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The relevance of sustainability to TAURON Capital Group

Strategic activities in the short-, medium- and long-term TAURON Capital Group’s Sustainable Development Goals

Dear Stakeholders,

TAURON Group, like the entire Polish energy sector, is on the verge of enormous systemic changes. These changes will determine the energy security of not only our country but also of the whole Central and Eastern European region. The victory of the Polish economy will depend on how smoothly and quickly we carry out this transformation.

Rising prices for CO2 emission allowances and an increasingly restrictive EU policy leave us no choice. The green transformation of the energy sector is no longer a matter of decision, but the only path we can now follow.

As of 2019, the TAURON Group is implementing the Green Turn strategy. According to its assumptions, by 2030, the Group is to generate 66% of energy from low- and zero-emission sources while reducing CO2 emissions by half. Currently TAURON’s generation portfolio comprises 182 onshore wind turbines with a total capacity of over 380 MW. Along with increasing wind capacity we are also implementing projects to build photovoltaic farms. TAURON’s future includes massive investments in wind, solar and, in the interim period, gas power generation, as well as investments in distribution networks.

We realise that, in the light of the changes over the last year, we already know that the green transformation of the energy sector needs to be made more dynamic. What so far appeared to be ambitious investment goals are no longer sufficient in the era of galloping prices of CO2 emission allowances and increasingly ambitious climate guidelines of the European Union. TAURON therefore faces an extremely demanding and responsible transformation task

Financial and insurance institutions no longer want to finance companies that have coal-fired assets in their mix. Only thanks to the government’s energy transformation programmes related to the separation of coal assets will we have a chance to finance new power plants powered by wind, solar, gas or hydrogen. The government’s plans to spin off conventional generation assets are an opportunity, not a threat, for both employees and TAURON.

The year 2021 is and will be dominated by cost-cutting. This is because it is necessary to reduce the TAURON Group’s debt and forces us to postpone the investment programme. In addition, we are reviewing projects in the Group.

Using EU and national funds, we must create a situation where Polish companies gain from the energy transition. It is of paramount importance that these companies take their rightful place in the value chain – as hubs where modern solutions and technologies are created. I firmly believe that such a scenario is possible. For this to happen, it is necessary to base the transformation of the Polish energy sector on natural gas, as a transitional fuel that will ensure the stability of the national power system in the coming years.

Yours respectfully,

Paweł Strączyński

President of the Management Board

TAURON Polska Energia S.A.