Sales essentially comprise income from energy sales (to final customers and as part of trading activities), delivery services related to use of the transmission and distribution network, and connection services. They also comprise income from other services and deliveries of goods, mainly engineering, operating and maintenance services, services related to energy sales, design, delivery and commissioning services for power plants or their major components.
Income on energy sales is recognised as deliveries are made to customers.
The quantities of energy supplied but not yet measured and billed are calculated using consumption statistics and selling price estimates, and are recognised in sales on that basis.
Some Group entities conduct optimisation operations on the wholesale gas and electricity markets, to balance supply and demand in compliance with the Group’s risk management policy. The sales concerned are recorded net of purchases. When an entity has a net short position in euros, it is included in“energy sales”. A net long position in euros is included in “fuel and energy purchases”.
In accordance with the provisions of IFRS 15 on the principal/agent distinction, energy delivery services are recognised in sales upon delivery to the customer in the following two cases:
Income from connections to the French electricity network is recognised in sales at the date when the connection becomes operational.
The sales revenue from other services or deliveries of goods is recognised overtime in the three following cases, based on a contractual analysis:
Sales revenues include the margin realised, essentially by EDF Trading, on energy market trading operations that fall within the scope of IFRS 9, which are recognised at fair value.
EDF Trading is the Group’s trading entity. It operates on the markets on behalfof other Group entities and through trading activity for its own purposes or for non-Group entities, backed by the Group’s industrial assets and within its assigned risk mandate.
EDF Trading trades on organised or OTC markets in derivatives such as futures, forwards, swaps and options.
EDF Trading undertakes purchase and sale operations on the wholesale markets in Europe and North America for:
EDF Trading also operates in the unregulated North American markets as part of its energy supply activities.
LNG optimisation and trading activities are carried out through the investment in Jera Global Markets, a joint venture with Jera.
Capacity mechanisms have been set up in France, the UK and Italy to ensure secure power supplies during peak periods.
French system: French law 2010-1488 of 7 December 2010 on the new organisation of the electricity market introduced an obligation in France to contribute to power supply security from January 2017.
Operators of electricity generation plants and load-shedding operators must have their capacities certified by RTE, and commit to a forecast level of availability for a given year of delivery. In return, they are awarded capacity certificates.
Meanwhile, electricity suppliers and purchasers of power to compensate for network losses (obligated actors) must have capacity certificates equivalent to consumption by their customers in peak periods. Suppliers pass on the cost of the capacity mechanism to final customers through their sale prices.
The system is completed by registers for capacity trading between actors. Capacity auctions are held several times a year.
The Group is concerned by both aspects of this system, as an operator of electricity plants (EDF SA, Dalkia, EDF Renewables), as an electricity supplier(EDF SA, Électricité de Strasbourg) and as a purchaser of power to compensate for network losses (Enedis and Électricité de Strasbourg).
In view of the Covid-19 pandemic’s effects on electricity supply security for the winter 2020-2021, and to maximise the utility and efficiency of the capacity mechanism, RTE made exceptional adjustments to certain conditions and relaxed certain regulatory constraints for capacity operators willing to increase their availability (notably waiving higher balance adjustment fees and late certification fees).
RTE thus issued a summary of transparency information currently available on the capacity mechanism on 18 September 2020, to enable the actors to assess the supply-demand balance situation for capacity guarantees in the mechanism for the next few years.
RTE also organised two further balance adjustment sessions for 2020, and made changes to the 2021 Demand Response tenders to make it more attractive. The volumes offered and accepted doubled, and a bonus was added for capacities that could be offered as soon as November 2020.
2020 registered a significant increase in capacity prices for 2020 and subsequent years from the auction in June. This is mainly explained by the market actors anticipating lower fleet availability for peak periods, in the context of the Covid-19 crisis (see note 1.4.1).
The market reference prices for 2017, 2018, 2019 and 2020 were established respectively at €10.0/kW, €9.3/kW, €17.4/kW and €19.5/kW. Six auctions held in 2020 (March, April, June, September, October, December) for deliveries in 2021 resulted in the following prices, in chronological order: €19.5/kW,€19.2/kW, €47.4/kW, €29.5/kW, €32.7/kW, and €39.1/kW.
The delivery year 2022 was also opened to auction in 2020. The four capacity auctions held resulted in the following prices, in chronological order: €16.6/kW,€38.9/kW, €18.1/kW and €18.2/kW.
