commissionedReAmssiseets
adll'owuvarnacgeess (1)
(1)
AmRoArtBisDse&mAent de la BARSoArstiseest de'xaictstifsBRAARBaaut 0011//01//2021
(in €bn)
12
10
8
6
4
2
0
CPRRegauula0te1d/0e1q/2u0it2y0 at 01/01/2020
CRPeRgualaute0d1/e0q1u/2it0y2a1t 01/01/2021
Annual change in RE
CACPEAPXEmXis en comsmeirsvsiicoened
ARmeogrtuislastemd enqtuditeys
AOuthtrers
DC&PARsCRPeRgualaute0d1/e0q1u/2it0y2a4t 01/01/2024
(1) Work by concession-granting authorities and transferred to Enedis + c.€4bn for the integration of growing columns excluding concession in 2020 (ELAN law)
(2) Estimated figures from the CRE deliberation
LINKY (1) : AN INCENTIVISING TARIFF FRAMEWORK
AN ATTRACTIVE REMUNERATION
STAGGERED OVER TIME
2014-2021 Investment pattern
€bn
0.8
0.8
Linky - Remuneration
7.25%
2014
Nominal rate of return on assets before tax
+
3%
Additional premium(3)
almost guaranteed
2015
2016
2017
2018
2019
2020
2021(2)
(1) Linky is a project led by Enedis, an independent EDF subsidiary as defined in the French Energy Code
(2) Estimated figures
(3) Additional premium of 3% / Penalties of -2 %, depending on the respect of costs, deadlines and performance of the system during the deployment phase
(4) At completion of the program, costs were revised downwards after latest negotiated prices
LINKY: A SIGNIFICANT CONTRIBUTION TO CASH-FLOW FROM 2022
A significant contribution to cash-flow from 2022...
… in line with the Linky RAB trend
EBITDA and cash flow generated from Linky operations (€m)
Linky RAB trend (€m)
1 000
3 500
0 -200 -400 -600 -800 -1 000
800
600
400
200
3 000
2 500
2 000
1 500
1 000
500
0
Linky's cash flow is negatively impacted until 2021 as a result of the roll-out and the Regulated Deferred Account mechanism (CRL).
Significant contribution from 2022 before peaking around 2025-2027
INVESTMENTS ACCELERATION SUPPORTING EBITDA GROWTH
(1) Excl. Linky
… in a context of development of new uses and ecology transition
Centralised and distributed solar
Onshore and offshore wind power
Consumer connections
(2) Regulatory EBITDA excluding weather impacts, etc., which are offset in subsequent years by the CRCP mechanism
Electric vehiclesStorage
ENEDIS (1): KEY FIGURES
In millions of euros
2019
2020
∆%
Sales
14,161
14,211
+0.4
EBITDA
4,140
4,285
+3.5
Net income excl. Non-recurrent items
779
835
+7.1
Gross operating investments (2)
4,270
3,874
-9.3
(1) Enedis, an independant EDF subsidiary as defined in the French energy code; local data
(2) Including Linky
ISLAND ACTIVITIES (1): SPECIFIC REGULATION AND OPERATIONAL PERFORMANCE SUPPORTING STABLE REVENUES
REGULATED ASSETS,
OPERATED
EFFICIENTLY, GENERATING A STABLE
EBITDA
Generation assets: 11% remuneration for assets commissioned between 2006 and April 2020 (7.25% before) / between 7% and 12% thereafter (decision expected in Q2 2021)
EDF PEI availability rate as a %
96.3
95.2
96.2
96.3
2017
Normalised EBITDA *
Range of €780M / year **
* Restated for the effect of the regularisation account (4)
2018
2019
2020
** o/w about a third related to grid activity, and excluding regularisation account
A CONTRIBUTION TO
THE ENERGY TRANSITION IN ZNI (2)
‒ Smart meter programme: install and operate 1.2 million smart meters by end 2024. Around 400k smart meters were already installed and operated by the end of 2020: roll-out on schedule.
‒ Energy efficiency: sustainable energy-saving measures (insulation, solar water heaters, etc.) with a 2% reduction in consumption in 2019, for example.
‒ Decarbonation: integration of renewable energy sources, development and operation of ~30 smart grids, electrification programme in isolated areas. Conversion to liquid biomass of the power plants operating in Port Est, Pointe Jarry and Bellefontaine, as well as the future Larivot plant.
