EDF / 2019 Universal registration document

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

trading throughout the entire value chain in North American gas and electricity ■ markets through EDF Trading North America, and the supply of energy management products in the US and Canada through EDF Energy Services (a wholly-owned subsidiary of EDF Trading North America); energy services, local management of energy and energy efficiency, under the ■ management of Dalkia and its subsidiaries, Dalkia Wastenergy, Dalkia Energy Solutions (formerly Groom Energy Solutions) and Aegis Energy Services; R&D and Innovation, as part of EDF Innovation Lab; ■ urban road lighting, via Citelum, a wholly-owned subsidiary of EDF. ■ Nuclear activities in the United States 1.4.5.3.4.1  Nuclear generation: Constellation Energy Nuclear Group (CENG) On 6 November 2009, the EDF group and CEG established CENG. Since the merger between Exelon and CEG, EDF and Exelon respectively hold 49.99% and 50.01% of CENG. EDF and Exelon signed an agreement in 2014 to transfer the operating licenses for the CENG power plants to Exelon, under which Exelon manages the operational activities of the three CENG nuclear sites (5 reactors). As part of the agreement, CENG paid EDF $ 400 million in exceptional dividends and EDF obtained an option to sell its CENG shares to Exelon at fair market value between 1 January 2016 and 30 June 2022. On 20 November 2019, EDF initiated the put procedure by notifying Exelon of its intention to the exercise of the put option  (1) . The disposal price of the shares will be based on the appraisal of their fair value, pursuant to the contractual provisions in the option to sell. Completion of the transaction is subject to obtaining the necessary regulatory permissions, in particular permission from the Nuclear Regulatory Commission (NRC). CENG’s governance is provided by a Board of Directors composed of ten members, five of whom are appointed by the EDF group and five others, including the President, by Exelon. CENG’s nuclear activities CENG’s nuclear business is under the control of the US Nuclear Regulatory Commission (NRC). CENG operates five nuclear reactors, spread across three operating sites and representing a combined capacity of 4,272MW. The duration of licences for Units 1 and 2 of Calvert Cliffs, Unit 1 and 2 of Nine Mile Point and RE Ginna is 60 years.

The Group is also present on the Spanish market through the local subsidiary Fenice (EDF Fenice Ibérica, see section 1.4.5.2 “Italy”) and Citelum (see section 1.4.6.1.2 “Citelum”). In 2019, Citelum optimised lighting in the capital of Asturies, Oviedo, making the city more sustainable, allowing it to achieve almost 80% power savings, and avoid emitting 84 tonnes of CO 2 per year. In La Nucia, Citelum installed new sports lighting and illumination for the facade of the Olympic Stadium at the Camilo Cano sports village, on the occasion of the 99th edition of the Spanish Athletics Championship. EDF Trading operates in this market from its trading platform in London (see section 1.4.6.3 “Optimisation and trading: EDF Trading”). Framatome Spain is active in Spain through various engineering and maintenance contracts with firms that own nuclear reactors. Since 2015, EDF Invest has held a minority stake in Madrileña Red de Gas, the operator of the main gas distribution network in the Madrid region. North America 1.4.5.3.4  The EDF group operates throughout the North American continent, with a strong presence in the United States. It has more than 9.8GW of gross installed capacity in North America. It also manages, on behalf of third parties, around 52GW of installed capacity under operation and maintenance or optimisation services contracts. EDF’s activities in North America mainly include: investments in nuclear generation, related to its 49.99% stake in CENG ■ (“Constellation Energy Nuclear Group”), a joint venture with the Exelon group (leading American nuclear operator) in three nuclear power plants. CENG has installed capacity of 4GW ( i.e. 2GW consolidated by EDF group). These three facilities are operated by Exelon; renewable energies, with a gross installed and under construction capacity of ■ 7.1GW, mainly located in the United States through EDF Renewables North America, a wholly-owned American subsidiary of EDF Renewables. Equally, EDF Renewables Services (a wholly-owned subsidiary of EDF Renewables North America) manages close to 10GW in North America through operation and maintenance contracts on its own account or on behalf of third parties;

Output  (2) (in TWh) 2019

Company-owned capacity (in MW)

Reactors

Capacity (in MW)

% interest

2018

Calvert Cliffs 1 Calvert Cliffs 2 Nine Mile Point 1 Nine Mile Point 2  (1)

908 881 620

100 100 100

908 882 620

7.91 7.10 4.57 9.16 4.99

7.29 7.70 5.31 8.29 4.70

1,287

82

1,056

RE Ginna

576

100

576

TOTAL 33.28 CENG owns 82% of this unit (i.e. 1,056MW of the unit’s total capacity of 1,287MW). The 18% of Unit 2 of Nine Mile Point not owned by CENG belongs to the (1) Long Island Power Authority (LIPA). LIPA receives 18% of the capacity and electricity generated by Nine Mile Point Unit 2, in consideration for payment to CENG of its share of the costs incurred by the unit, and is responsible for its 18% share of the costs of dismantling the unit. CENG and LIPA are each required to provide specific funding for Nine Mile Point 2. These values correspond to the sum of the exact values expressed to one decimal place after rounding. (2) 4,272 4,042 33.74

The assets of EDF represented 2% of the US nuclear generation capacity and 0.84% of total electricity generation (2018 data). The principal competitors of CENG on this

via a 12-year contract, administered in six tranches of two years, with effect from 1 April 2017 until 31 March 2029. The payment of ZECs to eligible producers will be made on the basis of the number of megawatt-hour produced, subject to caps and minimum performance requirements. The price to be paid for the ZEC for each tranche will be determined administratively using a formula based on the social cost of carbon estimated by the federal government in 2016. This formula also includes downward adjustments related to price fluctuations in the energy market and capacity. For the first tranche (from 1 April 2017 to the end of March 2019), the price

market are Entergy, AEP, Exelon, Dynegy and NRG. Regulations of the State of New York

On 1 August 2016, the New York Public Service Commission (NYPSC) issued an order establishing a new regulation, the Clean Energy Standard (CES), of which one of the aspects is aimed at the preservation of nuclear resources in the State of New York, by the recognition of their zero-carbon electricity generation environmental

of a ZEC was fixed at $17.48 per MWh generated. The updated price for the characteristics. The mechanism includes the creation of a programme of zero following tranche (April 2019 to the end of March 2021) has increased to $19.59 per emission credits (ZEC: Zero Emission Credit). The New York State Energy Research MWh. For the following tranches, the price will be updated every two years. and Development Authority (NYSERDA) procures ZECs from the eligible power plants

(1) See EDF’s press release dated 20 November 2019: “EDF notifies the exercise of its put option on its participation in CENG”.

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EDF | Universal registration document 2019

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