EDF Energy is party to a suite of agreements (the Restructuring Agreements) that set out how qualifying decommissioning and uncontracted liabilities costs will be funded by the Nuclear Liability Fund (NLF) as well as including a guarantee by the UK Government for the costs of decommissioning the existing nuclear plants. The NLF was funded initially through a UK Government contribution and since privatization by EDF Energy Nuclear Generation Ltd. making quarterly payments to the NLF under the terms of a contribution agreement. In 2020, the UK Government made an additional contribution to the NLF of £5 billion.
EDF Energy and the UK Government signed an update to the Restructuring Agreements on 23 June 2021. 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 all be transferred to the Nuclear Decommissioning Authority (NDA) which will be responsible for subsequent decommissioning activities (1).
| Output (in TWh) | |||||||
|---|---|---|---|---|---|---|---|
| Power Plant | Location | Year commissioned | Number of units | Type of station | Capacity (in MW) | 2022 | 2021 |
| West Burton A | Nottinghamshire | 1969 | 2 | Coal-fired and OCGT (1) | 1,000 | 0.1 | 0.5 |
| West Burton B | Nottinghamshire | 2013 | 3 | Combined Cycle Gas Turbine | - | - | 2.6 |
| TOTAL | UNITED KINGDOM | 5 | 1,000 | 0.1 | 3.1 | ||
(1) Open Cycle Gas Turbine.
The Cottam Power Plant closed on 30 September 2019 after more than 50 years of being in service. The decision to close the station was made following market changes together with a drive to actively remove carbon from the power generation process. Currently plans are progressing well with the decommissioning work and the likely timescale for completion of demolition is Q4 2025.
The West Burton A Power Station entered into partial decommissioning on 1 October 2021, reducing the available units from 4 to 2 (reducing Capacity from 1,987MW to 1,000MW). West Burton A previously announced that it would close on 30 September 2022 and go into full decommissioning however following a request from Government in April 2022, it was agreed that West Burton A would remain open for a further 6 months until 31 March 2023. The decision to close the station is in line with EDF’s commitment to contribute to Net Zero. In 2022, West Burton A generated 0.1TWh of electricity, 0.4TWh less generation than last year mainly due to the strategic decision to reduce current coal stock and be a station of last resort in preparation for its closure.
The West Burton B CCGT power plant was sold on 31 August 2021. EDF Energy now provides West Burton B with a route-to-market service whereby EDF Energy
provides access to forward hedging and prompt optimisation services on behalf of the asset.
EDF Energy also operates a mid-cycle gas storage facility in Cheshire. Hill Top Farm became commercially operational in mid-January 2015 with three cavities. A fourth cavity became commercially operational in 2018 with the remaining cavity brought into service in December 2019. During 2020, the decision was made to decommission the Hole House Facility due requirements for some significant investment to the plant. Decommissioning work is progressing well, it is expected to be complete by Q4 2025.
As the largest producer of low-carbon electricity in the country, EDF Energy benefits over the long term from the increase in the wholesale power price as a result of the application of a carbon price to the carbon emissions of fossil fuelled generation. Electricity producers in Great Britain are subject to two main carbon pricing mechanisms, the UK Emissions Trading System (UK ETS) and the UK’s Carbon Price Support tax set at £18/tonne until March 2024.
1.4.5.1.2.4 Customer business
| 31/12/2022 | 31/12/2021 | |
|---|---|---|
| Customer electricity supplied (in GWh) |
Customer electricity supplied (in GWh)31/12/202243,656 |
Customer electricity supplied (in GWh)31/12/202143,372 |
| Customer gas supplied (in GWh) |
Customer gas supplied (in GWh)31/12/202229,190 |
Customer gas supplied (in GWh)31/12/202136,032 |
| Number of domestic product customer accounts at the end of the period (in thousands) |
Number of domestic product customer accounts at the end of the period (in thousands)31/12/20225,542 |
Number of domestic product customer accounts at the end of the period (in thousands)31/12/20215,512 |
EDF Energy is responsible for the supply of gas and electricity and related services to residential and business customers across Great Britain and the wholesale market optimisation of EDF Energy’s generation and customer assets. The size of business customers ranges from large public sector contracts to small privately-owned businesses. EDF Energy adopts different risk management strategies for residential and business customers.
EDF Energy is the UK leader in energy efficiency installations, through the Energy Company Obligation Scheme (ECO).
EDF Energy remains committed to its Smart Meter installation programme and upgrading the UK’s energy infrastructure to enable concepts such as smart grids and time-of-use tariffs, which contribute to grid resilience as the UK moves towards a low carbon future.
EDF Energy supplied 11.231TWh of electricity and 28.288TWh of gas for the residential segment in 2022. As at 31 December 2022, EDF Energy had 3.264 million electricity accounts and 2.278 million gas accounts. The 2022 churn at 3% showed a decrease compared to 2021 (at 17%), driven by the Energy Crisis. EDF Energy’s market share decreased from 10.5% (2) in 2021 to 10.4% at the end of October in 2022.
Given the current cost of living crisis is now being accompanied with a forecast economic downturn until the end of 2024, there remains significant concern over the affordability of energy bills for customers. Therefore, EDF Energy is highly engaged with the UK Government and Ofgem to review issues such as supplier resilience, the future of the Default Tariff Cap methodology and Government support for consumers.
(1) Also see note 15.2.1 “Regulatory and contractual framework” of consolidated accounts.
(2) Cornwall insight figure. Electricity and gas perimeter.