(1) French island electrical activities include Corsica, Martinique, Guadeloupe, French Guiana, Réunion and Saint Pierre and Miquelon
(2) ZNI = non-interconnected zones
(3) FPE: Electricity Equalization Fund [Fonds de Péréquation de l'Electricité], current four-year period from the beginning of 2018 to the end of 2021
(4) CRCP of the FPE
2020 ANNUAL RESULTS
FRANCE - GENERATION AND SUPPLY
FRANCE NUCLEAR OUTPUT
(in TWh)
Cumulative output 2019
-11.6%
Q1
12M
(1)Estimated figures
FRANCE: UPSTREAM / DOWNSTREAM ELECTRICITY BALANCE
OUTPUT / PURCHASE
In TWh
Purchase obligations 60
LT&Structured purchases 5
Thermal Hydro (1)
9-1
45
Structured sales and other (2)
335-44
Nuclear
NB: EDF excluding French islands electrical activities
454
∆ 2020 vs. 2019
+3 -3
+5
(1) Hydro output after deduction of pumped volumes: 38.5TWh on 2020 / 33.4TWh on 2019
(2) Including hydro pumped volumes of 6.2TWh on 2020 / 6.3TWh on 2019
CONSUMPTION / SALES
454
-40
Net market sales 54
ARENH supply
∆ 2020 vs. 2019
-9
124+4
29-9
End-customers 247-26
-40
CHANGE IN LOAD FACTOR AND NUCLEAR OUTPUT
Annual load factor of nuclear fleet in France
Load factor (%)
Net output of PWR (1) fleet in France
TWh
80
70
60
440
400
360
320
(1)Pressurized Water Reactor
10-YEAR INSPECTIONS OF THE NUCLEAR FLEET
Number of 10-year inspections
8
7
6
5
4
3
2
1
0
2031
2019
2020
3rd 10-year inspection of 900MW reactors
3rd 10-year inspection of 1300MW reactors
2nd 10-year inspection of 1450MW reactors
NB: forecast data on 15 January 2021
2021
1,450MW
1,300MW
900MW
2022
2023
2024
2025
2026
4th 10-year inspection of 900MW reactors
2027
2028
2029
2030
5th 10-year inspection of 900MW reactors
4th 10-year inspection of 1300MW reactors
3rd 10-year inspection of 1450MW reactors
FRANCE HYDRO OUTPUT
(in TWh)
(1)
2019 cumulative output
2020 cumulative output (1)
+ 12.6%
vs. end-Dec. 2019
+ 24.8%
(1) Hydropower excluding electrical activities on French islands, before deduction of pumped volume consumption.
(2) Production after deduction of pumped volume consumption: 33.4TWh in 2019, and 38.5TWh in 2020
March
June
Sept.
Hydraulic conditions at normal level
Hydraulic reservoirs filling rate in France at 73% at the end of 2020: +10.2 points vs historical average
ELECTRICITY SUPPLY IN FRANCE
SALES TO END CUSTOMERS (1)(2)
(in TWh)
Local authorities, companies and professionals
(at market offers and including transitional offer)
Local authorities, companies and professionals
(at regulated tariffs) (3)
Residential customers
(at regulated tariffs)
292.6
272.4
Residential customers
At market offers
(1) Rounded to the nearest tenth
(2) Including EDF's own consumption
2018
2019
(3) Blue professional tariff, LDC (Local Distribution Companies) at transfer price and Yellow and Green tariffs, below 36kVA that persist beyond 2015
2020
ELECTRICITY SUPPLY IN FRANCE - SALES UNDER REGULATED TARIFFS SPLIT
(in TWh)
SALES TO END CUSTOMERS FOR 2020 (1) (2)
Market offers including transitional offer
Local authorities, companies and professionals
Local authorities, companies and professionals
Residential customers
Residential customers
At regulated tariffs
At regulated tariffs
At market offers
LDC (3) transfer price
Blue non-residential tariff (4)Blue residential tariff
(1)Rounded to the nearest tenth
(2) Including EDF's own consumption
(3) Local Distribution Companies (LDCs)
(4) Of which Yellow and Green tariffs for 0.1TWh - Tariffs lower than 36 kVA
CAPACITY MARKET IN FRANCE
CAPACITY AUCTION PRICES (1)
FOR DELIVERY IN 2020 | FOR DELIVERY IN 2021 | FOR DELIVERY IN 2022 |
(in €/kW) | (in €/kW) | |
(in €/kW) |
CAPACITY MARKET IN FRANCE: IMPACT ON EBITDA (YEAR Y)
Valuation method for certificatesTiming of EBITDA impact
Certificates concernedPrice
Volumes concerned (1)
Pass through of the capacity price to end customers
(market component of supply contracts and tariffs)
At the time of energy delivery
Certificates for delivery year Y
From 25 to 45GW (depending on the ARENH
Calculated from auction prices volumes subscribed and included in the supply contracts)
Transfers related to ARENH volumes
(incl. ARENH share of supply contracts and tariffs)
At the time of energy delivery
Certificates for delivery year Y
ARENH price at €42/MWh includes delivery of associated capacity guarantees
~115MW per TWh of ARENH
Certificate sales on the market
(via auctions or OTC)
At the time of closing of the transactions
Any certificateAuction price
(or negotiated price for OTC sales)
Variable
(according to ARENH volumes)
Certificate purchases on the market
(via auctions or OTC)
At the time of energy delivery
Certificates for delivery year Y
Auction price
(or negotiated price for OTC sales)
Variable
(according to ARENH volumes and needs of final customers)
2 years of auctions booked in 2020
(1) The volume of certified capacity certificates in France may be higher than RTE's estimate of demand. In such a case, a certain amount of the certificates held by EDF would not be sold
ARENH: VOLUMES ALLOCATED
(1)
(1)
H1 2017
H2 2017
H1 2018
H2 2018
H1 2019
H2 2019
H1 2020
H2 2020
H1 2021
H2 2021
Maximum annual sales volume of 100TWh by EDF to alternative suppliers and ~25TWh for network losses coverage
In November 2020, ARENH requests from alternative suppliers for 2021 amounted to 146.2TWh.
The volume for 2020 and 2021 was therefore capped at the legal ceiling of 100TWh generating the "cropping effect" in the tariff
Volume sold for 2021, including 26.3TWh sold for network losses coverage:
• 62.6TWh for H1
• 63.7TWh for H2
Pending litigation regarding the implementation of a Force Majeure in the ARENH contract between EDF and some alternative suppliers
Source: CRE
(1) Difference between half year estimated by EDF, from the annual data provided by the CRE, and likely to change during the year through the application of legal, regulatory and contractual provisions (sub-annual window, cancellations, defaults, etc.)
