EDF_REGISTRATION_DOCUMENT_2017

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PRESENTATION OF EDF GROUP Description of the Group's activities

high Level Waste (HLW) is defined as radioactive waste in which the temperature ■ may rise significantly as a result of the radioactivity, so this factor has to be taken into account in the design of storage and disposal facilities; higher Activity Waste (HAW) – this is effectively HLW, ILW and any LLW that are ■ unsuitable for near-surface disposal. EDF Energy nuclear generation’s strategy for LLW and HAW reflects that the UK and Scottish governments are focused on application of the waste hierarchy (reduce, reuse¸ recycle, recover). The use of a range of waste recycling and disposal routes will help to make the best use of the UK’s Low Level Waste Repository (LLWR) in Cumbria. Only a disposal route for LLW currently exists in the UK. HAW is stored for the medium-term in safe, purpose built facilities at EDF Energy’s stations while longer term national solutions are being established within England and Scotland. Under historic contractual arrangements, spent fuel from the AGRs is transported to Sellafield nuclear reprocessing site (owned by NDA) for reprocessing or long term storage. Heat generating HAW from the reprocessing of spent AGR fuel are converted into glass blocks for safe, long term storage. Regarding Sizewell B, the spent fuel is stored on site and EDF Energy has built a further spent fuel dry storage facility on the Sizewell B site to allow the station to continue to safely store all of the spent fuel that will be generated over Sizewell B’s life. Following long-term surface storage, the Sizewell B PWR spent fuel will be disposed to a future UK geological disposal facility. The nature of EDF Energy nuclear generation’s business and its historic government link means that the strategy for spent fuel and the management of radioactive waste from EDF Energy nuclear generation’s power stations is approved by the NDA. However, EDF Energy has policies to continually improve and minimise the spent fuel and waste arising through the Company’s wider safety, sustainability and environmental policies. Costs relating to radioactive waste management and decommissioning – Restructuring Agreements Restructuring Agreements were originally entered into in 2005 as part of the restructuring of the former British Energy Group of companies (hereafter referred to as “the EDF Energy Nuclear Generation Group”) and were carried out from 2002 under the aegis of the UK government in order to stabilise the financial situation of the EDF Energy Nuclear Generation Group (EENGG). By virtue of these restructuring agreements: the Nuclear Liabilities Fund (NLF), an independent trust set up by the UK ■ government as part of the restructuring, agreed (at the direction of the Secretary of State) to fund, to the extent of its assets: (i) qualifying uncontracted nuclear liabilities (including liabilities in connection with the management of spent fuel at the Sizewell B power station) and (ii) qualifying costs of decommissioning in relation to the existing nuclear power stations owned and operated by EENGG; the Secretary of State agreed to fund: (i) qualifying uncontracted nuclear ■ liabilities (including liabilities in connection with the management of spent fuel at the Sizewell B power station) and qualifying costs of decommissioning, in each case in relation to the existing nuclear power stations owned and operated by EENGG, to the extent that they exceed the assets of NLF and (ii) subject to a cap of £2,185 million (in December 2002 monetary values, adjusted accordingly),

qualifying contracted liabilities for the EENGG’s spent fuel (including in particular liabilities for management of AGR waste from spent fuel loaded prior to 15 January 2005); and EDF Energy is responsible for funding certain excluded or disqualified liabilities ■ (mainly liabilities incurred in with the event of an unsafe or careless operation of the power stations) and the potential associated obligations of its subsidiaries to the NLF and the Secretary of State are guaranteed by the principal members of the EENGG. Certain companies in the EENGG, including EDF Energy Nuclear Generation Limited, entered into a separate contract, now with the NDA for management of AGR spent fuel loaded from 15 January 2005 (termed “new fuel”) and have no responsibility/liability for this fuel after it is received at Sellafield. The Secretary of State and EDF agreed to limited amendments to the Restructuring Agreements, in connection with the acquisition of EENGG by Lake Acquisitions Limited. The amendments, among other things and subject to limited exceptions, restrict the majority of rights and obligations imposed by the Restructuring Agreements only to EENGG and its subsidiaries and subsidiary undertakings and accordingly, do not extend similar rights and obligations to EDF group, or its other subsidiaries and subsidiary undertakings. The amendments do not impact on the contractual funding commitments of the Secretary of State or NLF to the EENGG. Certain amendments have been made to the Restructuring Agreements, reflecting the EENGG’s access to an improved credit rating following the acquisition. In particular, EENGG is required to maintain a minimum cash reserve. The amendments reduced the minimum level to £290 million. The cash reserve may be further reduced to nil if EENGG achieves and maintains an investment grade rating or if irrevocable Committed Facilities of the same amount are put in place between third party financial institutions or a member of the wider EDF group with an investment grade rating and a member of the EENGG. Renewable generation 1.4.5.1.2.2 Through EDF Energy Renewables (EDF ER), a joint venture between EDF Energy and EDF Énergies Nouvelles, EDF Energy is developing its renewable assets. In addition, EDF Energy has signed power purchase agreements with renewable generators and supports independent developers. This ensures a balanced approach for compliance with its Renewables Obligations (RO) and the provision of renewable electricity to its customer base. EDF ER currently operates 36 wind farm sites with a total generation capacity of 704.2MW, including Beck Burn (31MW) which was brought into operation in 2017. One other onshore wind farm is currently in construction, Dorenell (177MW), EDF ER’s largest onshore wind farm to date, expected to commence operation early 2019. EDF ER continues to expand its scope of technologies with a 49MW battery storage facility under construction. This facility will be constructed adjacent to the West Burton coal and CCGT stations. In addition, the facility has successfully secured a 15 year Capacity Market agreement for delivery commencing October 2020 in the 2016 Capacity Market Auction held in December 2016. EDF EN Services UK Limited, a joint venture between EDF Energy and EDF Énergies Nouvelles, which commenced operations in October 2015, continues to expand and now provides operation and maintenance activities for 25 wholly and partly owned wind farms and 2 externally owned wind farms.

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DF I Reference Document 2017