EDF / 2018 Reference document

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PRESENTATION OF EDF GROUP Research & development, patents and licences

Research in this field has a twofold purpose: improving Divisional performance through advanced simulation technologies; ■ facilitating the emergence of new opportunities for business lines through ■ innovative uses of new information and communications technologies. Developing and experimenting 1.6.2.1 with new energy services for clients The development of energy efficiency and distributed renewable energies, regulatory and technological changes (digitisation) as well as market deregulation, have all led to profound changes in the relationship between energy firms and their clients. They allow customers to be actively involved in their consumption and production of energy, on an individual or regional scale. Shifts in European and French legislation and regulation, exemplified by the EU's Clean Energy Package and France's National Low-Carbon Strategy (SNBC) and multiyear energy programme (PPE), as well as various tax incentives to replace fossil fuels with clean electricity (batteries vs combustion engines, heat pumps vs oil-fired boilers) are shaping the future energy landscape. In this context, the challenges for the EDF group's marketers and specialised subsidiaries are many, and its CAP 2030 goals aim high in terms of energy services: the development of price categories in order to adapt them to conditions of ■ intensified competition; the desire to develop electricity use in building and transport, built on a low ■ carbon mix to preserve market share threatened by the emergence of a new environmental regulation for 2020, to succeed the 2012 Thermal Regulation (RT); demand-side management: Green deal in the United Kingdom, energy savings ■ certificates in France, suppliers must fulfil their increasing obligations; the development of smart technologies: the deployment of smart metres, easier ■ access to client consumption data and the emergence of connected objects will open, for the public, access to new services permitted by new smart technologies (remote operating, increasingly customised offers, etc.); changes in client relations, which are becoming increasingly digital, with more ■ demanding client expectations accompanied by changing behaviours. However, the modernisation of this relationship should not obscure the accompanying increase in clients’ energy vulnerability, which calls for an appropriate response from the Company; the increased power wielded by local territories within the framework of the ■ Energy Transition Law and the NOTRe Law: the regional authorities, already active in the fields of urban planning and public energy distribution, can increasingly take responsibility for their future energy strategies. The notion of sustainable territories, which combines aspects of planning (eco-districts) and mobility (electric vehicles), is becoming a key structural component in local policies. New potential areas of service are emerging at the intersection of the development of smart technologies and the shift in power to local territories; the emergence of demand among customers to become stakeholders in their ■ own electricity generation through private energy generation and consumption; the development of the performance of our specialised subsidiaries in their ■ respective areas of activity. For instance, research has been conducted into new uses for electricity, such as electric mobility, heat pumps and more economic buildings. R&D helped EDF Luminus integrate its PACO industrial high-temperature heat pump prototype into a heating network in Belgium, raising its share of renewable energy generated by cogeneration. A co-development initiative has been launched with equipment manufacturers, which will ultimately lead to a reduction in the cost of heat pumps for the tertiary, commercial and residential sectors. Lastly, innovations relating to smart energy management for electricity used for heating have been developed, in particular for residential heat pumps and the modernisation of storage tanks in order to make them compatible with innovative control modes such as managing daytime and nightime off-peak consumption.

In 2018, the actions were based around the following priorities: consolidating processes of valorisation and protection of internal innovation and ■ boosting the 'time to business' through actions aiming to accelerate/promote the industrialisation phase; for EDF is to detect, assess and propose high value external innovations to the Group's Divisions; R&D validated more than fifty demonstration projects this year. development of ■ collaborative innovation notably through SME partners and start-ups proposing value added solutions for the Group's Divisions. The objective for EDF is to detect, assess and propose high value external innovations to the Group's Divisions. R&D validated more than fifty demonstration projects this year. More broadly, the innovation dynamic relies on a network of partners. Partnerships have been entered into with incubators/accelerators like Paris&Co, Numa and EDF is a member of the Scientipôle and Incuballiance associations. Framework agreements with junior entrepreneurs (HEC, ESSEC, ESCP, etc.) have been launched, to carry out market studies. Agreements are being negotiated with networks of international experts to assess our technologies; internal and external optimisation and dissemination of innovation. R&D ■ contributes directly to creating value for innovation, externally through its contributions within the framework of the EDF Pulse competition, events such as Vivapolis. R&D also contributes to the development of new business, notably through entrepreneurship in conjunction with “EDF Pulse Expansion” Department (see section 1.4.6.1.3 “EDF Pulse Expansion”). EDF also has a stake in the Amorçage Technologique Investissement fund (ATI) managed by CEA Investissement. This is directed at new French companies working in technological innovation for energy, the environment, micro-technologies and nanotechnologies. Lastly, six stakes held by EDF Pulse Expansion in venture capital funds in France, North America and China provide access to a global pool of startups and innovation: Robolution Capital, a fund focusing on robotics, launched in March 2014; ■ Chrysalix, a Canadian fund dedicated to cleantech venture capital, in ■ December 2011; Tsing capital, the first Chinese fund to be devoted to cleantech venture capital, in ■ December 2011; DBL Investors in the USA, a fund set up in 2008; ■ Mc Rock, a Canadian venture capital firm that specialises in the Industrial ■ Internet of Things (IIoT), in 2015; Partech, a transatlantic venture capital firm specialising in information and ■ communication technologies, in 2017. 1.6.2 EDF R&D’s work serves all the Group’s Divisions (except for recently consolidated Framatome which still has its own R&D Division). For each of them, it offers technological solutions or innovative business and economic models designed to improve their performance, and prepare the Group’s future in the longer term by means of medium and long-term anticipation initiatives. It is one of the factors in EDF becoming a global industrial group providing low-carbon electricity systems. EDF’s R&D performs work for Enedis on the networks under a services agreement, which defines obligations that guarantee the protection of commercially sensitive information and compliance with the principle of the independent management of the distributor. As the energy sector undergoes profound change, the goal of EDF R&D may be defined in terms of three strategic avenues: developing and experimenting with new energy services for clients, preparing the electricity systems of the future and, moreover, consolidating and developing competitive, low-carbon production mixes. R&D also engages in research into information technology to support these three strategic avenues. This research is in turn structured around five major areas: complex systems, the management and the processing of large volumes of data, the Internet of Things, cyber security and the simulation of physical problems. R&D PRIORITIES

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I Reference Document 2018