(2) The Energy and Climate Change law of 8 November 2019, provides the government with the possibility of raising the cap for global maximal volumes via a ministerial order, from 100 to 150TWh as of 1 January 2020. The law also allows the government to revise the ARENH price. However, the government announced early November 2020 a status quo for both ARENH volumes and ARENH price for 2021
ARENH: FORCE MAJEURE LITIGATION
• The Covid-19 health crisis and the emergency measures taken by the French government as of 17 March 2020, have led to a decrease in electricity consumption from non-residential customers and a decrease in electricity wholesale market prices, affecting all suppliers, including EDF.
• Certain suppliers have asked the Presiding Judge of the Paris Commercial Court to order, as a matter of urgency, the total suspension of deliveries of volumes from
ARENH and/or their partial suspension up to the amount of the drop in electricity consumption of their customer portfolio during the crisis, invoking the Force Majeure clause provided for in the ARENH framework agreement concluded with EDF.
• The Summary Judge has decided that the conditions for Force Majeure have been met and has ordered EDF not to oppose the suspension of the agreement, entailing thereby the total interruption of the annual electricity transfer program.
• EDF has appealed the ruling. On 28 July 2020, the Paris Court of Appeals upheld the urgent application judge's decision, considering that the Force Majeure clause in the framework agreement has an automatic effect and that Force Majeure could not be excluded with the evidence required in summary proceedings. EDF filed an appeal on 24 September.
• To safeguard its rights, EDF announced on 2 June the termination, as a precautionary measure, of the ARENH contracts binding it to these energy suppliers, as provided for in the event of a suspension of these contracts beyond a two-month period. Total Direct Energie (TDE) contested this termination before the judge in charge of summary proceedings. The latter ruled on 1 July 2020 and provisionally suspended the effects of EDF's termination announcement. EDF has appealed this ruling.
On 19 November 2020, the Paris Court of Appeals overturned the ruling of the summary judge.
• As the French Energy Regulatory Commission (CRE) has not complied with EDF's request to suspend ARENH deliveries to TDE (1) starting on 23 November for the end of 2020 in accordance with the ruling of the Paris Court of Appeals, EDF filed an appeal with the French State Council for ultra vires on 10 December 2020 with a view to obtaining the revocation of the CRE's ruling.
• In September, an alternative supplier (Ohm Energie) also urgently appealed to the Presiding Judge of the Paris Commercial Court to suspend payments due for ARENH volumes delivered during the force majeure event, arguing that delivery should not have continued during the period of Force Majeure. On 23 October, the Summary Judge dismissed the application.
• These rulings were taken under an urgent procedure, on a provisional basis; only a procedure on the merits will make it possible to establish definitively the merits of the respective positions of the parties.
• Four alternative suppliers (Hydroption, Vattenfal, Primeo Energie and Arcelor Mittal) filed a claim against EDF before the Paris Commercial Court in order to obtain compensation for the damages allegedly caused by EDF's refusal to suspend ARENH deliveries on the basis of Force Majeure.
(1) TDE = Total Direct Energie
REGULATED SALES TARIFFS IN FRANCE (1/3)
Change in Blue tariff
Change in Residential Blue tariff
DateChange in Non-Residential Blue tariff
(VAT excluded)
(including VAT)
(VAT excluded)
(including VAT)
01/02/2018
+0.7%
+ 0.6%
+1.6%
+ 1.3%
01/08/2018
-0.5%
- 0.3%
+1.1%
+ 0.9%
01/06/2019
+7.7%
+ 5.9%
+7.7%
+ 5.9%
01/08/2019
+1.49%
+ 1.26%
+1.34%
+1.1%
01/02/2020
+3.0 %
+2.4%
+3.1%
+2.4%
01/08/2020
+1.82%
+1.54%
+1.81%
+ 1.58%
01/02/2021
+1.93%
+1.61%
+3.23%
+2.61%
REGULATED SALES TARIFFS IN FRANCE : CHANGE IN AUGUST 2020 (2/3)
RESIDENTIAL BLUE TARIFF EXCLUDING TAXES (1)AVERAGE BILL BREAKDOWN. VAT INCLUDED
(BLUE RESIDENTIAL CUSTOMER)
Cost to serve (3) and margin
Catch-up (4)
(1)Source: Data from the 2 July 2020 deliberation of the CRE approved by official decision published at the Journal Officiel on 31 July 2020
(2) In February 2020, the "Energy + fees" and "TURPE" figures were based on an average calculation on customers portfolio at the Regulated Sales Tariffs at end-2018 (base calculation for the CRE deliberation of 16/01/2020)
(3)
(4) Catch-up due to tariffs freeze at the beginning of 2019
(5) Half-rounded figures
REGULATED SALES TARIFFS IN FRANCE : CHANGE IN FEBRUARY 2021 (3/3)
RESIDENTIAL BLUE TARIFF EXCLUDING TAXES (1)
€125.4/MWh
+1.93 % + €2.42/MWh
€127.8/MWh
AVERAGE BILL BREAKDOWN. VAT INCLUDED
(BLUE RESIDENTIAL CUSTOMER)
€194.0/MWh (5)
44.0
Taxes
53.5
53.5
22.5
CSPE
Cost to serve (3) and margin
Catch-up (4)
(1)Source: Data from the 14 January 2021 deliberation of the CRE
