EDF_REGISTRATION_DOCUMENT_2017

PRESENTATION OF EDF GROUP Description of the Group's activities

NUGG plants foresees the construction of a storage facility for the LLW-LL liners of the silos at Saint-Laurent, pending the availability of a definitive disposal route. The decommissioning of the Chooz A and Creys-Malville plants is still under way with the filling of the Chooz reactor pool and the first underwater cutting of the internal components of the reactor vessel, on schedule, and the filling of the Crey-Malville reactor vessel. Chooz A is a pressurised water reactor using a technology similar to the 58 units in operation, but of an older design. It was commissioned in 1967 and operated until 1991 (final ending date for power generation). The reactor location in a rocky cave in a hillside means that access conditions and entry and exit of materials are more difficult than those of the rest of the existing PWR fleet. After EDF chose to opt from 2001 for a strategy of decommissioning as quickly as possible (i.e. without any period of dedicated waiting time for radioactive decrease) and following adoption in 2007 of the Decree for complete decommissioning, such decommissioning was launched and is expected to come to an end by 2022, that is to say 15 years after it was authorised. This duration is the one prudently chosen by EDF for the decommissioning of the Pressurized Water Reactors. Regarding Brennilis, pursuant to a 2008 agreement (1) with the CEA, EDF has become fully responsible for the decommissioning of this facility. The decommissioning work included in the scope of the original Decree is in progress with the demolition of the last section of the apron of the waste treatment plant. However, the final and complete dismantling work should be allowed by an additional decree that EDF applied for on 29 December 2011. In accordance with the opinion that the ASN had expressed, the Mission for Nuclear Security and Radiation Protection notified EDF in December 2012 that the request for authorisation for full decommissioning of Brennilis could not be pursued in its current state due to the cancellation of the ICEDA building permit (see section 2.4.1 “Legal proceedings concerning EDF”). The decision of the Administrative Court of Appeal in Lyon of 4 December 2014, by restoring the validity of the ICEDA building permit, led EDF to relaunch the study of a file on the complete dismantling of Brennilis, taking into consideration any new regulations arising since the creation of the previous file, in particular the application of the BNF regulations. Regarding the six NUGG reactors, the updating of their dismantling schedule has yielded the following sequencing: implementation of a “de-risking” period before the “in-air” dismantling of the ■ first caisson to address the risks identified in studies (additional characterisations, machinery tests based on models); realisation of an “in-air” dismantling of an initial series unit, followed by the ■ realisation of a complete feedback procedure before engaging in the industrial dismantling of the other NUGG reactors; for the other caissons, work to develop a secure configuration after ■ electromechanical dismantling and the dismantling of the peripheral buildings and structures (reactor buildings, pool hall, etc.) will be carried out for some in advance in regards to the previous scenario. This new scenario forecasts an initial removal of the graphite from the first NUGG reactor by 2044 and pushes back the need for a disposal route for the other graphite waste to after 2070. After the first hearing of the ASN's Audit Council in March 2016, the ASN in its follow-up letter of 29 July 2016 suggested an exchange of ideas around the matter. At the ASN's request, a Group of independent experts was appointed in the first quarter of 2017 to examine the solutions chosen by EDF to decommission its six NUGG reactors; EDF's measures were not called into question. A new hearing of the ASN's Audit Council was held in June 2017 on the basis of these conclusions and arguments submitted by EDF in March of that year. It concluded with a suggestion to hold another hearing, once EDF submits a detailed schedule of operations to be undertaken in the next 15 years as well as the results of numerous studies on the resistance of reactor structures over time.

EDF submitted documentation on strategy and secured configuration safety options as well as a detailed schedule of operations covering the 2017-2032 period in late December 2017. As a reminder, the industrial scenario for dismantling first-generation plants (in particular the NUGG reactors above) and the schedule for dismantling NUGG reactors were updated and modified respectively in 2015. Closure project of the Fessenheim plant Article L. 311-5-5 of the French Energy Code introduced by Law 2015-992 (“energy transition law”) caps the nuclear installed capacity in France at 63.2GW. The commissioning of the Flamanville EPR can therefore not take place before the closure of the two Fessenheim reactors in order to comply with that ceiling. The early closure of the Fessenheim plant would give EDF the right to compensation, as recalled by the Constitutional Council in its decision of 13 August 2015, on the occasion of the review of the constitutionality of Energy transition for green growth Law of 17 August 2015. Talks between EDF and the French government led to a draft memorandum setting out compensation principles that was approved by the European Commission under State aid rules. At its meeting of 6 April 2017, EDF's Board of Directors took note of the irreversible and unavoidable closure of Fessenheim provided that: the revocation of the Fessenheim plant's operating permit takes effect only once ■ the Flamanville 3 EPR comes into service; the closure of the Fessenheim plant is necessary to comply with the legal cap of ■ 63.2GW with regard to both the revocation request and the commissioning date of the Flamanville 3 EPR. In accordance with the law, the Board instructed EDF's Chairman & CEO to make the revocation request in line with the above conditions within the six months before the commissioning of the Flamanville 3 EPR. It also authorised the Chairman to sign the compensation memorandum negotiated with the French government and approved by the European Commission no later than the date on which the request is made. The Board's decision, taken in accordance with Law 2015-992 of 17 August 2015 (“energy transition law”), secures EDF's corporate interests and will enable the firm to continue its business at the service of its customers in all circumstances. The protocol provides for the following compensation for EDF: an initial fixed portion covering the advance costs to be committed after ■ operation (expenses for personnel retraining, decommissioning, the Basic Nuclear Facilities (BNF) tax and for “post-operation”). This fixed portion is currently estimated at approximately €490 million, 20% of which would be paid in 2019 and 80% in 2021; a further, variable portion giving rise, where applicable, to subsequent payments ■ reflecting EDF’s shortfall up to 2041. This will be determined on the basis of market prices and EDF’s 900MW generation volumes, without Fessenheim, as established over that period. EnBW, EDF’s partner in the plant, will under certain conditions be entitled to a share of lost earnings in proportion to its contractual rights to the plant's generation capacity. For its part CNP decided to end its involvement in the partnership. Once EDF took note of CNP's decision the contract between the two firms ended on 31 December 2017. The additional variable portion will be paid where applicable in 2041 at the latest with interim payments payable to EDF between 2021 and 2041 at its request or at the French government's initiative; the Amended Budget Law no. 2016-1918 of 29 December 2016 opened a ■ specific account in order to finance the compensation procedure between the French government and EDF relative to the early closure of the Fessenheim plant. As a consequence, the Group's nuclear generation in 2019 will take the closure of Fessenheim into account.

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With this agreement the CEA has become fully responsible for the decommissioning of Phénix. (1)

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DF I Reference Document 2017