| Risk category | Description | Potential impact for the EDF group |
|---|---|---|
| Legal risks | Legal risks Description Climate-related litigation |
Legal risks Potential impact for the EDF group Risk of cancellation of licences, risk of litigation following exceptional climatic events, risk of litigation related to EDF group publications, particularly as regards the duty of vigilance. |
| Political and regulatory risks | Political and regulatory risks Description Tension over uses of water |
Political and regulatory risks Potential impact for the EDF group Risk involved in the sharing of water resources due to multiple uses and multiple stakeholders in a context of increasing water scarcity. |
Risk category Tension over access to land and use of soils |
Description Risk involved in the necessary land resources for renewable energy due to regulation (biodiversity, agricultural lands) and the legitimacy of sharing with numerous stakeholders. |
|
Risk category Political difficulties to achieve the objectives of the Paris Agreement |
Description Opportunity: as a low-carbon leader, the EDF group is called on to play a key role in decarbonisation of the European economy. |
|
| Customer – market risks | Customer – market risks Description Change in customer expectations |
Customer – market risks Potential impact for the EDF group Opportunity: increased demands of own consumption, energy efficiency, electric mobility, green deals and low carbon. |
Risk category Change in uses of electricity |
Description Opportunity: decarbonised electricity is recognised as an indispensable means to decarbonise the economy. |
|
| Technological risks | Technological risks Description Stability and security of electricity networks |
Technological risks Potential impact for the EDF group Risk/Opportunity: risk of instability to the system in case of a high penetration rate of renewable energies, key role of nuclear energy usable together with renewable energies to ensure stability of the network. |
Risk category Transition technologies |
Description Risk/Opportunity: potential emergence of technologies such as CCSU, thermal solar, small modular reactors, storage or in the area of negative emissions. |
|
| Financial risks | Financial risks Description Access to competitive financing |
Financial risks Potential impact for the EDF group Risk/Opportunity: risk of non-alignment of investors with the 1.5°C criteria. Opportunity to provide the EDF group with sustainable financing (Green Bonds, positive incentive loans). |
Risk category Stranded assets |
Description Risk of stranded thermal assets after regulatory changes or carbon price increases. |
The International Energy Agency has shown that achieving carbon neutrality at the global level requires an increase in the electrification of uses, combined with an acceleration in the decarbonisation of electricity. In all scenarios compatible with the Paris Climate Agreement (1), the share of electricity in end energy use will have at least doubled by 2050 (20% in 2020) and become by far the leading form of energy worldwide. The IEA anticipates that end electrical energy use worldwide will have doubled by 2050, at a time when end energy demand is falling due to the development of energy efficiency and behavioural changes.
The EDF group has an atypical profile of exposure to transition risks compared to most other energy companies worldwide. Given the EDF group’s position as the world’s leading producer of electricity without direct CO2 emissions, the bolstering of policies seeking to work towards achieving carbon neutrality and the increase in European greenhouse gas market prices constitute major opportunities for the Group to showcase its strengths.
| Medium- and long-term scenarios, national and European scope | To assess transition risks (legal, technological, market, reputation), the EDF group uses medium-term scenarios (2030-2050), on national scopes. Examples include the French National Low Carbon Strategy (2020) and RTE’s provisional “Energy Futures 2050” report (2021). |
|---|---|
| The Group also uses European-level scenarios, such as the European Union’s long-term strategy (2018) and the ‘Decarbonisation Pathways’ sector study coordinated by Eurelectric. | |
| These scenarios are consistent with the goals of the Paris Agreement, and take into account the following key variables as input data: gross domestic product, the price of raw materials (coal, gas, fuel oil), electricity demand, the price of CO2, electrical interconnection between countries, the discounted cost of energy from different technologies (renewables, nuclear, gas, CCUS), the development of electric mobility, and hydrogen. |
Analysis of the risks of transition towards a carbon-neutral economy has led the EDF group to take strategic decisions to maintain and develop its leadership as a low-carbon electricity supplier: achieving net zero emissions by 2050 for all greenhouse gas emission scopes, withdrawing from carbon-based electricity production by 2030, the goal of 60GW for renewables by 2030, the Grand Carénage programme to extend the lifespan of existing nuclear power plants, the launch of the Group’s solar power plan, storage plan, and electric mobility plan, the creation of EDF Pulse Croissance, the creation of Hynamics, etc.
(1) Sustainable Development Scenarios (SDS) and Net Zero 2050 (NZE), AIE World Energy Outlook 2021.