(2) In August 2020 and February 2021, the "Energy + fees" and "TURPE" figures are based on an average calculation on customers portfolio at the Regulated Sales Tariffs at end-2019 (base calculation for the CRE deliberation of 14/01/2021)
(3)
(4) Catch-up due to tariffs freeze at the beginning of 2019 + balance of cost to serve 2020
(5) Half-rounded figures
DISTRIBUTION OF ELECTRICITY SALES (1) ACCORDING TO THEIR MARKET PRICE EXPOSURE
Volumes sold at the ARENH price following the cost-stacking formula in the regulated sales tariffs (essentially blue residential and non-residential tariffs)
Volumes sold at the market price if this price is lower than ARENH arbitration
threshold (ARENH price - capacity price) and ARENH price otherwise (3), which include:
• The ARENH volumes that can be requested by alternative suppliers and network operators for their purchases of losses
• Part of the volumes (4) sold to EDF final customers under market-based contracts
(1) Sales excluding purchase obligations volumes and volumes under long-term supply contracts. Estimated distribution based on the respective situations in 2019 and in 2020, in particular in terms of EDF downstream market shares. In 2019 and 2020, the level of cropping corresponding to ARENH over subscription (respectively 133 and 147 TWH) by alternative suppliers has been applied to downstream offers
(2) Regulated electricity sales tariffs
Volumes sold at the market price, whatever the price, which include:
• Part of the volumes sold to EDF final customers: "market complement supply" in the regulated tariffs (4), balance of the volumes sold to clients under market-based contracts
• Volumes sold on wholesale power markets
Contracts at negotiated prices that do not follow a market-indexed structure
(3) EDF is subjected to the arbitrage between the two prices and its date of exercise is variable depending on the volumes (it takes place at the latest at the time of the ARENH end of year subscription window for a delivery the following year)
(4) Related to the replication of the sourcing cost structure of alternative suppliers: shares of the volumes corresponding to the "ARENH rights"
(5) Related to the replication of the sourcing cost structure of alternative suppliers: the balancing volumes sourced onthe market which exceed the "ARENH rights"
ESTIMATED AVERAGE FORWARD HEDGED PRICE
Average hedged price (1)
France - Generation & Supply activities
In €/MWh
60 50 40 30
NB: projected prices, different from average realised prices
20
10 0
2018
2019
2020
2021
Notional volume of fixed-cost generation output of ~413TWh (2)
(1) Rounded to the nearest whole number. Excluding revenue associated with capacity certificates.
(2) Only from nuclear and hydro generation means, on the basis of normal hydro conditions
Average price captured through hedging activities on forward contracts before the beginning of the delivery year (3)Estimation based on:
• Forecasted distribution of electricity sales volumes
• 'Shaped demand' (baseload vs peakload, seasonality)This average price does not take into account purchases and sales on wholesale markets that may take place during the delivery year depending on unexpected generation or consumption events
It is not the average realised sale price
(3) Based on a principle of gradual closing of net positions before the end of the delivery year, based on a predefined hedging trajectory (typically 2 years for the wholesale power market in France) that captures an average price, potentially with overweighting of year Y-1 in view of liquidity constraints on the forward markets. Subject to very high uncertainty over EDF's net exposure due to the fact that the ARENH system is optional (the option cost is embedded in the market hedges).
2019 - 2028 MULTIANNUAL ENERGY PLAN (MEP) FOR FRANCE
• The MEP Decree dating from 21 April 2020 was published in the French Official Journal of 23 April 2020. The MEP covers two successive five-year periods: 2019-2023 and 2024-2028.
• The decree is accompanied by a report constituting an appendix of the decree and thus having regulatory value.
Main points in the MEP
14 nuclear reactors to close by 2035 to achieve a 50% share of the energy mix; 4 to 6 reactors (including Fessenheim) to be closed by 2028, subject to certain conditions being fulfilled. The draft MEP presents EDF's proposal for sites likely to be concerned. The government will have the final responsibility for identifying the priority sites.
Between now and mid-2021: the French government will study next-generation nuclear power with the sector and make its decision on scheduling construction of new plants.
France will close all coal-fired power plants by end-2022. No new all-fossil fuel thermal generation plants will be built.
Injected biogas production of 14 TWh to 22 TWh in 2028, the volumes being contingent on a sufficient decrease in costs (€75/MWh in 2023, €60/MWh in 2028).
Doubling of installed renewable electricity generation capacity (73 GW in 2023, and 101 GW to 103 GW in 2028), including the launch of nearly 1 GW/year of offshore wind capacity.
