EDF / 2019 Universal registration document

1. The Group, its strategy and activities Legislative and regulatory environment

Radioactive waste In the United Kingdom, EDF is required, under licence condition 34, to ensure, so far as is reasonably practicable, that radioactive material and radioactive waste cannot leak or escape. The Environment Agency regulates the disposal of radioactive waste from licensed nuclear sites under the environmental permitting regulations 2010. The Committee on Radioactive Waste Management (CoRWM) published its recommendations for the long-term management of higher activity waste in 2006. In response, the UK government decided to prefer the use of deep geological disposal facilities for the storage of higher activity waste in England. It set the framework for the management of long-term storage through geological storage, combined with a safe and secure interim storage. Financing of decommissioning and radioactive waste management In the United Kingdom, the costs associated with decommissioning and managing spent fuel are, with limited exceptions, guaranteed by the UK government for existing nuclear plants. The decommissioning costs of the eight plants are covered by the Nuclear Liabilities Fund (NLF) in accordance with the Nuclear Liabilities Funding Agreement. EDF Energy Nuclear Generation Ltd. is required to make quarterly payments to the NLF under the terms of a contribution agreement. Prospective operators of nuclear power plants are required to submit in their FDP a Decommissioning and Waste Management Plan (“DWMP”), setting out the operator’s costed plans for meeting its decommissioning and waste management and disposal obligations, and a Funding Arrangements Plan (“FAP”), explaining how the operator will make financial provision for its obligations. Chapter 1 of Part 3 of the EA 2008 sets out the rules governing the decommissioning and clean-up of nuclear In the United Kingdom, the ionising radiation regulations 2017 (“IRR 2017”), which transposed Directive 2013/59/Euratom into UK law on 1 January 2018, are based on basic safety standards and are designed to protect workers and the public from ionising radiation. Under the IRR 2017, EDF Energy has a legal obligation to take all necessary measures to limit, as far as possible, the exposure of workers and other persons to ionising radiation for any work involving ionising radiation. Civil liability of nuclear facility operators In the United Kingdom, liability to third parties for nuclear damage is governed by the Nuclear Installations Act 1965 (the “NIA”). It transposes the Paris Convention and the Brussels Supplementary Convention into UK law. Operators are liable under the NIA 1965 for the following heads of damage: personal injury to any person; ■ damage to any property. ■ Liability under the channelling principle is covered by mandatory nuclear insurance up to the prescribed financial limits. The Nuclear Installations (Liability for Damage) Order 2016 is due to come into force when the protocols amending the Paris and Brussels Conventions are ratified. Once it has come into force, it will amend the NIA to make operators liable for a higher level of compensation, for a wider category of claimants and for a wider range of damage than at present. It will include: Increase in the amount of compensation : There is currently a £140 million ■ cap on liability for any one incident for nuclear power plants. This liability cap will be increased to €700 million, plus a further €100 million per year, to reach €1.2 billion. Wider category of claimants : The rules currently only apply in countries that ■ are parties to the Paris Convention. The geographical scope of the Paris Convention has been extended to include all “qualifying territories”, which includes non-nuclear countries (e.g. Ireland) and countries with equivalent and reciprocal liability arrangements (e.g. the United States). However, this will not prevent claims from the countries of origin and will not eliminate the risk that the US courts could accept jurisdiction in a case brought against a US contractor. Wider range of damage : The current rules only apply to personal injury and ■ property damage. The amendments provide for three new categories of damage: sites, along with detailed provisions on FDPs. Regulations on radiation protection

(i) costs of measures of reinstatement of the impaired environment; (ii) loss of income deriving from a direct economic interest in any use or enjoyment of the environment; and (iii) costs of preventive measures and further loss or damage caused by such measures. It is common practice in the UK nuclear industry for operators to indemnify certain suppliers against nuclear liability risks, including where the liability is the fault of the supplier. This indemnification is required by suppliers due to gaps in the protection provided under the nuclear third party liability regime. This liability is not covered by the NIA and is not insurable (potentially unlimited). Protection of facilities that house nuclear materials The ONR is the UK’s nuclear safety regulator. In the United Kingdom, comprehensive safety rules are set out in various regulations and administered by the ONR. The main regulations dealing with nuclear security issues in the United Kingdom are the nuclear industries security regulations 2003, as amended by the nuclear industries security (amendment) regulations 2013. The United Kingdom takes into account the nuclear security recommendations made by the International Atomic Energy Agency (“IAEA”). The United Kingdom promotes effective and proportionate security and seeks to meet or even exceed the IAEA’s physical protection objectives, in particular: (1) Protection against the unauthorised removal of nuclear material; By leaving the European Union, the United Kingdom will no longer be a party to the Euratom Treaty. The consequences of this situation and the measures taken to deal with it are described in section 1.4.5.1.1 “United Kingdom – Strategy”. Regulations applicable to hydropower 1.5.3.3 facilities and other renewable energy facilities Regulations applicable to hydropower 1.5.3.3.1 facilities in France In France, hydropower facilities are subject to the provisions contained in Articles L. 511-1 et seq. of the French Energy Code. They require concession agreements granted by the State (for facilities generating over 4.5MW), or an authorisation from the Prefecture (for facilities under 4.5MW), (see section 1.4.1.5.1.4 “Hydropower generation issues”) concerning hydropower concessions. EDF’s hydropower generation business is subject to the substantive provisions of water regulations. Such regulations mainly cover control over variations in water levels and flow rates, the safety of areas in the vicinity and downstream of hydropower facilities and, in general, maintaining a balanced management of water resources (see section 1.5.3 “Regulations applicable to EDF group facilities and activities”). Competitive tendering for hydropower concession contracts Under the French Energy Code, the granting of a hydropower concession is preceded by public notice and competitive tendering in accordance with the terms and conditions set out in Part III of the French Public Procurement Code, subject to the provisions of the French Energy Code. The Law of 17 August 2015 on Energy Transition for Green Growth has completed the legal framework for hydropower concession contracts by giving the State the possibility: of combining concession contracts that form a “series of facilities that are ■ hydraulically linked”, by setting a new deadline for all the concession contracts concerned (Articles L. 521-16-1 and L. 521-16-2 of the French Energy Code); of creating semi-public hydroelectric companies (SEM) made up of private-sector ■ operators and a public Division (State, local authorities, etc.), each of which holds at least 34% of the shares (Articles L. 521-18 et seq. of the French Energy Code); of extending certain concession contracts in return for investments by operators ■ where these investments are necessary in order to reach national energy policy targets (Article L. 521-16-3 of the French Energy Code). (2) Location and recovery of nuclear material; and (3) Protection from nuclear material and facilities. Brexit’s impact on the Euratom Treaty

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EDF | Universal registration document 2019

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