EDF / 2019 Universal registration document

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

Furthermore, Enedis continues its efforts in the preventative maintenance of networks, including work relating to tree topping. This came to €319 million in 2019 (compared to €325 million in 2018). Quality of service Quality of service is one of Enedis’ main objectives. In 2019, the average outage time, excluding transmission incidents and exceptional incidents, was 64 minutes, which is a good result for a year marked by frequent and sharp climate variations. The quality of service provided is also reflected by maintaining steady voltage levels, kept as close as possible to the level set by regulations, and by minimising the number of outages. To respond to large-scale incidents, Enedis relies on an Electricity Rapid Intervention Force (FIRE), which allows it to mobilise, at any time, in an affected region, the teams and resources from other regions in order to restore customers’ electricity as rapidly as possible. In 2019, FIRE was deployed 7 times: Storm Miguel, which hit Western France on 7 June, the thunderstorms on 1 July that affected the Rhône-Alpes region, Storm Amelie, which hit South-Western France on 3 November, the episode of sticky snow that affected South-Western France on 14 and 15 November, the episode of strong winds that hit South-Western France on 13 and 14 December, Storm Elsa, which hit the Auvergne-Rhône-Alpes region on 19 and 20 December, and Storm Fabien, which mostly affected Nouvelle-Aquitaine on 21 and 22 December. As regards insurance cover for the protection of the overhead distribution network against the effects of large scale storms, see section 2.1.2.6 “Insurance - Storm Insurance cover”. Development of renewable energies Across the Enedis scope, the number of solar panel generation installations connected to the network grew again: in 2019, a growth in photovoltaic connections was observed with 858MW of new photovoltaic facilities connected (compared with 825MW at the end of 2018). The increase in wind power generation connected to the public distribution network also continued, with 1,202MW connected in 2019 (compared to 1,360MW in 2018). At the end of 2019, a total of around 22.5GW in photovoltaic and wind power generation was connected to the Enedis grid, made up of 8.2GW from photovoltaic plants and 14.3GW from wind power generation. To the power thus generated are added other sources of power generation, in particular “historical” hydropower plants (1.5GW), cogeneration (2.4GW), biogas, biomass and dispatchable fossil-fuel thermal. In all, at the end of 2019, the generation fleet connected to Enedis was around 28.3GW. In 2019, more than 25,200 photovoltaic self-consumption facilities were also connected, representing close to 92% of the year’s connections for small producers. In addition, Enedis has continued its efforts to develop capacities for accepting renewable energies, by implementing construction work on sources as part of the regulatory framework in the regional plans for the grid connection of renewable energies. Electricity market The French electricity sales market has been open to competition for all customers since 1 July 2007. 71 electricity suppliers, operating on the French market, have a contract with Enedis. This contract establishes the terms and conditions for the supplier and the distributor in the event that a customer subscribes to a single contract covering the supply and delivery of electricity. The supply market is facing sharply increased levels of competition for subscribed power supply in excess of 36kVA since the elimination of regulated sales tariffs (TRVs) for this type of power at the end of 2016, as well as for subscribed power supply for less than 36kVA in view of the partial end of Professional TRVs announced for the end of 2020. Over 180 new service providers are exploiting customer consumption data, subject to the customers’ permission, also making a significant contribution to the market dynamics. Concessions At 31 December 2019, Enedis and EDF were co-concession holders of 442 concessions contracts, covering around 95% of the population in continental metropolitan France. The concession contracts are generally concluded for a period of 25 to 30 years.

In France, public electricity distribution is operated under a concession plan that derogates from common law on local public service concessions. Enedis is thus designated by the law (Article L. 121-4 of the French Energy Code) to carry out the development and operation of the public distribution networks (rational service of French territory by public distribution networks, connection and access in accordance with non-discriminatory conditions to the public distribution networks). Enedis carries out this role over the majority of French territory, with the exception of the zones which are not interconnected to mainland France, in which this same role is the responsibility of EDF, and of the exclusive service zone of the LDCs (Local Distribution Companies). On 21 December 2017, FNCCR, France Urbaine, EDF and Enedis signed a framework agreement based on a new concession agreement model. Twenty-five years after the 1992 agreement with FNCCR, this new framework agreement includes France Urbaine which represents municipalities, large urban inter-municipalities and cities of which the majority of the members have contracting authority status for the public distribution of electricity. The new standard agreement endorsed by this agreement restates the principles of the French concession model: public service, regional solidarity and national optimisation, while at the same time taking into account issues involving energy transition. The official introduction of this new model opens the way to a modernised and lasting relationship between Enedis and the concession contracting authorities. The renewal of concession agreements, commenced in 2018, continued at a sustained pace in 2019. As of 31 December 2019, over 170 licensing authorities had entered into a concession agreement on the basis of the new model. Other negotiations are in progress or planned with the aim of renewing all the agreements underway by the end of 2021. Pursuant to Article L. 334-3 of the French Energy Code, concession contracts entered into or amended since the creation of Enedis (under its previous name ERDF), are jointly signed by the contracting authority (local authority or public cooperation institution), by EDF (or territorially competent LDC) for the “regulated tariff supply” portion, and by Enedis (or territorially competent LDC) for the “distribution network” portion. The concession agreements underway concluded before the creation of ERDF, now Enedis, have been deemed to have been entered into according to the same principles. Within the limits fixed by the law and by the jurisprudence, the contracting authorities are the owners of the distribution networks which constitute returnable assets  (1) (see also sections 1.4.2.2.4 “Public electricity distribution concessions at regulated tariffs” and 1.5.1.3 “Concession contracts for the distribution and supply of electricity in France”). Service shared by Enedis and GRDF 1.4.4.2.3 The common service function shared by Enedis and GRDF is defined by Article L. 111-71 of the French Energy Code. Its missions in the electricity and gas distribution sector are building structures, site project management, network operation and maintenance, and metering operations. This service is not a legal entity in its own right. Enedis and GRDF’s relations in this common service are governed by an agreement that defines the scope of the service and the resulting division of costs. The agreement has an unlimited term and can be terminated at any time subject to 18 months’ notice: in such a case, the parties undertake to renegotiate the agreement during the notice period. It is updated regularly. In July 2014, Enedis and GRDF issued a joint announcement that their joint activities of meter reading and work on meter panels would be discontinued in the future. To date, Enedis has favoured an organisation through the regional directorates integrating all its operational missions at the local level. In March 2018, Enedis and GRDF decided to create two joint entities: UONRH-MS, which groups together employment contract activities, studies and medical and social services, and OIT, the IT & Telecoms operator, which groups together all telephone and office technology activities. The establishment of these two joint entities took effect on 1 January 2019. For Enedis, other support functions (Vehicles and Machines, Litigation and Insurance, Training and Recruitment, and Purchase of services) are grouped under a Support Services Division. In 2019, the governance agreements between Enedis and GRDF were completely reviewed (11 briefs were revised).

(1) Returnable assets are those that must be returned to the granting authority at the end of the concession. These assets are deemed to belong to the concessionaire’s community from the outset. They are defined by the concession contract or even by law. Generally, assets that are essential to the performance of the concessioned service are qualified as such.

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EDF | Universal registration document 2019

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