EDF makes £8.5bn profit as France tells UK to pay more for nuclear projects

Healthy results come despite ballooning costs for Hinkley Point C

The French energy giant behind Hinkley Point C has made a €10bn (£8.5bn) profit amid a row over funding for the troubled British nuclear power project.
EDF, the French state-owned power giant, returned to profit last year following its massive losses in 2022. It came despite ballooning costs for its UK nuclear project at Hinkley Point C in Somerset.
Annual results published on Friday show EDF recorded a net profit for 2023 of €10bn (£8.5bn), compared to a €17.9bn loss a year earlier after several reactors had to be shut down for repairs and as the energy crisis gripped the world.
The healthy profit comes amid a row between Britain and France over who should pay for the ballooning cost of Hinkley Point C.
Last month, EDF revealed that Hinkley is likely to be delayed until 2029 or even 2031, and the price could hit as much as £46bn in today’s money. That compares with the initial budget of £18bn and a scheduled opening in 2025.
EDF has said many of the extra costs were caused by the UK government insisting on expensive extra safety measures after the 2011 Fukushima nuclear disaster.
Such issues have led to new tensions with the French government whose finance minister Bruno Le Maire has told Claire Coutinho, the UK energy secretary, that Britain will have to stump up extra cash for the project. Britain insists EDF must pay.
The contracts around Hinkley put the onus on EDF to complete construction without any UK bailouts. However, Britain is also relying on EDF to build the planned Sizewell C reactor in Suffolk, adding an extra dimension to negotiations.
EDF chief executive Luc Remont said he was in talks with the UK government over the “long-term financing” of Hinkley and Sizewell C.
Mr Remont said: “We’re obviously having talks with the British government on both projects.”
Centrica chief executive Chris O’Shea, which has a 20pc minority stake in EDF’s UK nuclear operations, on Thursday confirmed that his company is discussing co-financing Sizewell C.
Mr Remont said: “We’re having talks with the British government and other investors to set up the financing of Sizewell C.”
EDF emphasised its concern over its UK investments, pointing out that it had spent £3.6bn last year but earned only £3.4bn on which it also paid a £600m tax bill.
While it returned to profit last year, the company, which runs all of the UK’s existing nuclear stations, is still carrying €54bn in net debt.
Mr Remont said Hinkley could still be profitable for EDF despite the extra costs and delays, adding that the company wanted to complete it as soon as possible.
EDF’s financial performance improved last year as most of its reactors came back online, with French nuclear production increasing by 41.4 terawatt-hours (TWh) to 320.4 TWh.
Earnings were boosted further because the increased output coincided with historically high electricity market prices. The group said it expects nuclear power output to rise again in 2024.
Mr Remont said in a statement: “EDF has managed a turnaround in 2023, notably thanks to a rebound of its nuclear output. With these good results, EDF has met its financial targets and reduced its financial debt.”
EDF may benefit from a further rebound in its French nuclear production in the coming years as it progresses with checks and repairs of its reactor fleet. Stress corrosion cracks first uncovered in late 2021 have affected pipes at more than a dozen of its 56 atomic units.
Output is also due to get a boost in coming months from the startup of a much-delayed new reactor at Flamanville in northwestern France.  
However, Mr Remont has warned that the group’s cash flows will come under pressure again as annual investment rises to about €25bn in a few years, up from €19.1bn last year. That is because the French government wants it to build at least six new nuclear plants and to adapt the country’s grid for rising solar and wind generation.
Mr Le Maire has said EDF must focus on new nuclear projects in France where several new nuclear stations are needed to replace those approaching end of life.