EDF / 2018 Reference document

PRESENTATION OF EDF GROUP Legislative and regulatory environment

Generation facilities Anyone can operate an electricity generation facility provided that, above a certain power threshold determined by decree, an operating licence issued pursuant to Article L. 311-5 of the French Energy Code is obtained. The powers and responsibilities of local authorities with regard to electricity generation are defined in Articles L. 2224-32 and L. 2224-33 of the French Local Authorities Code, and in Article 88 of Law no. 2010-788 of 12 July 2010 on the national commitment to the environment. Regulated Access to Electricity from the Existing Nuclear Fleet (ARENH) The rules governing Regulated Access to Electricity from the Existing Nuclear Fleet (ARENH), provided for in Articles L. 336-1 et seq. of the French Energy Code, have been implemented since 1 July 2011. See section 1.4.3.3 “Regulated access to historic nuclear power (Accès Régulé à l’Énergie Nucléaire Historique, or ARENH)” on this point. Choice of electricity supplier All customers, without exception, have been eligible since 1 July 2007, i.e. they may freely sign a contract for the purchase of electricity with a producer or supplier of their choice that is established on the territory of the European Union or on the territory of a State that is party to an international agreement with France (Article L. 331-1 of the French Energy Code). Customers can choose to benefit from regulated electricity sales tariffs under the conditions set out in Articles L. 337-7 et seq. of the French Energy Code. Pursuant to these provisions: household and non-household final consumers whose power demand is less than ■ or equal to 36 kVA benefit, at their request, from regulated sales tariffs; this is also true for all customers in areas that are not interconnected to continental metropolitan France; household and non-household final consumers whose power demand is greater ■ than 36 kVA, who had not exercised their eligibility on 7 December 2010 were able to benefit from regulated sales tariffs until 31 December 2015. Since 1 January 2016, these consumers no longer benefit from regulated tariffs. Article 25 of Law no. 2014-344 -of 17 March 2014 on consumption provided for a six-month transitional period, during which customers who had not signed a new contract with the supplier of their choice before 31 December 2015 could, in order to guarantee the continuity of their electricity supply, continue to benefit from a contract with EDF (2) during a maximum transitional period of six months, at the end of which they would no longer be supplied (i.e. on 30 June 2016). During this period, customers had the opportunity to terminate this contract at any time without having to pay an indemnity. EDF had an obligation to inform the customers concerned, by letter, of the expiration of the transitional contract three months and one month before it ended. Order no. 2016-129 of 10 February 2016 introduced, from 1 July 2016, a mechanism ensuring the continuity of the gas and electricity supply: customers who, on 30 June 2016, have not subscribed to the market offering are deemed to have accepted a new contract proposed by the designated supplier, following a competition procedure, by the CRE in its decision of 4 May 2016. In November 2016, the CRE organised a new call for tenders for the lots that could not be allocated in May 2016. This call for tenders was unsuccessful for the lots concerning electricity supply contracts. Article L. 111-84 of the French Energy Code requires internal accounts to be kept that make it possible to distinguish between supply to customers who exercised their right to eligibility and supply to customers at regulated tariffs. The State and the CRE have a right of access to the electricity companies’ accounts. Third-party access to networks Article L. 111-91 of the French Energy Code provides that network managers must guarantee access to the public transmission and distribution networks in order to: perform the public service missions to supply electricity at regulated electricity ■ sales tariffs and at basic necessity special rates; perform electricity procurement contracts; ■ perform electricity export agreements signed by a producer or by a supplier who ■ is located on French national territory.

Finally, the “Security of Electricity Supply” Directive no. 2005/89/EC, which was adopted on 18 January 2006, is designed to provide a better definition of the responsibilities of the various operators, ensure that minimum operational standards are respected, maintain balance between demand and supply, and channel investments toward the systems. The objectives of this Directive have been taken into account in various French laws and regulations. Energy Union On 30 November 2016, the European Commission presented a legislative package entitled “Clean Energy for All Europeans”, which is a proposal to revise all legislation on electricity. This package is made up of 11 legislative texts and a considerable number of communications documents that accompany the European Commission’s proposals. These proposals concern the organisation of the wholesale and retail markets for electricity, and are designed to give increased importance to consumer-centred measures. The legislative proposals are also an opportunity to confirm or propose new European targets for 2030 in terms of energy efficiency (a 30% target proposal) and renewable energy (a 27% target proposal). A new regulation is proposed for security of supply, and a revised regulation is proposed concerning the Agency for the Cooperation of Energy Regulators (ACER). All the proposed provisions are intended to create a more cohesive organisational framework for the electricity markets, for the benefit of the European energy and climate policies, as part of the planned European Energy Union. A technical memo on Energy Union Governance completes the package and specifies the method for monitoring the achievement of objectives by the Member States that will be implemented by the Commission. The parliamentary debate began in early 2017, and the Council was also involved in negotiating these texts. Apart from Directive (EU) 2018/844 of 30 May 2018 on the energy performance of buildings, the final texts are not expected to be adopted before mid-2019 after trilogues between the European Parliament, the Council of the European Union and the European Commission. The (new or revised) provisions are therefore expected to enter into force between 2019 and 2021, depending on whether they are immediately applicable in the Member States (regulations) or have to be transposed into domestic law (default time of 18 months). The Agency for the Cooperation of Energy Regulators Regulation (EC) no. 713/2009 of the European Parliament and Council of 13 July 2009, established an Agency for the Cooperation of Energy Regulators (ACER). The ACER plays a role in developing network codes in the electricity and gas sectors, and can make decisions relating to cross-border infrastructures (on this subject, see also section 1.5.6.2.5 “Regulations applicable to renewable energy generation”). French legislation: the Energy Code 1.5.3.2 The various pieces of legislation on energy (1) were incorporated into the French Energy Code by Order no. 2011-504 of 9 May 2011, with the exception of the majority of the provisions on nuclear energy, which were incorporated into the French Environment Code, pursuant to Order no. 2012-6 of 5 January 2012. Moreover, Decree no. 2015-1823 of 30 December 2015 organised the regulatory section of the French Energy Code. Consequently, around one hundred decrees on energy law have been repealed. The Law of 17 August 2015 on Energy Transition for Green Growth amended numerous provisions of the French Energy Code, and in particular the objectives of the energy policy, which are now focused on the emergence of a competitive economy that creates an abundance of jobs through the mobilisation of all the industrial sectors (in particular the green growth sectors), security of supply and the reduction of reliance on imports, competitive and attractive energy prices, the preservation of human and environmental health, social and territorial cohesion, the fight against fuel poverty, and contributing to the implementation of a European Energy Union.

1.

Law of 15 June 1906, law no. 46–628 of 8 April 1946, law no. 2000-108 of 10 February 2000, law no. 2003-8 of 3 January 2003, law no. 2004-803 of 9 August 2004, law no. (1) 2006-1537 of 7 December 2006, law no. 2010-1488 of 7 December 2010 Or their Local Distribution Company. (2)

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EDF I Reference Document 2018