Increase renewable heat consumption by 25% in 2023 and 40% to 60% in 2028 compared with 2016 figures (154TWh)
A decrease in oil consumption of 19% by 2023 and 34% by 2028 (compared with 2012) and a decrease in natural gas consumption of 10% by 2023 and 22% by 2028 Industrial hydrogen: 10% in 2023 and 20% to 40% in 2028 via low-carbon generation (renewable or electrolytic)
2023: 2.5 million housing units renovated, 9.5 million housing units heated by wood, 3.4 million equivalent housing units connected to a heating network 2023: 1.2 million electric passenger cars in circulation (electric and plug-in hybrids) and more than 100,000 public charging points by 2023
NB: Island regions not connected to metropolitan France (Corsica, Guadeloupe, French Guiana, Martinique, Mayotte, Reunion and Saint-Pierre-et-Miquelon) are each subject to a distinct MEP currently under development
PUBLIC SERVICE COSTS: STABLE MECHANISM FOR COMPENSATING PUBLIC SERVICE COSTS AND TAXES SINCE 2016 (1/3)
The 2015 amended French finance act and the 2016 French finance act introduced the principles of a new mechanism for compensating energy public service costs, effective as of 1 January 2016, with the following specific characteristics:
• The French government budgets the public service costs for energy (electricity and gas) which are still calculated by the French Energy Regulatory Commission (CRE) and will be finalized as of 1 January 2021 by the "Public Energy Service" account in the French general budget. The 2019 French finance act allocates €9,149 million
Repayment achieved at the end of 2020 of EDF's historical compensation deficit, in accordance with the Ministers' letter of 26 January 2016, enacted in the Decree of 18 February 2016 and the Orders of 13 May and 2 December 2016
The CSPE (French contribution to electricity public service) tax has remained stable at €22.5/MWh since 2016 (full rate). Since early 2017, the tax is paid into the French general budget and not to the Energy Transition special purpose account, as was the case in 2016
CSPE: CHARGES FOR EDF (2/3)
Article L121-6 of the Energy Code stipulates that the charges attributable to the public service tasks assigned to the electricity operators are fully compensated by the State
En millions d'euros
2018
2019
2020
Purchase obligation (1) 4,856 74 % 5,699 | 74 % 6,158 76 % |
Other (2) 1,698 26 % 1,963 | 26 % 1,923 24 % |
Total EDF CSPE 6,554 100% 7,662 | 100% 8,081 100% |
The trend in public service charges between 2019 and 2020 can be attributed to two distinct factors:
Purchase obligation charges in metropolitan France increased between 2019 and 2020. This resulted from weather conditions favourable to the generation of wind capacity and photovoltaic power (sunshine) and from the growth in renewable power output in France. The rise in volumes was accompanied by a decline in electricity spot prices of -€7.3/MWh between 2019 (€39.5/MWh) and 2020 (€32.2/MWh). As with the volume effect, this decrease increased charges by widening the gap between the purchase obligation price and the market valuation.
Charges relating to ZNIs (3) fell between 2019 and 2020. The decrease in electricity consumption in ZNIs stemming from the health crisis in 2020 led to a contraction in power generation and, hence, to a decline in CSPE charges.
(1) Purchases obligations include electricity generated from: hydropower (less than 12MW), biomass, wind power, PV power, cogeneration, recovery of household waste and energy recovery, with the exception of ZNI (3)
(2) Additional generation costs and purchase obligations in ZNI(3), the TPN (First Necessity Tariff) and the FSL (Housing Solidarity Fund)
(3) ZNI: Zones non interconnectées corresponding to overseas departments and Corsica and some of the Breton islands
CSPE: CHANGE IN PURCHASE OBLIGATIONS IN MAINLAND FRANCEFOR EDF (3/3)
2017
Principle: The compensation mechanism of public energy services (2) charges offsets the difference between the cost of purchase obligations in mainland France and market prices
(1) EDF SA excluding island activities
8,294M€
8,653M€
2018
2019
2020
(2) The compensation mechanism of public energy services charges also covers the tariff equalization costs in the ZNI (Zones Non Interconnectées), and the solidarity programs.
Purchase obligations amount
Additional cost of purchase obligations to be offset by the mechanism (1)
Average spot price
Cost of purchase obligations valued at market prices based on CRE methodology
ENERGY EFFICIENCY CERTIFICATES SYSTEM
Implemented in 2006
Confirmed in 2015
Enhanced targets, a greatly increased scheme cost 5th consultation period
Involved partiesEDF and the mechanism
The French response to requirements of the European Directive 2012/27/EU on energy efficiency.
Article 30 of the energy transition law for Green Growth of 17 August 2015: a new Energy Efficiency Certificate (EEC) obligation benefiting households suffering from energy poverty, in addition to the traditional EEC obligation starting in 2016
The national obligation for the 4th period (2018-2021) is set at 2,133TWhc by the decree of 11 December 2019
Including 533TWhc for the benefit of households that suffer from energy poverty and 1,600TWhc of obligation of classic EEC. This represents a doubling over the 3rd period 2015-2017 (700TWhc classic EEC, 150TWhc energy poverty EEC). Between the two periods, the cost of the EEC scheme is multiplied by 7 and now exceeds €5bn/year.
Launch of several "Coup de Pouce" operations at a fixed EEC price during the 4th period, so that the obligated parties can answer to their contract obligations at reasonable cost
The draft texts defining the 5th period were put for consultation on February 1, 2021. In particular, they provide for an increase in the CEE obligation to 2,400 TWhc accompanied by a change in the breakdown of energies (27% for electricity against 32% in P4, 20% for gas against 15% in P4), a sharp reduction in volumes linked to bonuses and Programs as well as a strengthening of the system for very modest households
An obligation imposed on energy suppliers to achieve energy savings for customers called "obligated parties".
