Universal Registration Document 2022

• For the geological disposal centre project developed by ANDRA to accommodate high-level waste and intermediate-level long-lived waste (CIGEO), the risks of overcosts persist at both design phase and construction phase. Moreover, the policy directions for the tax treatment of this project were modified in late 2020 by a legislative amendment (instituting a storage levy) without specifying the terms and procedures for implementation, and hence they continue to pose a risk of upward revision of the applicable tax charge. All these items, and the supplementary investigation being carried out by ANDRA to obtain approval for the construction of this geological storage area, could lead to a revision of the provisions for long-term radioactive waste management.
• It may be necessary to update the provisions on the basis of the conclusions of studies conducted in connection with the PNGMDR (French National Plan for the Management of Radioactive Materials and Waste) relating to the storage of Long-Lived Low-Level Waste (LLW-LL), or the results of the end of the preliminary and final draft design study optimisation cycle for the design of the future geological disposal site developed by ANDRA.
• Pursuant to the restructuring agreements of British Energy, EDF Energy Nuclear Generation  Ltd. remains financially, technically and legally liable for the management, storage and reprocessing of waste that does not come within the scope of the aforementioned agreements.
• Failure to control the costs and time-frames for completion with respect to the solutions for the treatment and ultimate storage of waste for which the Group is liable would have a negative impact on the Group’s financial position and reputation.
• For nuclear power plants which EDF does not operate, but in which it has financial interests (Belgium, China), the Group is exposed financially in proportion to its shareholding to contributing to future expenditures related to the management of spent fuel and waste.

Control actions

• The control strategy consists in developing and securing radioactive waste treatment channels to meet the present and future needs of the Group’s nuclear facility decommissioning and operating projects. To this end, the structuring of the Cyclife subsidiaries has in particular been consolidated in order to offer a range of appropriate waste treatment solutions.
• For CIGEO (the geological disposal centre project developed by ANDRA for high-level waste and intermediate-level long-lived waste), the control strategy consists in securing the project by proposing to ANDRA and support for the development strategy and implementation of the disposal, in order to meet the target cost of €25 billion ⁽¹⁾ (see section 1.4.1.1.2.3 “The issues relating to the nuclear activity”). To this end, a cooperation agreement was signed at the end of 2020 between EDF and ANDRA.
• The Group participates, as a producer, in the various working groups on the storage of graphite waste. In addition, EDF is very actively involved in the PNGMDR steering Committee.
• In the United Kingdom, arrangements are in place for the management of spent fuel from AGR and PWR reactors:
  • through its safety and sustainable development policies, EDF Energy implements actions to continuously improve and minimise the quantities of spent fuel and waste generated;
  • the arrangements for the management of spent fuel from the AGRs were defined at the time of the restructuring of British Energy. Spent fuel from AGRs is disposed of at the Sellafield reprocessing site for long-term storage. EDF Energy finances this storage (as well as the reprocessing carried out in previous years);
  • the Sizewell B PWR spent fuel is stored on site in a dedicated dry storage facility. This facility will provide safe storage for all spent fuel produced during the lifetime of Sizewell B. At the end of this long-term surface storage, the Sizewell B PWR spent fuel will be transferred to the future UK geological disposal facility. This strategy is approved by the NDA and financed by the Nuclear Liabilities Fund.

c) Provisions and management of dedicated assets

Context

Note  15.1.2.4 “Nuclear provisions in France” to the consolidated financial statements as at 31 December 2022 sets out the amounts of expenses under the economic conditions at the end of 2022 as well as the corresponding provisions relating to:

• the future decommissioning of the nuclear electricity generation fleet in France and of the currently-halted facilities;
• the management of the last fuel cores;
• the long-term management of waste and the recovery and packaging of waste present in the facilities.

This note also provides analyses of the sensitivity of the Group’s provisions and income to a change in the discount rate for the various categories of provisions. All these provisions represent several tens of billions of euros.

Note 17.1 “Other provisions for decommissioning” to the consolidated financial statements for the fiscal year ended 31 December 2022 presents the same items for Framatome and Cyclife France (formerly SOCODEI) and their basic nuclear facilities in France.

Note 15.1.2.4 to the consolidated financial statements for the fiscal year ended 31 December 2022 sets out the realizable value of EDF’s portfolio of dedicated assets to cover the costs of long-term nuclear commitments (radioactive waste and decommissioning) at 31 December 2022.

In the United Kingdom, the funds for nuclear liabilities are managed by a body independent of EDF set up by the British Government (Nuclear Liabilities Fund – NLF) for the existing nuclear fleet. For HPC-related liabilities, the funds will be managed by FundCo, a body (Trust) independent of HPC’s shareholders (EDF Energy and CGN) and the UK Government. Operators therefore have no assets to manage for this purpose (see section 1.4.5.1.2.2 “Nuclear generation”).

Main risks

• All of the contingencies and uncertainties regarding these provisions may have a material adverse impact on the Group’s financial position (see note 15.1 to the consolidated financial statements for the fiscal year ended 31 December 2022).
• In the event of a significant change in the provisions determining the reference base of the dedicated assets, it might prove necessary to make additional allocations to adjust the value of these assets, which could have a material adverse impact on EDF’s financial position. Moreover, stricter regulations at the national level (in particular those that might impact the base for determining the dedicated assets to be constituted by EDF ⁽²⁾) or European level may lead to more stringent requirements regarding the constitution of dedicated assets and have a significant impact on EDF’s financial position.
• Although these assets are constituted and managed in accordance with strict prudential rules, price fluctuations in the financial markets or changes in valuation may have a material adverse impact on the value of these assets (for a sensitivity analysis, see section 5.1.6.1.6 “Management of financial risk of EDF’s dedicated asset portfolio”), which could require EDF to allocate additional amounts to restore the value of these assets. Such events could have a material adverse effect on the Group’s financial position.
• The unavailability or insufficient amount of the dedicated assets to hedge the expenditure schedules of the Group’s long-term commitments could have a negative impact on the Group’s financial position and reputation.

Governance arrangements

In order to ensure the control of provisions and the management of dedicated assets, the Group has put in place specific governance arrangements:

• the Nuclear Expense Assessment Control Function, in accordance with Decree 2020-830 of 1 July 2020;
• the Dedicated Asset Portfolio Operational Management Committee;
• the Nuclear Commitments Monitoring Committee (CSEN) of the Board of Directors.