At 31 December 2022, by the regulatory calculations provisions are 107.1% covered by dedicated assets. The potential regulatory caps on the realisable value of certain investments set in the Environment Code were not applicable at 31 December 2022. At 31 January 2023, nuclear provisions (as measured at 31 December 2022) were 109.7% covered by dedicated assets, in line with the noticeable positive developments on the financial markets in January 2023.
At 31 December 2021, by the regulatory calculations provisions were 109.3% covered by dedicated assets. Again, the regulatory caps were not applicable.
The long-term nuclear obligations concerned by the regulations for dedicated assets related to nuclear generation are included in EDF’s financial statements at the following values:
| (in millions of euros) | 31/12/2022 | 31/12/2021 |
|---|---|---|
| Provisions for spent fuel management – portion unrelated to the operating cycle as defined in the regulations | Provisions for spent fuel management – portion unrelated to the operating cycle as defined in the regulations 31/12/20221,607 |
Provisions for spent fuel management – portion unrelated to the operating cycle as defined in the regulations 31/12/20211,726 |
| Provisions for long-term radioactive waste management | Provisions for long-term radioactive waste management 31/12/202212,475 |
Provisions for long-term radioactive waste management 31/12/202114,233 |
| Provisions for nuclear plant decommissioning | Provisions for nuclear plant decommissioning 31/12/202217,094 |
Provisions for nuclear plant decommissioning 31/12/202117,730 |
| Provisions for last cores – portion for future costs of long-term radioactive waste management | Provisions for last cores – portion for future costs of long-term radioactive waste management 31/12/2022473 |
Provisions for last cores – portion for future costs of long-term radioactive waste management 31/12/2021587 |
| PRESENT COST OF LONG-TERM NUCLEAR OBLIGATIONS | PRESENT COST OF LONG-TERM NUCLEAR OBLIGATIONS31/12/202231,649 | PRESENT COST OF LONG-TERM NUCLEAR OBLIGATIONS31/12/202134,276 |
As the coverage of provisions by dedicated assets was above 100% at 31 December 2021 (109.3%), EDF had no obligation to add to the dedicated asset portfolio in 2022, and no allocation was made during the year (in 2021, there was also no such obligation and no allocation to dedicated assets was made).
In 2022, the markets were affected by strong inflationary pressure and the realisation by the central banks and the markets that bold measures, particularly interest rate rises, would be necessary to prevent de-anchoring of inflation expectations. The issue was exacerbated by the war in Ukraine and the disruption it caused to energy supplies for Europe. This situation initially affected bond instruments, which ended the year on a record low with -18.5% on government bonds (FTSE EMU Government Bond Index (EGBI)). Credit instruments also suffered significantly (the FTSE EuroBIG Corporate index fell by -14.5%) under the double effect of higher interest rates and wider spreads. However, despite the partial currency hedge set up by the Group, the rise of the dollar limited the decline in the Euro value of assets expressed in dollars. The equity markets declined, but for the time being have only echoed the rise in real interest rates, apparently without responding to the risk to profits in a depressed economic environment. The markets seem to be counting on the central banks to succeed in containing inflation without creation a recession, and this situation will need to be closely monitored in 2023.
In 2022, EDF Invest continued to extend its portfolio of unlisted assets, purchasing minority stakes in telecoms infrastructures (Norlys Fiber, a fibre optics network in Denmark), digital infrastructures (DataBank, a group of data centres in the United States), and shares in diversified unlisted investment funds. EDF Invest also sold its entire interest in Thyssengas (a gas network in Germany) and part of its stake in the Transport Stockage Hydrocarbures/Géosel group (salt cavern oil storage in France) and 50% of the MiRose wind farms in the US.
At 31 December 2022, dedicated assets registered an overall performance of €(667) million, comprising €(963) million in financial result and €296 million in exceptional result. This is principally explained by dividends and interest received (€917 million), increases to provisions on bonds and investment funds due notably to unfavourable market trends (€(1,810) million), and gains on sales of investment securities (€296 million).
Other provisions for decommissioning principally concern fossil-fired power plants.
The costs of decommissioning fossil-fired power plants are calculated using regularly updated studies based on estimated future costs, measured by reference to the charges recorded on past operations and the most recent estimates for plants still in operation.
The increase over the year is mainly explained by a re-estimation of decommissioning costs incorporating the latest experience gained from recent operations.
