EDF_REGISTRATION_DOCUMENT_2017

PRESENTATION OF EDF GROUP Group strategy

low carbon generation, with a balanced mix of nuclear and renewable energy; ■ international expansion. ■ More than 15 programmes have been launched since 2015, embodying each of these three strategic priorities. This goal will also be achieved through a transformation programme based on the following four main areas: simplification, innovation and digital technology, human ambition and skills, accountability and performance management. Proximity to customers and local 1.3.2.1 communities In order to support customers and local communities in their energy transition, the EDF group offers them competitive low carbon energy solutions and has acquired industrial expertise in smart grids. The EDF group’s strong position in energy services via Dalkia, Citelum and other subsidiaries (Sodetrel, Edelia, Netseenergy) allows it to support its customers in achieving energy efficiency and developing decentralised local systems. In 2017, EDF launched the “EDF Solutions énergétiques” brand to promote this product offering to all its customers. As for residential customers, the EDF group offers and continues to develop a range of digital energy services, marketed in France and in the “core European countries” (United Kingdom, Italy, Belgium). For example, the launch of Sowee in 2016 (a subsidiary offering innovative connected home products and solutions, that was further diversified in 2017) reflects the EDF group’s commitment to meeting the new expectations of its customers, especially with regard to sustainable wellbeing in the home. Existing offerings and customer relations will also continue to be enriched by new digital technologies and features, facilitated in particular by smart meter systems deployed in several countries. The EDF group is fully engaged in the energy transition: by proposing or developing energy efficiency solutions for its customers ■ (insulation, high efficiency solutions, deployment of innovative digital tools); by working to replace fossil fuels with new efficient uses of electricity, which ■ could represent dozens of additional TWh in France by 2030 (electric mobility, heat pumps, low carbon housing etc.); by developing carbon-free and decentralised electricity generation capacity such ■ as the self-consumption offering “Mon soleil et moi” ("My sun and me"); by developing and operating heating networks that use renewable and recovery ■ energies; by creating EDF Nouveaux Business, an incubator of in-house and external ■ projects aimed at testing and exploring new business sectors, creating new drivers of growth for the Group and bringing customers a new range of products and innovative services. Lastly, the development of renewable energies, the deployment of the Linky smart meters (1) and the emergence of metropolitan areas are putting the distribution networks on the front line of the transformation of the electricity system. The distributor thus plays a key role as facilitator of the energy transition. In this respect, Enedis and EDF have established with the national federation of licensing authorities (FNCCR) and the association France Urbaine, a new draft concession contract for the public distribution of electricity and the supply of electricity at regulated tariffs, in order to modernise relations with the concession contracting authorities. This contract integrates regional changes and the energy transition, while retaining the principles of the French concessionary model: public service, regional solidarity and nationwide optimisation. To support the energy transitions, the EDF group is intensifying research and development in storage, solar energy, electric mobility, smart electricity systems and sustainable local energy solutions (smart cities), like the signing of the Dijon Smart City contract, in consortium with the Bouygues group.

The agreement reached in Paris at the 21 st session of the Conference of Parties (COP 21) confirms the effort being made to combat climate change and the ramping up of energy transitions beyond Europe. This agreement, which was ratified by 168 countries as well as the European Union, came into force on 4 November 2016. COP 22 and COP 23, held in Morocco and Germany, reconfirmed the roadmap approved in Paris, despite the withdrawal of the United States from the agreement. The One Planet summit organised in Paris in December 2017 helped to mobilise funds and resulted in commitments in favour of the fight against global climate change. In France, the energy transition law for green growth adopted in August 2015 sets out several medium and long term objectives relating to greenhouse gas emissions, energy consumption and the energy mix in France. This law led to the drawing up of a national low carbon strategy and a multi-year energy programme (PPE) to manage these targets. The PPE defines the orientations and action priorities of public authorities for managing all the different energy forms for five-year periods. The current PPE covers the periods 2016-2018 and 2019-2023. In 2018, a new PPE will be drawn up for the periods 2019-2023 and 2024-2028 and will be subject to public debate. Customers are looking to increasingly take ownership of their consumption, and local communities of their energy policy. These new expectations are forcing energy producers to come up with new solutions and new, more decentralised models, facilitated by innovations in telecommunications and digital technologies and the emergence of new uses, including electric vehicles. The electricity sector is thus changing more than ever, at the centre of medium and long term societal and technological trends. Against this background and with this outlook, European electricity producers have scaled back their investments and focussed them on targeted segments, particularly renewable energy, low carbon solutions, international growth areas, networks, supply to customers and services. EDF is thus addressing specific strategic challenges: to play a responsible role in the fight against climate change: to contribute to the ■ achievement of the goals set out in the Energy Transition and Green Growth Law in France, in the Climate Change Act in the UK, and more broadly in the 2020 and 2030 Energy and Climate Change Packages in the European Union; to ensure the economic performance and safety of nuclear assets; ■ to innovate in order to set itself apart and to have the technological and ■ economic capabilities to renew and expand its generation and the services it offers to customers, in particular digital services, and thereby play a role in energy efficiency and supply security; to ensure that the EDF group is a consistently outstanding public service ■ operator, in particular in terms of solidarity and the fight against energy poverty, respect for others, and responsibility and ethics in the way it runs its business; to put itself on a sustainable value creation path for all stakeholders; ■ to create an environment that facilitates the involvement of all stakeholders in ■ the Group’s transformation. Therefore, in a particularly difficult market context, the EDF group is working hard to pursue its CAP 2030 strategy in order to be able to finance its priority developments. STRATEGY To be a responsible and efficient electricity producer that champions low carbon growth: this is the goal of the EDF group, driven by the CAP 2030 strategy. This goal can be split into three priorities, which combine the search for growth drivers with the optimisation of existing assets: proximity to customers and local communities; ■ PRIORITIES OF THE CAP 2030 1.3.2

1.

Linky is a project led by Enedis, the distribution network operator. For the sake of brevity, all further mentions of Linky in the rest of the document do not specify that it is a (1) project led by Enedis.

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EDF I Reference Document 2017