EDF / 2018 Reference document

1.

PRESENTATION OF EDF GROUP Research & development, patents and licences

Strengthening wholesale energy market integrity and transparency must foster open and fair competition on these markets, in particular so that prices set on these markets reflect a fair and competitive interplay between supply and demand. The regulation prohibits insider trading and market manipulation, and establishes an obligation to publish inside information as defined in the REMIT. The European Agency for the Cooperation of Energy Regulators (ACER) is primarily responsible for monitoring wholesale trades in energy products, in order to detect and prevent transactions based on inside information and market manipulations.

ACER also collects the data needed to assess and monitor markets. The regulation provides that market participants, or a person authorised to do so on their behalf, provide ACER with a detailed statement of the transactions in the wholesale energy market. Lastly, market participants that perform transactions for which a declaration to ACER is mandatory must register with the national regulatory authority of the Member State in which they are established (the CRE in France) or, if they are not established in the European Union, that of a Member State in which they do business.

1.6

RESEARCH & DEVELOPMENT, PATENTS AND LICENCES

The main missions of the EDF group’s Research and Development Division (R&D) are firstly, to support the Group’s Divisions and subsidiaries on a day to day basis, by providing them with its top-level expertise and high performance practices, and secondly, to contribute to build the Group’s future by anticipating the developments

In 2018 the R&D Division updated the list of disruptive initiatives it is leading to prepare for the Group's future: Five new disruptive initiatives were identified: a decarbonised economy powered by clean electricity – to combat climate ■ change and encourage growth, the world's major economies must reduce their carbon footprint. Electricity will be one of the key drivers of low-carbon growth. R&D is investing its technical resources to rise to the challenge; distributed storage and generation – more efficient and cheaper storage, solar ■ power and distributed generation solutions (e.g. standalone solar power systems, micro-cogeneration) are causing electricity companies to make major changes to their business models, currently based on balancing demand and supply at all times and mitigating network incidents. To help reach EDF's goal of developing 10GW of energy storage across the world by 2035, R&D is pouring resources into batteries, standalone power systems, distributed generation and carbon-free hydrogen; smart buildings & smart cities – future buildings must do their bit to lower ■ greenhouse gas emissions while tomorrow's cities must be such that one can sleep with the window open on account of the clean air, low noise, safe neighbourhood and eco-friendly atmosphere. To make this happen, EDF R&D will design methods and tools to manage and optimise combined power systems; nuclear innovation – to bring about the nuclear plant of tomorrow, EDF has ■ identified 18 technological building blocks for cutting edge innovation in digital technology (e.g. digital twins), manufacturing (e.g. 3D printing), materials (e.g. innovative fuels) and optimisation (e.g. renewables-nuclear energy mix); flexible, forward-looking R&D – the EDF group is adapting its R&D model to ■ create value for its various entities and enable it to meet intensifying technological and competitive challenges head on.

and major challenges with which it is confronted. In particular, these challenges include the following:

the complementarity between nuclear generation and generation from ■ intermittent renewable energies in order to support the energy transition and reduce CO 2 emissions; water use and environmental management; ■ the rapid development of emerging countries and the resulting shift in ■ consumption areas; the significant development of information technology applied to energy, offering ■ new opportunities for the electricity business, the changing behaviours of clients; consumers and local authorities who are also becoming producers, and seeking ■ to consume more effectively, living in buildings, neighbourhoods and cities that have greater energy autonomy. In this context, R&D’s role is crucial when it comes to finding solutions to all of these challenges. Its avenues of research are structured around three broad priorities: developing and experimenting with new energy services for clients, enabling ■ demand-side management that is both flexible and low-carbon, thanks to improvements in knowledge of demand, the development by clients of energy efficiency, the promotion of new, effective uses of electricity, often in combination with renewable energies (heat pumps, electric mobility, etc.), the development of technical and economic modelling to engineer buildings, industry and sustainable cities, and the development of uses and consumption being integrated into the electricity system itself through the use of smart grids and appropriate pricing; preparing the electricity systems of the future, by: optimising the lifespan of ■ network infrastructures and accompanying adaptation of the electricity system by improving network asset management; implementing optimisation models and economic scenarios for new infrastructure projects relating to energy transport; inserting intermittent energies; and developing smart grids; consolidating and developing competitive low-carbon production mixes: One of ■ the major challenges of the transition is to ensure the efficient co-existence of traditional means of generation, notably by further improving the security and performance of the existing nuclear plant as well as its operating lifespan, with the development of new renewable energies by improving their performance and integration into the energy systems.

1.6.1

R&D ORGANISATION AND KEY

FIGURES

EDF’s R&D is both integrated and cross-disciplinary, in order to facilitate synergies and method transfers between the different Divisions within the Group. Adding EDF's R&D budget of €510 million to that of some of its subsidiaries, including Framatome, the Group's total R&D allowance in 2018 came to €711 million. This is one of the largest R&D budgets of any major electricity company. Approximately two-thirds of this budget is devoted to programmes put together on a yearly basis under contractual agreements with EDF’s operational Divisions and subsidiaries. The remaining third goes to medium and long-term anticipation initiatives that fall within Group R&D priority areas.

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I Reference Document 2018