1 ACTIVITY & SUSTAINABLE DEVELOPMENT 2010
2 CONTENTS 04 EDF worldwide 06 Interview with the Chairman and CEO 12 Key figures and sustainable development indicators BUSINESSES AND EXPERTISE 20 Global energy challenges 23 Generation and engineering 34 Networks 39 Sales and trading 44 OPERATING PERFORMANCE BY COUNTRY 46 France 60 United Kingdom 64 Italy 68 Other international activities 76 Other businesses 78 FOSTERING HUMAN AND TECHNOLOGY POTENTIAL 80 Human resources 86 Innovation and R&D 90 GOVERNANCE AND RESULTS 92 Board of Directors 94 Executive Management 96 Shareholder relations 98 Financial statements Sustainable development indicators
3 PROFILE 03 PROFILE The EDF Group is one of the world s leading energy companies, active in all areas from generation to trading and network management. It has a sound business model, evenly balanced between regulated and deregulated activities. With its first-rate human resources, R&D capability, expertise in engineering and operating generation plants and networks, as well as its energy eco-efficiency offers, the Group delivers competitive solutions that help ensure sustainable economic development and climate protection. The EDF Group is the leader in the French and UK electricity markets and has solid positions in Italy and numerous other European countries, as well as industrial operations in Asia and the United States. Everywhere it operates, the Group is a model of quality public service for the energy sector. 37 million customers worldwide TWh electricity generation worldwide g of CO 2 per kwh generated (CO 2 emissions from EDF Group electricity and heat generation) 158,842 employees worldwide 65.2 billion in sales Consolidated data at
4 04 EDF WORLDWIDE Mapping Group operations The EDF Group is active in more than 30 countries. Its global operations focus on three core businesses: generation, networks and sales and trading. EUROPE UNITED KINGDOM EDF Energy (100%) Number of customer accounts: approximately 5.5 million including gas Installed electric capacity: 13 GW Gas sales: 30.4 TWh FRANCE EDF Number of customers: 27.7 million including gas Installed electric capacity: 97.2 GW Gas sales: 21.4 TWh RTE-EDF Transport (EDF 100%) BELGIUM EDF Belgium (100% EDF) EDF Belgium owns 50% of the Tihange 1 nuclear power plant Installed electric capacity: 419 MW SPE (EDF: 63.5% of capital and voting rights) Installed electric capacity: 1,986 MW Points of delivery: approximately 1,650,000 NETHERLANDS Sloe Centrale Holding BV (50% EDF) Installed capacity: 870 MW POLAND EC Wybrzeze (99.74% EDF) Installed electric capacity: 331 MW Installed thermal capacity: 1,199 MWth 2 ERSA (EDF: 79.79% of capital and 97.34% of voting rights) Installed capacity: 1,775 MW EC Kraków (94.31% EDF) Installed electric capacity: 460 MW Installed thermal capacity: 1,118 MWth 2 Kogeneracja (EDF: 40.58% of capital and 50% of voting rights) Installed electric capacity: 363 MW Installed thermal capacity: 1,124 MWth 2 Zielona Gora (EDF: 39.93% of capital and 98.4% of voting rights) Installed electric capacity: 221 MW Installed thermal capacity: 296 MWth 2 AUSTRIA Estag Group (25% EDF) SLOVAKIA Number of delivery points: 460,000 SSE (49% EDF) Number of customers: approximately 640,000 Sales: 4.8 TWh 100,000 km of high-voltage and very high voltage circuits 46 cross-border lines ERDF (EDF 100%) Distribution at 34 million points of delivery in mainland France via a network of approximately 1.3 million km of lines IES (Island Energy Systems) Number of customers: a little over 1 million Installed capacity: 1,878 MW 32,900 km of lines SPAIN Elcogas (31.48% EDF) Installed electric capacity: 320 MW SWITZERLAND Alpiq (25% EDF) Installed capacity: 6,563 MW ITALY Edison (EDF: 48.96% of capital and 50% of voting rights) Number of customer accounts: approximately 1 million including gas Installed electric capacity: 12.5 GW Gas activity: 15.8 GM 31 Fenice (100% EDF) Installed electric capacity: 508 MW Installed thermal capacity: 3,192 MWth 2 HUNGARY BE ZRt (95.57% EDF) Installed electric capacity: 409 MW Installed thermal capacity: 1,366 MWth 2 EDF Démász (EDF 100%) Number of customers: approximately 770,000 Electricity sales: 5.68 TWh Gross value, not adjusted for percentage of ownership interests
