Universal Registration Document 2020

• the Group’s nuclear activity is subject to detailed and demanding regulations with, particularly in France, a system in place that monitors and periodically re-examines basic nuclear facilities, which focuses, firstly on nuclear safety, protection of the environment and public health, but also on security considerations regarding malicious acts. These regulations may be significantly tightened by national orEuropean authorities. Furthermore, stricter regulations or possible non-compliance with current or future regulations could result in the temporary or permanent shutdown of one or more of the Group’s plants or financial penalties as stated inArticle L. 596-4 of the French Environmental Code. Cases of non-compliance with regulations or non-compliance with commitments undertaken may also be used by third parties against EDF and brought before the courts. The increased number of requests emanating from the French Nuclear Safety Authority (NSA) and enhanced controls may increase EDF’s compliance costs and risks;
• although the nuclear business can contribute effectively to the security of energy supply and to combating the greenhouse effect, it must also demonstrate its competitiveness and its acceptance over the different time scales in which it operates. Nuclear activity by its very nature requires substantial and long-term investments. The robustness and efficiency over time of maintenance and upgrading programmes for the operating fleet, new reactor projects, and the respect of very long-term commitments are inevitably subject to extreme vigilance, with industrial cycles that span a century or even beyond;
• the nuclear fuel cycle is part of this long-term industrial outlook. EDF has a specific responsibility to develop a long-term strategy with the various stakeholders;
• the nuclear business is an industrial activity that brings together a large number of industrial partners in France, Europe and throughout the world. In France, EDF was assigned the role of lead company in the nuclear sector by the public authorities, with the integration of the Framatome subsidiary, which involves specific risks associated with the exercise of this responsibility and the activities of Framatome.

In light of the fact that EDF is the world’s largest nuclear operator, exploiting global feedback and making comparisons with best practices internationally⁽¹⁾ represents an ongoing challenge to ensure that the EDF group is well positioned to be able to sustainably manage the risks associated with being the world leader.

5A – Failure to comply with the objectives (i) in terms of operation and/or (ii) in terms of extending the operating life of nuclear power plants (France and United Kingdom).

Criticality in view of the control actions undertaken: Strong.

Nuclear fleet in France

The health crisis could affect the achievement of operating targets and the success of maintenance projects, including the Grand Carénage projects. If the health crisis were to worsen, it could lead to further delays or additional costs, particularly due to public health requirements (social distancing, curfews, lockdowns, etc.).

The fleet of nuclear reactors that the Group currently operates in France is highly standardised (see section 1.4.1.1.1 “EDF’s nuclear fleet in France”). This enables the Group, in particular, to achieve economies of scale, to apply improvements made to its newest reactors to all reactors and, in the event of a reactor malfunction, to anticipate the measures to be taken in other reactors. But this standardisation has a potential parallel risk of the dysfunction being common to several reactors or to a generation or series of reactors (see section 1.4.1.1.2 “Nuclear power generation in France”).

The Group cannot guarantee that it will not be required to make significant or costly repairs or modifications to all or some of its plants. In addition, the occurrence of events that could have an impact on the operation of the fleet or on its output, which could lead to a temporary shutdown or closure of all or part of the fleet cannot be ruled out. For example, the deviation related to the stress relieving process for steam generator (SG) welds which was detected and reported to the Safety Authority in the summer of 2019 concerned the SGs installed on six reactors in the nuclear fleet operating in France and the Flamanville 3 EPR. However, this event did not ultimately lead to reactor unavailability (see Risk 4A – Framatome).

During the periodic reviews carried out during the ten-yearly inspections and following the Fukushima accident in Japan, the Group drew up a major work programme, called Grand Carénage, the principle of which was approved by the Board of Directors (see section 1.4.1.1.2). The potential risks of the latter include a possible delay in the appraisal of the authorisations required to start operations, in particular as regards the authorisations expected from the French Nuclear SafetyAuthority (ASN). Such uncertainties may also concern the manufacture and delivery on site of new equipment or work carried out on-site in a situation where a large number of industrial operations are being carried out at the same time. Any delays caused by the health crisis may also mean that the work will not be able to be completed within the stipulated timeframe.

The ASN decides on the measures taken by the operator and may give additional instructions for each reactor. Solutions are being studied to demonstrate the capacity of non-replaceable equipment such as the containment building and reactor vessels, to ensure their operation up to 60 years. These studies, which are based on data available in France but also internationally⁽²⁾ make it possible to confirm the safety margins available for the operating periods under investigation but may also lead to the need to adopt additional protective measures, if necessary, to be taken on the existing fleet, which could have consequences on its performance.

In order to continue to benefit from low-carbon monitored generation and cash flow from its existing fleet, the Group has been aiming for several years to extend the operating life of its nuclear fleet in France beyond 40 years. The fourth ten-yearly inspection of the 900MWe reactor series (VD4-900), like the previous ones, includes, on the one hand, a verification of the compliance of the facilities with the current reference design and, on the other hand, a safety reassessment. This makes it possible to increase the level of safety by taking into account, on the one hand, international best practices and, on the other hand, the condition of the facilities, the experience acquired during operation and the evolution of the knowledge and rules applicable to similar facilities. As part of this process, the ASN could prescribe significant additional amendments.

In its decision of 23 February 2021 on the conditions for continued operation of EDF’s900MWe reactors beyond their fourth periodic review, the ASN found that the measures planned by EDF, supplemented by the responses to the requirements formulated by the ASN, will make it possible to achieve the objectives of the review and that these safety improvements open up the prospect of continued operation of the 900MWe reactors for a period of ten years beyond their fourth periodic review, subject to the implementation of additional measures. These new requirements lead to an increase in investments and an additional industrial load of around 25% compared to the already very ambitious initial programme, increasing the risk on the ability of industrialists to make the necessary investments within the stipulated deadlines. This additional cost is taken into account for the period from 2014 to 2025 in the cost increase for the Grand Carénage project as announced in the press release of 29 October 2020. Capital expenditure will remain high after 2025.