Electricity, gas, heating, refrigeration, domestic fuel and automotive fuel
In order to promote the issuance of energy efficiency operations to their customers
Households, local authorities, social housing landlords or business/professionals
EDF is the first obligated party and intervenes in several areas (2020 data):
Residential (265,000 renovation operations, up 20% due to the increase in insulation work and the replacement of heating equipment thanks to the subsidies provided by the "Coups de Pouce" schemes via the "Mon chauffage durable" offer), social-housing lessors
(180,000 subsidised housing units), industry and services (7,000 actions)
Financing of national programmes (Toits d'abord with the Abbé Pierre Foundation, ADVENIR for electric vehicle recharging stations, FEEBat for training craftsmen, Habiter mieux from ANAH to fight against energy poverty, ACTEE with the FNCCR, etc.).
2020 ANNUAL RESULTS
CONSOLIDATED FINANCIAL STATEMENTS
COVID-19 (1) IMPACTS
In accordance with AMF and ANC recommendations, the Group has not applied any different classifications as a result of Covid-19 from those normally used in its income statement.
In-depth analyses were conducted in the Group's separate entities and centrally, to prepare reliable estimates of the impacts of the pandemic on the Group's financial statements
In millions of euros
France - Generation and supply activities
France - Regulated activities
UK
ItalyDalkiaFramatomeOther internationalOther activitiesTotal
Sales (1,083) (278) (451) (90) (193) | (78) (80) (53) (2,306) |
EBITDA (872) (237) (182) (60) (40) | (47) (23) (18) (1,479) |
of which bad debt (80) (56) (68) (4) - | - (13) - (223) |
In 2020, the economic disruption caused by the health crisis substantially impacted many of the Group's activities, particularly nuclear generation, construction sites and services.
For nuclear generation, progress on work that was due to be performed during maintenance outages was significantly affected. As a result, EDF had to adapt the planning of reactor maintenance shutdowns for 2020 as well as the planning of reactor shutdowns for subsequent years. In addition, the shortfall in volumes was covered at relatively favourable conditions.
(1) For more information on the consequences of the Covid-19 health crisis on the Group's financial statements, please refer to Note 1.4 to the financial statements at 31 December 2020
SIMPLIFIED INCOME STATEMENT
In millions of euros
Sales
Fuel and energy purchases Other external expenses Personnel expenses
Taxes other than income taxes
Other operating income and expenses EBITDA
Impact of the commodities volatility
Amortisation/depreciation expenses and provisions for renewal (Impairment)/reversals
Other income and expenses EBIT
Financial income
Income before taxes of consolidated companies Net income - Group share
Net income excl. non-recurring items (2)
(1) The 2019 published data has been restated for the impact of the change in the scope of the E&P disposal
(2) Excluding non-recurring items & commodities volatility
2019 restated (1)
2020
71,347
69,031
(35,091)
(32,425)
(8,625)
(8,461)
(13,797)
(13,957)
(3,798)
(3,797)
6,687 16,723 642 (10,020)
5,783 16,174
(175) (10,838)
(403) (185) 6,757 (364) 6,393 5,155 3,871
(799) (487) 3,875 (2,582)
1,293 650 1,969
CHANGE IN SALES (1)
In millions of euros
2019 restated (2)
France - Generation and supply activities
France - Regulated activities (4)
Framatome
United Kingdom
Italy
Other international
EDF Renewables
Dalkia
Other activities
Inter-segment eliminations
Total Group 71,347 (338) 417 (2,395) | 69,031 -3.4 |
(1) Breakdown of sales across the segments, before inter-segment eliminations
27,870 16,087
3,377
9,574
7,597
2,690
1,565
4,281
2,728
(4,422)
(2) The 2019 published data has been restated for the impact of the change in the scope of the E&P disposal
(3) Organic change at constant scope and exchange rates
Forex
- -(11)
(126)
-(144)
(33)
(7)
(17)
-
(4) Regulated activities: Enedis, ÉS and island activities; Enedis, an independant EDF subsidiary as defined in the French energy code
ScopeOrganic growth
285
-206 141
34
(105)
(220)
(187)
20 10
(1,650)
(136)
(69)
119
337
(399)
(16)
(568)
36
184
2020
28,361 16,228
3,295
9,041
5,967
2,420
1,582
4,212
2,127
(4,202)
∆% org. (3)
0.7
0.9
-3.1
-2.0
-21.7
-5.1
7.6
-9.3
-20.8
-4.2
CHANGE IN EBITDA (1)
In millions of euros
France - Generation and supply activitiesFrance - Regulated activities (4)FramatomeUnited KingdomItalyOther internationalEDF RenewablesDalkiaOther activities
Total Group
(1) Contribution to the Group
2019 restated (2)
7,615 5,101
256 772 593 339
1,193
349 505
16,723
(2) The 2019 published data has been restated for the impact of the change in the scope of the E&P disposal
(3) Organic change at constant scope, standard and exchange rates
Forex
- -(1)
(10)
-(32)
(27)
(1)
(4)
(75)
(4) Regulated activities: Enedis, ÉS and island activities; Enedis, an independant EDF subsidiary as defined in the French energy code
Scope
