2022 REVIEW | POWER MARKET DEVELOPMENTS
Above: The delayed restart of Vattenfall’s Ringhals unit 4 also hit nuclear output
after 46 years of life). UK sales increased by 61.3% from €10.1bn to €16.1bn – a reverse of the situation in 2021, when EDF Energy had to buy power at the start of the rise in prices to compensate for low generation levels, resulting in a loss of €21m. The company credited good fleet availability and a lighter maintenance programme than in 2021.
The market continues to reward flexibility, and that
means companies like Centrica (see box) and Vattenfall, below, are increasing their investment in flexible assets. With Framatome in its portfolio, EDF has to take a lead on new nuclear construction. The company updated the market on the Flamanville
project in December 2022, when it said the planned date for fuel loading had been delayed from Q2 2023 to Q1 2024 and the estimated cost had increased from €12.7bn to €13.2bn. The nuclear utility also highlighted two significant steps with its European neighbours. It has signed a Framework Cooperation Agreement for Nuclear New Build in Finland and Sweden with Fortum. It has submitted an initial bid to Czech operator ČEZ and its project company Elektrárna Dukovany for one EPR1200 reactor for the Dukovany site in the Czech Republic. It also recently reaffirmed its offer based on the EPR technology to support the ambitions of the Polish Nuclear Power Programme to deliver up to 9 GWe of nuclear output by 2043.
Vattenfall looks to nuclear for long-term Another nuclear generator also saw a shift in its business in 2022. Vattenfall’s wind business (which also includes some solar) was almost as important for the company’s earnings as was its longstanding nuclear and hydropower segment. The nuclear portfolio decreased last year as its German nuclear plants closed for good and it too had ongoing maintenance issues to manage. But it also suffered because it was unable to gain from high power market prices because of lack of transmission capacity in Sweden. Vattenfall’s wind farms are offshore of Denmark and Sweden, as well as onshore in the UK. Wind generation from 3 GW of capacity at 50 wind farms rose slightly from 11.2 TWh in 2021 to 12.2 TWh, but Ebitda jumped from SEK13,451bn
(€1.21bn) in 2021 to SEK22,508bn (€2bn) as a result of higher electricity prices on the Continent and new capacity coming online. Vattenfall’s nuclear and hydro business remained steady
overall. Generation from nuclear power declined (-0.8 TWh), owing to lower availability caused by the delayed restart of Ringhals 4. The work on repairing the damaged pressure regulator at Ringhals 4 is ongoing “at high pace”, the company said and the reactor is planned to restart on 19 March. That outage was partly offset by Forsmark, which reached record levels of generation in 2022 with 25.5 TWh delivered. Overall, nuclear generation was 39.6 TWh, slightly down
from 40.4 TWh the previous year, while hydro generation was 40.5 TWh, a shade down on 40.8 TWh in 2021. But in contrast to the high earnings from the wind business, Ebitda in nuclear and hydro fell from SEK40,312m (€36m) to SEK28,193m (€25m). The decrease is partly attributable to lower achieved electricity prices in the Nordic countries due to major price differences between price areas in Sweden. In recent years, the differences in electricity prices between the areas have grown wider as a result of bottlenecks in the transmission grid, which prevents the electricity from reaching southern regions. With its attractive return, it is no surprise that in the
next few years Vattenfall is investing in wind, with a plan to quadruple its present capacity by 2030. Upcoming investment of SEK50bn (€4.5bn) will see the largest share, SEK38bn (€3.4bn), invested in wind power. Vattenfall will also invest in electricity grids and expansion of district heating operations. Other growth investments include charging infrastructure, solar and battery projects and heat energy solutions. The company is supportive of plans for new nuclear in Sweden but that is further ahead. It said, “We welcome the fact that the energy issue is given high priority on the public agenda and that nuclear power is once again viewed as a natural part of the Swedish energy mix. All fossil-free energy sources are needed, and we are looking forward to participating in bridging the existing gap between supply and demand in fossil-free energy.” ■
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