STRATEGY Home Investors Strategy Share Terna’s industrial plan aims to reinforce our central role in directing and enabling Italy’s energy system and energy transition, as the driving force behind our country’s achievement of the goals of the European Green New Deal. We will invest 8.9 billion euros on regulated activities in Italy between 2021 and 2025, our biggest ever spending plan, thus helping to contribute to the country’s economic recovery The power sector is going through a period of profound transformation in Italy and Europe. The energy transition is marked by increasingly challenging decarbonisation objectives, and Terna is today the main player capable of enabling Italy to reach European and domestic targets, in particular a 55% reduction in emissions by 2030 and zero emissions by 2050. This is why we have decided to significantly increase investments in the national transmission grid, aimed at integrating non-programmable renewable sources and increasing the security and resilience of the system. Our investments also have an important multiplier effect, both in terms of GDP growth and in terms of new jobs: they therefore represent a decisive contribution to Italy's post-Covid recovery. 2021-2025 INDUSTRIAL PLAN SECURITY ADEQUACY QUALITY OF SERVICE RESILIENCE EFFICIENCY REGULATED ACTIVITIES Develop, modernize and strengthen the National Transmission Grid € 8.9 billion in investment, the highest ever seen in Italy RAB of € 21.8 bn in 2025 6 % CAGR over life of Plan (sharply up on previous Plan) on previous Plan + 22 % in sustainable investments including 95 % Driving the Ecological Transition PEOPLE + 10 % workforce in next 3 years Next Terna (New ways of working) project launched INNOVATION AND DIGITALISATION 900 m invested in digitalisation, innovation and new technologies Enablers Enablers Contributing € 450 million to EBTDA NON-REGULATED ACTIVITIES Technological, innovative and digital solutions to support the ecological transition € 300 m in investment Contribution to EBITDA +€ 200 m INTERNATIONAL ACTIVITIES Putting our competencies and know-how into grids worldwide INDUSTRIAL PLAN 2021-2025: INVESTIMENTS IN REGULATED ACTIVITIES 5.3 billion euros +13% compared to previous plan The cornerstone of our 2021-2025 "Driving Energy" industrial plan is sustainable investment in the national transmission grid (regulated activities), which continues to represent the group's core business: we plan to invest 8.9 billion euros over the course of the plan, the highest level ever and up 22% on the previous plan. These investments allow us to strengthen our central role as enabler and “director” of the energy transition. As for our non-regulated and international activities, we will focus on initiatives consistent with our core business, characterised by a low level of risk and limited capital absorption. To achieve our objectives in an increasingly complex scenario, we will implement innovation and digitalisation initiatives, which are essential to enable the energy transition at a system-wide level, and we will adopt new organisational models: “new ways of working” that will allow us to operate more effectively, with benefits for the quality of life of our people. Sustainability is at the heart of our strategy: based on the criteria of the future European taxonomy, 95% of our planned investments in Italy are sustainable in nature. The industrial plan also includes specific sustainability objectives. Boosting Investments Further acceleration on grid investments Energy Transition Enabling the Energy Transition Sustainability Sustainable approach to support stakeholders and local communities Transformation Development of a deep tranformation process AN INCREASINGLY CHALLENGING AND COMPLEX SCENARIO Our new industrial plan will allow us to better respond to the extraordinary challenge we have ahead of us. Terna can and must act to help achieve some of the 17 Sustainable Development Goals (SDGs) set by the United Nations: Increasing energy efficency Research in non-regulated activities Active role in international associations Realization of Development and Resiliency Plans Realization of cross-border interconnections Development of International activities Implementation of Resiliency Plan Research Development and Innovation in non-regulated activities Innovation focused on grid resiliency Strengthen the means of implementation Renew partnerships for sustainable development Looking at the Italian context, the National Integrated Energy and Climate Plan (PNIEC in Italian) envisages that the share of renewables in Italy will increase from 18% to 30% of gross final energy consumption by 2030. This implies a considerable evolution of the power system, and therefore of our grid, the country's energy backbone. Large generation plants Large/Medium generation plants + Demand Responde Distribuited generation Non-programmable renewables Storage/electric vehicles For further information on our business context, see Scenario and growth drivers. 5.4 billion euros REGULATED ACTIVITIES Development of the national power grid We will invest 5.4 billion euros to develop the national electricity grid in order to increase transmission capacity between the various market zones, resolving current congestion, and rationalising networks in the country's main metropolitan areas and increasing interconnections with foreign countries. The most important projects included in the 2021-2025 Industrial Plan include: the Tyrrhenian Link, the interconnector linking Campania with Sicily and Sardinia that will contribute to the decarbonisation of Sardinia; the power line that will link the Colunga zone (in the Province of Bologna) with the Calenzano zone (in the Province of Florence), significantly boosting exchange capacity between south-central and north-central Italy; the power line that will connect southern and northern Sicily between Chiaramonte Gulfi (in the Province of Ragusa) and Ciminna (in the Province of Palermo); SA.CO.I.3, which will increase connection capacity between Sardinia, Corsica and the Italian mainland. For further information on our projects, see Projects. 2.4 billion euros Renewing assets and improving efficiency Spending on renewing and improving the efficiency of our assets will go primarily on improving the quality of our services and processes and on the development of sustainable grid solutions. 