Several important agreements were negotiated between EDF and Orano:
Relations between EDF and Orano Recyclage (formerly Orano Cycle) concerning transportation, processing and recycling of spent fuels are described in note 15.1.1.1.
The Company’s key management and governance personnel are the Chairman and CEO, the members of the COMEX (Executive Committee) throughout 2021 or since their date of appointment if they joined the COMEX during the year, and the Directors. Directors representing the employees receive no remuneration for their services.
The total compensation paid by EDF and controlled companies to the Group’s key management and governance personnel amounted to €12.3 million in 2021
(€11.9 million in 2020). This amount covered short-term benefits (basic salaries, performance-related salary, profit share and benefits in kind), special IEG post employment benefits where relevant, and the corresponding employer contributions, plus any director’s fees.
EDF’s key management and governance personnel benefit from no special pension system, starting bonus or severance payment entitlement except by contractual negotiation.
In view of the high increases in electricity market prices, France introduced a “tariff cap” limiting the raise in regulated sales tariffs to a maximum 4% (including taxes) at 1 February 2022 for residential customers compared to the tariffs in force at 1 August 2021. This tariff cap is founded on 2 articles of the Finance Law for 2022 (law 2021-1900 of 30 December 2021):
On 13 January 2022 the French government also announced further exceptional measures to limit the rise in electricity tariffs for consumers in 2022. Details of their practical implementation are still forthcoming, but one main step is attribution of an additional volume of 20TWh to the ARENH scheme for 2022, over the period 1 April to 31 December 2022, at the price of €46.2/MWh. This measure, announced in January 2022, has two effects for the Group: i) it is necessary to purchase these 20TWh of ARENH volume for delivery to other suppliers, with a very significant negative price effect given current market prices; ii) the increased ARENH portion in relation to the market-price portion in the “cost stacking” method used to calculate regulated sales tariffs for 2022 will induce a decrease in sales prices to customers on both regulated-tariff and market-price contracts.
The additional measures also concern extension of the 4% regulated tariff increase cap (including taxes) to non-residential customers who are still eligible for the regulated tariff in mainland France and non-interconnected zones.
In a press release of 13 January 2022, the Group acknowledged the measures announced by the French Government to limit the rise in electricity tariffs for 2022. The Group stated that the financial consequences could not be accurately determined at this stage. Based on the information available to the Group at the press release date, the impact of these measures on EDF’s 2022 EBITDA, compared to a situation in which they were not implemented, was estimated at around €8.4 billion based on market prices at 31 December 2021, and around €7.7 billion based on market prices at 12 January 2022. EDF stated that the final impact on EBITDA would depend on the market prices over the implementation period, and that it would release information as soon as possible and regularly on adjustments to this estimate. In the meantime it withdrew its 2022 Net Financial Debt/EBITDA guidance.
The Group also stated that it was going to consider appropriate measures to strengthen its balance sheet structure, and any steps that could protect its interests.
In a decision of 18 January 2022, the CRE proposed an increase of 35.4% including taxes (44.5% excluding taxes) in the “blue” tariffs for residential customers and 35.9% including taxes (44.7% excluding taxes) in the “blue” tariffs for non-residential customers from 1 February 2022. This proposed increase was driven primarily by the significant rise in prices on the energy market. If it had taken account of the maximum decrease in the TICFE confirmed by decree 2022-84 of 28 January 2022, this proposal would have been for a 20% increase (including taxes) in the “blue” tariffs for residential customers and a 20.9% increase (including taxes) in the “blue” tariffs for non-residential customers. In accordance with the tariff cap, this proposal was rejected by the ministers for the economy and energy, who set the increase in the “blue” tariffs for residential customers at 4% including taxes (24.3% excluding taxes) and the increase in the “blue” tariffs for non-residential customers at 4% including taxes (23.6% excluding taxes) through tariff orders of 28 January 2022, published in the Journal officiel of 30 January 2022 and implemented from 1 February 2022.
The CRE stated that the average price (excluding taxes) resulting from the new “blue” tariffs for residential customers in mainland France would have been €57.2/ MWh under its tariff proposal, and will be €31.2/MWh in application of the tariff order of 28 January 2022. In accordance with Article 181 of the Finance Law for 2022, the difference will be covered by a catch-up adjustment in 2023, and suppliers to residential customers on market-price contracts and the local distribution companies will be entitled to compensation from 1 February 2022. The CRE also stated that it would assess the impact of the additional ARENH volumes in 2022 at a later date; this should result in a reduction to the catch-up adjustment planned for 2023, and the supplier compensation provided for in Article 181 of the Finance Law.
Various measures have also been taken by the British government in 2022 to limit the effects of the energy price crisis for UK consumers. On 3 February 2022 the British energy regulator OFGEM announced the new energy price cap for the Standard Variable Tariff (SVT), applicable from April 2022 for the following six months. The 54% increase announced is estimated to correspond to an average +£693 cost per year for a standard consumer profile. The British government announced parallel measures to reduce this burden for households: i) a £150 rebate on local taxes from April 2022, for 80% of households; ii) a £200 reduction on energy bills, to be applied by suppliers in October 2022, and subsequently paid by consumers in £40 instalments over 5 years from 2023. The associated costs will be financed by the state in the meantime.
