EDF / 2018 Reference document

PRESENTATION OF EDF GROUP Description of the Group's activities

The decommissioning of the Chooz A plants is still under way with the filling of the Chooz reactor pool and the end of the cuttings and extractions of the internal components of the reactor vessel, on schedule. Chooz A is a pressurised water reactor using a technology similar to the 58 units in operation, but of an older design. It was commissioned in 1967 and operated until 1991 (final ending date for power generation). The reactor location in a rocky cave in a hillside means that access conditions and entry and exit of materials are more difficult than those of the rest of the existing PWR fleet. After EDF chose to opt from 2001 for a strategy of decommissioning without any period of dedicated waiting time for radioactive decrease and following adoption in 2007 of the Decree for complete decommissioning, the decommissioning was launched and is expected to come to an end by 2022, that is to say 15 years after it was authorised. This duration was chosen by EDF for the decommissioning of the Pressurised Water Reactors. Following the filling of the Crey-Malville reactor vessel in end-2017, the dismantling process continued through the construction site of the cutting workshop for caps of the reactor vessels. Regarding Brennilis, pursuant to a 2008 agreement (1) with the CEA, EDF has become fully responsible for the decommissioning of this facility. The decommissioning work included in the scope of the original Decree is in progress with the demolition of the last section of the apron and soil excavation of the waste treatment plant. The decision of the Administrative Court of Appeal in Lyon of 4 December 2014, by restoring the validity of the ICEDA building permit, led EDF to relaunch the study of a file on the complete dismantling of Brennilis, taking into consideration any new regulations arising since the creation of the previous file, in particular the application of the BNF regulations. The complete dismantling file was thus submitted at the end of July 2018. The industrial strategy of the dismantling of the NUGG reactors was thoroughly reviewed at the end of 2015 with the shift from “in-water” dismantling to “in-air” dismantling, and takes into account the results of the 2013-2015 pre-project studies, which show a significant prolongation of the operations to dismantle the caisson (about 25 years instead of 10 as originally planned), and the need to make the operation less risky by completely dismantling an initial series unit before dismantling the other 5 units. The new dismantling strategy was presented to the ASN’s Audit Council in March 2016 and June 2017. At the ASN's request, a group of independent experts was commissioned to assess the robustness of the proposed dismantling whose chief features were confirmed. The update of the industrial scenario for the dismantling of first generation plants, in particular in regards to the NUGG reactors, had led to an increase in the provision of €590 million on 31 December 2015 (see note 29.1 to the consolidated financial statements at 31 December 2015). The update of their dismantling schedule has yielded the following sequencing: construction of an industrial demonstrator to test the tooling to be used during ■ the “in-air” dismantling of the first caisson; realisation of an “in-air” dismantling of an initial series unit, followed by the ■ realisation of a complete feedback procedure before engaging in the industrial dismantling of the other NUGG reactors; for the other caissons, work to develop a secure configuration after ■ electromechanical dismantling and the dismantling of the peripheral buildings and structures (reactor buildings, pool hall, etc.) will be carried out for some in advance in regards to the previous scenario. This new scenario forecasts an initial removal of the graphite from the first NUGG reactor by 2044 and pushes back the need for a disposal route for the other graphite waste to after 2070. After the first hearing of the ASN's Audit Council in March 2016, the ASN in its follow-up letter of 29 July 2016 suggested an exchange of ideas around the matter. At the ASN's request, a group of independent experts was appointed in the first quarter of 2017 to examine the solutions chosen by EDF to decommission its six NUGG reactors; EDF's measures were confirmed. A new hearing of the ASN's Audit Council was held in June 2017 on the basis of these conclusions and arguments submitted by EDF in March of that year.

EDF submitted documentation on strategy and secured configuration safety options as well as a detailed schedule of operations covering the 2017-2032 period in late December 2017. In 2018, ASN issued its main questions and conclusions on the NUGG strategy documentation. The “in-air” dismantling of all the reactors, the relevance of an industrial demonstrator, and the planning of the first “initial series unit” dismantled reactor (Chinon A2) appear to be accepted. However, discussions are continuing with regard to the schedule for dismantling the other five reactors. The schedule proposed by EDF would allow substantial feedback (dismantling of a first reactor) before the start of more complex phases. Although the ASN recognises the need to take into account the feedback on the initial series unit, it has not, at this stage, expressed agreement on the overall schedule. EDF was heard on 12 February 2019 by the ASN's Audit Council in order to present all information supporting the planning proposed by EDF. The ASN's proposed decisions which will be submitted for public consultation are expected in 2019. Considering the sources of uncertainty surrounding the complex operations to be undertaken (in particular the development of new methods and technologies), the provisions are highly sensitive to the sequencing of operations, and the overall schedule of the dismantling programme of the six reactors. If, ultimately, the Company has to change the schedule for the operations (shortening the sequencing), this is likely to lead to an increase in the level of provisions. Closure project of the Fessenheim plant Article L. 311-5-5 of the French Energy Code introduced by Law 2015-992 (“energy transition law”) caps the nuclear installed capacity in France at 63.2GW. The commissioning of the Flamanville EPR can therefore not take place before the closure of the two Fessenheim reactors in order to comply with that ceiling. The early closure of the Fessenheim plant would give EDF the right to compensation, as recalled by the Constitutional Council in its decision of 13 August 2015, on the occasion of the review of the constitutionality of Law 2015-992 of 17 August 2015 ("energy transition law"). Talks between EDF and the French government led to a draft memorandum setting out compensation principles that was approved by the European Commission under State aid rules. At its meeting of 6 April 2017, EDF's Board of Directors took note of the irreversible and unavoidable closure of Fessenheim provided that the revocation of the Fessenheim plant's operating permit takes effect only once the Flamanville 3 EPR comes into service and that the closure of the Fessenheim plant is necessary to comply with the legal cap of 63.2GW with regard to both the revocation request and the commissioning date of the Flamanville 3 EPR. Pursuant to the law, the Board had authorised the Chairman to sign the compensation memorandum negotiated with the French government and approved by the European Commission no later than the date on which the revocation request is made. The Board's decision, taken in accordance with Law 2015-992 of 17 August 2015 (“energy transition law”), secures EDF's corporate interests and will enable the firm to continue its business at the service of its customers in all circumstances. On 25 January 2019, the Ministry of Ecological and Solidarity Transition published the draft multi-year energy programme for the 2019-2023 and 2024-2028 periods which specifies that "the Fessenheim nuclear power plant should be decommissioned by spring 2020". Given this change in situation, new negotiations have started with a view to fine-tuning certain provisions of the draft agreement and in particular to dissociate the closure of Fessenheim from the commissioning of Flamanville 3, while maintaining EDF's right to compensation. EnBW, EDF’s partner in the plant, will under certain conditions be entitled to a share of lost earnings in proportion to its contractual rights to the plant's generation capacity. For its part CNP decided to end its involvement in the partnership. Once EDF took note of CNP's decision the contract between the two firms ended on 31 December 2017.

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iW th this agreement the CEA has become fully responsible for the decommissioning of Phénix. (1)

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EDF I Reference Document 2018