Universal Registration Document 2020

Electrical losses are inherent to the functioning of the distribution network and mainly result from physical effects which are directly dependent on the amount of electricity delivered. Enedis must compensate these losses to complete the amount of energy delivered to all the customers connected to the distribution network.

The volume of losses in 2020 stood at 23.3TWh (see Electricity report above), i.e. a rate of 6.01%⁽¹⁾.

Energy purchases made to compensate losses recognised in the accounts, including restatements of prior fiscal years, amount to €1,116 million. To compensate these losses, Enedis buys the corresponding electricity from the wholesale market, either through organised market platforms, or through calls for tender open to around 20qualified suppliers. Enedis also takes part in the consultations organised by thePurchase Obligation mission, within DOAAT.

Enedis’ entitlement to ARENH rights to cover losses takes place, as applicable, through specific calls for tender with a panel of qualified suppliers for this product.

In 2020, the Covid-19 epidemic resulted in a drop in delivery estimated at 8.4TWh with an impact on losses of -0.7TWh.

1.4.4.2.1 Organisation of Enedis

Distribution activities on mainland France are, very largely conducted by Enedis, a French public limited company (société anonyme) with an Executive Board and a Supervisory Board responsible for the management of the public electricity distribution network.

Pursuant to EU Directives, in order to abide by the rules of non-discriminatory access to the grids and independence, which are binding on network managers, the latter must be independent from any energy supply and production activity. If the distribution network manager is part of a vertically integrated company, it must be legally distinct in order to guarantee its functional and decision-making independence. In this regard, EDF and Gaz de France, now Engie, made their distribution network managers subsidiaries in 2008. Furthermore, Enedis and GRDF share a “common service” pursuant to the legal framework (see section 1.4.4.2.3“Service shared by Enedis and GRDF”).

The Supervisory Board of Enedis comprises fifteen members, of which:

• eight are appointed by the Ordinary Shareholders’ Meeting;
• five are representatives of the employees elected in accordance with the conditions set out in Law no. 83–675 dated 26 July 1983 relating to the democratisation of the public sector;
• one member is appointed by the French State by virtue of Articles 4 or 6 ofOrdinance no. 2014-948 dated 20 August 2014;
• and one member, representing the organising authorities for the public electricity distribution network, is appointed by decree in application of Article 153 of Law no. 2015-992 relating to energy transition for green growth.

A new Chairman of the Management Board was appointed on 9 February 2020 to head up a two-person Management Board. On 1st August 2020, the Enedis Executive Board was expanded to five members who performed their work under the supervision of the Supervisory Board. In application of the possibility offered by Ordinance no. 2014-948 dated 20 August 2014 (Article 15) and in compliance withDecree no. 2015-38 dated 19 January 2015, the French State appointed by a Decreedated 21 April 2020 a Government Commissioner for the purposes of attending the meetings of the Supervisory Board of Enedis.

On 1 June 2016, the business name of the public distribution network operator was changed to Enedis, as a replacement for ERDF. This new name reflects the company’s strong commitment to the energy transition in the wake of COP21. It will also raise the profile of the network operator and clarify its purpose, as the CRE recommended.

Enedis’ missions in France

Enedis, pursuant to the conditions set by law and the concession contracts signed with each of the public electricity distribution contracting authorities, performs its missions as the public distribution network operator in mainland France.

These missions are:

• define and implement operational, investment and development policies in relation to the electricity distribution network;
• provide connection and access for users to these networks under objective, transparent and non-discriminatory conditions, as well as inter-connection with other networks;
• provide users with the information needed to access the network efficiently(information protected by regulations or law excepted);
• oversee relations with the energy regulation authorities (Energy Minister, the Energy Regulation Commission (CRE), public distribution contracting authorities) inline with its activities;
• oversee relations with local authorities in respect of its activities;
• negotiate, conclude and manage concession contracts;
• operate, maintain and repair the electricity distribution networks;
• design and build infrastructure, as well as manage work on the networks;
• carry out metering activities for users connected to the networks, particularly as regards supply, installation, meter inspection, maintenance and renewal of metering devices, as well as managing data activities and any other missions relating to its work as a whole;
• ensuring that the market works properly, and providing equal access to the network and data for market players;
• encourage the integration of renewable energy in the grid and the implementation of energy efficiency initiatives;
• ensure the monitoring of the load sharing perimeters;
• be the guarantor for the distribution and accounting for the energy flows between the network user players, and the fair compensation of losses on these networks.

1.4.4.2.2 Distribution activities

Enedis’ business is based on a number of activities:

• manage, in its capacity as the concession holder, the assets under concession;
• run and maintain the network in such a way as to ensure the continuity of supply;
• ensure customer satisfaction, providing the best possible connection times, and using customer feedback and surveys to deliver better service;
• carry out work on the network (in particular, network connection, reinforcement and renewal work);
• provide access to the network to all users in the framework of contractual provisions in force (see section 1.4.4.1.2, text box on regulation relating to “third party access to the network”);
• and manage the meter fleet, as well as obtaining, processing and transmitting data on network user consumption.

Change in investments

In 2020, €3,962 million was invested by Enedis. €1,584 million was earmarked for connections (consumers and producers) and adjusting the grid to the load. €1,998 million was dedicated to the quality of the service, to securing the networks, to the security and preservation of the environment and rolling out the Linky meters, areas where the identified expectations of customers, local authorities and concession authorities are particularly strong. Lastly, €379 million was invested in information systems and operational resources (vehicles, machinery, real estate, etc.).

In addition, the contracting authorities invested €730 million in 2020. In all, almost €4,692 billion was therefore invested on the distribution networks in 2020 in mainland France.