Universal Registration Document 2020

1.4 Comparability (including the effect of the Covid-19 pandemic)

1.4.1 Consequences of the Covid-19 pandemic

The economic disruption caused by the Covid-19 pandemic had significant repercussions for many of the Group’s activities in 2020, particularly nuclear power, worksites, supply and services.

On 14 April 2020⁽¹⁾, the Group withdrew all its financial targets for 2020, including the lower threshold (€17.5 billion) for operating profit before depreciation and amortisation, and also for 2021. The Group was able to publish a new 2020 target for operating profit before depreciation and amortisation on 31 July 2020, setting arange of €15.2-15.7 billion. This was confirmed on 13 November 2020 when the third-quarter results were published, then revised upwards on 16 December 2020 to€16 billion or slightly more, given the greater clarity in the second half of the year regarding nuclear power generation in France in the crisis context.

Nuclear power generation in France

As announced in the press release of 16 April 2020⁽²⁾, due to the Covid-19 crisisEDF had to make adjustments to all its activities in order to protect personnel working at its nuclear power plants. Work on the industrial maintenance programme, particularly scheduled operations during maintenance outages, was significantly affected, with a resulting reduction in the electricity generation capacity.EDF thus had to adjust its schedule of reactor outages for maintenance so as to contribute alongside the transmission operator RTE to ensuring a secure power supply throughout the winter of 2020-2021. Some reactors were consequently taken offline in order to save their fuel.

In addition, the economic slowdown during France’s lockdown led to a decline of up to 20% in electricity consumption compared to normal levels⁽³⁾, resulting in lower use of power plants.

Due to measures taken as a result of the Covid-19 pandemic (social distancing, organisation of employee movements, limits on the number of workers on site), work took longer to complete. Consequently, nuclear reactor outages lasted longer under the twin constraints of lower employee availability and lower productivity. The industrial maintenance programme was therefore revised to adjust scheduled work to industrial capacities, and match the number of reactors in operation to requirements of the network, particularly for the winter period of 2020-2021.

This crisis also led EDF to amend the schedule for reactor outages in future years. Reactor outages depend on complex optimisation in a field subject to many constraints, such as fuel management, compliance with regulatory requirements and scheduling work to match industrial capacities, while always ensuring a balance between supply and demand for electricity, especially in the winter period. As reactor outages are scheduled several years in advance by reference to forecast network requirements and industrial resources, deferring outages from one year to the next has a knock-on effect on the maintenance programme in subsequent years and therefore on the expected power output.

EDF’s press release of 16 April 2020 consequently stated a revised estimate of annual nuclear power output in France: approximately 300TWh in 2020 (compared to between 375TWh and 390TWh as communicated on 14 February 2020), reflecting the consequences of the Covid-19 pandemic and other factors affecting availability of the nuclear fleet, and between 330TWh and 360TWh each year in 2021 and 2022.

On 2 July 2020⁽⁴⁾ the EDF group then announced an upward revision to this estimate of annual nuclear power output in France in 2020, to approximately 315-325TWh.

These revisions were undertaken because work resumed earlier than had been expected when the 16 April estimate was published. The duration of scheduled outages in 2020 was adjusted in view of the observed on-site conditions for the return to work. EDF was able to complete several outages of the 2020 programme during the first half of the year, and continue work on reactors still in operation, while respecting the required measures to prevent the spread of the virus, by optimising movements into and out of restricted-access areas through adjustments to the organisation of work so as to limit the number of people working on the same activity, or using work-from-home arrangements. As a result of the Covid-19 pandemic, the second half of the year began with more reactors on scheduled outages for maintenance than initially planned.

Thanks to better performances than expected on maintenance outages during the second half of the 2020, it was possible to re-estimate nuclear power output for the year at 325-335TWh on 13 November, then announce that it would be close to 335TWh on 16 December 2020. In the end nuclear output for 2020 stood at335.4TWh, 44.1TWh lower than in 2019 due to the direct and indirect effects of the Covid-19 pandemic totalling 32.9TWh (modulation in response to demand and the timing of outages; constraints associated with measures to prevent the spread of the virus, affecting work during outages). As well the impacts of the pandemic, the decrease in nuclear power output compared to 2019 is mainly attributable to the shutdown of the two Fessenheim reactors, and prolongation of three complex outages.

Support for customers and suppliers

As set out in the press release of 16 April 2020 ⁽⁵⁾, EDF introduced specific measures to support its customers in the context of the Covid-19 pandemic.

During France’s first official public health emergency period, from 24 March to10 July, EDF decided to guarantee the power supply for all residential customers by suspending all reductions and cut-offs of electricity and gas supplies, and all late payment penalties, until 1 September 2020, and to support customers in difficulty by offering more flexible payment terms and deadlines. The Company thus took steps that went further in both scope and duration than the measures introduced by the French government (such as extending the period when tenant evictions and customer power cut-offs are banned, which normally covers the winter months, to 10 July 2020).

For business customers, EDF took all the necessary measures to grant payment deferrals requested by customers eligible for the national Solidarity Fund, in compliance with the ordinances and decrees adopted by the government. The small businesses concerned were entitled to request deferred payment of invoices falling due until the end of France’s first public health emergency period (10 July 2020). The deferred amounts were spread over a 6-month period from the last day of the month following that date.

The French government then declared a public health emergency period from 17 October 2020, initially until February 2021 but which could be extended to 1 June 2021. For residential customers, EDF took further measures in addition to the standard winter ban on evictions and power cut-offs that begins in France on 1 November: to protect customers in difficulty, EDF decided to suspend all power reductions until 15 January 2021, not to apply late payment penalties to invoices issued during the period, and to allow customers extended payment deadlines. The higher risk of non-recovery associated with these measures is incorporated into calculation of the provisions for customer receivables at 31 December 2020 (see note 13.3). For business customers, EDF was prepared to allow deferred payment on invoices as required by the French law of October 2020 on the Covid-19 emergency as soon as its application decree defining the scope of customers concerned was published. As that decree has not yet been published, debt collection on the business customer segment remained in line with normal laws and no specific measure has been applied by EDF.

In addition, as explained in the press release of 2 April 2020⁽⁶⁾, to support its very small, small and medium-sized suppliers in the economic slowdown caused by the pandemic, the Group decided to settle its suppliers’ invoices sooner than the contractual 60-day period in France. This initially applied to completed services that had been validated by EDF at 31 March 2020: EDF SA paid its very small suppliers by mid-April and its small and medium-sized suppliers by the end of April, with no intervention required of the supplier. Enedis also took equivalent measures. The first wave of faster payments concerned more than twenty thousand invoices amounting to a total of around €190 million for the entire Group in France.