EDF / 2018 Reference document

PRESENTATION OF EDF GROUP Legislative and regulatory environment

Regulations applicable to renewable 1.5.6.2.5 energy generation The “Climate Package” (known as the “2020 Energy-Climate Package”) is the source of a set of measures aimed at ensuring that, by 2020, the EU will achieve the objectives of a 20% reduction of greenhouse gas (GHG) emissions, a 20% improvement in energy efficiency and a 20% portion of renewable energy (REN) in energy consumption. The “2030 Energy-Climate Package”, which was adopted on 24 October 2014, set new targets for 2030: a 40% reduction in GHG emissions compared to 1990, 27% of renewable energies in the energy mix and a 27% improvement in energy savings. One of the five instruments that make up the 2020 Energy-Climate Package is Directive no. 2009/28/EC of 23 April 2009 on the Promotion of the Use of Energy from Renewable Sources, known as the “REN” Directive. It allocates the effort to reach the target of 20% of renewable energies in final EU energy consumption by 2020 among Member States, taking into account, among other aspects, the national energy mix, the potential of each State and its GDP, and requires Member States to adopt national renewable energy action plans. According to Article 4 of the aforementioned REN Directive, France adopted its National Action Plan in favour of renewable energies (2009-2020). This plan, in accordance with the REN Directive, sets a national target of a 23% share of energy from renewable sources in the gross final consumption of energy by 2020. The Law of 17 August 2015 on Energy Transition for Green Growth also provides for a target of 32% of renewable energies in energy consumption by 2030. Moreover, the same Law provides that the National Plan will be replaced by the part of the PPE that concerns the development of renewable energies and energy recovery. In order to achieve the objectives of the REN Directive, the Grenelle 2 Law created new land planning instruments with a view to enabling balanced development between the various renewable energy sectors. These include: regional climate, air and energy schemes (SRCAEs), for which the legal ■ framework is laid down in Articles L. 222-1 to L. 222-3 and R. 222-1 to R. 222-7 of the French Environment Code. As of 1 May 2014, all regions had adopted their SRCAE; regional schemes for connection to renewable energy networks (S3RERs), of ■ which Articles D. 321-10 to D. 321-21 and D. 342-22 to D. 342-25 of the French Energy Code specify the content, approval rules, host capacity management and financial conditions for the connection of electricity producers. Under Article 15 of the REN Directive, an Order of 14 September 2011 (ratified by Law no. 2013-619 of 16 July 2013) amended the legal rules on the guarantees of origin of the electricity produced using renewable sources or by cogeneration, laid down in Articles L. 314-14 et seq. of the French Energy Code. The terms and conditions to implement this new scheme and the rules for appointing the organisation in charge of managing guarantees of origin (issuing, transfer, cancellation) are stipulated in Articles R. 314-24 to R. 314-41 of the French Energy Code. As producer and mandatory purchaser of electricity produced using renewable energy sources, the EDF group is concerned by these provisions. The Law of 17 August 2015 on Energy Transition for Green Growth has empowered the Government to take Order no. 2016-1059 of 3 August 2016 relating to the electricity generation from renewable energies, which has amended the provisions applicable to facilities generating electricity from renewable sources in order to ensure their better integration into the electricity market and to provide the technical provisions necessary for better integration into the electricity system of connected electricity generation facilities to a public distribution network, particularly facilities generating electricity from renewable sources. The Grenelle 2 Law also contains exceptional provisions designed to encourage the development of sea-based energies, which were enhanced by the Law of 17 August 2015 on Energy Transition for Green Growth. In addition, Article 18 of Law no. 2014-1545 of 20 December 2014 on the simplification of corporate life empowers the Government to set up a dedicated, comprehensive authorisation system for sea-based facilities that produce renewable energy and that are located in the maritime public domain, and for the connection structures for these facilities. Moreover, Decree no. 2016-9 of 8 January 2016 simplified the legal procedures that are applicable to sea-based renewable energy projects that win competitive tendering procedures. Furthermore, the Law of 17 August 2015 on Energy Transition for Green Growth provides an exceptional appeal timeframe for the benefit of “facilities that produce

energy from renewable sources” of four months in which to contest an authorisation, as from, respectively, either the publication of the authorisation, or its notification. Regulations applicable to wind power 1.5.6.2.6 generation Pursuant to Articles R. 421-1 and R. 421-2 of the French Urban Planning Code, a building permit must be obtained for land-based wind farms with a height equal to or greater than 12 metres. However, the environmental authorisation granted for the completion of an onshore wind farm project is exempted from the requirement for a building permit, in accordance with Article R. 425-29-2 of the French Urban Planning Code. For its part, the construction of wind farms on the public maritime domain is exempted from the requirement for a building permit, in accordance with Article R. 421-8-1 of the French Urban Planning Code. In addition, the Grenelle 2 Law provides that onshore wind farms are now subject to the nomenclature applicable to ICPEs with the legal system of authorisation or declaration (see section 1.5.6.2.1 “Regulations applicable to facilities classified for the protection of the environment (ICPEs)”) under section 2980 “Terrestrial facilities for the generation of electricity using mechanical wind energy with one or more wind-power generators”. In connection with the application for a building permit, an impact study must be performed for wind farms that are subject to authorisation and submitted with the building permit file. The Law of 17 August 2015 on Energy Transition for Green Growth amended the rules on the distance required between wind farms and housing: the minimum distance of 500 metres is maintained, but may be increased in light of the impact study, which is part of the authorisation application. It also inserted provisions into Article L. 146-4.I of the French Urban Planning Code that are designed to facilitate the location of land-based wind farms in municipalities concerned by the “Coastline” Law. A decree is also expected to clarify the rules on wind farm location with regard to military facilities and sectors, weather monitoring equipment and air navigation equipment. The operator of a wind farm, or in the event of default, the parent company, is responsible for decommissioning the farm and site restoration, as soon as operation is terminated for any reason (Articles L. 553-3 and R. 553-1 of the French Environment Code). For this purpose, the operator is required to lodge financial guarantees as of the start-up of generation and for subsequent accounting periods. The authorisations relating to the generation and transmission works necessary for the development of offshore wind farm projects are subject to a specific litigation framework, laid down by Decree No. 2016-9 of 8 January 2016. Regulations applicable to public 1.5.6.2.7 procurements Directive no. 2014/24/EU on Public Procurement and Directive no. 2014/25/EU on Procurement by Entities Operating in the Water, Energy, Transport and Postal Services Sectors, to which EDF is subject as a purchaser, have been transposed into French domestic law by: order no. 2015-899 of 23 July 2015 on public procurement contracts, which ■ unified the various competitive tendering procedures that previously existed in the French Public Procurement Code and Order no. 2005-649 of 6 June 2005; decree no. 2016-260 of 25 March 2016 that implemented the Order of ■ 23 July 2015. These texts entered into force on 1 April 2016 ENERGY MARKETS Inspired by the rules contained in Directive no. 2003/6/EC on Market Abuse applicable to financial markets (see section 4.1 “Corporate Governance Code”), regulation (EU) no. 1227/2011, known as the “REMIT” regulation, on wholesale energy market integrity and transparency came into force on 28 December 2011 This regulation is aimed at preventing market abuse and manipulation on wholesale energy markets and strengthening the confidence of market participants and consumers. REGULATIONS ON WHOLESALE 1.5.7

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EDF I Reference Document 2018