Terna is Italy's transmission system operator and plays a key role in driving Italy's energy transition. The document outlines Terna's strategy and investment plan to support Italy's decarbonization targets and renewable energy integration goals through 2030. Key points include that Terna plans over €22 billion in investments from 2021-2025 to modernize and expand Italy's grid, with a focus on enabling over 60-70 GW of new renewable capacity. Terna's strategy also involves developing new market designs and digital technologies to manage Italy's changing energy landscape.
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2. 7
Closing Remarks 27
Annexes 29
10-year National Development Plan 11
Energy Scenario and System Strategy
2021 – 2025 Group Financial Targets and Dividend Policy 22
3
Sustainability
Agenda
2
Strategy 15
4. Sustainability
4
Driving Energy - The Role of Terna
Ensuring continuity of
the service
Meeting the expected
demand in any condition
Dealing with unforeseeable events
Withstanding grid stresses and
return to normal operating state
Managing the system respecting the
requirements of safety, adequacy and
quality, at the minimum cost for final users
Security
Adequacy
Resiliency
Efficiency
Quality of service
TSO Role
5. Sustainability
5
ESG as a growth driver
Environment
Acceleration of green innovation
▪ Low cost PV and wind energy
▪ Electric vehicles
Social
Governments and companies committed
to a zero emissions future
▪ Introduction of «Net Zero» policies
▪ EU Green Deal, international climate plans
Governance
Change in markets perception
▪ Lower investments in traditional generation
▪ ESG Investments trend
Energy transition is at the heart of ESG policies and drives current investment strategies
Energy
Transition
6. Sustainability
6
NexTerna
A new People Strategy to generate a cultural change enabling the Industrial Plan
NEW
PEOPLE STRATEGY
ORGANIZATION AS
TRUE ENABLING
FACTOR
CHANGE
MANAGEMENT
Talents Skills
Engagement and well-being
Diversity and inclusion
Employee centricity
A new model for grid
development, exercise and
maintenance
Inclusive leadership People care and skills
Virtual and physical spaces
New industrial relationship
Sustainability, Communication
Agile solutions
applied to processes
Technology, Digitalization
8. Green Deal
2030
Energy Scenario and System Strategy
8
Italian decarbonization targets
-24%
-55%
Actual
-40%
CEP
2030
Green Deal
2030
CO2 emissions reduction
RES share in electricity
consumption
PV and wind capacities
Green Deal
2030
Actual
36%
NECP
2030
55%
65%
Actual
+40 GW
34 GW
+60/70 GW
2
2
3
3
1. CEP: Clean Energy Package
2. National Energy and Climate Plan. Published in December 2019
3. First assumptions based on the new emission reduction targets defined in the Green Deal
NECP
2030
1
9. Energy Scenario and System Strategy
9
RES Evolution in Italy
PV AND WIND INSTALLED CAPACITY EVOLUTION*
*2021 provisional data. Year-end data
2
32 33 34
71
~90 - 100
2005 2019 2020 2021 2030 PNIEC Green Deal /
Fit-for-55
Wind
PV
▪ +60/70 GW of RES
▪ Increasing system
complexity
▪ System investments
acceleration needed
GW
10. Energy Scenario and System Strategy
10
System Strategy towards Energy Transition
▪ Increasing installations, through
simplified authorization
procedures and appropriate
incentive mechanisms
▪ Ensuring security of supply,
leveraging technology
▪ Ensuring geographical
consistency of plants location
planning
▪ Implementing new hydroelectric
and electrochemical storage
