EDF / 2019 Universal registration document

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

This goal is being leveraged in a number of ways: development of hydropower projects in France’s overseas departments and ■ territories to address the needs identified in these localities’ multi-year energy programs (PPE); continuing to develop reserved-flow turbines. The purpose is to equip a certain ■ number of dams in order to recover part of the energy associated with these minimum regulatory flows, by adding an additional total capacity of 4.5MW already commissioned since 2015; a number of new projects are being studied for commissioning between now and 2020; increasing the capacity of infrastructures managed under concession. A provision ■ in France’s “Climate and Energy” Act of 8 November 2019 makes it possible to use a declaration procedure to implement a capacity increase, subject to a number of conditions, including acceptance by the administrative authority in question. EDF is planning to launch capacity increase studies for a number of developments in 2020; strengthening its ambition in the small hydropower segment in metropolitan ■ France (corresponding mostly to small and medium-output installations, producing less than 12MW for the most part, but sometimes up to 20-30MW), in two ways. The first involves improving performance of this segment in the existing fleet by means of dedicated asset management for these 237 power plants (with a production potential of 5,500GWh in 2019), using a profit & loss approach. The second aims to boost this segment by an additional 60MW, by means of acquisitions and a few disposals, in particular by developing so-called greenfield projects as part of CRE calls for tender (For instance, via its SHEMA subsidiary, EDF has won 5 tenders for a total of 9.4MW), as well as by increasing capacity within the existing fleet; major projects are also being developed to address storage requirements linked ■ to energy transition and the growing need to compensate for very low water levels in view of climate change. Pumped-storage plants thus play a major role in energy transition and in integrating variable power sources in the French electricity system. EDF fully intends to enhance this hydropower asset via its storage plan, both in France and internationally. In particular, EDF is heading up a major project in the La Truyère Valley, extending the La Truyère and upstream part of the Lot concessions to address storage requirements. This was submitted by the French State in April 2017 to the European Commission. An authorisation in principle is awaited prior to the formal notification process. Regional anchoring in hydropower valleys EDF has always taken care to ensure the sustainable and shared development of the hydropower valleys and the economic regions close to generation facilities. These regions, often rural and sometimes isolated, are always looking to adapt to the changes in their environment: economic, societal or even climatic. EDF has a clear commitment to strong local roots in this respect, combining a stance as a responsible concession manager based on dialogue with co-building alongside all stakeholders, supporting local economic development through its Une rivière, un territoire (“One River, One Territory”) agencies: EDF’s “responsible hydroelectric concession manager” policy is characterised by ■ collaborative work with economic, political, and non-profit stakeholders, together with residents living close to the hydropower infrastructures being operated. It is structured around two main pillars: maximising economic outcomes of hydroelectric activity for “hydro territories”, thus providing networks of local industrial resources (supplier panels list over 1,000 local companies specialising in various hydro lines of business), together with local services that benefit all stakeholders in the valley. An initial assessment of the employment footprint of EDF’s hydroelectric activity in metropolitan France suggests the existence of some 3,280 indirect jobs; ongoing dialogue with stakeholders in “hydro territories” through consultation ■ (the Parlons Tourisme (“let’s talk tourism”) consultation in Corrèze (Massif Central) and preparation of the new water level handbook for the Rance estuary, applicable in 2020, to ensure water levels are in line with the requirements of the seaward end of the Rance); co-building added-value projects with local stakeholders (local development policies such as “I Lac it” for the Tarn); development of day-to-day, multi-service information and data exchange interfaces ( Ma Rivière & Moi (“My River and Me”) application for several valleys in the Alps, Pyrenées, and the Massif Central).

These two pillars are also brought into play for major worksites as part of the “ Chantier d’Avenir ” (“Worksite for the Future”) policy. In 2019, this policy helped embed the hydroelectric worksites at La Coche, Savoie and Sabart, Ariège at the local level, on the basis of benefit-sharing with the locality in terms of economic outcomes, local jobs, and enhanced, ongoing dialogue with local residents and other local stakeholders. In 2012, EDF launched a dedicated programme entitled Une rivière, un territoire (“One River, One Territory”). This has continued to expand, with the opening of an eighth agency devoted to the Rhine Valley. Since 2013, this local programme has created or maintained over 340 jobs in the valleys by means of loans to over 40 local companies. The 8 “One River, One Territory” agencies roll out action strategies tailored to their respective localities, aimed at integration through (and benefiting) employment, developing sustainable economic activity in the valleys, assisting public and private-sector project promoters, and developing innovation in these largely rural areas. Managing access to water The dams operated by EDF in France provide storage capacity for over 7 billion cubic metres of water. As well as generating electricity, hydropower infrastructures are also used to help with water management, and thus represent a major contribution by EDF to local life and economic development. For instance, EDF provides a degree of flow capping during floods, and low water level support during periods of drought. These initiatives are undertaken by EDF to benefit aquatic environments and other uses of water in the Garonne, Aude, Ardèche, Vienne, and Moselle river basins. EDF also maintains water levels commensurate with tourism at major reservoirs, allowing the development of recreational activities and the tourist economy as part of concerted policy initiatives. Similarly, EDF also ensures certain rivers have water levels that can accommodate sports and leisure activities such as canoeing and kayaking. The Durance-Verdon and Saint-Cassien (Alpes-Maritimes) reservoirs also play a fundamental role in crop irrigation in Provence and the drinking water supply for the French Riviera. Water management is carried out in consultation with the various stakeholders; in some cases, this includes agreements with local councillors, fishermen, farmers, and the managers of tourist destinations and industrial sites. EDF is thus a major stakeholder in local water management governance. For instance, EDF has set up an innovative “Basin coordinator delegate” scheme, so that all EDF’s business lines have representation in water-related authorities such as basin committees and water agency boards of Directors. This representation and coordinated action within EDF as regards water management ensures its business is sustainable and nurtures shared management of water resources. EDF is constantly seeking to minimise the impact of its infrastructures on aquatic biodiversity, abiding by reserved flow levels, fitting infrastructures with fishways on listed waterways, and adapting operating procedures where fragile environments so dictate. Solar and wind power 1.4.1.5.2  Wind power 1.4.1.5.2.1 Wind turbines capture energy from the wind and turn it into electrical power. There are various categories: onshore wind power, a proven and increasingly competitive sector which is now ■ close to competing with, if not matching, traditional sectors in certain areas. It benefits from economic incentives in various countries, although an increasing number of projects are developed without a financial support mechanism (see section 1.5.3.3.2.2 “Regulations applicable to wind power generation”). On average, the rated capacity of onshore wind turbines installed worldwide is more than 2MW, a figure which is increasing steadily. The subsidiary responsible for developing wind power within the Group is EDF Renewables. The Luminus and Edison subsidiaries are also active in onshore wind power; offshore wind power: this sector is expanding rapidly, and costs have decreased ■ considerably in recent years. Development of the sector has been especially helped by the organisation of dedicated calls for tender in various countries. The advantages of this sector are the higher rated capacity of each wind turbine (typically over 5MW, and now up to 12MW) and increased productivity due to more reliable winds. The sector faces specific challenges in terms of construction, operation, and maintenance, due to the particular nature of the marine environment. The EDF group has decided to ramp up its investment in offshore wind generation which offers interesting development prospects in some of the Group’s key countries including France and the United Kingdom.

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EDF | Universal registration document 2019

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