EDF / 2019 Universal registration document

1. The Group, its strategy and activities Description of the Group’s activities

In 2019, the Kp factor reached 68.6%, on a slight decrease compared with that of 2018 (71.1%). This results from a Kd of 74.0%, lower than in 2018 (76.5%) and a Ku of 92.7%, relatively stable compared to 2018 (92.8%). In 2019, generation performance was impacted by exceptional incidents and large-scale contingencies (totalling approximately 12TWh), longer outage extensions than expected (totalling approximately 12TWh) and environmental constraints (totalling approximately 4TWh, including the Le Teil earthquake, accounting for 2.3TWh). The outage extensions experienced in 2019 were caused in equal measure by maintenance and operational quality issues, technical failures and project management deficiencies. Performance losses related to unplanned outages rose slightly from a rate of 3.7% in 2018 to 3.95% in 2019 because of several exceptional incidents. Without these, the rate of unplanned outages would have been 2.1%. These figures do not undermine the maintenance strategy implemented in 2007 to renovate and replace major components which has brought the overall rate of unplanned outages down to 30% since 2009. The main technical incidents that impacted generation in 2019 are: two instances of technical damage on the Dampierre 4 and Chinon 2 alternator ■ rotors caused lengthy unexpected outages; the turbo supply pumps (“TPA”) for the installation’s secondary circuit ■ experienced several contingencies, not only during the outage campaign, but also during the production cycle in question. The damage at Saint-Albain 1 and Flamanville 1 led to significant generation losses; the emergency diesel installations generated multiple impacts on the 2019 ■ generation process, with long and significant compliance works both during outage periods (Penly 2 and Flamanville 2) and during the production cycle (Flamanville 1), as well as damage requiring the complete replacement of diesel installations, as was the case at Dampierre 1 and Paluel 4 (during their respective ten-year inspections). 2019 was not impacted by the investigations into quality discrepancies detected in several instances when tracking the manufacturing of forged parts (referred to as the “cancelled” and “non-cancelled” cases) in Framatome’s Creusot Forges plant. In summer 2019, Framatome detected non-compliance with temperature ranges during the application of certain local stress-relieving heat treatments (SRHT) on welded steam generator and pressurizers seals (see section 1.4.1.3.2 “Framatome activities”). Following this discrepancy, declared to the ASN, EDF drew up a list of the affected equipment: 16 steam generators (GVs) installed for 6 nuclear reactors in operation (Blayais, Bugey, Fessenheim, Dampierre, and Paluel). The Flamanville 3 GVs and pressuriser were also impacted, as were 6 GVs destined to replace those for the two reactors at Gravelines. EDF and Framatome supplied the ASN with evidence that the integrity of the components had not been compromised. On the basis of this evidence, after analysis, the ASN took the view that “the reactors in question could continue to operate in their current condition”. Technical investigations in this respect, in liaison with the ASN, are ongoing. EDF has also continued its structuring process to guarantee the compliance of the equipment of its nuclear facilities. EDF has thus presented to the ASN an action plan so as to prioritise and arrange for the treatment of anomalies taking into account safety issues. Its implementation involves all nuclear power plants and national engineering units. Investment programme for the existing nuclear fleet in France EDF’s industrial strategy is to operate the existing nuclear fleet well beyond 40 years, under the best conditions of nuclear safety (integrating, in particular, post-Fukushima modifications), of environmental safety and protection, which requires to keep on performing significant maintenance operations over the 2014-2025 period. The “ Grand Carénage ” programme was implemented, so that the Group can integrate, with its industrial partners, the significant amount of work to be done on the fleet.

On 22 January 2015, EDF’s Board of Directors approved in principle a major overhaul programme (the “ Grand Carénage ”) aimed at refurbishing the French nuclear fleet, enhancing reactor safety and, if conditions allow, continuing their operation. The authorised investment amount stood at a maximum of € 2013 55 billion (€60 billion in current euros) in total over the 2014-2025 period for the 58 reactors currently operating  (1) . For the existing nuclear fleet, the programme covers both usual maintenance spending and investments required to extend the lifespan of equipment (replacement of the steam generators, VD4 900, VD3 1300). The optimisation work undertaken since (reductions and postponements) led to a downward revision of the overall cost of the programme to € 2013 45 billion (or €48 billion in current euros) over the 2014-2025 period. This revision is largely a result of continued optimisation efforts regarding the adopted technical solutions and component replacement strategies and greater precision in their application by integrating the capacities of the industrial base, which enabled certain expenses to be postponed. Bringing forward the shutdown date for the Fessenheim plant (2020 in the most recent forecast) has also been taken into account. By dint of these industrial measures, around € 2013 6 billion (or €7.5 billion in current euros) in costs was reduced and around € 2013  3.8 billion (or €4.7 billion in current euros) of spending was postponed to after 2025 for total savings of close to € 2013  10 billion (or €12 billion in current euros) from initial estimates. The contribution of postponements to this overall revision was therefore revised slightly up in 2018 compared with 2017. Although additional savings have been identified regarding the ten-year inspections and the application of feedback from Fukushima (for a total of € 2013  6.2 billion or €7.2 billion in current euros), the replacement of steam generators and major components (for a total of € 2013  4 billion or €4.6 billion in current euros) and other engineering projects (for a total of € 2013  1.8 billion or €2.1 billion in current euros), they were offset by an increase of approximately €2 billion in current euros. Indeed from 2019 onward, usual maintenance spending, primarily due to better identification of expenses for regular inspections will be recognised as investments. In order to complete the programme, a separate entity was created, the “ Grand Carénage ”. The programme’s sponsor is the Nuclear and Thermal Fleet Department (DPNT) which approves the programme’s scope, currently broken down into 20 projects, and financial trajectory. The programme’s supervision is taken care of by the Nuclear Generation Division, which defines the content of the activities. Project management is handled by the programme Director assisted by the project managers over the life of the project in all areas: deadlines, quality control, financial trajectory. The Board of Directors examines the main investments for each major category of projects whose chief characteristics are presented to it, approves contracts or deals above a predefined amount, and conducts the annual review of the programme’s implementation on the basis of indicators showing the extent of its physical and financial progress, what remains to be completed and the final costs. This industrial programme is being gradually implemented in compliance with the objectives of the Energy transition for green growth Law, multi-year energy programmes and the opinions and orders of the ASN as well as the procedures for authorisation for reactors to run for more than 40 years (see section 1.4.1.1.5 “Preparing for the future of the nuclear fleet in France”). Under this programme, the planned renovation or replacement of major components of power stations such as generators, transformers or steam generators will continue. At end 2019: the alternator stator renovation programme, covering 49 units, was completed; ■ the programme for preventive replacement of the poles in the main transformers ■ is ongoing. 138 main transformer poles out of 174 had been replaced, i.e. approximately 79% of the programme; the steam generators of 28 out of the 34 units of the 900MW series were ■ replaced.

(1) The figures presented by the French Cour des Comptes in its report of 10 February 2016 cover a longer time horizon, up to 2030, and included, beyond the investment, operating and maintenance expenses. Both assessments are consistent, as stated by the Cour des Comptes in its report. Indeed, among the overall estimates calculated by the Cour des Comptes and amounting to close to €100 billion for the 2014-2030 period, the investment expenditures estimated at €74.73 billion should be distinguished from the operating expenditures estimated at € 2013 25.16 billion. Within the € 2013 74.73 billion of investment expenses between 2014 and 2030, € 2013 55 billion are dedicated to the 2014-2025 period, which allows the two estimates established by the EDF group and the Cour des Comptes to be connected.

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EDF | Universal registration document 2019

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