systems
▪ Managing the overgeneration
and residual load ramps
▪ Providing security of supply
▪ Strengthening of grids and
interconnections
▪ Increasing investments in
voltage regulation devices
▪ Increasing resiliency
INFRASTRUCTURE
DEVELOPMENT
RENEWABLE
INTEGRATION
STORAGE
Develop the infrastructure
needed to enable RES
integration
Address the technology mix and
localization correctly
Identify optimal volumes and
technology mix
2030
▪ Identifying the right mix of
market design that optimally
integrates futures markets and
spot markets, both for energy
and for services
▪ Expanding participation to the
supply of flexibility services and
“new” sources
MARKET DESIGN
Ensure alignment between
effective market development
and energy scenarios
12. 10-year National Development Plan
12
Grid Investments
14.4
18.1
Development
Plan 2020
*Approximately 7.2 GW of currently installed capacity
▪ Investments up by 25% compared to the previous 10-year
Plan
▪ Investments to enable the energy transition and achieve
decarbonization targets set by Europe
▪ Transmission investments considered sustainable
according to the European Taxonomy criteria
▪ Focused on achieving national targets for the integration
of renewables and the phase out of coal*
▪ Increase transport capacity solving grid congestions
▪ Grid rationalization in the main metropolitan areas
▪ Increase foreign interconnections
▪ Increase safety and resiliency of the system
Development
Plan 2021
A Plan to
support the
energy
transition
Green and
sustainable
development
projects
Highest level
of investments
ever for the
Country
€bn
13. 10-year National Development Plan
13
Main ongoing and future projects
Interconnections Grid reinforcements Rationalization of metropolitan areas
EE: entry into operation
SACOI 3
EE 2025-2026
TYRRHENIAN
LINK
ADRIATIC LINK
EE 2028
COLUNGA-CALENZANO
EE 2023
CHIARAMONTE
GULFI-CIMINNA
EE 2026
BISACCIA-DELICETO
EE 2022
ITALY-FRANCE
EE 2022
ITALY-AUSTRIA
EE 2023
ITALY-TUNISIA
EE 2027
MONTEC.-
BENEVENTO
EE 2028
EE 2027-2028
GIGLIO
INTERCONNECTION
NEW BOLANO-
PARADISO
ITALY-GREECE
FAVIGNANA
INTERCONNECTION
INTERCONNECTION WITH
SWITZERLAND
VALCHIAVENNA
RATIONALIZATION
NORTH-BENEVENTO
AREA
MAIN ONGOING PROJECTS MAIN NEW PROJECTS
14. 10-year National Development Plan
14
Benefits for the System
Benefits
for the
system
Grid investments as a key tool for the energy transition, the security of supply and
the reduction of costs for final users
Increasing grid
resiliency
Supporting the gradual closure
of plants with higher emissions
4,600 km
obsolete lines removed
+8 GW
exchange capacity between market zones
+6 GW
foreign interconnections
+40GW
new renewable capacity*
-70%
energy not supplied
-5.6 mn
tonnes of CO2 per year
Source: Terna 2021 Ten-year Development Plan https://www.terna.it/en/electric-system/grid/national-electricity-transmission-grid-development-plan
*In line with the current national target (Integrated National Energy and Climate Plan 2030 targets)
16. Strategy
16
Domestic Regulated Activities
DOMESTIC REGULATED CAPEX1
CAGR2020-2025 7%
RAB EVOLUTION2
7.3
€bn
€bn
22.7
Plan
2021-2025
2022 2025
17.9
Plan
2020-2024
8.9
2021
16.9
1. Excluding EU contributions
2. Calendar RAB including WIP. RAB inflation at 1.3% on average during the plan period
Updated
Plan 2021-2025
9.5
17. Strategy
17
Domestic Regulated Activities
CATEGORY CUMULATED CAPEX MAIN PROJECTS
▪ Tyrrhenian Link
▪ SA.CO.I 3
▪ Voltage regulation
▪ New control and defence system
▪ Infrastructure security
