Published on :
The French government takes note of “ the deterioration of EDF’s financial situation and is counting on the new CEO Luc Rémont to raise the bar. ” Deterioration of the situation is almost an understatement. The French electrician announced Friday morning February 17 a net loss of nearly 18 billion euros while the group was profitable in 2021, which constitutes one of the worst losses in the history of the Cac 40.
Soaring electricity prices and a boom in the number of customers. Looking at only part of the picture, these losses seem counter-intuitive. But, EDF has accumulated setbacks and in thirty yearsa production had not been so low. For the first time since 1980, France was also a net importer of electricity.
The drought has reduced the potential of the dams. Above all, the crisis of stress corrosion “, that is to say microcracks on pipes of nuclear power plants, associated with a delay in maintenance due to Covid-19, have caused nuclear production to fall by almost a quarter.
To supply its customers, EDF therefore had to buy electricity at exorbitant prices on the markets without necessarily being able to resell it at a high price. For customers benefiting from the regulated tariff, the government capped price increases at 4% last year. It also forced EDF to sell more power at an advantageous price to its competitors. This last measure alone cost more than 8 billion euros to EDF.
EDF, which also has a financial debt of more than 64 billion euros, against 43 at the end of 2021.
► To listen also: « We are becoming exporters again but we have not emerged from the energy crisis »
How to raise the bar?
« The first thing is to stop burdening the company, by allowing it to gradually increase its prices, analyzes Jacques Percebois, director of the Center for Research in Energy Economics and Law (Creden), at the microphone of Pauline Gléize of RFI’s economy department. Admittedly, electricity prices have fallen on the wholesale market so it will probably be a little easier, but EDF must not always be the state’s cash cow. We can also hope that within the company, we will put the power stations back afloat a little. That doesn’t solve the problem for the future because for the future, we’re going to have to invest massively in new nuclear power and EDF won’t be able to go into very high debt, the debt has already reached 64 billion euros. »
For the economist, EDF will thus have to find new means of financing. ” it can exist, he said, since the State nationalizes EDF at 100%, the State as a shareholder can provide capital grants. And then, we have to think about new financing mechanisms, those that are practiced for example in England for the English nuclear industry, that is to say systems that we call contracts for difference, BPA. BPA means that you have large industrial consumers or competitors of EDF or electricity producers who wish to invest in nuclear power through EDF and who in return have drawing rights on production. So we have to think about financing mechanisms. »
► To listen also: “The decisions taken by EDF will have little consequence for this winter”
The 100% renationalization of EDF, an asset for the electrician?
« For the moment, the State being a shareholder, EDF must pay dividends for many years to the State, continues Jacques Percebois. The State has received more from EDF than it has paid to EDF, especially since it is very difficult for the State to give subsidies to EDF because the European Commission is vigilant: it does not like not that we pay subsidies to companies that are in a situation of competition. So now the fact that EDF is 100% public, which in my opinion does not change things fundamentally, simply allows the State to have a little more freedom, does that will lead to substantial changes? No. I think it will allow EDF, if EDF borrows on the international markets, to give additional guarantees because it means that EDF being a totally public company, when EDF goes into debt, it is as if the French State s was in debt. But in any case, EDF will not be able to borrow too much, we cannot finance new nuclear solely by borrowing. »