EDF / 2018 Reference document

PRESENTATION OF EDF GROUP Description of the Group's activities

nuclear fleet, abundant French hydropower output as well as several outages of Belgian nuclear plants at the end of the year; Italy: the trade balance with Italy is significantly in surplus. It is up with 18.5TWh. ■ Interconnection is primarily requested in the direction of export with only 330 import hourly periods (i.e. less than 4% of the time) compared with 452 in 2017; Switzerland: the balance of trade with Switzerland is increasing and stands at ■ 10.6TWh. July is the only deficit month, with trade usually more balanced in summer (when Swiss hydropower output is higher); United Kingdom: the balance of trade with the United Kingdom is a surplus at ■ 13TWh, up compared with 2017, in spite of trading capacity limited at 1,500MW between 9 March and 5 May due to a partial outage of the IFA Interconnector following a cable incident. aintenance of the transmission 1.4.4.1.2.2 infrastructure RTE manages the assets of the transmission network through maintenance, refurbishment and replacement of structures and emergency repairs. Implementation of a mechanical safety programme in response to extreme weather events to make the electricity grid more robust and more resilient was completed at the end of 2017, in accordance with the commitments made with the relevant Ministry following the storms of 1999. This programme cost close to €2.8 billion. The low impact of these latest storms proves the programme's effectiveness, especially regarding the role played by anti-cascading safety towers. At the end of 2017, 100% of target connections were automatically secured. Since 2018, RTE has In a context where energy transition is changing the fundamentals of the French electricity system, RTE is upgrading its activities to prepare for and support these major transformations: consumption growth is no longer the sole driver of RTE's investments which are more open to renewable energies while interconnections are increasing. RTE is also developing new solutions to make network management more flexible using digital technologies, storage and new practices. RTE draws up an annual investment programme that is submitted to the CRE. In 2018, RTE’s total investments within the scope regulated by the CRE stood at €1,447 million. The principal investments concerned: construction work of the direct current line between France and Italy passing through the Fréjus safety tunnel; the continuation of construction work on “IFA 2”, the new direct current line between France and the UK; the commissioning of the “Cergy-Persan” project which consists of improving safety of North-West Paris and the mobility projects of Greater Paris by replacing the current grid of 225,000 volts by a 400,000 volts technology; and the launch of connection works at the offshore wind farm of Saint-Nazaire. Out of a concern to best optimise the existing assets and to limit the impact of its construction works in the regions as much as possible, RTE dedicates approximately two thirds of its capital investments to the adaptation of existing structures. RTE’s 2019 investment programme approved by the regulator amounts to €1,642 million. The 2019 investment programme concerns the continuation of significant investment in developing and renewing the network, as well as developing and renewing IT systems, in particular in light of the changing environment associated with energy transition and European market integration. For example, it is to be noted that following the renegotiation of the contracts of tenders for offshore wind farms between the winners and the State in summer 2018, expenses for connecting these projects to the electricity grid are now borne by RTE. ensured the continued existence of this secure network. Development and completion 1.4.4.1.2.3 of new capital investments

In 2018, the Regulated Assets Base (RAB) increased by €194 million, up from €14,119 million as at January 1 st 2018 to €14,313 million as at January 1 st 2019 (1) . As a reminder, RAB is remunerated by the tariff at the weighted average cost of capital of 6.125% before tax on the TURPE 5. It represents RTE’s industrial assets, net of investment subsidies, and is calculated excluding property, plant and equipment in progress (which until the end of 2012 were remunerated at 4.8% by the TURPE 3 tariff, then at 4.6% for the period from 2013 to 2016 in accordance with the CRE’s pricing decision of April 2013, and which has been remunerated at 3.7% since 2017 in accordance with the TURPE 5 decision of 17 November 2016). Operation of the electricity system 1.4.4.1.2.4 Management of the electricity system RTE manages the flows on the transmission network in real time, and makes use of the resources available to it through the adjustment mechanism to ensure the balance between supply and demand in real time. The cost corresponding to the adjustments made by RTE and due to the negative differences between the projected flows and those already realised is passed on to the “Balance responsible entities” (producers, traders, suppliers, etc.) in proportion to their difference. In the case of a positive difference, RTE compensates the balance responsible entities financially. Management of the interconnections RTE manages access to international interconnections in collaboration with the neighbouring European transmission network operators. These interconnections ensure the transmission of energy from one country to another, the operating safety of the electricity transmission networks and the development of the European electricity market. They ensure that an electricity supplier can sell its energy to a customer in another European Union country, by taking advantage of the differences in the timing of peak load on either side of the border, and can better pool the means of generation at the European level. Network coordination in Europe In December 2008, RTE and Elia (2) created a common company named Coreso, which aims to coordinate the operation of electricity networks comprising France and Belgium. The creation of Coreso fulfils the need of reinforcing the operational coordination between transmission network operators (TNO) expressed both by the European Commission and by the players of the electricity market. Coreso must allow better integration at the regional level of generation from renewable sources and guarantee secure management of rising cross-border flows. RTE and Elia were then gradually joined by grid operators in Western Europe: National Grid (UK), Terna (Italy), 50 Hertz (North-East Germany), REN (Portugal), REE (Spain) and recently Eirgrid and SONI (Ireland). Distribution – Enedis 1.4.4.2 Enedis’ main objective is to operate and develop the public electricity distribution network, guaranteeing its security and safety, and overseeing the balance of electricity flows at all times. Enedis has been operational since 1 January 2008. Initially called ERDF, it changed its name to Enedis on 1 June 2016. Enedis services around 95% of the population in mainland France. The remaining 5% are provided by Local Distribution Companies (LDCs). In 2018, Enedis distributed electricity to more than 36.5 million customers (points of delivery) and provided for the injection from 410,000 production sites in mainland

1.

France, thanks to a network of around 1.4 million kilometres. At 31 December 2018, Enedis employed 38,691 people.

Amounts still to be confirmed by the CRE, calculated on the basis of what has been realised. (1) Elia is the Belgian electricity transmission network operator for high voltage (from 30,000 to 380,000 Volts). (2)

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EDF I Reference Document 2018