Areva - Reference Document 2016

06

BUSINESS OVERVIEW

6.4 Operations

Operations and highlights

a large part of theWestern world’s demand for forgings. Supply has increased since 2006, with large capital projects in Germany, Italy, South Korea, China and India. There is considerable international competition in heavy components, with six main competitors: Toshiba-Westinghouse, Doosan, MHI, Babcock &Wilcox and the arrival of emerging Chinese players mainly active in their domestic market. The EDF group has opened replacement steam generator manufacturing to the competition. AREVA NP is able to respond to customer requirements for all engineering and project management services. AREVA’s main competitors inmobile components are Toshiba-Westinghouse, MHI, Curtis Wright, KSB and Andritz. Extension of the power plant operating period and optimization of maintenance strategies are two important issues for operators, who are becoming more demanding in terms of performance improvement, reliability and maintenance costs for reactor coolant pumps. Outlook and development goals The Components Business Unit works for all reactor types. The nuclear equipment market consists of two segments: the component maintenance and replacement market, and the new builds market. Despite the deterioration of global energy markets, the load outlook for the Saint- Marcel and Jeumont manufacturing plants is pointed upwards for the next three years, led in particular by the ramp-up of primary cooling system equipment manufacturing for the Hinkley Point EPR. In 2017, the Creusot site’s priority will to be to continue to audit past manufacturing files and to deploy the quality plan to securemanufacturing quality. This programwill be accompanied by investment in improvements to key equipment in its industrial operations. The production sites’ main challenges are to improve industrial safety, increase quality levels and achieve productivity gains. The objective remains to deliver primary cooling systemequipment for nuclear reactors with the requisite standards of quality, according to the schedule agreed upon with the customer, and in a competitive manner. Businesses The principal missions of the Technical and Engineering Department (TED) are the following: p support AREVA NP’s operations for the design of nuclear steam supply systems in France and Germany. The Technical and Engineering Department provides technical and testing facilities for which it is responsible, around the world; p develop and guarantee the technical performance, licensing and competitiveness of the nuclear steam supply system; 6.4.2.1.5. Technical and engineering department

RESEARCH AND DEVELOPMENT This entity coordinates R&D teams responsible for key technologies and products supporting PWR and BWR reactors. It is also responsible for the development of new systems and technologies for next-generation reactors, in particular high temperature reactors and fast neutron reactors. Since July 1, 2016, and following the establishment of the new AREVA NP organization, it also steers AREVA NP’s R&D program. DESIGN AUTHORITY The entity is the authority for AREVA NP’s products (reactor models and products and services offered by the Installed Base Business Unit). For reactors, it ensures the consistency of themodels under construction or development. For the products and services of the Installed Base Business Unit, it provides independent verification of the technical risk assessment. In 2016, the division in charge of TED continued in its role as Design Authority for the EPR NM project jointly with EDF’s Septen (issuance of opinions and recommendations on the technical configuration of the EPR NM reactor). TECHNICAL CENTER The Technical Center brings a unique and wide range of skills, test facilities and laboratories to the development and testing of advanced methods and solutions. The Technical Center’s facilities are located in Erlangen and Karlstein, Germany, and in le Creusot and Chalon/St-Marcel in France. LICENSING, QUALITY AND SAFETY This entity is in charge of relations with the nuclear safety regulators. In the French regulatory context, it is also responsible for relations with the French nuclear safety authority ASN for assessment of pressurized nuclear equipment conformity within the scope allocated to it, in accordance with the ESPN order of December 12, 2005, as amended by the order of December 30, 2015. To meet ASN requests for justifications and demonstrations to be provided in connection with this regulation, AREVA NP has put in place determining actions to evolve its practices. Internal and external work within the AFCEN association (publisher of the RCC-M mechanical construction code) received a positive score from ASN and will strengthen the group’s position as a leading “manufacturer”, under the meaning of the orders. ENGINEERING OF SAFETY, MECHANICAL AND CROSS-BUSINESS PROCESSES The engineering entities are responsible for carrying out studies in connection with projects led by the business units at the requisite level of quality, schedule and budget compliance. They are responsible for harvesting knowledge, managing skills and developing related codes and methods in the nuclear steam supply system field and in services to operating reactors. The teams are based in France (Paris and Lyon) and in Germany (Erlangen). Human and industrial resources The technical units are comprised of international teams and have experimental and engineering facilities in France (Paris, Chalon, Lyon and le Creusot), in Germany (Erlangen and Karlstein) and in United States (Lynchburg). Relations with customers and suppliers The Technical and Engineering Department teams work on projects won by other business units from external customers, and contribute to project performance.

p maintain and develop skills, methods and tools;

p promote the operations supported by these skills, ensuring proposal competitiveness;

p steer the Research and Development process for AREVA NP;

p manage relations with the safety authorities concerning the licensing of nuclear steam supply systems or the design of pressurized nuclear equipment, and with the institutions which define codes and standards applicable to AREVA NP’s technical fields; p fulfill the Technical Direction function within the scope of work of AREVA NP, except for the Fuel operations.

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2016 AREVA REFERENCE DOCUMENT