Universal Registration Document 2020

Note 5 Operating subsidies

CSPE

Operating subsidies mainly comprise the subsidy received or receivable by EDF in respect of the compensation for public energy charges (CSPE), recognised in the financial statements as income of €8,081 million for 2020 (€7,662 million for 2019).

The increase is mainly explained by the higher subsidy for purchase obligations due to the lower market prices for electricity observed in the first half of 2020, and the increase in purchased volumes of photovoltaic power (+8%) and wind power (+5%).

Closure of Fessenheim nuclear power plant

In accordance with the application for termination of operations and the declaration of the permanent shutdown of both reactors at Fessenheim nuclear power plant sent by EDF to the Minister for the Ecological and Inclusive Transition and to the ASN on 30 September 2019, EDF shut down reactor 1 on 22 February 2020 and reactor 2 on 30 June 2020.

On 27 September 2019, due to the cap on nuclear power output set by the “energy transition for green growth” law of 17 August 2015, the French State and EDF signed a protocol agreement whereby the State will compensate EDF for the early closure of Fessenheim.

The compensation paid under the terms of this protocol comprises:

• initial instalments to compensate for expenses incurred after the closure of the plant (end-of-operations expenditure, INB taxes, dismantling costs and staff redeployment costs), which will be paid over a maximum 4-year period following the closure. An amount of €370 million was received on 14 December 2020.

This compensation is recognised as income in profit and loss as and when the associated costs are incurred;

• subsequent payments corresponding to the lost income that would have been generated by future power generation up until 2041, based on Fessenheim’s previous output figures and calculated ex post on the basis of nuclear power sale prices, particularly observed market prices.

Since its decoupling from the network, the Fessenheim plant has entered a post-operating phase that will last approximately five years. During that period, units 1 and 2 will continue to be operated and maintained as “defueled core” and“evacuated fuel” reactors. This will require a series of technical and administrative operations.

All the post-operating expenses and income associated with the closure of the two units in 2020 are recognised in operating expenses. At 31 December 2020, they mainly comprise:

• expenses of €113 million (salaries and social security charges for labour at the site amounting to €42 million, purchases of goods and services amounting to €43 million, taxes other than income taxes, mainly payroll taxes, energy taxes and local taxes amounting to €28 million);
• the compensation defined in the protocol for expenses that will be incurred after the closure, amounting to €50 million, recognised as an operating subsidy in the income statement under the methods explained above.

The estimated impact of the Covid-19 pandemic on operating subsidies in 2020 is €(37) million, attributable to the lower level of surplus costs for energy purchases and generation in the island territories, in line with the decline in electricity consumption.

Note 6 Reversals of provisions and impairment