EDF / 2018 Reference document

1.

PRESENTATION OF EDF GROUP Legislative and regulatory environment

Electricity load shedding The Law of 17 August 2015 on Energy Transition for Green Growth amended the legal rules on load shedding and, in particular, Articles L. 271-1 et seq. of the French Energy Code on this subject. These provisions amend the previous legal rules and stipulate, in particular: that load shedding is defined as “the action to reduce temporarily the effective ■ withdrawal level of electricity from the public electricity supply and distribution networks by one or more consumption sites, compared to a forward-looking consumption plan or an estimated consumption, when an ad hoc request is sent to one or more final consumers by a load manager or an electricity supplier”; that there is the possibility for consumers to monetise each of their demand ■ responses, either vis-à-vis their supplier as part of a demand response offer that is inseparable from the supply, or via the intermediary of load managers; that the Government will organise calls for tenders if the load management ■ capacities do not meet the targets of the multi-year energy programme (this mechanism replaces that of the load shedding premium); finally, for load shedding that leads to significant energy savings, the law ■ provides that the administrative authority may require the payment to the supplier to be shared between the load manager and RTE. The terms and conditions for applying these provisions are specified in Articles R. 271-1 et seq. of the French Energy Code, last completed by Decree no. 2017-437 of 29 March 2017 and by the rules for valuing the demand response on the wholesale energy markets (known as the “NEBEF 3.1” rules) approved by the CRE on 14 December 2017 and applicable for 2018 and the rules concerning scheduling, the balancing mechanism and the recovery of balancing charges, in their version approved by a decision of the CRE of 14 December 2017 and applicable for 2018. Self-consumption of electricity Article 119 of Law no. 2015-992 of 17 August 2015 on Energy Transition for Green Growth authorised the Government to take, by way of an order, the necessary measures to ensure the controlled and secure development of facilities intended to consume all or some their own electrical output. Following Order no. 2016-1019 of 27 July 2016 on the self-consumption of electricity came the publication of Articles L. 315-1 to L. 315-8 of the French Energy Code on 28 July 2016, which were ratified and completed by the Law of 24 February 2017 and distinguish between individual and collective self-consumption and in particular: require network operators to facilitate self-consumption operations, to implement ■ the necessary technical and contractual arrangements, particularly with regards to the metering of electricity and to enable the realisation of self-consumption operations under transparent and non-discriminatory conditions; provide that the CRE establish special tariffs for public distribution networks for ■ consumers participating in self-consumption operations when the installed capacity of generation facilities supplying them is less than 100 kilowatts. The provisions of Decree no. 2017-676 of 28 April 2017 amending the French Energy Code specifies the conditions for applying these provisions, particularly with regards to collective self-consumption (no measurement used to qualify self-consumption, procedures for assessing the 100kW threshold provided for by law for the eligibility of TURPE “self-consumption” facilities to be defined by the CRE, general principles of distributing generation between each consumer participating in a collective self-consumption operation, link between the legal entity responsible for a collective self-consumption operation and the public distribution network managers, maximum capacity of the generation facilities eligible for derogation from the obligation to be attached to a balance group, which is set in the decree at 3kW). At this stage, the implementation methods for self-consumption operations are still to be decided and in autumn 2017 the CRE organised self-consumption workshops with stakeholders and launched three calls for contributions on self-consumption: tariff issues, contractual framework and support mechanisms. As such, on 15 February 2018 the CRE gave its decision presenting its recommendations and opinion on matters relating to self-consumption. In its decision of 7 June 2018, the CRE set the TURPE (Tariff for using the public transmission network) for collective self-consumption.

As part of considering the PACTE business reform bill, the Assembly passed an amendment to permit, on a trial basis, for a period of five years, collective self-consumption “within a limited geographic scope defined by Order on the opinion of the CRE”. Closed distribution networks Article 167 of Law no. 2015-992 of 17 August 2015 on Energy Transition for Green Growth authorised the Government to take any measure, by way of an order, arising from the law in order to add a section on closed distribution networks to the French Energy Code to provide a framework for a practice made possible by Article 28 of Directive 2009/72/EC. Following Order no. 2016-1725 of 15 December 2016 on closed distribution networks, Articles L. 344-1 et seq. of the French Energy Code specify the definition of the closed distribution networks, their legal regime, missions assigned to the manager of the closed distribution network and the sanctions applicable if these provisions are not adhered to. Article L. 344-13 of the French Energy Code provides that the terms and conditions for applying these provisions are defined by decree of the Council of State. To date, this decree has not been adopted. A draft law to ratify the order was registered in the French Senate on 15 February 2017. Domestic networks Law no. 2017-1839 of 30 December 2017 ending the research and use of conventional and non-conventional hydrocarbons and introducing various provisions’ relating to energy and the environment was published in the Journal Officiel of 31 December. Its purpose, in particular, is to define and authorise the creation and operation of domestic building networks which constitute a new category of networks alongside public electricity distribution or transmission networks, and closed electricity distribution networks. Pursuant to Articles L. 345-1 et seq. of the French Energy Code, domestic networks can now only be legally created if four criteria are met: the domestic building from which the network will be created must i) stand alone, ii) belong to a single owner, iii) be used primarily for offices, iv) not contain any dwellings. Decree no. 2018-402 of 29 May 2018 on domestic building networks sets out the conditions under which these networks may exist as well as the rights and duties of office building owners and managers, network users and electricity public distribution networks managers. Electricity sector regulation The Energy Regulation Commission (CRE) CRE is an independent administrative authority created by Article 28 of the Law of 10 February 2000. Articles L. 131-1 et seq. of the French Energy Code give a general definition of the remit of the CRE, which is tasked with contributing to the correct functioning of the electricity and natural gas markets for the benefit of final consumers. In this respect, the CRE ensures, in particular, that the conditions for access to electricity and natural gas transmission and distribution networks do not impede the development of competition. The CRE has significant powers: the power to make proposals, advisory powers and decision-making powers (approval power and regulatory power). The CRE makes proposals, in particular, to the Ministers for the Economy and for Energy regarding the amount of the costs that are attributable to the public service missions assigned to power producers, and the net amount of the related contributions. Once the Decree has been published that specifies the methods for identifying and recognising the costs that are taken into account for the calculation of the ARENH price, the CRE will also propose the ARENH price. Moreover, since 7 December 2015, it has been the CRE’s responsibility to send its justifiable proposals for changes in the regulated sales and transfer tariffs for electricity (on which it previously could only issue an opinion) to the Ministers for the Economy and Energy. The decision is deemed to have been made in the absence of any objections by one of the Ministers within the three months following the receipt of these proposals.

90

EDF I Reference Document 2018