EDF / 2019 Universal registration document

1. The Group, its strategy and activities Research & development, patents and licences

Research & development, patents and licences 1.6 EDF group’s Research & Development (R&D) activities are carried out by the Research and Development Department – EDF R&D, as well as by certain Group subsidiaries. These activities are complementary and are in line with the Group’s CAP 2030 strategy.

the very significant changes in our lifestyles and actions with respect to energy use. The research work on grids on behalf of Enedis is carried out under a services contract, which defines obligations that guarantee the protection of commercially sensitive information and compliance with the principle of the independent management of the distributor. In addition, Enedis also has its own independent R&D programme. This work is described in section 1.6.1.5. Electric transition 1.6.1.1 The development of energy efficiency and distributed renewable energies, regulatory and technological changes (digitisation) as well as market deregulation, have all led to profound changes in the relationship between energy firms and their clients. They allow customers to be actively involved in their consumption and production of energy, on an individual or regional scale. Shifts in European and French legislation and regulation, exemplified by the EU’s Clean energy for all Europeans Package and France’s National Low-Carbon Strategy (SNBC) and multiyear energy programme (PPE), as well as various tax incentives to replace fossil fuels with clean electricity (batteries vs combustion engines, heat pumps vs oil-fired boilers) are shaping the future energy landscape. In this context, the challenges for the EDF group’s marketers and specialised subsidiaries are many, and its CAP 2030 goals aim high in terms of energy services: changes in the range of price offers for both electricity and gas; ■ the development of smart technologies, e.g. the deployment of smart meters; ■ changes in client relations, which are becoming increasingly digital, with more ■ demanding client expectations accompanied by changing behaviours; the emergence of demand among customers to become stakeholders in their own ■ electricity generation through private energy generation and consumption. Work on new uses for electricity were carried out, in particular by the EDF Energy subsidiary, which develops activities in the electric mobility field. 2019 also saw new customer interfaces, using techniques linked to artificial intelligence and augmented reality, being marketed. The dynamics of the energy transition are creating new uses of electricity and new expectations. For example, energy communities are emerging: cities have expressed enthusiasm for optimising infrastructures and their management (transport, waste treatment, buildings, energy generation, grids) and aim to become smart cities or “sustainable cities”. For electric mobility, which offers the prospect of a profound transformation of modes of transport, the issue of battery storage is key. R&D research in this respect consists, firstly, in characterising battery safety and performance in the lab, and secondly, in innovating in the realm of breakthrough technologies with the potential to deliver significant improvements in battery life and/or cost. R&D is also studying non mobile applications for the reuse of batteries that were originally used in electric vehicles (combining them with renewable energies, system services, etc.). In the longer term, R&D will adopt a similar approach for the hydrogen technologies that are used for mobility, including electrolysers and charging stations, as well as fuel cells for heavy transport and light vehicles. Energy transition towards a low-carbon economy in Europe also involves reducing the carbon footprint of electricity systems. This will require taking on new challenges: managing the intermittence of production sources that use renewable energies ■ and pushing back the limits of their inclusion in electrical systems; integrating new uses of electricity by optimising the production mix and grid ■ requirements; developing network transmission infrastructures and optimising electricity traffic ■ in Europe; optimising decentralised energy systems (demand-side management, ■ decentralised generation and storage, etc.) by integrating them into larger scale energy management systems; adapting the coordination of electricity systems in order to address a reduction in ■ inertia of the electricity system in a context of increasing use of power electronics in order to factor in patterns of use and new production sources;

EDF group’s R&D is both integrated and cross-disciplinary, in order to facilitate synergies and method transfers between the different Divisions within the Group. It employs over 2,700  (1) persons worldwide. Skills cover all the Group’s field of activities: renewable energies and storage, networks, nuclear generation, thermal, hydropower, energy management, trade and services, IT systems, environment. They are specific to particular disciplines, business lines and projects, and also come together for work on major systems. EDF R&D is currently organised on a multi-site basis, with several sites located in France and abroad, mainly in Germany, the UK, China, the United States, Singapore and Italy. EDF R&D’s main centre is located in Palaiseau on the Paris-Saclay campus where it opened in 2016. At end 2019 EDF’s R&D employed 1,868 people in France representing 29 nationalities. The main missions of the EDF group’s Research and Development Division (R&D) are firstly, to support the Group’s Divisions and subsidiaries on a day to day basis, by providing them with its top-level expertise and high performance practices, and secondly, to contribute to build the Group’s future by anticipating the developments and major challenges with which it is confronted. With the goal of carbon neutrality by 2050, and with electricity anticipated to be a major factor in the decarbonisation of the French economy, the role that R&D will play will be crucial to achieving this objective. Its avenues of research are structured around three broad topics: In 2019, EDF group’s total R&D budget was €713 million. It comprises EDF’s R&D budget of €523 million, as well as the research carried out by certain wholly-owned subsidiaries, mainly Framatome, EDF Energy and Edison. This is one of the largest R&D budgets of any major electricity company. Moreover, in 2019, approximately 18% of this budget was devoted to protecting the environment. In particular, expenditures covered research into energy efficiency, uses of electricity as a substitute for fossil fuels, renewable energies and their insertion into the grid, energy storage, carbon-free hydrogen and its applications for decarbonising the economy, sustainable cities, the local impacts of climate change and other environmental issues such as biodiversity, water quality, and the mitigation of disturbances. R&D priorities 1.6.1 EDF R&D’s work serves all the Group’s business lines. For each of them, it offers technological solutions or innovative business and economic models designed to improve their performance, and prepare the Group’s future in the longer term by means of medium and long-term anticipation initiatives. It is one of the factors in EDF becoming a global industrial group providing low-carbon electricity systems. Its research focuses on three main areas, in line with the CAP 2030 project: electric transition: electricity, especially if generated using low-CO 2 emission ■ facilities, will play a major role in decarbonising the end uses of energy. Among these uses, electric mobility and innovative heat production methods are important development drivers for EDF; climate transition: this focus includes issues in relation to EDF’s electricity ■ generation facilities. EDF group, a champion of carbon-free energies, endeavours to ensure that its facilities emit as little CO 2 as possible and, therefore, to make a major contribution to the COP21 and COP22 climate goals; digital and societal transition: this focus recognises the advent of connected ■ objects and digital tools, which have been developing exponentially in the domestic and business worlds in recent years. This transition is inseparable from electric transition; ■ climate transition; ■ digital and societal transition. ■

(1) Calculated as full-time FTEs.

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EDF | Universal registration document 2019

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