EDF 2017 financials squeezed as utility accelerates transition from nuclear to renewables

Despite hitting annual sales targets, revenue slips following fall in nuclear and hydropower prices in French utility’s key markets. New Solar Plan forms backdrop of renewable energy transition, company says.

EDF's renewable activities are accelerating as the company slowly pivots towards solar energy.

Image: EDF

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EDF, the French power utility, has posted a fall in revenue for 2017, as a combination of lower nuclear and hydropower output and prices, alongside its accelerated transition to renewables, weighed on the company’s bottom line.

Despite continued dominance of the French electricity market – which is still heavily reliant on nuclear power – EDF saw its revenue for 2017 fall to €69.6 billion, down from €71.2 billion in 2016. Although only a contraction of 2.2%, this slide does exhibit how structural challenges in the firm’s traditional energy sectors are having an impact.

Both nuclear and hydropower output in France was lower than the year prior, as the country begins to adopt more renewable capacity on the grid. In the U.K., too, where EDF is a leading nuclear power provider, EBITDA fell by a third, due to lower nuclear prices and a slowly shifting power generation landscape.

EDF, for its part, has at least begun to embrace its renewable energy responsibilities with more gusto, and will invest more than €25 billion in solar power and green electricity tariffs over the coming few years.

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This transition was always going to exert a toll on earnings and income, the company said, but EDF chairman and chief executive, Jean-Bernard Levy said that he expects a rebound in 2018 delivered not by an uptick in nuclear – which is expected to decline further – but via cost savings injected to offset anticipated revenue decline.

“We are beginning an unprecedented acceleration in renewable energies with the launch of EDF’s Solar Plan, at the same time that we are strengthening our commercial initiatives,” said Levy. “Supported by our staff dedicated to working in the service of the energy transition and by a newly reorganized nuclear industry, EDF now enjoys a solid basis to achieve the rebound expected in 2018.”

EDF Energies Nouvelles, the utility’s renewables division, reached a renewables output of 12.6 TWh in 2017, which represents an increase of 11% on 2016.

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