Energy bills: Couple discuss the increase in their prices
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French energy firm EDF announced that its UK business had profits of more than £1 billion thanks to soaring wholesale electricity prices. As the cost of wholesale gas skyrocketed following Russia’s invasion of Ukraine, it had a knock-on effect on electricity prices, as a large percent of the UK’s electricity is generated from gas-fired power plants. As a result EDF, which was struggling financially, was able to bounce back into profitability in the last year, as it was able to sell its electricity at higher prices. The company announced a pre-tax profit of £1.1billion in the UK in 2022.
EDF, which operates the UK nuclear power plants, attributed its profits to soaring energy prices, along with a stronger operational performance of its nuclear fleet
The company is currently building the Hinkley Point C nuclear reactor in Somerset, which has been hit with delays and ballooning cost overruns.
The plant was originally meant to have begun producing enough electricity to power seven percent of the country’s needs by 2017 at a cost of £18billion.
However, in 2021 EDF updated its Hinkley Point construction schedule, when it said the plant would be postponed by six months to June 2026 with the cost surging to around £25billion.
Today, the company said the £25billion figures were based on calculations made in 2015, however inflation could mean that the “the estimated nominal cost at completion could reach £32.7billion”.
EDF, which is currently in the process of being fully nationalised by the French government, is the UK’s fourth-largest energy supplier, providing gas and electricity to more than 5 million households in the UK.
The company also said its UK supplier business lost more than £200million, as the cost of buying wholesale energy was more expensive than the rates they could charge households, thanks to the price cap imposed by the Government.
While EDF enjoyed bumper profits in the UK, the french company as a whole reported a record net loss of £16billion due to plummeting nuclear output in France after over half of their reactors were shut down due to maintenance work or corrosion leaks.
Luc Rémont, chairman and chief executive officer of EDF, said: “The 2022 results were significantly affected by the decline in our electricity output, and also by exceptional regulatory measures introduced in France in difficult market conditions.
“Despite all the challenges, EDF actively focused on service and support for all its residential and business customers and made every endeavour to ensure the best generation fleet availability for the winter period. All the Group’s employees deserve praise for their dedication and great resilience in a difficult environment.”
Its announcement this morning comes after Centrica, owner of British Gas, yesterday confirmed its operating profits hit £3.3billion last year.
Over the last few weeks, energy giant Shell also announced profits of £32.2billion ($39.9billion) for last year, while BP profits hit £23billion ($27.7billion). US heavyweight Chevron has revealed record annual profits of £28.6billion while ExxonMobil reported full-year earnings of £45.2billion.
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As many households struggle with soaring power bills the massive profits raked in by energy companies have provoked accusations of profiteering.
Record operating profits of £3.3billion were recorded at Centrica, up from £948million in 2021 and surpassing the firm’s previous highest of £2.7billion, posted in 2012.
The general secretary of the Unite union, Sharon Graham, said the figures were “obscene”. She said: “Energy companies are showing us everything that is wrong with the UK’s broken economy.”
Trades Union Congress general secretary, Paul Nowak, called for public ownership of energy companies and said: “While millions of families struggle to heat their homes, firms like Centrica are raking in monster profits.”
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