Also, after corrosion was observed on pressuriser valves at the EPR at Olkiluto (Finland), EDF carried out equipment checks and also detected traces of corrosion on the Flamanville EPR’s valves. The material used for certain components of the pilot control valves has been changed accordingly. Several corrosion stress tests were conducted to select the best material. The components are currently in production and will be installed on site during the first half of 2022. The ASN has been regularly informed of the technical choices, and made no objection to this strategy. The ASN and the IRSN are also continuing their examination of the operation and reliability of the pressuriser valves. EDF is due to respond to the IRSN’s most recent questions so that it can finalise examination of the valve design by the end of the first half of 2022.
As the work advances, new technical matters emerge that could increase the completion cost and the risk of deferred timelines. In view of the progress made on operations and preparations for start-up, on 12 January 2022 EDF adjusted the schedule for the Flamanville 3 project. The fuel loading date has been deferred from late 2022 to the second quarter of 2023, and the estimated completion cost revised from €12.4 billion to €12.7 billion (in 2015 euros, excluding interim interest).
Before loading the fuel into the reactor vessel and carrying out the overall start-up tests, several operations remain to be carried out, mainly:
As announced in January 2022, inspections of the fuel assemblies concerned showed mechanical wear on certain assembly components. This kind of wear has already been observed in several reactors of the French nuclear fleet. For the future commissioning of Flamanville 3, a solution will be examined with the ASN.
Since 2014 EDF has been implementing its Grand Carénage industrial refurbishment programme designed to enhance reactor safety and extend nuclear fleet operating lifetimes beyond 40 years. The most recent estimate of the programme’s cost for the period 2014 to 2025 was established on 29 October 2020 and amounted to €49.4 billion in current euros.
This cost estimate mainly reflected the first information about the additional works to be conducted, based on the fourth periodic review of the Group’s 900MW reactors, a process that concluded with the ASN’s decision issued on 23 February 2021. The work required covers studies, modification work and initially unplanned additional equipment to improve safety levels. This estimate also factored in the revised duration of scheduled maintenance outages for 10 year and partial inspections, building on prior year experience, and the impacts of the Covid-19 pandemic for the period 2020-2022 as estimated in 2020. The estimated cost of the Grand Carénage programme is regularly updated, and currently stands at €50.2 billion in current euros. This figure takes account of further work, studies and controls to be conducted, and a revaluation of certain costs. The industrial work will continue beyond 2025, and consequently the investment expenses will remain high beyond that date.
The principal events and industrial milestones of the Grand Carénage programme in 2021 were the following:
On 22 April 2021, EDF remitted to NCPIL the binding French techno-commercial offer to supply engineering studies and equipment for the construction of six EPR reactors at the Jaitapur site, Maharashtra, India. This major milestone for EDF, its partners and the French nuclear industry provided a basis for discussions aimed at converging towards a binding framework agreement (see the press release of 23 April 2021).
On 29 June 2021, EDF and AREVA reached a settlement agreement for the payment by AREVA to EDF of €563 million by 31 December 2021.
This settlement and the enforcement of two arbitration awards of 29 and 30 June 2021 put an end to all disputes between EDF and AREVA relating to the Framatome acquisition contract of 2017 and their business relations prior to the acquisition.
The agreement signed led to receipt of the sum of €563 million with recognition of exceptional income of €501 million (see note 14), and an adjustment of €(29) million to the value of the shares held in Framatome, with the balance of €33 million included in amounts collected for third parties in liabilities.
EDF launched an issue of Euro-denominated perpetual social hybrid notes on 26 May 2021 for a total nominal amount of €1.25 billion with an initial coupon of 2.625% and a first redemption at the option of EDF on 1 June 2028.
EDF can redeem the social hybrid notes for cash at any time during the 60 days before the first interest reset date, which is expected to be in 7 years (i.e. in 2028), and at every coupon payment date thereafter.
These issues are recorded in additional equity (see note 25).
The proceeds raised are dedicated to the financing of eligible projects including capital expenditure engaged by EDF group for orders from SMEs which contribute to the development or maintenance of the EDF group’s power generation or distribution assets in the European Union and the United Kingdom. In compliance with the social bond principles and the Sustainability Bond Guidelines of the ICMA (International Capital Market Association), this social hybrid notes issue is consistent with EDF’s commitments and CSR (Corporate Social Responsibility) strategy for the responsible development of local areas and the expansion of industrial sectors.
Settlement took place on 1 June 2021, on which date the social hybrid notes were admitted to trading on the regulated market of Euronext Paris.
Allocation of the funds raised by EDF’s social bond issues is certified by one of the Statutory Auditors: see section 6.8 of the 2021 Universal Registration Document.
