EDF / 2019 Universal registration document

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

31/12/2019

EDF Energy

31/12/2018

Electricity supplied  (1) (in GWh)

44,526 28,527

43,939 28,944

Gas supplied (in GWh)

Number of residential customer accounts (in thousands) (2)

5,043

4,945

Number of employees  (3)

11,834

12,292

Total Recordable Incident Rate  (4)

1.03

1.12

Power supplied to final consumer including previous year metering cut-offs. (1) Year end figure. (2) Headcount at the end of the period, including staff on maternity leave. (3)

Total Recordable Incident Rate: Annual total combined number of Lost Time Incidents, fatalities, Restricted Work Injuries and Medical Treatment Injuries (4) (excluding First Aid)/number of hours worked ×1,000,000. This covers all employees, agency and contractor staff. Excludes EDF Renewables and Hinkley Point C project. Accident Frequency Rate (AFR) for HPC is 0.084 at December 2019.

Strategy 1.4.5.1.1 Overview

operate. In August 2019, the UK’s independent nuclear safety regulator, ONR, gave permission for EDF Energy to re-start Reactor 4 for approximately four months operation. The unit was run continuously until December 2019 when it was shut down again for further inspections and safety case work. The safety case for the return to service of Reactor 3 has been submitted to the ONR for consideration. As the stations approach their technical lifetime limit, EDF Energy is aiming to optimise their end of life value and to develop new activities in nuclear decommissioning, building on its expertise in operating the UK’s existing nuclear stations. The UK government’s Department for Business, Energy and Industrial Strategy (BEIS) is working with EDF Energy and the Nuclear Decommissioning Authority (NDA) to consider how efficient and cost-effective decommissioning of the stations can be planned for and delivered, including how the stations will be owned and managed in the future. The Sizewell B pressurized-water reactor (PWR) has a longer expected remaining life, and although work is yet to be carried out to support a life extension, EDF Energy expects that it should be possible to extend it by c.20 years from currently estimated decommissioning date of 2035. EDF Energy is also decommissioning the Cottam coal power station that closed in 2019 after over 50 years of operation. A key element of these plans is a people plan to preserve and develop our capabilities as the business evolves from generation to decommissioning. Other important strategic actions concerning the generation fleet include optimising the operations of the West Burton B (Combined Cycle Gas Turbine power station) and the remaining lifetime value of West Burton A coal power station in the UK capacity market. This power plant has capacity agreements until September 2021. EDF Energy supports the government’s policy aimed at ceasing coal-fired production by 2024, whilst continuing to examine the options beyond September 2021. In partnership with China General Nuclear Corporation (CGN), EDF is building two new nuclear units (3.2GW capacity in total) at Hinkley Point in Somerset, based on the EPR technology. EDF Energy is also working with CGN to progress a similar 3.2GW EPR project at Sizewell in Suffolk. A further new nuclear power station proposal is being developed at Bradwell in Essex based on CGN’s “UK HPR1000” Chinese technology. Key milestones have included, in summer 2019, the Hinkley Point project achieving its first major construction milestone, J0, on schedule; and the UK government publishing a consultation on a new regulated asset base financing model for further new nuclear plant (see section 1.4.5.1.2.4 “United Kingdom – Nuclear New Build Business”). EDF Renewables UK, a joint venture between EDF Renewables and EDF Energy continues to operate and develop new renewable generation and storage projects. In 2019, EDF Renewables UK acquired the British start up Pivot Power, specialist in infrastructure for storage and electric vehicle charging, further strengthening the Group’s position in the UK storage and electric vehicle market.

EDF Energy’s vision, "Our Future is Electric", is to lead the transition to a low-carbon energy system and the fight against climate change in five areas: serving customers; generating electricity; building new nuclear; providing energy and technical services; and renewables – in the latter two areas through joint ventures (JVs) with Dalkia and EDF Renewables, respectively. EDF Energy and the JVs aim to be the leaders in each area, while exploring its advantage from being the only company working in all five, and from being part of the EDF group. This strategy is entirely consistent with EDF group’s CAP 2030 and underpinned by a focus on safety performance, cost efficiency across the business and R&D activity across the business areas. In its energy supply business, EDF Energy is shifting focus from service efficiency to delivering outstanding customer experience, and has reached 4.4/5 score on Trust pilot as at Q4 2019. Following successful supply business transformation to its strongest profit level in 2018, the default tariff cap in force on the residential GB market since the start of 2019, combined with unprecedented levels of competition, now requires EDF Energy to deliver a new profit recovery plan. At the same time, EDF Energy is delivering on its regulatory obligations through a cost-efficient roll-out of smart meters to customers’ homes and small business premises, as part of the national programme. It is also developing new services and revenue streams by moving beyond supply, in response to market opportunities in flexibility, smart energy products and electrification of the economy, including through its innovation accelerator Blue Lab and products such as electric vehicle, smart charging and related electricity supply propositions, supported by EDF Energy’s Generation Electric brand position. EDF Energy aims to help businesses explore and develop solutions that deliver energy, carbon and cost savings, including through new capabilities such as the flexibility platform Powershift, and through Imtech – one of the largest technical and engineering service providers in the UK and Ireland that is co-owned with Dalkia and that recently also acquired Breathe, a UK energy performance contractor operating mainly in the public sector (also see section 1.4.6.1.1 “Dalkia”). In electricity generation, EDF Energy seeks to create value from both existing and new activities. It aims to secure value from its existing nuclear, coal and gas assets through continued operational excellence and safe, reliable generation. Since 2009, EDF Energy has extended the lifetime of its nuclear Advanced Gas-cooled Reactors (AGRs) by an average of 8 years. However due to large non-replaceable components, there is a technical limit to AGR lifetimes. During a planned 2018 outage of Hunterston B Reactor 3 for graphite inspections, new keyway root cracks were discovered in the reactor core, resulting in a decision to take both Hunterston reactors (3&4) offline, and begin the most extensive graphite investigation programme ever undertaken. The graphite was always expected to change over time, and how it ages is one factor that will determine how long Britain’s AGRs will

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EDF | Universal registration document 2019

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