Universal Registration Document 2022

Details of changes in provisions for the back-end of the nuclear cycle and provisions for decommissioning and last cores are as follows:

“Other movements” include the changes in nuclear liabilities with a corresponding adjustment in the amount of reimbursements receivable from the NLF and the British government, and the change in the provision for last cores via an adjustment to fixed assets.

The overall change of the “other movements” is mainly due to an increase in the real discount rate in the United Kingdom (particularly +100 base point on provisions for the backend of the cycle and decommissioning), resulting in a decrease of the provisions for an amount of €(2,934) million.

As planned, in 2022, EDF Energy ended power generation at the Hunterston B and Hinkley Point B power plants (on 7 January 2022 and 1 August 2022 respectively). Defueling began on 16 May 2022, for Hunterston B and on 14 September 2022, for Hinkley Point B. The provision for last cores consequently decreased by €(576) million and the stock of nuclear fuel decreased by an equivalent amount, corresponding to the fuel stock still in the reactor.

15.2.1 Regulatory and contractual framework

Amendments signed with the Nuclear Liabilities Fund (NLF – an independent trust set up by the UK Government as part of the restructuring of British Energy) following the EDF group’s acquisition of British Energy had a limited impact on the contractual financing commitments made to British Energy by the UK Secretary of State and the NLF under the “Restructuring Agreements”. These agreements were entered into by British Energy on 14 January 2005 as part of the restructuring led by the UK Government in order to stabilise British Energy’s financial position. These agreements were amended and restated on 5 January 2009 as part of the acquisition of the British Energy Generation Limited by the Group. British Energy Generation Limited changed its name to EDF Energy Nuclear Generation Limited on 1 July 2011 and replaced British Energy in these agreements and amendments.

Under the terms of the Restructuring Agreements:

• the NLF agreed to fund, to the extent of its assets: (i) qualifying contingent and/or latent nuclear liabilities (including liabilities for management of spent fuel from the Sizewell B power station); and (ii) qualifying decommissioning costs for EDF Energy’s existing nuclear power stations;
• the Secretary of State agreed to fund: (i) qualifying contingent and/or latent nuclear liabilities (including liabilities for the management of spent fuel from the Sizewell B power station) and qualifying decommissioning costs related to EDF Energy’s existing nuclear power stations, to the extent that they exceed the assets of the NLF; and (ii)  subject to a cap of £2,18  million (in December 2002 monetary values, adjusted accordingly), qualifying known existing liabilities for EDF Energy’s spent fuel (including liabilities for management of spent fuel from plants other than Sizewell B loaded in reactors prior to 15 January 2005);
• EDF Energy is responsible for funding certain excluded or disqualified liabilities (e.g. those defined as EDF Energy liabilities), and additional liabilities which could be created as a result of failure by EDF Energy to meet minimum performance standards under applicable law. The obligations of EDF Energy to the NLF and the Secretary of State are guaranteed by the assets of the principal members of EDF Energy.

EDF Energy also made commitments to pay:

• annual decommissioning contributions for a period limited to the useful life of the plants as at the date of the “restructuring agreements”; the corresponding provision amounts to €90 million at 31 December 2022;
• £150,000 (indexed to inflation) per tonne of uranium loaded in the Sizewell B reactor after the date of the “restructuring agreements”.

Furthermore, EDF Energy entered into a separate contract with the Nuclear Decommissioning Authority (NDA) for management of AGR spent fuel and associated radioactive waste resulting from operation of power plants other than Sizewell B after 15 January 2005, and bears no responsibility for this fuel and waste once it is transferred to the processing site at Sellafield. The corresponding costs of £150,000 (indexed to inflation) per tonne of loaded uranium – plus a rebate or surcharge dependent on market electricity price and electricity generated in the year – are included in inventories.

On 23 June 2021 EDF and the UK government signed an update to the Restructuring Agreements. The changes and clarifications to the Agreements confirm the recovery of qualifying costs and stipulate that once the AGR stations have finished defueling under EDF Energy responsibility, they will transfer to the NDA which will be responsible for subsequent decommissioning activities. These amended agreements have no consequences in the Group financial statements at 31 December 2022.

Phase 1 of the Decommissioning Plan Submission (DPS 20) submitted in 2020, which was an update to the defueling liability, was approved by the NDA in June 2021. The Integrated Plan (IP) 22, which updated the AGR defueling cost estimates previously submitted in 2020, was approved by the Non-Nuclear Liabilities Assurance team (NLA) in December 2021.

Phase 2 of the Decommissioning plan submission (DPS 21) which included updates for all the other decommissioning activities for the AGR plants, decommissioning of Sizewell B and an update to the Uncontracted Liability Discharge Plan (UCLDP), was approved by the NLA in August 2022.

The IP23, which updated the cost estimates from IP22 and DPS21, respectively, was approved by the NLA in December 2022.

The cost estimates from IP23 form the basis of EDF Energy’s Back End Nuclear Cycle and Nuclear Plants Decommissionning provision as at 31 December 2022, incorporating the deferral of Sizewell B’s decommissioning costs associated with life extension in 2021.