EDF Energy’s Medium Business segment have continued its focus on the number of meters, which has increased by 45% since the start of the year.
In the Large Business segment, the continuation of a targeted new-business approach has led to the successful acquisitions of 14 new customers in 2022, with 2 exceeding 100GWh. Additionally, 23 Large Business contracts have been renewed.
In the Public Sector, EDF Energy have supplied 17TWh over several large contracts including Crown Commercial Services, Network Rail and Scottish Procurement.
In the electricity purchase market, EDF Energy has grown its PPA business and has become the largest renewable power offtaker (based on owned and 3rd party capacity) according to the latest industry market report. EDF has also successfully bid to become the offtaker of the Sofia Wind Farm, 6.5TWh of annual volume expected to become fully operational in 2026.
In September 2022, the Government introduced the Energy Bill Relief Scheme (EBRS) to support businesses with their energy costs, in response to rising energy prices. Under the EBRS, the government is providing discounts on gas and electricity unit prices. The discount is calculated by comparing the estimated wholesale portion of the unit price a customer would be paying during winter 2022/2023 with a baseline ‘government supported price’ which is lower than currently expected wholesale prices this winter. The scheme runs from the 1 October 2022 until 31 March 2023. The support is applied to qualifying customers’ bills automatically by energy suppliers who then recover the costs from government.
Following two years of work, Ofgem completed its microbusiness review in 2022. The review culminated in a number of reforms to the market for microbusiness customers aimed at improving customer protections. These measures came into effect on 1 October 2022.
The policies surrounding EDF Energy’s energy purchasing and risk management activities are carried out in accordance with EDF group’s policies and ensure that EDF Energy’s activities are optimised and its services delivered at a competitive price while limiting its gross margin volatility. The Wholesale Market Services (WMS) Division’s purpose is to manage the wholesale market risk in one place within pre- defined risk limits and control framework. It provides an interface with the wholesale markets, via EDF Trading. WMS also provides modelling services to the whole of EDF Energy, as well as negotiating and managing asset backed commercial structures with third parties including providing route to market and optimization agreements for producers.
Since April 2010, 20% of the output from nuclear generation is separately sold to Centrica, the minority shareholder of the current nuclear fleet, under the agreements entered into with Centrica. The remaining 80% is sold internally under the same transfer price as used for the transaction with Centrica, based on published market prices, smoothed over forward electricity prices where liquidity allows.
Over and above its own generation, EDF Energy also sources electricity through export power supplied from power purchase agreements which are mainly with renewable and CHP producers. In 2022, EDF Energy acquired approximately 8.1TWh through this channel.
EDF Energy’s innovative Powershift platform gained its first customers in 2019. It offers customers flexibility and forecasting services for storage and small-scale generation to earn revenues from reducing or shifting energy demand. EDF Energy’s Battery Flexibility Services have secured an additional 273MW in the year for contracts between 7 and 12 years in length.
For delivery in 2022, EDF Energy’s net position on the wholesale market was a sale of approximately 1.6TWh (including structured trades). In 2022, EDF Energy sold approximately 31.6TWh and bought 30TWh.
Coal and gas contracts (physical and financial) and CO2 emissions rights are entered into by EDF Energy to hedge the fuel requirements of its power plants, gas storage and gas consumers. Purchases are based on generation forecasts and target fuels stock levels. In 2022, EDF Energy’s coal deliveries totaled c.131kt, as part of the National Grid Extension contract for West Burton A to provide security of supply throughout Winter-22.
Pod Point was successfully floated on the London Stock Exchange on 4 November 2021 raising £105 million of third-party financing to fund future growth in the UK electric vehicle market. EDF has retained a 54.05% stake in Pod Point following the IPO.
In 2022, Pod Point installed 68,693 Plug-in-Vehicles (PiV). These sales were achieved amid supply chain issues and slowing growth in the EV market.
Following the final investment decision (FID) made by EDF Energy’s Board of Directors on 28 July 2016, EDF Energy and China General Nuclear Power Corporation (CGN) signed contracts for the construction and operation of two EPR reactors on Hinkley Point site in Somerset (“Hinkley Point C” or “HPC” project).
EDF participates in the development of the Sizewell nuclear power plant project in Suffolk (“Sizewell C” project, based on EPR technology).
Morevover, EDF owns 33.5% of “Bradwell B” project based on UK HPR1000 technology, in Essex.
EDF Energy’s share in HPC is 66.5%, with CGN owning the remaining 33.5%.
As with any project of this scope, the project presents very important industrial risks in terms of schedule and budget overruns at completion of the project. These risks are detailed in section 2.2.4, risk factor 4A “Management of large and complex industrial projects (including EPR project)”.