5 EDF WORLDWIDE05 OTHER COUNTRIES WORLDWIDE CHINA Figlec (100% EDF) UNITED STATES Constellation Energy Nuclear Group (49.99% EDF) Installed capacity: 4,044 MW LAOS Nam Theun Power Company (40% EDF) Installed capacity: 1,070 MW BRAZIL UTE Norte Fluminense (90% EDF) Installed capacity: 869 MW VIETNAM Meco (56.25% EDF) Installed capacity: 715 MW Installed capacity: 720 MW Datang San Men Xia Power Company Ltd (35% EDF) Installed capacity: 1,200 MW Shandong Zhonghua Power Company Ltd (19.6% EDF) Installed capacity: 3,060 MW Taishan Nuclear Power Joint Venture Company (30% EDF) Construction of 2 EPR reactors OTHER ACTIVITIES EDF Energies Nouvelles (50% EDF) Installed capacity: 3,422.6 MW Total capacity of facilities in which EDF Energies Nouvelles has a stake Tiru (51% EDF) 3.7 TWh of electricity and steam sales, of which 50% was clean energy (excluding heating), generated from 3.9 million tonnes of recycled waste Electricité de Strasbourg (88.82% EDF) Number of customers: 488, TWh of electricity and 0.2 TWh of gas sales Dalkia (EDF: 34% of capital and voting rights of Dalkia s holding company) Optimized energy management EDF Trading (100% EDF) Traded volumes (approx.): 3,306 TWh of electricity 120 billion therms of natural gas 411 million tonnes of coal 813 million barrels of oil (primarily by-products) Around 233 million tonnes of CO 2 emission certifi cates 1. Gross global gas volumes handled by the Group s companies including plants internal consumption. 2. MWth: thermal MW for cogeneration, as opposed to MW of electricity. Generation and engineering Distribution Services Transmission (including the minority interests) at December 31, 2010.
6 06 INTERVIEW WITH THE CHAIRMAN AND CEO HENRI PROGLIO Interview with Henri Proglio (Pascal SITTLER / REA)
7 INTERVIEW WITH THE CHAIRMAN AND CEO HENRI PROGLIO07 As we prepare to go to press at the beginning of April 2011, all eyes are on Fukushima. What are your thoughts on this dramatic event? I, along with everyone at EDF, have been deeply affected by the earthquake and tsunami that have claimed so many lives in Japan and created a critical situation at the Fukushima power plant. The accident has shown just what a crucial role operators play. It is also a reminder that safety is the absolute priority for nuclear power plants. Safety is the very core of our industrial culture, a culture we approach with discipline and humility, remembering that nothing should ever be taken for granted. What consequences will the event have on your activities? We will use the lessons learned from Fukushima to make even more progress with safety at our plants, as we did after the Three Mile Island and Chernobyl accidents. Already, we are taking an active part in conducting security audits in Europe, and especially in France. One way we consistently work to improve safety at our plants is by gathering feedback and closely analyzing the dysfunctions that cause incidents or accidents. This type of steady progress is possible because we operate and design our own plants. Significant investments are made in reactor safety, and this safety in turn depends on how reactors are designed and operated and on the improvements made over time, all the way to decommissioning was your first full year as Chairman and CEO of EDF. How would you describe the year? I would say that 2010 was a year during which we tackled a large number of challenges head-on, in a complex environment. As the global population increases and becomes more urban, human and economic development is affected by the fact that energy resources are limited, which pushes prices upward as soon as demand increases. At the same time, there is an absolute need to limit greenhouse gas emissions. Security of supply, energy conservation, economic efficiency and the delivery of safe solutions are the fundamental challenges for our industry. With each passing day, we are making progress toward meeting them. What was the biggest challenge you addressed in 2010? One we could not postpone: operating performance needed to be put back on track. This was definitely the main highlight of the year, particularly in France, where electricity generation increased by 22.5 TWh because of solid output from all of our nuclear, hydro and fossil-fired plants. The same positive trend carried over to January 2011, when EDF s nuclear electricity output climbed to a record 43.9 TWh. We delivered on our objective to improve the availability of our nuclear fleet in France, lifting it to 78.5%. This was an important turnaround after three consecutive years of decline. Safety standards were maintained over this period through significant investments and the organization of five ten-year inspections. I would also like to acknowledge the efficiency of our teams in the United Kingdom in their handling of an unscheduled shutdown at the Sizewell PWR 1 plant and efforts to improve performances 1. PWR : Pressurized Water Reactor.