1.2 billion euros Defence Plan A total of 1.2 billion euros will go towards the Defence Plan, primarily financing the work needed to ensure voltage regulation and the dynamic stability of the electricity system. These investments help boost the resilience of the power system, allowing us to deal with extreme weather events, the frequency of which has intensified in recent years as a result of climate change. We are also continuing our efforts to minimise the visual and landscape impact of electricity infrastructure, including by removing over the course of the plan around 500 km of lines made obsolete by new grid development investments. As a result of these investments, the value of our regulated asset base (RAB) will rise to 21.8 billion euros in 2025, compared with 16.1 billion euros expected at end-2020. NON-REGULATED ACTIVITIES The part of the 2021-2025 plan focusing on non-regulated activities will aim to develop innovative, digital solutions to support the energy transition, fully in line with the Group’s core business. These activities include: the provision of Energy Solutions, services for high-voltage infrastructure and smart grids, and energy efficiency services offered through Avvenia; the offer of connectivity, dark fibre and services for telecommunications providers; the manufacturing of power transformers and terrestrial cables carried out by Tamini and Brugg. Non-regulated Activities are expected to contribute a cumulative total of approximately 450 million euros to the Group’s EBITDA over the life of the plan. INTERNATIONAL ACTIVITIES Turning to our international activities, Terna now operates in a number of Latin American countries, where we aim to maintain a presence in order to exploit our expertise and build on our know-how in cross-border high-voltage and very high-voltage connections. In addition to the projects currently underway in Brazil, Peru and Uruguay, the 2021-2025 Industrial Plan envisages that we will take advantage of new opportunities. We plan to invest a maximum amount of 300 million euros cumulated in potential new projects over the life of the plan and expect that International Activities will contribute a cumulative total of over 200 million euros to the group’s EBITDA over the life of the plan. Did you know that... In May 2019, through our Santa Lucia Transmissora de Energia subsidiary, we have completed work on construction and commissioning of the second high-voltage “Jauru-Cuiabá 2” power line and its two electrical substations in the state of Mato Grosso in central Brazil. In Uruguay we’ve completed the new 500 kV power line, running 213 km between the areas of Melo and Tacuarembó, with the aim of increasing the efficiency and security of the national grid, promoting energy diversification and supporting the integration of energy from renewable sources in the north of the country. The line has been in operation since 24 October 2019. Finally, in Peru we will complete a high-voltage transmission line between Aguaytía and Pucallpa, in the central region of Ucayali, running for over 150 km, connected to the Sistema Eléctrico Interconectado Nacional (SEIN). This infrastructure will enable an increase in the generation, transmission and consumption of energy from renewable sources, promoting its integration and impact in the context of the country's production. In this way, we are pursuing our strategy to combine investments and sustainability to create value. Find out more on the Terna Plus website. FURTHER POSSIBLE DEVELOPMENTS OF THE SYSTEM We stand ready to seize any new investment opportunities in Italy with the aim of guiding the system’s transformation as part of the ongoing energy transition. We are looking at three possible areas: any opportunities to expand the perimeter of our activities as Transmission and System Operator; involvement in the development of hydro-pumping electricity storage systems in market failure situations; with the aim of achieving the challenging goals set in the Italian energy and climate plan, we could boost our role as a turnkey supplier of projects linked to the development of solar PV. Given the different time horizon and the need for an appropriate legal and regulatory framework, these initiatives have not been included in the 2021-2025 Industrial Plan, but have an important part to play in speeding up the energy transition. INNOVATION E DIGITALISATION Over the next five years, new technologies and digitalisation will acquire ever greater importance in enabling the energy transition. That’s why we will dedicate about 900 million euros (out of the 8.9 billion-euro total) to innovation and digitalisation projects. We will invest especially in remote control systems for electricity substations and key infrastructure by installing sensor, monitoring and diagnostic systems, including those of a predictive nature, to boost the security of the grid and local communities. DRONES, ROBOTS, AUGMENTED REALITY: THE FUTURE OF THE GRID IS ALREADY HERE GO TO THE BLOG NEW WAYS OF WORKING Innovating doesn’t just mean technology. The biggest challenge will require a change in culture: we are putting our people at the heart of our plans because their exceptional expertise is crucial for reaching our goals. We expect to see a 10% increase in Terna’s workforce in the first three years to over 5,000 people, a particularly important commitment in the context of post-Covid recovery. The complex scenario we are facing will also require us to adopt new organisational models, made possible by technological advances. This “new ways of working” approach represents a project of cultural transformation that will lead to us giving more responsibility to people and involving them in our industrial plan’s goals and challenges. The project will make it possible to optimise our office space, guaranteeing that we can work efficiently and effectively and at the same time bringing benefits to our people in terms of quality of life. TERNA’S 2021-25 PLAN: RECORD INVESTMENTS AND SUSTAINABILITY GO TO THE BLOG TERNA IS THE FIRST GRID OPERATOR FOR ELECTRICITY TRANSMISSION IN EUROPE. WE PROMOTE THE ENERGY TRANSITION AND SUSTAINABLE DEVELOPMENT BY FOCUSING ON PEOPLE AND INNOVATION. We work every day to build an atmosphere of dialogue and trust in local areas, to which we bring a vital asset for everyone’s economic and social lives: electricity. > FIND OUT MORE Useful links CALENDAR GENERAL ARCHIVE CERT REAL ESTATE ASSETS ACCESSIBILITY PRIVACY COOKIE DECLARATION LEGAL NOTICE INSERT CV Portals PURCHASES SUPPLIERS QUALIFICATION GAUDI GSTAT ENERGY DISTRIBUTORS MY TERNA TITOLARI RTN OUR SITES: OPEN AND TRANSPARENT SETTLEMENT CERTIFICATION WHISTLEBLOWING TERNA PLUS TERNA S.p.A. - Capitale sociale € 442.198.240 interamente versato - Sede Legale in Italia, Viale Egidio Galbani, 70 - 00156 Roma - Tel +39 06 83138111 Registro delle Imprese di Roma - Codice fiscale e Partita IVA 05779661007 - R.E.A. di Roma 922416