Universal Registration Document 2020

1.3.1 Environment and strategic challenges

Energy efficiency and low-carbon electricity are at the heart of energy transition.

At present, electricity in France accounts for some 25% of final energy consumption worldwide, but only just over 11% of CO₂⁽¹⁾ emissions (the figures internationally are 19%⁽²⁾ and 40%⁽³⁾ respectively). The fight against climate change is a major challenge for the planet.

The agreement reached in Paris at the 21st session of the Conference of Parties
(COP 21) in 2015 confirms the effort being made to combat climate change and the ramping up of energy transitions beyond Europe. This agreement, which was ratified by 168 countries as well as the European Union, came into force on
4 November 2016.

In Europe, the Clean Energy Package finalised in 2019 and the Green Deal developed in 2020 should enable the European Union to become carbon-neutral by 2050. Recovery programmes in the wake of the Covid-19 health crisis have made climate issues an even higher priority.

The EU’s Green Deal and the related national programmes are set to focus on
cutting CO₂ emissions as a priority, and as competitively as possible, drawing on a locally-rooted industrial vision and facilitating the long-term fight against climate change.

The UK, which must undertake a major renewal of its electricity generation facilities, adopted the Climate Change Act in 2008 and established a market model consistent with that policy (Carbon Price Floor, Contracts for Difference, capacity market, consideration of a regulated asset base model for new nuclear generation facilities).

France’s “Climate and Energy” Act (loi relative à l’énergie et au climat) of
8 November 2019 places cutting greenhouse gas emissions at the heart of French energy policy. The goal is now “becoming carbon-neutral by 2050 by cutting greenhouse gas emissions more than six fold”. France’s Multi-Year Energy Programme (Programmation Pluriannuelle de l’Énergie, PPE), which lists the broad outlines of French energy policy, sets out a ten-year vision, vital for major industrial players. EDF agrees with the PPE’s analysis: identifying sources of leverage, trajectories to change the energy mix and eliminate fossil energy. Transition to a carbon-free economy is needed, but this should be achieved whilst preserving households’ purchasing power and companies’ competitiveness.

To reach these objectives, the two major levers of actions are:

• lowering energy consumption by developing energy efficiency solutions (downstream); and
• switching from fossil fuel to carbon-free energy sources, with carbon-free electricity first and renewable heat (upstream).

Innovation, both upstream and downstream, will be an essential factor in these goals being successfully achieved.

1.3.2 Priorities of the CAP 2030 strategy

The CAP 2030 strategy is fully in line with EDF’s raison d’être to “To build a net zero energy future with electricity and innovative solutions and services, to help save the planet and drive wellbeing and economic development”. Drawing on the contribution of employees during the “Let’s Talk Energy” (Parlons Energies) dialogue, the raison d’être was added to the Company’s bylaws at the Shareholders’ General Meeting held on 7 May 2020.

For EDF, the fight against climate change is based on two catalysts: energy efficiency and energy decarbonisation. This conviction drives our strategy, which focuses on three priorities:

• creating services and solutions to assist customers and local areas to achieve carbon neutrality;
• holding a world leading position in CO₂ neutral electricity generation;
• arising as a worldwide stakeholder in the energy transition.

The Group, a producer of decarbonised electric power, develops solutions that enable everyone, at their own level, to play a role in the energy transition and promotes its low-carbon model internationally.

1.3.2.1 Creating services and solutions to assist customers and local areas to achieve carbon neutrality

Individuals, businesses and cities want to change the way they light, heat, produce, consume and travel... Everyone wishes to be a stakeholder in the energy transition. This momentum, an aggregate of individual initiatives and public decisions, is gradually expanding everywhere. EDF’s goal is to assist customers and local areas to achieve CO² neutrality with accessible and innovative carbon-free and
energy-efficient solutions.

In doing so, EDF develops the value of its customer portfolio in key European countries (France, UK, Belgium and Italy) thanks to an unparalleled customer relationship and an enhanced range of services and supply offers.

In 2030, EDF group is aiming to achieve sales of €10 billion in services⁽⁴⁾.

EDF is strengthening its positions in electric mobility (in France, the UK, Italy, and Belgium), in renewable heating and cooling networks in France, and in leveraging electrical flexibility and aggregation (in Europe).

Building on customer confidence and developing a broad range of offers, in particular in sustainable energy performance on residential and business markets, EDF is growing value per customer and is seeking to achieve more than 1.5 contracts per domestic customer in 2030⁽⁵⁾. Offerings for green energy, self-consumption, energy efficiency services, local services, contracts covering performance and electrical/climate engineering, waste heat recovery, and biomass all address its customers’ emerging needs.