8 08 INTERVIEW WITH THE CHAIRMAN AND CEO HENRI PROGLIO Via RTE-EDF Transport, the EDF Group operates Europe s largest network. Right: automated welding tests at the Industrial Risk Management Department at R&D s Chatou site. (Above and right: EDF Philippe ERANIAN) of the AGR 1 plants, one of which achieved a load factor of 90% for the first time since Progress was also made at the networks businesses, with ERDF reducing outage time by 5% to boost its performance. Is this uptrend in operating performance sustainable? It was achieved through significant capital expenditure and investments in sales and marketing. Our operating investments totaled 12.2 billion. In France, they increased by 10%, with 7.9 billion invested in generation facilities and the transmission and distribution networks. Was this solid operating performance reflected in the income statement? Yes, especially because we were able to meet our target of keeping operating expenses under control in France, limiting the rise to 1.5%, which was below inflation. Sales increased by 4.6% to reach billion, and EBITDA has seen organic growth of 5.2% to billion. Net income from ordinary operations ended the year 11.3% higher at 3.96 billion. And in net income? Our net income included significant non-recurring items. Over the year, gas prices plummeted, particularly in the United States. This had repercussions throughout global energy markets, and on electricity prices outside France. We also wanted to take the uncertainties associated with some of our markets into account. As such, we decided to record 2.9 billion of exceptional provisions for risks and impairments, especially in the United States, Italy and France, where we needed to factor in the extension of the TaRTAM mechanism. These non-recurring items resulted in a 73.9% decline in net income, Group share, which came to 1.02 billion for the year. On the other hand, they had no impact on Group cash flow. A number of transactions changed the EDF Group s scope of consolidation in Can you tell us about this reconfiguration? Improving the Group s risk profile and reducing its debt was another major challenge. We were able to find a better balance in our relationship with Constellation in the United States by securing the elimination of a put option that constituted a major risk. We also sold EDF Energy s distribution networks business in the United Kingdom under terms that were favorable both financially and for the people working there, and reached an agreement to transfer our interest in EnBW to the Land of Baden-Württemberg. Lastly, we allocated 50% of the RTE shares to the dedicated asset portfolio set aside to cover costs associated with the back-end of the fuel cycle. As a result of these transactions, and taking into account the disposal of our interest in EnBW after the close of the fiscal year, we succeeded in reducing EDF s debt by close to 20 billion in one year. The Group s increased financial flexibility
9 INTERVIEW WITH THE CHAIRMAN AND CEO HENRI PROGLIO09 Three research priorities Consolidate and develop the carbon-free energy mix Promote flexible, low-carbon energy demand Adapt the electricity system We are stepping up our commitment to innovation. resources plan is the Training Challenge (DEFI Formation) program, on which an agreement was reached with all unions. The first campuses are being developed in France and Great Britain, the Group University will now be open to all managers, and skills academies are being set up for each of the key business lines. What will the next steps be? gives it more leeway than it had before. These are only the financial aspects. EDF s reconfiguration has also entailed significant social and organizational changes. How has the Group s organization changed? The organizational structure has been strengthened. Our key businesses generation, downstream activities (customers, optimization and trading) and networks have been placed at the fore and given a global dimension. We aim to take full advantage of synergies and ensure that each business delivers solutions that address the full range of needs in France and internationally. We are also bringing together our fields of expertise through a geographical organization, with each region overseen by an Executive Committee member. In each of these areas, support is provided by cross-regional resources: HR, legal, financial, communication, and research and development. In sum, the new organizational structure is more in line with operating priorities, designed to extract maximum value from our expertise, and better geared toward today s energy issues, which are now global in scope. And what changes have been made to human resources? Having completed this reconfiguration and recovered a good level of financial flexibility in 2010, the task now is to take full advantage of our new room for maneuver by capitalizing on growth opportunities that arise. Will this new financial flexibility benefit R&D? Absolutely. After reducing our debt and improving our risk profile, we will now be able to optimize our financial resources and devote more resources to research, especially into renewable energies. We are also stepping up our commitment to innovation. The Group must enhance its ability to anticipate in 1. AGR: Advanced Gas Reactor. Breakdown of EDF installed capacity worldwide in 2010 in GW 9.4 (7%) Combined-cycle gas and cogeneration 21.5 (16%) Hydropower 3.3 (2.5%) Other renewables (o/w wind power: 2.7, or 2%) I have long been convinced that it is not possible to develop industrially without clear goals for human resources. Our dialogue is based on recognizing achievements and anticipating the needs of the future. One concrete aspect of EDF s human 25.4 (19%) Fossil-fired (exc. gas) 74.3 (55.5%) Nuclear
