PARIS (BBC) -Energy prices may have jumped to unprecedented highs, but for France’s state-controlled power company EDF 2022 was a miserable year with record annual losses of €17.9bn.
A price cap on energy for French consumers hit EDF profits hard but so did the enforced closure of many of its of nuclear power stations for repairs.
The losses are the third biggest in French corporate history and the worst for more than 20 years.
EDF’s debts have spiralled to €64.5bn.
On an underlying basis, EDF’s losses came in at €4.99bn. The figure was in marked contrast to EDF’s UK-based business, which made an underlying profit of £1.12bn (€1.26bn) supplying electricity and gas to five million households.
In France, President Emmanuel Macron’s government responded to Russia, Ukraine conflict by imposing a tariff “shield” for consumers, limiting energy companies to a 4% rise in 2022 followed by 15% in 2023, keeping inflation lower than in other European countries.
But it meant that EDF had to sell power to French consumers at a loss, while UK consumers paid far more for their energy. EDF has around 80% of France’s electricity market.
French industry has not seen such poor results since 2002, when Vivendi Universal and France Telecom both posted losses above €20bn for the previous year.
EDF has never before reported such large losses.
“The 2022 results were significantly affected by the decline in our electricity output, and also by exceptional regulatory measures introduced in France in difficult market conditions,” said Chief Executive Luc Remont, who said EDF’s priority was now to put the company back on track. He said core earnings would be significantly higher in 2023.
EDF’s nuclear output in France fell by 30% to its lowest since 1988 as more than half of its 56 ageing nuclear power stations went offline for repairs, which had been delayed because of the Covid-19 pandemic. France has the biggest fleet of nuclear plants in Europe.
The outages meant that France became a net importer of electricity for the first time in decades.
EDF’s financial woes have various causes, but another major factor is an obligation it has to sell a quarter of its production at a fixed price to its competitors.
The system known as Arenh (Regulated Access to Historic Nuclear Electricity) was devised in 2010 in order to satisfy the EU, which was worried about EDF - with its massive nuclear capacity - becoming a monopoly provider.