EDF_REGISTRATION_DOCUMENT_2017

PRESENTATION OF EDF GROUP Description of the Group's activities

Development and completion of new capital 1.4.4.1.2.3 investments Furthermore, RTE continues to develop and renew the network. The projects studied and implemented fall within the dynamics of the growing need to meet the challenges of energy transition. RTE draws up an annual investment programme that is submitted to the CRE. In 2017, RTE’s total investments within the scope regulated by the CRE amounted to €1,393 million. The principal investments included: the safety net in central Brittany and the “2 Loires” project to rebuild the 225kV line between Auvergne, the Rhône Valley and the Massif Central; the continuation of construction work on the French side of the direct current line between France and Italy passing through the Fréjus safety tunnel; the restructuring of the 225kV network in Haute Durance; and the start of construction work on “IFA 2”, the new direct current line between France and the UK. Out of a concern to best optimise the existing assets and to limit the impact of its construction works in the regions as much as possible, RTE dedicates approximately two thirds of its capital investments to the adaptation of existing structures. RTE’s 2018 investment programme approved by the regulator amounts to €1,492 million. The 2018 investment programme concerns the continuation of significant investment in developing and renewing the network, as well as developing and updating the IT systems, in particular in light of the changing environment associated with energy transition and European market integration. RTE’s investments are also made in a context of growing needs for meeting the challenges of maintaining the power supply security level, acceptance of new generation means (including intermittent renewable sources of energy), integration of European electricity markets and gradual increase in the need to renew infrastructures. In 2017, the Regulated Assets Base (RAB) increased by €522 million, up from €13,598 million as at 1 st January 2017 to €14,119 million as at 1 st January 2018 (1) . As a reminder, RAB is remunerated by the tariff at the weighted average cost of capital of 6.125% before tax on the TURPE 5. It represents RTE’s industrial assets, net of investment subsidies, and is calculated excluding property, plant and equipment in progress (which until the end of 2012 were remunerated at 4.8% by the TURPE 3 tariff, then at 4.6% for the period from 2013 to 2016 in accordance

with the CRE’s pricing decision of April 2013, and which will be remunerated at 3.7% since 2017 in accordance with the TURPE 5 decision of 17 November 2016).

Operation of the electricity system 1.4.4.1.2.4 Management of the electricity system

1.

RTE manages the flows on the transmission network in real time, and makes use of the resources available to it through the adjustment mechanism to ensure the balance between supply and demand in real time. The cost corresponding to the adjustments made by RTE and due to the negative differences between the projected flows and those already realised is passed on to the “Balance responsible entities” (producers, traders, suppliers, etc.) in proportion to their difference. In the case of a positive difference, RTE compensates the balance responsible entities financially. Management of the interconnections RTE manages access to international interconnections in collaboration with the neighbouring European transmission network operators. These interconnections make it possible to ensure the transit of energy from one country to another and the operating safety of the electricity transmission networks, to develop the European electricity market, by enabling an electricity supplier to sell its energy to a customer in another European Union country, by taking advantage of the differences in the timing of peak load on either side of the border, and to better In December 2008, RTE and ELIA (2) created a common company named Coreso, which aims to coordinate the operation of electricity networks comprising France and Belgium. The creation of Coreso fulfils the need of reinforcing the operational coordination between transmission network operators (TNO) expressed both by the European Commission and by the players of the electricity market. Coreso must allow better integration at the regional level of generation from renewable sources and guarantee secure management of rising cross-border flows. National Grid, the British network operator, Terna and 50 hertz, transmission network operators in Italy and Northern and Eastern Germany, REN, the Portuguese network operator, and recently REE, the Spanish network operator, joined Coreso. pool the means of generation at the European level. Network coordination in Europe

Amounts still to be confirmed by the CRE, calculated on the basis of what has been realised. (1) Elia is the Belgian electricity transmission network operator for high voltage (from 30,000 to 380,000 Volts). (2)

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DF I Reference Document 2017