EDF_REGISTRATION_DOCUMENT_2017

3.

ENVIRONMENTAL AND SOCIETAL INFORMATION − HUMAN RESOURCES Offer sustainable, safe and efficient energy

The extension of the “Green Bond Framework” to hydropower France in 2016 made it possible to finance numerous investment, development and performance improvement projects, thus contributing to the energy transition objectives for metropolitan France’s fleet. Outside of metropolitan France, EDF invested €13 million in maintenance and operations via its entity Direction des Systèmes Électriques Insulaires. It also launched studies for the construction of a STEP for the Sampolo (Corsica) hydropower concessions, and the optimisation of the Takamaka 1 concession (La Réunion). It also launched studies for the renovation of the Saut Maripa hydropower plant in Saint-Georges-de-l’Oyapock, the purpose of which will be to make this French Guiana town the first to be self-sufficient in the supply of renewable energies (pairing with a private biomass power plant). Outside Europe, the EDF group is interested in hydropower facility projects in areas where the hydroelectric potential could make reliable electricity available to populations and the local economy, in particular South America, Africa and South-east Asia. EDF’s engineering teams have renowned skills and expertise in taking technical, environmental, social and societal aspects into consideration in projects, particularly following the completion of the Nam Theun dam in Laos, which integrated all aspects of sustainable development in conjunction with the local populations. Through its Brazilian subsidiary EDF Norte Fluminense, EDF owns 51% in the Compagnie Énergétique de Sinop responsible for building and operating the hydropower facilities on the Sinop dam. Work is continuing on this 400MW project, which began in 2014. Its commissioning for commercial operations is scheduled for the end of 2018. Further, EDF is currently a 40% partner with the Government of Cameroon (30%) and the SFI (30%) in the development of a 420MW dam on the Sanaga river, 60 kilometres north of Yaoundé within the Cameroonian company Nachtigal Hydro Power Company (NHPC). The Electricity Generation Concession Agreement was signed on 20 April 2017 between the Minister of Water and Energy and the CEO of NHPC, making NHPC the concession holder of the upstream Nachtigal Hydroelectric facility for a period of 35 years and thus transferring the land rights to the Project site. In addition, 2017 saw the start of the implementation of the environmental and social plans approved in 2016. Wind power, solar power and storage In order to develop its installed capacities in wind and solar power, the Group is primarily relying on EDF Énergies Nouvelles (EDF EN), a leading producer of renewable energy. The company develops, builds and operates green electricity power plants in 21 countries, for itself and on behalf of third parties, particularly in wind power and solar photovoltaic power, mature and competitive technologies. Attentive to future developments in other segments, the Company is also present in decentralised energy, energy storage and marine energy. Its strengths lie in four areas: low carbon energy: continue investments in our principal segments, onshore and ■ offshore wind farms and photovoltaic solar energy; international: strengthen our international positions by concentrating our ■ development and strengthening in each key country, including France; innovation: participate in the emergence of new technologies in marine energies ■ (floating wind turbines, tidal turbines), energy storage or solar energy, contribute to the technological optimisation of mature renewable energies and the development of industrial sectors; partnerships: focus on local partnerships to conquer new markets and promote ■ local economic activity. For the “Solar power plan” and EDF EN, refer to section 1.4.1.5.3 "EDF Énergies Nouvelles". Moreover, the EDF group also supports the emergence and development of renewable electricity generation methods adapted to Island Energy Systems. Island territories have the distinction of forming “small isolated systems” that are not interconnected to a continental power grid, or, in the case of Corsica, they are connected to a limited degree. That is why EDF dedicated an entire entity to them Island Energy Systems Division (DSEI). In these territories, EDF consolidated all business lines that provide public electricity service.

EDF group plans to achieve this in four ways: roll out a global renewable energies and low-carbon strategy to strengthen its ■ positions in France and worldwide; optimise the performance of the facilities; ■ develop new projects to support a country’s energy transition; ■ prioritise the most competitive technologies (hydropower, onshore wind power, ■ photovoltaic), by contributing to improvements to the most promising, but as yet costly, technologies (offshore, CSP, etc.), by investing in innovation in the right places, in line with EDF group’s international strategy (USA, China and others), with the right mix. The percentage of renewable energies in the EDF group electricity capacity mix stood at 23.8% in 2017 compared with 22.1% in 2016, 21.9% in 2015 and 20.8% in 2014. Investments and their financing For the past six years, the Group has dedicated a large part of its gross operating investments for development to the development of renewable sources and strengthened its positions in strategic countries. In 2017, the net invesments (excluding new developpement) in renewable energies represented €1.3 billion (see section 1.3.3.1 “Investments in 2017”). In 2013, EDF innovated by becoming the first large corporate to issue a Green Bond (€1.4 billion raised). In 2015, the Company launched its second Green Bond worth €1.25 billion, followed by a third in 2016 worth €1.75 billion (EDF’s new Green Bond Framework, extended to the financing of investments to renovate and modernise hydroelectric assets in mainland France, in addition to the construction of new wind power and solar power projects already eligible under the first two issues). On 20 January 2017, EDF became the first major industrial player to issue a Green Bond in yen by raising ¥26 billion in two tranches with 12 and 15 years’ maturity. Therefore, overall, EDF issued Green Bonds amounting to close to €4.5 billion to support its renewable energy development. Furthermore, on 20 April 2016, the French financial markets authority approved the partnership entered into in October 2014 between EDF and Amundi. The resulting asset management company, Amundi Transition Énergétique (ATE), 40% of which is owned by EDF, aims to raise funds from institutional investors and private individuals for the production of renewable energies (wind power, photovoltaic, small hydropower works), and to develop systems for improving energy efficiency and to manage on behalf of third parties funds designated for energy transition projects. In 2017, ATE completed its first financing transaction for the energy transition by finalising the acquisition of a majority stake in a portfolio of gas-fired cogeneration facilities from Dalkia, a leading French energy services company. With a value of more than €150 million, this first transaction represents more than 330MW of electrical power distributed over 132 facilities that produce electricity and heat for the needs of industrial or public customers. Hydropower EDF group is the European Union’s largest hydroelectricity producer and has 21.5GW installed worldwide. In France, the possibilities for hydroelectric development are limited, but the EDF group, through its subsidiaries in particular, responds to calls for tenders launched by the Energy Regulation Commission. As a result, on 27/04/2017, two subsidiaries of the EDF group won the April 2016 call for tender for small-scale hydropower: SHEMA (two projects) and Électricité de Strasbourg (one project). In France, EDF’s hydropower fleet underwent a significant modernisation and maintenance programme. Through some 2,000 annual maintenance operations, EDF adapts its resources to performance and regulatory requirements, thereby protecting its hydropower generation potential. In 2017, maintenance and operation investments amounted to €300 million, and those for development amounted to nearly €100 million. Large-scale maintenance projects were underway in 2017, such as the penstocks projects in Passy, Aston and la Coche, the renovation of the Revin pumped-storage hydropower plant with an increase in capacity for the three reversible pump turbines, or the renovation of the Bathie power plant to increase the capacity of the six facility units.

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EDF I Reference Document 2017