▪ Quality of Service
▪ Quality of Processes
▪ Quality of the environment
▪ Solving grid congestions
▪ RES integration
Strong focus on quality, resiliency, technologies and sustainability
Development
Asset Renewal
and Efficiency
Defence
5.6€bn
2.6€bn
1.3€bn
Note: Including EU contributions; figures may not add up due to rounding
18. Strategy
18
Regulatory milestones and output-based incentives
2022 2023
▪ Set of 2022-2024 WACC at 5%
▪ Introduction of three-year incentive
(2022-2024) for the reduction of
MSD and essentiality costs
▪ Recognition of inter-zonal premia
on finalized 2020 capital light
projects
Possible annual WACC update
according to trigger mechanism
Intra-zonal
incentives
recognition
2024 2025
▪ End of NPR2 and start of ROSS
▪ New regulation for quality of
service and introduction of
incentives for resiliency
WACC 2025-2027 update
based on kd graduality formula
and update of other macro-
economic and fiscal parameters
FOCUS ON OUTPUT-BASED INCENTIVES
Incentives already foreseen
▪ Inter-zonal
▪ Intra-zonal
▪ MSD & essentiality
Potential new incentives
▪ Resiliency
▪ Other incentives for
efficiency
19. Strategy
19
Non Regulated Activities
EBITDA >450 €mn cumulated in 5 years
INDUSTRIAL
CONNECTIVITY
ENERGY SOLUTIONS
DIGITAL
Seizing market opportunities to
create value for the system
▪ Transformers
▪ HV and LMV Cables
▪ Services
▪ Optical Fiber
▪ Housing (IRU)
▪ Service (IRU)
▪ High Voltage (EPC/BOO/O&M)
▪ Smart Grid (EPC/BOO/O&M)
▪ Photovoltaic (EPC/O&M)
▪ Energy Efficiency
▪ Monitoring Housing
▪ Monitoring PV Control
Room
▪ Monitoring Consumption
20. Strategy
20
International Activities
Confirming focus on the
industrial role as
Transmission Operator
based on competences
Enhancing skills in the
development of large
HVDC projects
Enhancing strategic
relationships with key
manufacturers in different
geographical areas
NEW INTERNATIONAL STRATEGY
▪ LatAm valorization
▪ Potential entry into the USA
▪ Consolidation of the European position
Gradual transition
towards other
geographies
21. Strategy
21
Innovation and Digitalization
Technologies clustering takes into
account
Global technology trends
Energy sector peculiarity
Energy transition challenge
Growing focus on digitalization
The Sustainable Development Goals
The context and Terna’s needs
APPROACH TECHNOLOGICAL CLUSTERS
More efficient
and green
technologies
Large-scale
automation
Eco-friendly
materials
Smart digital
solutions to
manage energy
and power
2021-2025 cumulated capex* ~1.2 €bn
*Included in Regulated Capex
22. 2021 – 2025 Group Financial Targets
and Dividend Policy
22
23. 2021 – 2025 Group Financial Targets and Dividend Policy
23
Guidance 2022 and 2025
Increasing growth and value creation
Revenues
EBITDA
Capex1
EPS€cents
10.0
Cumulated 2021-2025
3.08
2.14
45
Guidance
€bn
2.74
1.90
1.7
39
1. Including Regulated, Non Regulated, capitalized financial charges and EU contributions
Note: P&L values restated for International deconsolidation
2,605
1,855
1,521
39.3
FY 2021
Actual
€mn
FY 2022
Guidance
€bn
FY 2025
Guidance
€bn
24. 2021 – 2025 Group Financial Targets and Dividend Policy
24
Dividend Policy
€ cents
CAGR 8%
For 2024 and 2025
the payout ratio is expected to be 75%
with a guaranteed minimum dividend
equal to the 2023 dividend
2021 2022 2023
29.11
25. 2022 – 2025 Group Financial Targets and Dividend Policy
25
Financial Efficiency and Financial Structure
Solid financial structure to support investments acceleration
▪ Gross Debt @ ~91% Fix rate1
