EDF / 2018 Reference document

1.

PRESENTATION OF EDF GROUP Description of the Group's activities

1.4

DESCRIPTION OF THE GROUP'S ACTIVITIES

The EDF group is an integrated energy company active in all electricity businesses: nuclear, renewable and thermal generation, transmission (through RTE (1) an entity accounted for using the equity (method), distribution (through Enedis (2) ), sales and marketing, efficiency and energy services, and energy trading. It is the leading player in the French electricity market and holds strong positions in Europe (mainly in the United Kingdom (UK), Italy and Belgium), which makes it one of the world’s leading electric energy companies and a renowned gas player. It is also present in the design and manufacture of equipment and fuel for nuclear reactors, and in related services (activity carried out by Framatome). With a global installed net generation capacity of 126.5GWe (3) as at 31 December 2018, generating 584TWh worldwide, the Group has one of the largest generation fleets in the world. Among the ten largest global power suppliers, it produces the smallest amount of CO 2 per kilowatt-hour (4) generated thanks to the share of nuclear, hydro and other renewable energies in its generation mix. The EDF group supplies energy and provides services to 39.8 million customer sites (5) worldwide (of which 29.7 million in France) including: to 34.7 million customers (6) in electricity, of which 28.2 million in France; ■ to 5.1 million customers (7) in gas, of which 1.5 million in France. ■ The Group is thus implementing an integrated model for the joint operational management of its portfolio of assets upstream (generation and procurement of energy and fuels) and downstream (wholesale and retail) to guarantee supply of energy to its customers through the best possible management of operational and market risks and with a view to maximising gross margin.

these two departments, the Engineering and New Nuclear Project Department is responsible for the development projects for the Group’s new nuclear generation assets, in France and abroad. Each of these three departments has all the expertise and performance drivers required to operate the leading European electricity generation fleet and ensure its development and sustainability, and offer their technical and industrial expertise to the whole Group in these three areas.

Strengths of the generation fleet The Group’s generation fleet has significant strengths: a competitive generation mix with low variable generation costs (8) ; ■

a variety of means of generation, which enable adequate coverage of EDF’s ■ downstream portfolio needs (end users, sales to alternative suppliers, sales on the wholesale markets, etc.). Use of the fleet’s various components is managed by giving priority, at any given time, to the generation type offering the lowest variable costs: run-of-river hydropower plants are used for base generation; nuclear plants, because of their low variable generation costs, are used for base and mid-merit generation; adjustable hydropower generation (coming from dams) complemented by energy transfer pumping stations (STEP) (9) and thermal fleet are used for mid-merit and peak generation; a significant standardised fleet of nuclear facilities, for which EDF provides full ■ control over their entire life cycle. Moreover, EDF is working towards extending the operating lifespan of its power plants and improving their technical performance; a fleet generating at 90% without CO 2 emissions due to the predominance of ■ nuclear and hydropower generation facilities, in an increasingly restrictive environmental regulatory context; a geographical position at the junction of electricity exchanges between the ■ continental platform and the electric peninsulas (Italy, Spain and the UK).

1.4.1

ELECTRICITY GENERATION

ACTIVITY

In mainland France, the electricity generation activities are split across the Nuclear and Thermal Fleet Department and the Renewable Energy Division. In addition to

RTE, transmission network operator, independently managed within the meaning of the French Energy Code. (1) Enedis is an independently managed subsidiary within the meaning of the provisions of the Energy Code. (2) Source: EDF. Figures calculated according to consolidation accounting rules. (3) Source: comparison based on data published by these ten groups. (4)

Customers are counted at the end of 2018 per site; a customer can have 2 delivery points: one for electricity and another one for gas. (5) The number of electricity sites at end-2017 was 35.9 million, of which 29.4 in France (EDF excluding ES and overseas departments). (6) The number of gas sites at the end-2017 was 4.7 million, of which 1.5 in France (EDF excluding ES and overseas departments). (7) Variable generation costs correspond to all costs that vary directly with the amount of energy generated. Variable costs for electricity generation are mainly fuel costs. (8) EDF operates 5GW of STEP in France and its engineering is referenced to the tune of 30GW abroad (e.g.: Israel, Chile). (9)

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I Reference Document 2018