EDF / 2019 Universal registration document
3. Non-financial performance Appendices, concordance tables and report from Statutory Auditors
Summary of EDF group climate risks 3.6.3
DESCRIPTION OF PHYSICAL RISKS
Risk category
Description Potential impact for the EDF group
Production Drop in nuclear production due to heat sink, low water flow for dams in southern countries, accelerated wearing of materials Transmission and Distribution Drop in network capacity, fire risk All business lines Rise in the cost of insurance, deterioration of working conditions for employees and service providers. Production Slow-down or potential temporary halt of production facilities, impacts of higher flood waters Transmission and Distribution Power cut offs. Production Change and drop in hydropower production, decreased yield of nuclear and thermal power facilities, risk of submersion of infrastructures on seacoasts (particularly island regions). Proliferation of organisms that plug water intake, risk of microbial growth in cooling circuits. Transmission and Distribution Diminished capacity of transmission lines Sales and marketing Drop in heating demand Increase in air-conditioning demand. Risk of cancellation of licences, risk of litigation following exceptional climatic events, risk of litigation related to EDF group publications, particularly as regards the duty of care. Risk involved in the sharing of water resources due to multiple uses and multiple stakeholders in a context of increasing water scarcity situations. Risk involved in the necessary land resources for renewable energy due to restrictive regulations (biodiversity, agricultural lands) and the legitimacy of sharing with numerous stakeholders. Opportunity As a low-carbon leader, the EDF group is called on to play a key role in decarbonisation of the European economy. Opportunity Increased demands of own consumption, energy efficiency, electric mobility, green deals and low-carbon. Opportunity Decarbonised electricity is recognised as an indispensable means to deliver decarbonisation to the economy. Risk/Opportunity Risk of instability to the system in case of a high penetration rate of renewable energies, Key role of nuclear energy usable together with renewable energies to ensure stability of the network. Risk/Opportunity Potential emergence of technologies such as CCSU, thermal solar, small modular reactors, storage or in the area of negative emissions. Risk/Opportunity Risk in case of European taxonomy having an impact technologically Opportunity to provide the EDF group with sustainable financing (Green Bonds, positive incentive loans).
Increase of heatwaves and droughts
Risks related to extreme events
Increase of strong wind events, storms, tornados and floods
Risks related to chronic events
Increase of average temperatures Increase of sea levels
DESCRIPTION OF RISKS AND TRANSITION OPPORTUNITIES
Risk category
Description Potential impact for the EDF group
Legal risks
Climate-related litigation
Tension over uses of water
Political and regulatory risks
Tension over access to land and use of soils
Political difficulties to achieve the objectives of the Paris Agreement
Change in customer expectations
Customer – market risks
Change in uses of electricity
Stability and security of electricity networks
Technological risks
Transition technologies
Access to competitive financing
Financial risks
Stranded assets
Risk of stranded thermal assets after regulatory changes or carbon price increase.
The main actions implemented by the EDF group to manage climate-related risks are described in section 2 “Risk factors and control framework” and section 3.2 “EDF, a company committed to the energy transition”.
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EDF | Universal registration document 2019
www.edf.fr
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