10 10 INTERVIEW WITH THE CHAIRMAN AND CEO HENRI PROGLIO all businesses. This is obviously true of generation, where we will be focusing on carbon-free solutions, but more will also have to be done for the customers and networks businesses, which are poised to undergo major transformations. The development of smart grids will revolutionize the electricity market, and the Linky meter tested by ERDF will play a key role. Smart grids will make it easier to integrate distributed generation and allow end-users to be active participants in the electricity system. Our decision to move our main R&D center to the Saclay plateau, where we will be working alongside the very best French technology firms, is proof that we are setting the highest standards for ourselves. What are the next challenges you will be tackling in France? We plan to ensure that the recovery in operating performance at our nuclear power plants continues and aim to keep the availability rate at 78.5% in spite of a higher number of scheduled shutdowns, notably due to the nine ten-year inspections planned for In addition to drawing lessons from Fukushima, we will continue to invest in improving safety 78.5% The availability rate of nuclear power plants in France, despite an increase in scheduled shutdowns. and replacing large components at the nuclear plants, modernizing the fossil-fired and hydro fleets and strengthening the networks. Construction of the EPR plant in Flamanville will also continue. It is scheduled to start delivering power to the grid in Meanwhile, the government s recent announcement that 25% of the electricity output we will be required to sell to competitors will be priced at 40 per MWh from July 1, 2011, and then at 42 from January 1, 2012, is a pivotal development for EDF What are your priorities internationally? EDF s development will require selective investments. The Group will also need to leverage the strengths of its different businesses: electricity generation nuclear, fossil-fired, hydro and other renewable energies and sales and distribution. There are many ways for EDF to capitalize on these strengths, including the provision of engineering and consulting services for the design, construction and operation of facilities for third parties, with or without capital commitments. A good example is the Nam Theun hydropower project in Laos. With its 40% interest, EDF has designed, built and will operate the dam for 25 years. This successful undertaking provides us with a top-quality benchmark on the international market at a time when hydropower projects are gathering momentum across the globe. We also plan to bolster our positions in Europe. A revision of the shareholders agreement in Italy is being negotiated, and all options remain open. In the United Kingdom, we are forging ahead with nuclear power development plans by engaging in constructive talks with British safety authorities and ongoing dialogue with residents around the sites in question.
11 INTERVIEW WITH THE CHAIRMAN AND CEO HENRI PROGLIO11 The Penly nuclear plant in Upper Normandy (left). The Nam Theun dam in Laos (center) was brought on stream in (Left and center: EDF Philippe ERANIAN, right: Wostok Press Jonathan REBBOAH) What are EDF s priorities with regard to its customers? All of our customer s households, businesses and local authorities in France and other European countries, particularly the UK, expect us to help them manage their energy consumption and reduce their carbon footprint. We will be working to ensure that we are more in tune with their expectations and in a better position to deliver solutions tailored to their specific needs. Other priorities will be to deepen our ties with local communities and to invest in customer management systems that allow our sales advisors to help customers play an active role in optimizing their energy use. Our customers know that with EDF, they can count on technical expertise and robust solutions incorporating the best technologies, such as heat pumps for homes and induction furnaces for industry, to provide both high-quality service and energy consumption management. We help customers play an active role in optimizing their energy use. What makes you confident about the future? I know that EDF has great strengths in its human, industrial and technological resources. Having improved workplace relations, developed additional room for maneuver and built an organizational structure built around core businesses, all backed by investments in skills and innovation, we are in a better position now to leverage these strengths. Regardless of what happens in the energy sector, EDF will remain a force to be reckoned with. What should shareholders expect? Will the dividend be reduced in 2010? No. We have agreed with the Board of Directors that I will propose a dividend of 1.15 per share, the same amount as last year, at the next Shareholders Meeting. This is in line with our net income from ordinary operations. We will also be proposing a system wherein dividends will be increased by 10% for registered shareholders who have owned their shares for more than two years.
