EDF_REGISTRATION_DOCUMENT_2017

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PRESENTATION OF EDF GROUP History and development of the company

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HISTORY AND DEVELOPMENT OF THE COMPANY

In the context of nationalisation of gas and electricity sectors, the Act of 8 April 1946 created EDF as a State-owned industrial and commercial establishment (EPIC) and created a special status for the personnel of the electric and gas industries (IEG). The law nevertheless left in existence a certain number of non-nationalised distributors (DNN) and local distribution companies (ELD). The years 1946 to 2000 were marked by the development of the Group’s industrial base. Initially, there was a fleet of thermal generation facilities using coal and then fuel oil, as well as hydropower facilities, in particular with the construction of the dams at Tignes in 1952 and Serre-Ponçon in 1960. In 1963, EDF commissioned the first commercial-scale nuclear generation unit at Chinon (70MW), the first of a series of six generation units of the Uranium Natural Graphite Gas (UNGG) family, the construction of which continued until 1972. The oil crises of 1973 and 1979 led to accelerated replacement of thermal power with nuclear power. In 1969, the UNGG family was abandoned in favour of the Pressurised Water Reactor (PWR) family, which was used for new power plants. In the beginning of the 1990s, EDF embarked on a significant expansion abroad in particular with the acquisition of London Electricity (which was renamed EDF Energy on 30 June 2003) in December 1998. This policy was pursued in 2001 with the acquisition of 20% of EnBW (a stake that was successively raised to 45.01% by 2005) and with the acquisition of equity interests in the Italian company Edison by the IEB consortium (63.8%), in which EDF holds a stake of 18.03%, and in 2002, with the acquisition of EPN Distribution Plc. and Seeboard Plc., two England-based distribution companies. In France, the major development in recent years has been the liberalisation of the market pursuant to European regulations. In February 1999, sites where electricity consumption exceeded 100GWh per year, i.e. 20% of the market, became entitled to choose their supplier. The eligibility threshold was then progressively lowered, opening thus 30% of the market in May 2000, then 37% in February 2003, and 69% in July 2004, due to the liberalisation of all of the market for non-household customers. Since July 2007, the market has been fully liberalised, including for residential customers. At the same time, the structures necessary for a competitive market to function effectively were set up. The French Electricity Regulation Commission, which became the Energy Regulation Commission (Commission de régulation de l’énergie or CRE) was created in May 2000. That same year, in order to guarantee non-discriminatory access to all operators in the market, EDF created Réseau de Transport d'Électricité (which became a subsidiary (1) of EDF in 2005 under the name RTE EDF Transport, and which has been renamed RTE Réseau de Transport d’Électricité), responsible for managing the high voltage and very high voltage public electricity transmission network. In 2000, the Group formed the trading company, EDF Trading, with the trading specialist Louis Dreyfus. It became a wholly-owned subsidiary of EDF in 2003. In 2001, Euronext and various industrial and financial operators in the electricity market, including EDF, created Powernext, the French electricity exchange. In 2001, as a condition for authorising EDF’s acquisition of a stake in EnBW, the European Commission required EDF to set up a system of power supply capacity auctions (Virtual Power Plants or VPP) to facilitate access to the market for competitors. In 2003, the EDF group sold its stake in Compagnie Nationale du Rhône to Suez (now Engie). On 20 November 2004, pursuant to the Act of 9 August 2004, EDF became a French limited company (société anonyme) with a Board of Directors.

In 2005, EDF and A2A SA (formerly AEM SpA) entered into agreements for a joint takeover of Edison following the launch of a tender offer. The EDF group has pursued a strategy of refocusing on Europe and sold its controlling interest in its subsidiaries Edenor and Light and its assets in Mexico. EDF filed for an initial public offering in November 2005 through the issue of 196,371,090 new shares and the sale by the French State of over 34.5 million shares it held in the Company to employees and former employees of EDF and of certain EDF subsidiaries. Subsequently, on 3 December 2007, the French government sold an additional 45 million of its shares. In late 2006, EDF Énergies Nouvelles, an EDF group’s 50%-owned subsidiary, filed for an initial public offering. Since 1 January 2008, EDF’s distribution business has been conducted by Enedis (2) (previously ERDF), a subsidiary of EDF to which the distribution business was contributed pursuant to the Act of 7 December 2006 on the energy sector. In 2008-2009, the EDF group became a major player in the revival of nuclear power internationally, by creating a joint venture with the Chinese utility CGN, acquiring British Energy, one of the largest energy companies in the United Kingdom, and acquiring nearly half of the nuclear assets of US-based Constellation Energy. EDF also acquired a 51% stake in the Belgian company EDF Luminus, and subsequently raised its stake in EDF Luminus to 63.5% in 2010. EDF finalised in 2010 the sale of its British distribution networks to the Cheung Kong group of Hong Kong and, in 2011, it completed the sale of its interest in EnBW to the German state of Baden-Württemberg. In 2011, EDF confirmed its positioning as a key player in the field of power generation using renewable energies by increasing its stake in EDF Énergies Nouvelles to 100% by way of a simplified alternative cash or exchange tender offer, followed by a squeeze-out of minority shareholders. In 2012, after more than seven years of a strategic partnership with A2A, EDF took over Edison, one of the key players in the Italian electricity market, the fourth largest market in Europe. This transaction was carried out as part of the Group’s gas strategy, which relies on Edison’s expertise at all stages of the gas chain. In 2014, EDF has delegated to Exelon, the leading American nuclear operator, the operational management of the five nuclear reactors owned by CENG, held by EDF (49.99%) and Exelon (50.01%). Furthermore, EDF took over all of Dalkia’s lines of business in France, including the Citelum group, and Veolia took over the Dalkia group’s international business. Finally, F2i, Edison and EDF Énergies Nouvelles created the third largest Italian operator in the renewable energy sector, owned by F2i (70%) and a holding company (30%) owned by Edison and EDF Énergies Nouvelles. In 2015, EDF and China General Nuclear Power Corporation (CGN) entered into a non-binding strategic investment agreement relating to the construction and the operation of the Hinkley Point C nuclear power plant in Somerset. This partnership has been approved on 28 July 2016 by EDF’s Board of Directors. The contractual documentation was signed on 29 September 2016.

This entity is called indifferently "New NP" or "New AREVA NP " or Framatome in this Reference Document. (1) Enedis is an independently managed subsidiary within the meaning of the provisions of the Energy Code. For the sake of readability, reference will simply be made in the rest of (2) the document to Enedis, without systematically specifying that it is a fully independent subsidiary, within the meaning of the provisions of the Energy Code.

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EDF I Reference Document 2017