Letter from President of the Management Board

We hereby convey to you the ENEA Group’s 2022 ESG Report. In it we depict the efforts we have made to mitigate our environmental impact while simultaneously enhancing our positive impact on our social environment.

As a result of Russia’s military aggression against Ukraine we are undergoing a global energy crisis that directly affects the political, social and economic situation. These tragic war-time events are the source of many challenges for representatives of the power sector. At the same time, the armed conflict being waged on the other side of our eastern frontier has strengthened our determination to counteract this global crisis and strengthen Poland’s sovereignty and energy security through our involvement in transforming the power sector.

The international situation, not just politically but also economically contributed to strengthening and focusing our efforts in 2022 in pursuing our ESG targets. The ENEA Group Development Strategy until 2030 with an outlook to 2040 is our principal frame of reference and it is well aligned with Poland’s energy transition goals. Its execution will enable us to achieve climate neutrality by 2050 while simultaneously constantly growing enterprise value.

The targets laid down in the Strategy affirm that sustainability is reflected in practice in all of our key business activities. We are focused on achieving our economic goals, but this is done while respecting the environment and society. This business model is a source of benefit to our stakeholders in both of these areas. On top of our strategy, the United Nations Sustainable Development Goals inform our efforts. In connection with the profile of our business we are making a particularly substantial contribution to Goals 7, 8 and 9 (Clean and accessible energy, Economic growth and good jobs and Innovation, industry and infrastructure). We are consistently developing our own renewable energy sources, including PV farms in Lików, Jastrów and Lubno. At the same time, we are running tens of projects that will significantly strengthen the potential of our RES in the near future.

In parallel, we are taking action to perform the key task of the nation’s power system involving the construction of offshore wind farms on the Baltic Sea. The installed capacity in our renewable energy sources at the end of 2022 was 449 MW, while our investments in new generation assets are accompanied by the intense pursuit of programs to expand and upgrade the distribution grids that are critical for the long-term development of RES. We estimate that the requisite efforts will involve spending more than PLN 40 billion over the next fifteen or so years.

In 2022, we successfully completed a recapitalization process, raising over PLN 750 million to modernize and build power lines. It is worth emphasizing that at the beginning of 2022, we launched a new cogeneration source in Piła, worth nearly PLN 50 million, based on three gas engines and solar collectors whose operation resulted in a significant reduction of coal consumption in the heating system. We did not stop here. In the upcoming years we will concentrate on investments to develop renewable energy sources and zero emission technology while continuing to modernize and expand the distribution grid. But that is not all.

The construction of a CCGT unit in the Kozienice Power Plant represents one of the ENEA Group’s strategic investments in the process of our company’s rational transition. This unit is slated to replace the coal-fired capacity that has completed its period of service. CCGT power units are a zero emission source of energy strengthening energy security and supporting the generation of energy from RES during the transition phase. Our state-of-the-art installations will be H2 Ready, which means that they will enable green hydrogen co-generation. This is a forward-looking solution based on the use of green hydrogen as an ecological fuel of the future. It will make it possible to reduce our emission levels even further. Moreover, we at ENEA see the future of small and micro nuclear reactors that will operate in the base load of the power system.

The energy crisis precipitated among other things by the war started by Russia is unprecedented. In this challenging time our task is above all to secure the stability of energy supply to our offtakers. We measured up to this task in full. As a socially responsible company we deployed the Government Solidarity Shield whose most significant purpose was to protect Polish citizens against the effects of a dramatic hike in electricity prices. All these efforts were made for Tariff Group G customers, local governments, public institutions and micro, small and medium-sized enterprises to be spared the effects of the energy crisis.

Last year we continued to be involved in the life of local communities. This is extremely important to us in the context of corporate social responsibility, which has been one of the pillars of our Group’s activities for many years. Jointly with the ENEA Foundation we carried out socially beneficial projects and we supported hundreds of campaigns initiated by public entities engaged in the education of children and youth, promoting a healthy lifestyle, health care, culture and the development of associations and local communities.

We are active in developing Polish sports, professional and amateur alike. In 2022, we were the titular sponsor of volleyball and basketball teams and various sporting events, including the ENEA Bydgoszcz Triathlon and ENEA IRONMAN Gdynia. We advanced the sports education of the youngest children as part of the ENEA Academy of Sport. We are involved in supporting crew, table tennis and badminton. Our ambassador is Natalia Partyka, a prominent table tennis player and a participant in multiple Olympic games and a medalist of paralympic games. By supporting various sports disciplines, we intend not to just to continue raising the level of athletic achievement, but also to encourage Poles constantly to take care of their health by improving their physical fitness. Endeavors to promote youth sports play a major role. This is an area in which we have been investing as ENEA continuously for many years. We are aware that healthy habits and consistency in action are qualities that are worth pursuing from the very earliest stages of life. As a Group we also invariably support Polish culture. In 2022 as a patron of the arts we continued our cooperation with the Grand Theater in Poznań, the Musical Theater in Poznań and the Pomeranian Philharmonic in Bydgoszcz. It is also worth emphasizing that we supported the acquisition of works of art for the Royal Castle in Warsaw, which in the past were part of King Stanisław August’s collection. The primary purpose of our involvement in activities related to cultural achievements of past eras is their preservation for future generations of Poles and the protection of Poland’s national heritage as one of the foundations of our identity.

The past year has seen ENEA’S involvement in disseminating knowledge on Sustainability Goals, which has also been possible thanks to our cooperation with United Nations Association Poland. Environmentally-friendly activities were accompanied by drives to plant trees including the ENEA Group’s engaged volunteers. Our employees readily participate in charitable campaigns. In 2022 as part of the project entitled “We Run – Raise – Help” they have covered more than 100,000 kilometers in their daily activities as well as in sports competitions in triathlon, cycling and running. The points awarded for physical activity were allocated to achieve a common goal: to help children in an orphanage. The educational campaign entitled “It’s worthwhile to be honest, we all benefit from that!” deserves special mention among the actions taken to create a friendly working environment. As part of this campaign we raise the awareness of our employees on preventing situations involving corruption and we strengthen the ethical dimension of our organizational culture.

We have not been indifferent in the face of the consequences of Russian aggression in Ukraine. Jointly with the ENEA Foundation we made our recreation and training centers available to refugees searching for safe refuge. In total, we allocated more than PLN 5.5 million last year in the form of aid to Ukrainians and their country at war. Moreover, ENEA Operator, like other Polish energy distributors, has actively joined in the process of rebuilding the Ukrainian power system, which became the target of numerous attacks. The company donated the requisite industrial materials, including cables, wires and accessories to repair damaged power infrastructure. We continue to provide support and we understand that real aid means not just spontaneous activity but providing the long-term support thousands of Ukrainian nationals continue to need.

Thank you for all the efforts we managed to conduct by working together. The ENEA Group consists above all of people who are well aware of how important sustainable growth is. I invite you to peruse this report and work together for the purpose of creating a better future.