Universal Registration Document 2022

The table below presents a qualitative evaluation of the financial impact of the main risks inherent in transition on the EDF group’s business model.

Low-carbon electricity: the main vector towards carbon neutrality

The IEA 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 ⁽¹⁾. In all scenarios compatible with the Paris Climate Agreement, the share of electricity in end energy use will have doubled by 2050 (compared to 20% in 2021) and become 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 most ambitious climate/energy scenario, NZE, is also the scenario in which the increase in absolute electricity demand rises the fastest worldwide.

Key advantages held by the EDF group in the energy transition

Worldwide, the electricity and heat production sector is the number one greenhouse gas-emitting sector, accounting on its own for 25% of global emissions ⁽²⁾. In France, as a result of the EDF group’s carbon performance, the electricity and heat production sector accounts for approximately 5% of national man-made greenhouse gas emissions ⁽³⁾.

As the world’s leading producer of electricity with no direct CO₂ emissions ⁽⁴⁾, the EDF group has an atypical risk profile when it comes to transition risks. For the EDF group, tougher policies designed to achieve carbon neutrality faster are in fact powerful opportunities to promote its low-carbon mix based on nuclear energy and renewables. For instance, the increase in CO₂ prices visible in the most ambitious climate/energy scenarios does not have a negative impact on the EDF group’s financial performance and could even be construed as an opportunity for the Group, favouring its investments in new, low-carbon production facilities.

Examples of strategic decisions taken by the EDF group to mitigate transition risks

The EDF group has set itself the goal of contributing to the fight against climate change ever since its first environmental policy in 2005. Integration of this issue at the heart of the Group’s strategy has become much faster in the wake of the Paris Agreement (2015), the recommendations of the TCFD (2017) and most recently, the adoption of the Group’s raison d’être (2020). In particular, this policy has resulted in the following strategic decisions and commitments on the part of the EDF group: achieving net zero emissions by 2050 for all greenhouse gas emission scopes, withdrawing from carbon-based electricity production by 2030, the goal of 60GW of installed capacity in renewables energies 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, Hydrogen plan, the creation of the Innovation and Pulse Programme Department (DIPP), the creation of Hynamics, etc.