In valuing the Group’s long-term assets, climate issues are taken into account through impairment testing. The long-term scenarios used for electricity prices in countries where the Group does business are consistent with the trajectories of European decarbonisation targets, particularly as set in the Paris climate agreement. As explained in note 10.8, in constructing long-term electricity prices, the impact of climate contingencies is incorporated into assumptions concerning demand (particularly energy requirements for heating, and summer comfort), generation of renewable energies (onshore and offshore wind power, solar power) for all European countries, the contribution of hydropower, and environmental tax cuts for nuclear power generation in France. Climate time series analyses are based on the European EUROCORDEX model and include the impact of climate change. A deliberately prudent approach is adopted to avoid any bias towards underestimation of the practical effects of climate change on the relevant physical quantities (temperatures, cloud coverage, wind speeds) and ultimately on the European electricity system between 2027 and 2050. Scenarios also take account of the objectives of public energy and climate policies such as the Paris Agreement at worldwide level, Fit For 55 and RepowerEU at European Union level, and the National Low Carbon Strategy (Stratégie Nationale Bas Carbone) in France. The scenarios used mainly include high CO2 prices supporting carbon-free electricity production in Europe, and a lower-carbon economy more generally through electrification of uses.
The Group controls and operates thermal (gas-fired, coal-fired, oil-fired) electricity generation plants principally in France and Italy, to a smaller extent in Brazil, in Laos and Belgium, and to a now marginal degree in England (since the sale of West Burton B in 2021, see note 3.1.2). The net book value of the assets concerned is €5 billion at 31 December 2022 (unchanged from at 31 December 2021), including €3.6 billion for assets in France and €1.0 billion for assets in Italy.
In mainland France, the electricity generated by EDF’s fleet of thermal power plants (CCGT, CT, and coal), with net book value of €1.8 billion at 31 December 2022 (€1.9 billion at 31 December 2021) accounted for around 3.57% of EDF’s total electricity output in 2022. These plants operate in semi-baseload and peak periods and are used to variable degrees throughout the year, playing a significant role in system security when there are tensions in the supply-demand balance, which was the case during the winter of 2022.
With the end of coal-fired generation in application of the Multi-year energy programme, the coal-fired plant at Le Havre (0.6GW) was closed at 1 April 2021 and the Cordemais plant is due to cease operations in 2026 at the latest.
EDF is modernising its fleet of natural gas CCGT plants (Blénod, Martigues, Bouchain) to reduce air emissions of CO2, NOx and SO2. The Bouchain plant in particular produces CO2 emissions of around 360g/kWh on average.
In the island territories, electricity is principally generated by an oil-fired fleet (with net book value of €1.8 billion at 31 December 2022), and to a smaller degree hydroelectric plants and other renewable energy plants. Where required by the Multi-year energy programme, EDF intends to operate new plants running on liquid biomass, or to convert its existing plants to run on bioliquid.
In Italy, Edison’s thermal fleet consists of CCG plants. In keeping with the “National plan for energy and the climate” supporting development of gas-based electricity generation and its integration with renewable energy generation, Edison began construction in 2019 of the first new-generation CCG plant at the Marghera Levante site (780MW), and in 2020 of a 760MW greenfield project at Presenzano (in Campania), using the same technology, for low environmental impact (CO2 emissions 40% below the national average, and a 70% reduction in NOx emissions). Both plants should be commissioned in 2023.
Since 2013 the Group has made seven Green Bond issues for a value equivalent to €9.96 billion. These issues were made under its Green Bond Framework and were intended to finance construction of new wind and solar power projects, investments to renovate and modernise its hydropower assets in mainland France and internationally, energy efficiency projects, and biodiversity protection projects.
In July 2022, the Group produced the fourth edition of its Green Bond Framework, which is now a Green Financing Framework covering all its green financing operations. Eligible projects must meet the European Taxonomy criteria. Two new eligible categories have been added to the scope of application: distribution networks and nuclear generation assets. EDF has also made a commitment to inform investors before every bond issue if the proceeds of the issue will be used to finance nuclear activities. On 5 October 2022 the Group issued a €1.25 billion bond to finance distribution network activities.
The Green Financing Framework was also reviewed by an independent body which confirmed that it respects best practices on the Green Loan market (the Green Loan Principles published by the Loan Syndications and Trading Association).
Allocation of the funds raised by EDF’s Green Bond issues is certified by one of the Statutory Auditors (see section 6.7 of the Universal Registration Document). This certification can be consulted on the EDF website’s sustainable development page.
On 26 May 2021 EDF launched an issue of Euro-denominated perpetual social hybrid notes with total nominal value of €1.25 billion.
The funds raised were used to finance eligible projects, as defined in the EDF group’s Social Bond Framework. These projects include investment expenditure by EDF in Small and Medium-Sized Enterprises (SMEs) that contribute to the development and maintenance of electricity generation and distribution assets in Europe (including the United Kingdom).
The Social Bond Framework’s compliance with the Social Bond Principles published by the International Capital Markets Association (ICMA) has been validated by an independent body.
On 18 November 2022 EDF and Crédit Agricole CIB signed a €1 billion bilateral green loan that complies with EDF’s Green Financing Framework. This loan will contribute to the Grand Carénage programme to enhance safety and extend the operating lifetime of French nuclear reactors beyond 40 years. The funds will be entirely dedicated to maintenance of French power plants, in order to continue production of very low-carbon energy (4g CO2 equivalent per kWh over the life cycle (1)).
The EDG group has 18 renewable bilateral credit lines and two syndicated credit facilities indexed on the Group’s sustainable development performance (incorporating a cost adjustment mechanism for financing costs):
(1) Source: Analyse Cycle de Vie du kWh nucléaire d’EDF published by EDF in 2022 and reviewed by independent experts https://www.edf.fr/sites/groupe/files/2022-11/edfgroup_acv- 4_plaquette_2022111_en.pdf