Organic growth
2020
∆% org. (3)
- - 4
(203)
7,412 5,206
-2.7
105
2.1
12 76 50 71
271 823 683 380 848 290 261
4.7
(15)
9.8
40
8.4
2
20.9
(44)
(274)
-23.0
3
(61)
-17.5
(14)
(226)
-44.8
(24)
(450)
16,174
-2.7
BREAKDOWN OF GROUP EBITDA
2019 (1)
(1)The 31/12/2019 annual published amounts were restated of the impact linked to the E&P activity presentation as a discontinued operation
(2)Regulated activities: Enedis, ÉS and island activities; Enedis, an independant EDF subsidiary as defined in the French energy code
7 %
5 %
2020
CHANGE IN COMMODITIES (1) VOLATILITY
In millions of euros
France - Generation and supply activities
France - Regulated activities
United Kingdom
Italy
Dalkia
Other activities
Total Group (2) 642 | (175) | (817) |
(1) Net changes in fair value of energy and commodity derivatives, excluding trading activities
(2) The segments Other international, Framatome and EDF Renewables are not concerned
2019
7
(2)
30 3
1
603
2020
(108)
1
18
(3)
-(83)
∆
(115)
3
(12)
(6)
(1)
(686)
FROM EBITDA TO EBIT (1) IN 2020
In millions of euros
TOTAL GROUP
EBITDA
16,174
Commodities volatility
Net depreciation and amortisation
(10,838)
(Impairment) / reversals
Other operating income and expenses
EBIT
3,875
(1) Contribution to the group
(2) Regulated activities: Enedis, ÉS and island activities; Enedis, an independant EDF subsidiary as defined in the French energy code
ANNUAL RESULTS 2020
France - Generation and supply activitiesFrance - Regulated (2)
FramatomeOtherUK
Italy InternationalEDF RenewablesDalkiaOther Activities
7,412
5,206
271
823
683
380
848
290
261
(175)
(108)
1
-
18
(3)
-
-
-
(83)
(4,613)
(3,314)
(276)
(1,122)
(417)
(284)
(458)
(278)
(76)
(799)
(16)
- --(638)
(74)
-
(36)
(34)
(1)
(487)
(405)
11
(28)
(55)
2
-
(10)
(2)
2,270
1,893
6
(947)
134
98
354
(32)
99
CHANGE IN FINANCIAL RESULT
In millions of euros
Cost of gross financial debt
o/w interest expenses on financing operations o/w net foreign exchange gain on debt and other
Discount expenses (2)
Other financial income and expenses
o/w gains on dedicated assets disposals
o/w net change in fair value of debt and equity instruments
of dedicated assets
Financial result | (364) (2,582) | (2,218) |
Excluding non-recurring items before tax (change in IFRS 9 fair value of financial instruments) | (2,586) (1,123) | 1,463 |
Current Financial result | (2,950) (3,705) | (755) |
(1) The 2019 published data has been restated for the impact of the change in the scope of the E&P disposal
(2) Including the impact of the decrease in the discount rate of nuclear provisions in France in 2019
2019 restated (1)
(1,806)
(1,801)
49
(3,161)
4,603
136 2,545
2020
∆
(1,610) 196
(1,699) 102
47 (42)
(3,733)
2,761
162 1,218
(572)
(1,842)
26
(1,327)
FROM INTEREST CHARGES ON FINANCING ACTIVITIES TO NET FINANCIAL EXPENSES DISBURSED
Interest charges on financing activities
Accrued interestOther financial income and charges (including dividends)
Net financial expenses disbursed (802) (1,008) | (206) |
(1)The 2019 published data has been restated for the impact of the change in the scope of the E&P disposal
In millions of euros
2019 restated (1)
2020
∆
(1,801)
7
992
(1,699)
102
(86)
(93)
777
(215)
CHANGE IN NET INCOME
Income before taxes of consolidated companies
Income tax
Share in income of associates and joint ventures
Net income of the discontinued operations
Net income - consolidated
Deducting net income from minority interests
Net income - Group Share
Neutralisation of non-recurring items including commodities volatility
Net income excl. non-recurring items
(1)The 2019 published data has been restated for the impact of the change in the scope of the E&P disposal
In millions of euros
2019 restated (1)
2020
∆
6,393
1,293
(5,100)
(1,532)
(945)
587
818
425
(393)
(497)
(158)
339
5,182
615
(4,567)
27
(35)
(62)
5,155
650
(4,505)
(1,284)
1,319
2,603
3,871
1,969
(1,902)
NET INCOME EXCLUDING NON-RECURRING ITEMS (1)
In millions of euros
2019 restated (2)
2020
Net income - Group share 5,155 | 650 |
Impairments 883 | 844 |
Change in fair value IFRS 9 (1,780) | (873) |
Other (387) | 1,348 |
Net income excluding non-recurring items 3,871 | 1,969 |
(1) Net income excluding non-recurring items is not defined by IFRS, and is not directly visible in the Group's consolidated income statement. It corresponds to the Group's share of net income (EDF net income) excluding non-recurring items, net changes in the fair value of energy and commodity derivatives (excluding trading activities), and net changes in the fair value of debt and equity instruments, net of tax
(2)The 2019 published data has been restated for the impact of the change in the scope of the E&P disposal
SHARE IN NET INCOME OF ASSOCIATES AND JOINT VENTURES
In millions of euros
CTE/RTECENGOther (2)
TOTAL
(1) The 2019 published data has been restated for the impact of the change in the scope of the E&P disposal
2019 restated (1)
2020
∆
308
237
(71)
288
63
(225)
222
125
(97)
818
425
(393)