12 12 KEY FIGURES 2010 FINANCIAL INDICATORS Financial performance 2010 The 2010 financial year was marked by three major transactions, which have had an impact on the Group s consolidation scope: disposal of the UK networks, the EnBW disposal agreement and a change in consolidation methods. As with changes in accounting methods and reporting, this affects the comparability of the 2009 and 2010 financial years. The sale of EnBW and its reclassification under discontinued operations notably led to changes in the comparable figures as reported in Sales growth of 4.6% in billion 59.1* % 5.5 Other activities 3.5 Other international 4.8 Italy 11.2 United Kingdom 34.1 France 65.2* Other activities 6.9 Other international 5.6 Italy 10.7 United Kingdom 36.2 France *The figures of 59.1 billion and 65.2 billion correspond to the sum of the precise values, corrected to one decimal place. Organic EBITDA growth of 5.2% in billion % 2.0 Other activities 0.7 Other international 0.8 Italy 3.1 United Kingdom Other activities 1.1 Other international 0.8 Italy 2.7 United Kingdom 1.15 per share Proposed dividend for 2010 fi nancial year France France 10% loyalty dividend proposed at the Shareholders Meeting for application in 2014 in respect of 2013 EBITDA rose by 5.2% like-for-like on the 2009 level. In France, EBITDA was up 7.7% over the year, thanks to an increase in nuclear power generation and favorable weather conditions. International EBITDA ended the year 0.4% lower, notably dropping in the UK, where the shutdown of the Sizewell nuclear power plant for six months had an impact, and at EDF Trading, which was affected by a sharp deterioration in market conditions starting in May 2010.
13 KEY FIGURES 2010 FINANCIAL INDICATORS13 Net income (Group share) down 73.9% in million Growth in net income excluding non-recurring items of 11.3% in million 3, % % 3,961 3,558 1, Net income, Group share, included 2,941 million of nonrecurring items net of tax, primarily comprising provisions for risks, impairment and provisions for the extension of the TaRTAM mechanism. This gain was a reflection of improved operating performance, which more than offset the rise in amortization and depreciation and financial expenses linked to the increase in investment. Net financial debt in billion Net financial debt/ebitda ratio * 2.2 / 1.9 * at 12/31/2010 against 2.5 at 12/31/2009 *After disposal of EnBW 12/31/ /31/ /31/2010 Net debt was reduced by 8.1 billion, even after taking into account 2.3 billion of dividend payments and the allocation of 1.3 billion to the dedicated assets. The decline was attributable in large part to the disposal of the distribution network in the UK ( 6.7 billion) and a change in the consolidation method applied to RTE ( 6.3 billion). After adjustments for the sale of the stake in EnBW, net debt ended the year at 27.3 billion. *After disposal of EnBW
14 14 KEY FIGURES 2010 FINANCIAL INDICATORS Operational Excellence in million ,000 1,256 Increase in operating investments: + 4%, o/w +10% in France in million 13% 26% 30% 11, % Other business International Unregulated France 12,241 12,241 7,324 13% 23% 31% 31% Regulated France 33% Unregulated 60% Regulated 40% 52% Development o/w nuclear: 1,134m 48% Maintenance o/w nuclear: 1,960m Target 2008 Actual 2008 Target 2009 Actual 2009 Target 2010 Actual Total gains net of inflation in Group EBITDA versus 2007 Unrealized nuclear Kd gains Operating investments increased by 4% on the 2009 level i.e. 464 million. They rose by 10% in France, notably refleting ongoing construction work on the Flamanville EPR and the expansion of fossil-fired capacity, as well as a sharp increase in photovoltaic site connections. Operating investments declined by 244 million excluding France and were unchanged for the other activities operating cash flow and free cash flow in million Δ WCR o/w CSPE -968 o/w Exeltium 1, ,446-12,053 Operating investment net of disposals (309) Operating cash flow Free Cash Flow
15 KEY FIGURES 2010 FINANCIAL INDICATORS15 Over 3.3bn* invested in 2010 to develop the Group s generation capacity 8% West Burton UK 5% French island systems TOTAL 3.3 bn* 10% Other 33% New nuclear 11% Fossil-fired and Hydropower France 33% EDF EN * Main Group projects Continuous improvement in nuclear performance in France in 2010 in TWh % - 2.8% - 1.9% - 1.9% - 0.4% + 0.9% + 2.4% + 3.1% + 3.1% + 4.6% + 4% 408 TWh 6% 4% 2% 0% - 2% - 4% Total difference 2010 vs total output % Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec - 6% - 8% January 2011: best nuclear output (43.9 TWh) ever achieved in a single month.
