In the meantime, these three energy suppliers notified EDF of the end of the force majeure event in mid-June, and ARENH deliveries resumed. As the CRE did not allow EDF’s request to suspend ARENH deliveries to Total Direct Energie for the end of the year, in application of the Paris Court of Appeal decision of 19 November, on 10 December 2020 EDF brought a claim before the Council of State for abuse of power, requesting cancellation of the CRE’s decision.
The suspension of deliveries to these three suppliers for approximately 15 days (from the ruling by the Paris commercial court in summary proceedings, to the notification of the end of force majeure by the suppliers), and the continuation of deliveries to Total Direct Energie, represent some tens of millions of euros in lost income for EDF at 31 December 2020 (due to the price effect of volumes being sold at market prices instead of ARENH prices during that period).
Further summary proceedings were initiated in late September 2020 by Ohm Energie, seeking a suspension of payments due for ARENH volumes, claiming that deliveries had been continued illegally by EDF since it had requested suspension of ARENH deliveries from April to June 2020 due to force majeure. On 23 October 2020 the Paris Commercial Court rejected all of Ohm Energie’s claims.
In parallel to the above summary proceedings, cases concerning the substance of the matter were brought before the Paris Commercial Court by several ARENH applicants, claiming compensation from EDF for the prejudice caused by its allegedly illegal refusal to apply the force majeure clause. These cases are ongoing.
Gross investments in property, plant and equipment and intangible assets amounted to €5,848 million in 2020 (see the cash flow statement) compared to €6,365in 2019, a decrease of €517 million. These amounts include capitalised production costs totalling €1,243 million in 2020 and €1,329 million in 2019.
The Covid-19 pandemic had a moderate overall impact for EDF on gross investments in property, plant and equipment and intangible assets compared to 2019.
With the introduction of national lockdowns and practices to prevent the virus spreading, some work projects were suspended and deferred, while others continued but at a much slower pace. Resumption of work varied in speed and intensity in the second half of the year, depending on the activities concerned. Some work, much of it engineering work, could be done remotely.
The new public health measures themselves have generated additional costs, principally resulting from additional protective activities, tension on external resources in some fields of work, and longer completion times for certain operations (due to adoption of practices to stop the virus spreading, limits on the number of workers onsite, etc.). The additional costs directly attributable to continuation of site work and completion of assets have been capitalised. No significant effect resulting from below-normal production activity that might have been capitalised was identified at 31 December 2020. The costs of demobilising and remobilising personnel for the deferred and suspended worksites are recorded as expenses.
Most of the €517 million decrease in gross investments between 2019 and 2020 was unrelated to Covid-19 effects, which were as follows:
In view of the significant downward revision during the first half-year of estimates of nuclear power output in France for 2020, and the results of the capacity auction held on 25 June 2020, EDF considered in its half-year financial statements that it was likely to be required to make imbalance settlement payments for the delivery year 2020, and recorded a provision of €137 million for this purpose at 30 June 2020 (see notes 1.3.1 and 3.6 for details of the operation of France’s capacity mechanism).In view of the final nuclear power output achieved in 2020, and particularly the availability of EDF’s generation plants during the peak periods of the second half of the year, this provision was cancelled in the second half-year since EDF had fulfill edits obligations relating to the French capacity mechanism.
EDF has updated its provisions for onerous contracts (mainly gas purchase contracts and some customer contracts), principally to reflect changes in market price scenarios (see note 27). No new significant onerous contracts were identified.
On going work on decommissioning was halted from 16 March 2020. On the sites concerned, only the regulatory activities (monitoring the environment, site safety and security) continued. Work first resumed on 11 May 2020.
The temporary deferral of certain types of on-site decommissioning work led to a €45 million increase to provisions for decommissioning concerning nuclear plants currently being dismantled at 31 December 2020.
In addition to the information in the previous paragraphs, the Covid-19 pandemic did not involve any other specific use of judgments, estimates or assumptions for determination of the value of assets and liabilities, income and expenses of the period (other than those described in note 1.2).
On 11 April 2019 (1), EDF announced that it was aware of the opinion of thePermanent Group of experts for nuclear pressure equipment (GP ESPN), made public on 11 April 2019, regarding the quality deviations affecting the welds located on the main steam transfer pipes covered by the break preclusion principle(2) at the Flamanville EPR.
(1) Cf. press release of 11 April 2019.
(2) The break preclusion principle is a very high standard of quality with stricter requirements than nuclear pressure equipment regulations for the design, manufacturing andin-service monitoring of certain items of equipment. These stricter requirements must be sufficient to consider that rupture of this equipment is highly unlikely. When this standard is applied, a comprehensive study of the consequences of breaks in this piping is not required in the plant safety case.
