Areva - Reference Document 2016

BUSINESS OVERVIEW

6.4 Operations

signed by Gorgé on the Elta company, a subsidiary of AREVA TA (66%) and

of FracoQ2 (34%) (wholly owned subsidiary of AREVA SA) based in Toulouse.

AREVA TA completed the sale of Elta to the Gorgé group in late November.

Throughout 2016, AREVA TA together with its parent company AREVA SA

implemented theplan to removeAREVATA fromtheAREVAgroup. OnDecember 17,

2016, AREVA signed a share purchase agreement for all of its shares in AREVA TA

with a consortium of buyers composed of the Agence des participations de l’État

(APE, 50.32% of the capital), the Commissariat à l’énergie atomique et aux énergies

renouvelables (CEA, 20.32%), and DCNS (20.32%). EDF will keep its 9.03% interest

in the capital. The sale is expected to close in late March/early April 2017.

Human and industrial resources

AREVA TA has four main industrial and engineering locations in France:

Saclay: support functions and project operations;

Aix-en-Provence: mainly engineering activities;

Cadarache: support to and operation of onboard reactors;

AREVA Expansion a subsidiary of AREVA TA (51%) and AREVA NP (49%), is

based in Toulouse.

It is also located in the ports of Toulon, Brest and Cherbourg and close to DCNS

Indret in Nantes and to the CEA in Bordeaux.

Relations with customers and suppliers

AREVA TA’s principal customers and partners are:

in the defense sector: the CEA, the DGA, DCNS, the SSF and the SID;

in the civilian nuclear sector: the CEA and AREVA NP.

AREVA TA’s principal suppliers are:

in the defense sector: DCNS, AREVA NP, Technoplus Industries, SPX-Clyde

Union;

in the civilian nuclear sector: SEIV, Endel-Engie, Comex, Sogeti, CNIM.

Market and competitive position

AREVA TA works in the defense markets, mainly in the field of marine nuclear

propulsion and defense facilities, markets which are based exclusively in France.

It is also positioned in the market for small modular reactors for research, both for

new construction or for services to the installed base, in France and abroad.

Its principal competitors in its civilian operations are mainly large constructors such

as Invap in Argentina, Rosatom in Russia and Kaeri in South Korean.

AREVA TA also provides expertise and solutions to support power reactors for

AREVA in the energy market.

Outlook and development goals

In 2016, AREVA TA completed its process of refocusing on its nuclear operations

and henceforth concentrates on the development of the following dual model:

In the defense nuclear segment, AREVA TA plans to keep its design, construction,

maintenance, dismantling and fuel supply operations for nuclear steam supply

systems for nuclear propulsion, and to develop even further its support activities

in the field of defense facilities, making sure to maintain its expertise at the highest

level of excellence.

In the civilian nuclear field, AREVA TA’s goal is to develop its operations by capitalizing

on its experience and references in design and engineering meeting demanding

requirements in terms of safety and availability, focusing on:

the design and construction of small modular reactors and nuclear facilities

devoted to research and medical isotope production, in particular by positioning

itself for international calls for proposals such as the Safari 2 research reactor in

South Africa and the Pallas research reactor in the Netherlands;

the supply of engineering services for power reactor systems and equipment,

particularly in the field of instrumentation and control.

6.4.3.2.

RENEWABLE ENERGIES

Operations and highlights

As part of the group’s refocusing on operations related to the fuel cycle, the strategy

for the streamlining of and withdrawal from the renewables operations launched

in 2013 accelerated in 2016. Implementation of this strategy materialized as a series

of decisions and actions during the year:

in offshore wind, at the end of a three-month competitive bidding process

designed to solicit and assess offers from potential third-party investors, on

September 14, 2016 AREVA exercised its option to sell its 50% interest in the

Adwen joint venture to Gamesa. This sale closed on January 5, 2017, and

Gamesa holds 100% of the shares of Adwen since that date;

in accordance with the decisions made in 2015, the Solar Energy operations

were shut down in 2016. On February 22, 2016, an agreement between AREVA

and its customer Reliance Power entered into force concerning the concentrated

solar power plant built by AREVA in the state of Rajasthan, India. The agreement

officially transfers the solar field in as-is condition to Reliance, along with the

maintenance and operation of the power plant. As a result of the termination of

this project and the absence of any orders in backlog, this decisionmarks the end

of AREVA’s involvement in any solar energy operation and the discontinuation

of that business;

in accordance with the decisions made in 2015, the process of shutting down

the Bioenergy operations also continued in 2016:

○

in Brazil and Asia, the entity completed projects in the pipeline over the course

of 2016. At December 31, 2016, the entity no longer had any projects under

construction or any operating activities in these two regions, except for

limited maintenance of three projects still under warranty. The business exit

plan continued in 2016 in those two regions, in compliance with AREVA’s

contractual commitments,

○

in Europe, the Bioenergy entity continued in 2016 the construction of the co-

generation biomass power plant project in Commentry, France. The gradual

exit from the business continued in parallel and could be completed after the

project is completed, scheduled for the third quarter of 2017;

in energy storage, AREVA still has limited involvement in two initiatives:

○

a shareholding interest of 40% in the joint venture AREVA H2Gen co-owned

with Ademe and Smart Energies, which develops, manufactures and markets

hydrogen electrolyzers based on PEM technology. The business operates

as an independent company, and AREVA is only involved as a shareholder

through its representation on the Supervisory Board,

○

the development of a continuous flow battery technology led by the Research,

Development and Innovation Department.

2016 AREVA

REFERENCE DOCUMENT