▪ Average duration of ~5 years1
FINANCIAL RATING
▪ Net Debt / RAB2
~60% in 2025
▪ Average Cost of Net Debt 2021-2025 @ 1.3%
▪ Strong commitment to maintain current rating level
ESG RATING
▪ S&P Global CSA (Corporate Sustainability
Assessment) score: 89/100
▪ CDP (former Carbon Disclosure Project): A-
▪ Sustainalytics: Low risk
▪ Moody’s ESG Solutions (former Vigeo Eiris):
Advanced
▪ ISS ESG Corporate Rating: Prime
1. As of FY2021. Calculated on medium-long term debt
2. Total Calendar RAB
Rating Outlook Rating Outlook
S&P BBB+ Positive BBB Positive
Moody's Baa2 Stable Baa3 Stable
Scope A- Stable BBB+ Stable
Terna Sovereign
26. 2022 – 2025 Group Financial Targets and Dividend Policy
26
ESG KPIs
TARGET
CAPITAL KPI 2025 2030
Human ▪ % share of women in the company (base year: 2019) 20% 22%
▪ % share of women in the company net of workers (base year: 2019) 25% 27%
▪ Workplace Safety Index for Terna Group’s employees ≤1 ≤1
Social and
Relational
▪ % significant projects joined by stakeholders engagement initiatives
- projects with High electrical priority and capex threshold >50 €mn 100% =
- projects with High electrical priority and capex threshold of 10-50 €mn or with
Medium electrical priority and capex threshold >50 €mn
= 100%
Intellectual % employees trained on ESG subjects = 100%
Natural Yearly CO2 emissions avoided thanks to National Development Plan projects
(equivalent tons)
- 5.6 mn
28. Closing Remarks
28
Reinforcing Terna’s institutional role for the Country
Generating further benefits for the system and confirming of Terna’s
role in driving the current energy transition
Focus on creating sustainable value over time for shareholders and
communities
Guaranteeing low risk profile and financial stability
Ensuring access to a safe, efficient and effective system at the
lowest cost possible
32. Disclaimer
32
THIS DOCUMENT HAS BEEN PREPARED BY TERNA S.P.A. (THE “COMPANY”) FOR THE SOLE PURPOSE DESCRIBED HEREIN. IN NO CASE MAY IT BE INTERPRETED AS AN OFFER OR
INVITATION TO SELL OR PURCHASE ANY SECURITY ISSUED BY THE COMPANY OR ITS SUBSIDIARIES.
THE CONTENT OF THIS DOCUMENT HAS A MERELY INFORMATIVE AND PROVISIONAL NATURE AND THE STATEMENTS CONTAINED HEREIN HAVE NOT BEEN INDEPENDENTLY
VERIFIED. NEITHER THE COMPANY NOR ANY OF ITS REPRESENTATIVES SHALL ACCEPT ANY LIABILITY WHATSOEVER (WHETHER IN NEGLIGENCE OR OTHERWISE) ARISING IN ANY
WAY FROM THE USE OF THIS DOCUMENT OR ITS CONTENTS OR OTHERWISE ARISING IN CONNECTION WITH THIS DOCUMENT OR ANY MATERIAL DISCUSSED DURING THE
PRESENTATION.
THIS DOCUMENT MAY NOT BE REPRODUCED OR REDISTRIBUTED, IN WHOLE OR IN PART, TO ANY OTHER PERSON. THE INFORMATION CONTAINED HEREIN AND OTHER MATERIAL
DISCUSSED AT THE CONFERENCE CALL MAY INCLUDE FORWARD-LOOKING STATEMENTS THAT ARE NOT HISTORICAL FACTS, INCLUDING STATEMENTS ABOUT THE COMPANY’S
BELIEFS AND EXPECTATIONS. THESE STATEMENTS ARE BASED ON CURRENT PLANS, ESTIMATES, PROJECTIONS AND PROJECTS, AND CANNOT BE INTERPRETED AS A PROMISE
OR GUARANTEE OF WHATSOEVER NATURE.
HOWEVER, FORWARD-LOOKING STATEMENTS INVOLVE INHERENT RISKS AND UNCERTAINTIES AND ARE CURRENT ONLY AT THE DATE THEY ARE MADE. WE CAUTION YOU THAT A
NUMBER OF FACTORS COULD CAUSE THE COMPANY’S ACTUAL RESULTS AND PROVISIONS TO DIFFER MATERIALLY FROM THOSE CONTAINED IN ANY FORWARD-LOOKING
STATEMENT. SUCH FACTORS INCLUDE, BUT ARE NOT LIMITED TO: TRENDS IN COMPANY’S BUSINESS, ITS ABILITY TO IMPLEMENT COST-CUTTING PLANS, CHANGES IN THE
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