16 16 KEY FIGURES 2010 SUSTAINABLE DEVELOPMENT Sustainable development indicators 2010 EDF s Sustainable Development Committee oversees the Group s sustainable development strategy, which is driven by commitments to the environment, the community and corporate governance. Regarding the environment, the Group intends to remain one of Europe s least carbon-emitting energy companies, adapt its generation fleet and offerings to climate change, and reduce its environmental impact, especially on biodiversity. The Group s commitment to the community focuses on energy efficiency and energy access for all, developing and maintaining ties with local communities and promoting awareness of energyrelated issues. When it comes to corporate governance, commitments include building a solid core of values shared by all Group employees, maintaining constant dialogue with stakeholders and providing them with reports on sustainable development initiatives, and taking an active part in the national and international debate on sustainable development. In 2010, the Group introduced a strategy for adapting to climate change which covers generation activities and identifying new customer needs. All Group companies and businesses have concrete action plans to implement this strategy. Share of electricity and heat generated from renewable energy sources, EDF Group, EDF and EDF Énergies Nouvelles (%) (Note: Hydropower generation includes the energy produced by pumping plants.) EDF Group* EDF * Excluding EnBW for 2009 and EDF Energies Nouvelles ,724 Vulnerable clients who benefi ted from the EDF Energy Energy Assist tariff at end-2010 (158,000 at end-2009) 8 million Goods and services purchased from the protected sector by EDF in 2010
17 KEY FIGURES 2010 SUSTAINABLE DEVELOPMENT17 CO 2 emissions from electricity and heat generation (g/kwh) EDF Group* EDF * Excluding EnBW for 2009 and Percentage of women at managerial level (%) EDF Group* Work-related injuries Injury frequency rate * Excluding EnBW for 2009 and EDF EDF Group* EDF * Excluding EnBW for 2009 and 2010.
18 18 BUSINESSES AND EXPERTISE THREE CORE BUSINESSES The EDF Group is actively developing its three core businesses across the world electricity generation, transmission and distribution network management, and the supply, trading and upstreamdownstream optimization of electricity and gas to deliver state-of-the-art energy solutions at the best price to all its customers.
19 BUSINESSES AND EXPERTISE19 (EDF Lionel CHARRIER, Getty/Photodisc, Getty/Flickr, EDF Philippe Marini)
20 20 BUSINESSES AND EXPERTISE GLOBAL ENERGY CHALLENGES Global energy challenges Breakdown of electrical energy sources worldwide in 2009 in % 7 Hydro plants 20 Nuclear plants 4 Other renewable sources (wind, solar, biomass) 1 Oil-fired plants 45 Coal-fired plants The world is emerging from the crisis that had slowed growth and depressed energy demand, although some regions are recovering faster than others. The challenge, however, is the same as before: How can we encourage development while tackling climate change, given the fact that resources are increasingly scarce, and therefore increasingly expensive? Our response must be adapted to a fast-changing world that is ever more urbanized and in which new dynamics are taking shape. 23 Gas-fired plants Source: SOeS, based on Eurostat figures Breakdown of urban population in 2050, by region in % 53.8 Asia Africa Latin America and the Caribbean Europe North America Oceania Source: United Nations, Department of Economic and Social Affairs 2010 (2009 Revision). Responding to divergent trends in a multipolar world The crisis has taken a toll on business levels in Europe and the United States, and caused energy consumption and prices to decline. Elsewhere in the world, growth remains on track, and energy demand continues to rise. New countries are emerging as major energy players, including Brazil, India and China. In 2010, China alone added about 100 GW of capacity, the equivalent of EDF s generation fleet in France. In sum, a multipolar world is taking shape, challenging the economic dominance which OECD countries have known for years. Addressing the issue of resources The downward pressure the crisis put on energy prices was exacerbated by nonconventional gas production in the United States, where gas prices were reduced by two-thirds. Increasing the use of gas in electricity generation promises to be a good transitional solution to preserve the climate balance if it is used to replace coal, demand for which is still climbing. However, this option could also increase the dependence of many European states on other countries, not to mention the environmental hazards posed by nonconventional gas production. Be that as it may, there is no choice but to reduce reliance on fossil fuels over the long term, since they pose the biggest threat to the climate, and the cheapest reserves are becoming scarcer. Tapping into the potential of urban growth One of the most significant changes taking place is global urbanization. More than half of all people now live in cities. The bulk of demographic growth (the world population is expected to grow by 2.5 billion between now and ) will be absorbed by cities, which are the ideal place to use network energies like electricity. Innovative solutions will be developed to make cities sustainable, including electric vehicles, lowwattage devices, and smart grids integrating decentralized renewable energy. These adjustments will have to go hand in hand with new and innovative approaches to both society and sales and marketing strategies, to ensure that the poorest people also have access to modern energies.