EDF / 2020 Universal Registration Document

2 RISK FACTORS AND CONTROL FRAMEWORK Risks to which the Group is exposed Moreover, in terms of the governance or delimitation of its scope of activity that may be enforced, EDF group could be affected by a limitation or loss of control of certain strategic and operational decisions that could have a negative impact on the outlook and profitability of its various activities. At the same time, EDF, as a shareholder, may continue to bear certain risks, calling into question its potential liability with regard to third parties or affecting the profitability of its assets. Finally, the competent authorities or certain States could, in order to preserve or promote competition on certain energy markets, take decisions that are contrary to the Group’s economic or financial interests or that impact its integrated operator model. Finally, in the renewable energies field , EDF relies primarily on its EDF Renewables subsidiary (see section 1.4.1.3.3 “EDF Renewables activites”), which does business in numerous countries. The profitability of these developments often depends on the support and tendering policies implemented in the different countries. The Group cannot guarantee that these policies will not change in some of these countries in ways that will be detrimental to the profitability of investments. 1B: Changes in the regulatory environment (ARENH, regulated sales tariffs, environmental legislation, ESC and SNBC national low carbon strategy). A significant portion of the Group’s revenues comes from regulated activities. Thus, any change in regulated sales tariffs, the ARENH or the Tariffs for Using the Public Transmission and Distribution Networks (TURPE), or any change in the regulation (energy savings certificates, environment regulation, CO2 regulation), would be likely to affect the Group’s profitability and its ability to meet the challenges of energy transition by developing low-carbon energy solutions for the protection of the climate. Furthermore, given the impact of ARENH on EDF’s financial situation, the failure of its reform represents a major risk for the Group ARENH reform - major risk if no reform is carried out The law on the New Organisation of the Electricity Market (NOME law or Nouvelle Organisation du Marché de l’Electricité ) has introduced the Regulated Access to Electricity from the Existing Nuclear Fleet (ARENH), for the benefit of EDF’s competing electricity suppliers. The Multi-Year Energy Programme (PPE) stipulates that “the government will propose the terms of a new regulation for existing nuclear power that will make it possible to guarantee consumer protection against market price increases beyond 2025 by giving them the competitive advantage linked to the investment made in the historic nuclear fleet, while giving EDF the financial capacity to ensure the economic sustainability of the generation facilities to meet the needs of the PPE in low price scenarios.”. With this in mind, in January 2020, the government launched a call for contributions from market players and stakeholders on the fundamental findings that lead to the need for a new economic regulation, as well as on its proposed construction and operating principles. Any modification of the ARENH system (volume ceiling, prices) or its replacement by a new system is the responsibility of the French government or the legislator and requires prior in-depth discussions with the European Commission, which means that there is a great deal of uncertainty about what changes will ultimately be implemented and the associated deadlines. In this context, the major risks for the Group are as follows: with regard to the existing ARENH system, under the current conditions of the scheme: the optional nature of the mechanism gives suppliers opportunities for ❯ arbitrage between the ARENH mechanism and the markets to the detriment of EDF, and exposes EDF to major uncertainties that have a negative impact on the effectiveness of its energy market risk management with no corresponding consideration since the option is free of charge. As a result, EDF is highly exposed to falls in wholesale electricity market prices when their total level (energy + capacity) is below the ARENH price (currently €42/MWh) for the year Criticality in view of the control actions undertaken: Strong.

of delivery in question. Conversely, the positive impact of wholesale electricity market price increases is limited when their total level (energy + capacity) is above the ARENH price, risk of an increase in the volume of ARENH without sufficient change in price ❯ (see “risk 1A Changes in public policies in France and Europe”). If this development were implemented, it would further reduce EDF’s ability to benefit from wholesale market prices for electricity when their total level (energy + capacity) is above the ARENH price. The French government has announced, however, that it will not increase the ceiling of the HRDA for 2021, furthermore, the implementation of the mechanism was the subject of disputes ❯ in 2020, described in note 1.4.1 to the consolidated financial statements. These disputes relating to the application of force majeure in the context of the Covid-19 health crisis exemplify the arbitrage carried out by certain alternative suppliers when market prices become lower than the ARENH price, by suspending the performance of the ARENH contract between them and EDF in order to benefit from cheaper supplies on the markets; with regard to future regulations: a comprehensive negotiation on the framework of the future regulation of existing nuclear power is currently underway between the French State and the European Commission. The main risks relate to the level of prices, the French State’s ability to negotiate with the European Commission sufficient terms of compensation and proportionate consideration. The risk that these negotiations might fail is a major risk for the Group, particularly in its ability to finance the development of its strategy. Tariff regulation In France, a significant portion of the EDF group’s revenues is based on regulated tariffs set by public authorities or regulatory authorities (Electricity Regulated Sales Tariffs – TRVE, Tariffs for Using the Public Transmission and Distribution Networks – TURPE). Within the framework of the Energy and Climate Act, several provisions have been taken concerning regulated sales tariffs or the ARENH: the provisions concerning the ARENH: they are described in §1A above (Developments in public policies in France and Europe); the reduced scope of sites eligible for the Regulated Sales Tariffs (TRVE): as of 1 January 2021, only domestic end consumers, including sole proprietors and co-owners’ associations of a single residential building; domestic end consumers, including sole proprietors and co-owners’ ❯ associations of a single residential building, and non-domestic end consumers employing fewer than ten people and having ❯ annual sales, revenue or balance sheet total not exceeding €2 million may benefit from the TRVE for their sites with a subscribed power less than or equal to 36kVA. In this context, the major risks for the Group are as follows: with regard to the regulated sales tariffs: risk of disputes by stakeholders; with regard to TURPE 6: the Energy Regulatory Commission has been organising the consultation process since 2019 for the future TURPE 6. This process gave rise to a deliberation by the Energy Regulatory Commission on 21 January 2021 and should culminate in a publication in the French Official Gazette at the end of March 2021, due to come into force on 1 August 2021. The risk involves whether the level of compensation of network operators is sufficient to enable them to carry out the tasks entrusted to them. More generally, in France as in other countries, the Group cannot guarantee that the ARENH, regulated sales tariffs, TURPE or local tariff regulations will be set at levels that enable it to preserve its short-, medium- and long-term investment capacity and its proprietary interest, by ensuring a fair return on the capital invested by the Group in its generation, service, transmission and distribution assets. Other regulatory issues Environmental regulation (ER): in order to meet the National Low Carbon Strategy (SNBC) target of zero CO 2 emissions from residential and tertiary buildings by 2050, the 2020 ER, which is due to come into force at the beginning of 2022 for single-family homes, multi-family dwellings, office and educational buildings and will be applied one year later for the other tertiary sectors, gives priority to reducing the carbon footprint of buildings. Correcting the pitfalls of the 2012 thermal regulation which led to the generalisation of

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EDF - UNIVERSAL REGISTRATION DOCUMENT 2020