(2) Mainly Jera Trading, NTPC, CES (Companhia Energética Sinop SA), Jiangxi Datang International Fuzhou Power Generation Company Ltd and different companies owned by EDF Renewables and EDF SA
CHANGE IN NET INCOME FROM MINORITY INTERESTS
FramatomeUnited KingdomOther internationalEDF Renewables
(1)The 2019 published data has been restated for the impact of the change in the scope of the E&P disposal
In millions of euros
2019 restated (1)
2020
∆
(22)
(26)
(4)
(225)
(92)
133
Italy
(11)
11
22
2
2
-251
39
(212)Other
32
31
(1)
TOTAL
27
(35)
(62)
CHANGE IN OPEX (1)
In millions of euros
2019 restated (2)
France - Generation and supply activities
France - Regulated activities
8,458 4,696
Framatome
1,691
United Kingdom
2,108
Italy
879
Other international
EDF Renewables
612 932
Dalkia
2,558
Other activities
488
Total Group 22,422 22,418 | 4 0.0 |
(1) Opex (operational expenses) corresponding to the sum of personnel expenses and other external expenses after inter-segment eliminations
(2) The 2019 published data has been restated for the impact of the change in the scope of the E&P disposal
2020
∆
8,377 4,792
81
(96)
1,617
74
1,910
198
843
36
612 982
-(50)
2,794
(236)
491
(3)
∆%
1.0
-2.0
4.4
9.4
4.1
0.0
-5.4
-9.2
-0.6
CHANGE IN NET FINANCIAL DEBT
(1)
In millions of euros
2019 restated (1)
2020
EBITDA 16,723 | 16,174 |
Cancellation of non-monetary items included in EBITDA (1,930) | 328 |
EBITDA Cash 14,793 | 16,502 |
Change in net WCR 475 | (1,679) |
Net investments - excluding disposals, HPC and Linky (11,433) | (11,570) |
Dividends received from associates and joint ventures 349 | 433 |
Other elements (46) | (450) |
Operating Cash Flow 4,138 | 3,236 |
Assets disposals 531 | 187 |
Income taxes paid (915) | (983) |
Net financial expenses (802) | (1,008) |
Dedicated assets (394) | (798) |
Dividends paid in cash (801) | (768) |
Cash flow before Linky and HPC 1,757 | (134) |
Linky (822) | (682) |
HPC (1,760) | (1 893) |
Group Cash Flow (825) | (2,709) |
Other monetary changes (1,595) | 2,194 |
Change in net financial debt (2,420) | (515) |
Effects of change and exchange rates (341) | 445 |
Other non-monetary changes - IFRS 16 (4,878) | (574) |
Other non-monetary changes (161) | (503) |
Change in net financial debt from continuing operations (7,800) | (1,147) |
Change in net financial debt from discontinued operations 55 | (10) |
Net Financial Debt - Opening balance 33,388 | 41,133 |
Net Financial Debt - Closing balance 41,133 | 42,290 |
The 2019 published data has been restated for the impact of the change in the scope of the E&P disposal
EBITDA NON-CASH ITEMS
2018-2020 evolution
In millions of euros
1,245
1,930
2020
Main items
Fair value adjustments (important variation of the fair value of EDF Trading between 2019 and 2020)
Significative gains or losses on assets disposals in 2019 (NNG)
Changes in provisions (nuclear provisions, employee benefits, other provisions recorded in EBITDA)
2018
2019
NET INVESTMENTS
In millions of euros
France - Generation and supply activities
France - Regulated activities
Framatome
United Kingdom
Italy
Other international
EDF Renewables
o/w Gross investment
o/w Disposals and subsidies
Dalkia
Other activities
Net investments excluding Linky, HPC and disposal plan 11,433 11,570 | 137 +1 |
Linky (2) 822 682 | (140) -17 |
HPC 1,760 1,893 | 133 +8 |
Total net investments, excluding assets disposal plan 14,015 14,145 | 130 +1 |
Group assets disposal plan (531) (187) | 345 -65 |
NET INVESTMENTS 13,484 13,959 | 475 +4 |
NB: figures rounded up to the nearest whole number
2019 restated (1)
(1) The 2019 published data has been restated for the impact of the change in the scope of the E&P disposal
(2) Linky is a project of Enedis, independant subsidiary of EDF under the provisions of the French Energy Code
2020
6,329
3,622
5,484 3,367
134
219
659
732
433
531
309
207
(276)
812
1,941
1,852
(2,216)
(1,040)
138 86
180 38
∆
(845)
(256)
85
73
98
(102)
1 089
42
(48)
∆%
-13
-7
+64
+11
+23
-33
NA
31 -56
INVESTMENTS: FROM GROSS TO NET (1)
In millions of euros 16,508
16,008 (2)
Gross operating investments
+ 501
Gross financial investments
Mainly EDF Energy, EDF Renewables and Edison
Disposals
Gross investments
(1) Net investments in the Change in NFD statement including Linky, HPC and assets disposals
(2) Investments in intangible assets and property, plant and equipment in consolidated cash flow statement
- 627
-1,543
-380
13,958
Net investments
NET TOTAL INVESTMENTS INCLUDING ACQUISITIONS EXCLUDING DISPOSAL PLAN
EDF RENEWABLES (2)
FRANCE - REGULATED ACTIVITIES
1%
2019
(1) The 2019 published data has been restated for the impact of the change in the scope of the E&P disposal
6%
2020
(2) (2)% of net investments for EDF Renewables due to the debt deconsolidation associated to the offshore wind projects NnG following the disposal of 50% of the shares
100
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EDF - Électricité de France SA published this content on 04 March 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 05 March 2021 09:58:06 UTC.
