EDF / 2018 Reference document

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PRESENTATION OF EDF GROUP Description of the Group's activities

Access to customer data is subject to certification and signing an acceptable use policy. Special attention is also paid to the implementation of actions on a proactive basis. A Customer Preference Centre allows Residential customers to enjoy a central view of consents and preferences and manage these consents from their customer space. Public electricity distribution 1.4.2.2.5 concessions at regulated tariffs Concessions hereby referred to cover two distinct public service missions: the development and operation of public distribution networks, which are the ■ responsibility of Enedis (1) in mainland France, excluding Local Distribution Companies (ELD) (see section 1.4.4.2 “Distribution – Enedis”) and of EDF in the non-interconnected areas (ZNI); the supply of electricity to customers benefiting from regulated sales tariffs ■ connected to the public distribution networks, under the responsibility of EDF for mainland France (excluding ELDs) and ZNIs. This mission is carried out in compliance with the commitments of the concession specifications and general terms and conditions of sale (subscription terms, payment and delivery terms, contractualisation, etc.). Each concession contract in continental metropolitan France is co-signed by EDF, Enedis and the licensing authority, and concerns a municipality or a grouping of municipalities. These public service missions are executed within the framework of 475 concession agreements of which 50 are at Department level. 2018 was the first year of the process concerning the implementation of the new national concession agreement model which was the subject matter of an agreement signed on 21 December 2017 between EDF, Enedis, the FNCCR (national federation of licencisng authorities) and France Urbaine. Some sixty agreements aligned on this new model were entered into at 31 December 2018, with departmental energy consortia, urban communities and communes. 2019 will be marked by the continued application of the new agreement model. An organisation and tools are maintained, particularly in order to renew concession contracts, mobilise both national and regional competences, develop the expertise of EDF’s contacts in the contracting authorities, draw up each year the concession activity reports (CRAC) and respond to inspection requests from the granting authorities. The of EDF’s upstream/downstream electricity portfolio, optimising and securing the electricity gross margin created by this portfolio, as well as managing the associated physical and financial risks. Management of electricity supply/demand can be broken down to real-time, within the framework set by the policies of extreme risk (volume risks) and of price risks, developed pursuant to the Directives of the Group Risk Control Department, and validated by its Executive Committee (see section 2.1.2 “Risks related to the competitive and general context”). Climate variations affect this management. Hence, a fall in temperature of 1°C in winter leads to a rise in electricity consumption in France of the order of 2,400MW (2) and EDF’s portfolio bears a large part of this thermosensitivity. In addition, depending on the run-off, the amplitude of hydraulic generation in the EDF scope, between one extreme year and another, can amount to around 20TW hours. The DOAAT ensures that it has, in all timeframes, sufficient power margins in order to enable it to meet its commitments. To do this, it manages a set of leveraged actions: scheduling of maintenance operations of generation means (in particular nuclear), management of inventory (fossil fuels, hydro-electric reserves and customer load shedding), purchases and sales in wholesale markets via EDF Trading, which is in charge of market access on behalf of DOAAT (see section 1.4.6.3 “Optimisation and trading: EDF Trading”). DOAAT also manages the exposure of EDF’s upstream/downstream DOAAT is responsible for managing the balance OPTIMISATION ACTIVITIES 1.4.3 FOR EDF IN FRANCE Role and activities of the 1.4.3.1 Upstream/Downstream Optimisation & Trading Division (DOAAT)

portfolio to price variations in the energy and fuel wholesale markets (gas, coal, petroleum products) and in the CO 2 emissions licensing market, with the assistance of EDF Trading. With respect to RTE, DOAAT plays the role of “balance responsible entity” on EDF’s perimeter in mainland France. In this regard, EDF is committed to financially compensate RTE in the case of a deviation onto its balance group. The optimisation consists of offering RTE an offer schedule that is balanced with the demand, which makes it possible to minimise the supply cost of EDF’s contractual commitments. Long-term electricity purchase 1.4.3.2 and sales contracts EDF maintains commercial relations through energy purchase or sales contracts with European operators. These contracts are of many types, and confer: rights to the energy generated by facilities, primarily nuclear, in which the ■ counterparties hold a participating interest over the duration of the exploitation of the facility (see section 1.4.1.1.1 “EDF’s nuclear fleet in France”); drawing rights for totally or partially guaranteed electrical power, for a duration ■ generally comprised between 15 and 25 years. Regulated Access to Historic Nuclear 1.4.3.3 Operational since 1 July 2011, the ARENH mechanism entitles alternative suppliers to buy electricity from EDF to supply their customers, once they have signed a framework agreement, at a regulated price and at volumes determined by the Energy Regulation Commission (CRE). This mechanism can also be accessed by network operators for their losses. The CRE is responsible for managing the mechanism and for calculating entitlements of which it notifies the co-contracting parties. Thus, suppliers wishing to exercise their right to access the ARENH can do so by submitting a request to the CRE. The detailed forecasts, along with the entitlements calculated for each supplier, are only known to the CRE and the supplier. The payments are managed by the Caisse des Dépôts. The price of the ARENH, determined by the Minister of Energy and the Minister for the Economy, upon proposal by the Energy Regulation Commission (CRE), has been maintained at €42/MWh since 17 May 2011. It includes the supply of electricity and the issue of the related capacity certificates. The maximum ARENH volume that can be sold to suppliers, which make a request to cover the needs of the ultimate customers, is set at 100TWh per year. The conditions of application of this ceiling are defined by the CRE. The order of 14 November 2016 is amending the ARENH framework agreement, particularly in order to incorporate provisions related to the implementation of the capacity mechanism and to frame the conditions for early termination by suppliers. The revised framework agreement restricts the use of such unilateral termination faculty by making it applicable only in cases when the price of the ARENH is modified by more than 2%, when the framework-agreement is substantially modified or when changes in the regulations relating to the ARENH substantially and unfavourably affect the balance of the procurement terms for the Buyer. In addition, Decree No. 2017-369 of 21 March 2017 relating to regulated access to historic nuclear power amended some of the provisions of the regulatory section of the French Energy Code on ARENH, in order to define the terms and conditions for implementing the “monotony clause”. It thus addresses cases not provided for in the earlier wording of the French Energy Code, namely situations where there is no framework agreement or request for ARENH in the period before the current period. The lack of subscription or agreement is now considered as a zero volume subscription. In 2018, EDF supplied 87.1TWh to cover the needs of the ultimate customers of its competitors as part of ARENH. By way of deliberation 2018-222 of 25 October 2018, the Energy Regulation Commission set out, pursuant to the provisions of the French Energy Code, the method of allocation of the ARENH volumes if demand is higher than the statutory ceiling. This decision provides that if the ARENH ceiling is crossed from Power (Accès Régulé à l’Énergie Nucléaire Historique, or ARENH)

Network operator, independently managed. (1) Source: RTE. (2)

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I Reference Document 2018