EDF / 2020 Universal Registration Document

1 THE GROUP, ITS STRATEGY AND ACTIVITIES Description of the Group’s activities Industrialising technical solutions Enedis is pursuing the industrialisation of cutting-edge solutions for smart grids. New digital technologies are gradually equipping all components of the network: source control stations (PCCNs, or Digital Command and Control Stations, which provide central management of the network’s transmission automation; FARs, or Functions for Automation of the Network, which facilitate management of the insertion of electricity from renewable sources), the distribution stations (HVA/LV Smart stations); the sensors on the network; all the information system tools (forecast, management, planning management, Linky network, etc.). Enedis continues with the ambitious modernisation of the network, in order to facilitate the insertion of renewable energies and to assist all players in the electricity system. Technology based on artificial intelligence is being progressively tested and deployed on the grid, in particular to help with predictive maintenance of grid assets (modelling and breakdown prevention, etc.). Digitisation of energy systems: carry out the digital switch-over and the management of the data The development of measurement systems combined with digital innovations (the internet of things) enables collection and analysis of network data to be increased with a view to optimising management. Blockchain and artificial intelligence both offer new possibilities for network managers and all the players in the value chain, in particular regarding traceability from production to consumption, scheduling network maintenance operations, and anticipating supply and demand balancing. Against this backdrop, the digital programme undertaken by Enedis since 2014 has matured. This programme is based on four vectors: infrastructure management (remote management, predictive management, etc.); dialogue with outside parties; management of data from electricity meters and sensors; and social and cultural transformation of the company, which is providing its employees with new tools connected to the Information Systems. The programme aims at delivering better services to customers. Enedis has organised itself to process, exploit and accumulate the collected data and provide it to the various players in the electricity system (suppliers, transmission network operators, local authorities, new entrants) in compliance with the confidentiality and security regulations. Enedis’ action for the “smart cities”, all local communities and citizens. Self-consumption, self-supply, electric mobility, smart meters, data management and the optimisation in real time of networks – these are the new challenges facing electricity distributors in relation to regions as a whole, and especially cities. Enedis is pursuing its transformation from DNMs (distribution network managers) to DSOs (distribution systems operators) and acts as a facilitator of energy and ecological transition, both in general and in particular for all applications at every scale, including locally (cities, neighbourhoods, etc.). This role covers not only the networks but also the associated data, necessary for regional players and cities aiming to become smart cities. The role of Enedis is therefore constantly changing as it adjusts to regional reorganisations and the organisation of society into metropolises, whilst also ensuring a high-quality electricity supply is maintained in rural areas. Enedis makes its technical expertise available to local authorities to contribute to local energy policies, “positive energy territories for green growth”, urban travel plans, and “smart cities” projects. The Open Innovation policy developed by Enedis has also become popular in local communities which have organised many energy, technological and environmental initiatives, and rely on a number of startups. Enedis “enriches” these projects and developments with its own research and innovation, especially in the fields of smart grids and data.

Regulatory notice

Linky regulation The Linky project, led by Enedis, is subject to a specific regulatory framework regarding meters operating life (20 years), with a dedicated regulated asset basis (RAB) for the meters installed between 2015 and 2021 and the associated information systems. The CRE’s decision dated 17 July 2014 thus set a nominal return rate before tax of 7.25% and a 3% additional premium in return for an incentive regulation to better meet costs and system performance, targets as well as deadlines bringing the return on the RAB to 10.25%. The incentive regulation can also trigger penalties potentially lowering the return, although not below a floor of 5.25%. As provided for in the decision dated 17 July 2014, the incentive regulation of the system’s performance for 2020 and 2021 was set by the CRE in a decision dated 23 January 2020. In addition, the implementation of a postponed tariff, set up to guarantee a neutral impact of Linky on the tariff for customers, means that payments for the 2014-2022 period will be made during the 2023-2030 period. This postponed tariff, to which is attached a 4.6% compensation covering the cost of financial carry, will be totally paid by 2030. At 31 December 2020, the deferred amount is +€1,650 million (this represents a receivable from Enedis in relation to their network users, which is not recognised on the Group’s balance sheet at 31 December 2020, pursuant to the accounting standards in force on this date). Ecological transition In September 2020, Enedis unveiled its industrial and HR goal for 2020-2025: becoming France’s preferred public service encouraging ecological transition. Enedis intends to bring together industrial performance and a sustainable approach, at the heart of territories and alongside its customers, responding to present-day changes and anticipating those of the future. This project takes into account the current changes in the energy mix in Metropolitan France enshrined in the multi-year energy programme ( Programmation pluriannuelle de l’énergie, PPE); this calls for increased integration of decentralised intermittent renewable electricity production assets in electricity grids. On the other end, new electric practices, thus resulting in new types of energy use, are expected to grow, in particular due to the expected development in electric vehicles. Ecological transition calls for the development of electricity storage capacity and services, allowing optimised management of grid supply and demand balancing. Most of these transformations will be based on the electricity distribution network; this will become the backbone of ecological transition. In this respect, Enedis is implementing several solutions, in which the Linky meter is one of the basic building blocks, providing access to a thoroughly modernised network for both producers and customers from the mass market and the business market. These solutions cover mainly the monitoring and steering in real time of low- and medium-voltage networks, anticipation of events, the integration of renewable energies and electric vehicles, storage management, voltage stability, etc. The challenge for the distributor is to support energy transition while developing the networks at the lowest cost for society. Thanks to the wide-spread use of rollout of Linky and new technologies, a more detailed and responsive oversight is possible, based on a better understanding of consumption, generation and the state of the network, and on the increasing use of flexibilities. This “intelligence” makes it possible to optimise investments, while guaranteeing the reliability of the network, pursuant to Enedis’ double public service objective of performance and security. The smart solutions being rolled out relate to areas such as connected objects, flexibilities, individual and collective self-consumption, demand-side management, storage, data management, and business models.

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EDF - UNIVERSAL REGISTRATION DOCUMENT 2020