EDF / 2019 Universal registration document

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

Electricity generation 1.4.5.2.3.1 In Italy, as of 31 December 2019 Edison’s installed capacity (excluding energy efficiency services) amounted to 6.5GW, with net electricity production of 20.6TWh in 2019, an increase of almost 10% from the 2018 figure. Edison’s generation fleet is currently made up of 93 hydropower plants, 14 thermal power plants, 46 wind farms and 64 photovoltaic plants. Combined-Cycle Gas Turbines (CCGT) account for 78% of electricity generation, while hydropower accounts for 15% and combined wind and solar for 7%. In 2019, Edison’s hydropower output totalled 3.2TWh (up 3.6% from 2018), resulting from the operation of some 1.0GW of hydropower installations in Italy, approximately 80MW of which was from “mini hydropower” installations, some of them located on irrigation canals in Piedmont and Lombardy. Wind and solar power production increased by 0.6TWh in 2019, due in particular to the acquisition of EDF EN Italia power plants and the output from all the new wind farms following the public auction in 2016. In the field of renewable energy, Edison has installed capacity of 0.9GW, making it the second-largest wind power operator on the Italian market after ERG  (1) . Edison operates wind power through E2i (Énergie Speciali srl), a company set up in 2014 in partnership with the F2i fund, which owns a 70% stake; the remaining 30% is owned by Edison via Edison Partecipazioni Énergie Rinnovabili srl. E2i owns 711MW of renewable assets, 165MW of which correspond to eight construction, reconstruction, or extension projects for wind farms acquired following a public auction in 2016, construction of which was completed between late 2018 and 2019. All energy produced by E2i is transferred to Edison as part of the integrated management of its production portfolio. Furthermore, in July 2019, with a view to increasing its size and exploit synergies on the client market, Edison bought out EDF Renewables’ 100% stake in EDF EN Italia. The rationalisation of renewable business in Italy continued, with the acquisition by Edison from EDF Renewables Services SAS of 70% of EDF EN Services Italia Srl (previously, Edison owned a 30% stake): this company undertakes operation and maintenance of the Group’s renewable installations (including those of E2i) (see section 1.4.1.5.4 “EDF Renewables”). In line with Italy’s National Plan for the Climate and Energy ( Piano Nazionale Integrato Per l’Energia e il Clima 2030 ), which supports the development of gas-powered electricity production and its integration with renewable production to ensure the flexibility and security of the national electricity system, in 2019 Edison started work on the first new-generation combined-cycle gas power plant (CCG) on the site of the Marghera Levante power plant. This 780MW installation is highly flexible and efficient (with energy efficiency of 63%), has a low environmental impact (with CO 2 emissions 40% lower than the national average and 70% fewer NO X emissions); construction is scheduled to take three years. The company also announced that one of its aims for 2020 was to begin work on a 760MW greenfield project at Presenzano, in Campania, using the same technology, with construction over a period of some 30 months. Internationally, Edison is well-established in Greece, where it owns a 50% stake in ElpEdison SA, one of the country’s main electricity operators, alongside Hellenic Petroleum. ElpEdison owns two CCGT plants: one in Thessaloniki (400MW) and one in Thisvi (410MW), both built by Edison and whose electricity is sold on the retail market. Last, Edison holds a 50% stake in Ibiritermo, a subsidiary in Brazil, which operates a 226MW CCGT plant, and a 20% stake in Kraftwerke, which operates 626MW of hydropower in Switzerland.

Gas 1.4.5.2.3.2 For the implementation of its gas strategy, the EDF group, through Edison, benefits from experience along the entire value chain of natural gas. Edison’s Italian gas supply portfolio is based mainly on a series of long-term agreements; as of the end of 2019, these covered approximately 14.7 billion cubic meters of imports via gas pipelines and LNG; 5.3 billion cubic metres were bought on the market or produced in Italy by E&P activities (currently being disposed of). In 2019, total sales of gas in Italy amounted to 20.0Gm 3 (compared with 20.7Gm 3 in 2018). Edison delivered 4.9Gm 3 of gas to the industrial sector, 2.6Gm 3 to the residential sector, 6.6Gm 3 to the thermoelectric sector (including Edison’s own internal needs), and 5.8Gm 3 to the wholesale market. With the aim of increasing its competitiveness and bolstering Italy’s gas supply system, in late 2019 Edison extended the agreement to import one billion cubic meters of gas per year from Algeria through until 2027. The long-term import agreement for Russian gas came to end in 2019; Edison has entered into a new agreement for one billion cubic meters of gas starting in 2020. In July 2019 Edison announced the disposal of its oil & gas exploration and production activities to Energean Oil and Gas for the sum of $750 million, plus a price supplement of $100 million on commencement of gas production from the Cassiopeia field. Completion of this transaction remains subject to obtaining the administrative permissions required in the various countries of operation, in particular Algeria, whose government has asked Edison to enter into discussions with Sonatrach with respect to assets in the Edison E&P portfolio located in Algeria. Disposal of E&P assets is expected to be finalised in 2020. Gas infrastructures Edison is involved in various gas import infrastructure projects (see section 1.4.6.2.2.2 “Infrastructures”), such as IGI Poseidon, 50%-owned by Edison (and 50%-owned by Depa SA), a company involved in the development of several projects that aim to connect Greece and Italy (Poseidon), Greece and Bulgaria (IGB, in 50/50 partnership with Bulgaria), as well as the gas resources from the Eastern Mediterranean area (Israel, Cyprus) to Greece (EastMed) and Italy (Poseidon). In particular, construction of the IGB gas pipeline, 182km long and capable of transporting three billion cubic meters per year, commenced in 2019. This project is one of the European Commission’s Projects of Common Interest, and benefits from €84 million worth of EU aid. At the end of 2019, IGI Poseidon and Israel Natural Gas Lines Company Ltd (which operates infrastructures in Israel) entered into a collaborative agreement for the development of the Eastmed gas pipeline linking the eastern Mediterranean basin to Europe. Edison also has the right of use of 80% of the Rovigo offshore regasification terminal’s capacity (6.4Gm 3 out of 8Gm 3 a year) where LNG imported from Qatar with Ras Laffan Liquified Natural Gas Company Limited II (RasGas II) is regasified. Concerning LNG, since 2018 Edison engaged in building a Small Scale LNG supply chain to sell LNG and thereby support the development of a sustainable fuel for transport by road and sea. The first stage of the project consists of setting up an onshore depot at the port of Ravenna, where the LNG will be stored via a small dedicated LNG terminal, and will be undertaken by Depositi Italiani GNL, a new entity jointly held by Edison (49%) and Petrolifera Italiana Rumena (51%). Depositi Italiani GNL started the construction of the depot in 2019; Edison will have right of use to 85% of the depot’s capacity of over 1Mm 3 of LNG a year and will be able to supply LNG to 12,000 lorries and up to 48 ferries.

(1) Data published by ANEV (page 11 of the ANEV 2019 Brochure), taking into account the capacity of EDF EN Italia and E2i.

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EDF | Universal registration document 2019

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