Terna’s business model is divided into three separate lines of business (Regulated Activities, Non-regulated Activities and International Activities). These correspond with the core business (Electricity Transmission and Dispatching) and the two complementary deregulated areas of operation, consisting of the design, engineering, operation and maintenance of energy market solutions (Non-regulated Activities) and the development of partnerships and projects with a low risk profile (International Activities).

The capitals represent the key resources at Terna’s disposal to create and preserve value over time through their continual combination and interaction, both within the Company and with the outside world, including in the latter the legitimate needs and expectations of stakeholders. The capitals thus play a key role in the value creation process, representing, at one and the same time, inputs that can be measured from one year to another (on the left side of the infographic), outputs representing the results in terms of the organisation’s products, services, by products and waste (at the centre of the infographic) and outcomes, representing their ability to grow or change or to contribute to the achievement of the objectives set by the Company in its strategic plans (on the right).

For Terna, the United Nations’ Sustainable Development Goals (“SDGs”), forming the heart of the 2030 Agenda, provide a series of benchmark values, with SDGs 7 (Affordable and clean energy), 9 (Industry, innovation and infrastructure) and 13 (Climate action) fully aligned with the Company’s mission and strategic objective of achieving a just transition. SDG 17 (Partnership for the goals), meanwhile, provides further impetus for accelerating delivery of this objective. The SDGs also summarise the coherency of Terna’s value creation process with the aim of delivering sustainable success, the operating results of which are measured through specific indicators referred to throughout the Report.

Terna also strives to achieve SDGs 4 (Quality education), 5 (Gender equality), 8 (Decent work and economic growth), 10 (Reduced inequalities), 11 (Sustainable cities and communities), 12 (Responsible consumption and production), 14 (Life under water), 15 (Life on land) and 16 (Peace, justice and strong institutions).

In recent years, the energy system has become increasingly complex, posing major new challenges for supply chain operators. Development of the National Transmission Grid is clearly necessary to support the energy transition, but on its own the risk is that this may not be sufficient unless accompanied by the progressive development of digital technologies. This opens the way to the concept of a Twin Transition: Energy and Digital. With the new Industrial Plan Terna is ready to meet the challenges posed by this twin transition, with the aim of ensuring a Just Transition that is fair and inclusive for all stakeholders.

The 2024-2028 Industrial Plan provides for total capital expenditure of €16.5 billion, through which Terna will accelerate its commitment to the country’s ecological transition, energy independence and decarbonisation, in keeping with the challenging objectives set in the National Integrated Energy and Climate Plan (“PNIEC”) and the targets in the EU’s Green Deal, which aim to cut greenhouse gas emissions by at least 55% by 2030, compared with 1990 levels.

The Terna Group’s strategy for the five-year period from 2024 to 2028 is based on a unified vision of its role in serving the country and means that the Sustainability Plan, for the first time in the Group’s history, has been fully embedded in the new Industrial Plan.

The structure of the Sustainability Plan has been revised with the aim of enhancing the focus on all the ESG goals – with particular attention given to the circular economy and sustainable supply chain strategies – in keeping with the objectives in the Industrial Plan.

The elements that make up the two threads - Green by Nature and Social by Purpose – thus indicate that, in delivering on its priority goal of achieving a combined energy and digital transition (the Twin Transition), the Company must also take into account the social impacts, raising the Group’s ambition and delivering a Just Transition.

Achieving an energy and digital transition that is both fair and inclusive is thus, at the same time, the priority goal of the 2024-2028 Sustainability Plan and the Plan’s contribution to the Industrial Plan, providing further impetus towards the objective of delivering long-term value and sustainable success.

The Plan is based on four pillars (Energy transition, Sustainable value chain, Creation of share value, Sustainable growth), all defined with a view to delivering the priority goal of a Just Transition and whose content is firmly anchored to the Company’s Purpose and the way in which Terna intends to fulfil its role in leading the country’s fair and inclusive energy transition.

The 2023 Development Plan has been drawn up at a particular time in history when issues surrounding energy provision are even more the focus of attention. In a period of rapid geopolitical upheaval, the energy system is faced with a series of unprecedented and highly ambitious challenges.

Against this backdrop, Terna must design a grid capable of handling progressive decarbonisation and the growing integration of renewables, whilst at the same time the efficiency and security of supply.

The Plan must guarantee the sustainable development of the National Transmission Grid (NTG), by enabling the implementation of RES, and supporting the energy transition and the phase-out of coal. It contains the investments that Terna is committed to carrying out in order to guarantee the efficiency of the grid, the security of supply and of the service and the integration of production from renewable sources, in line with the goals set in the Fit for 55 package and included in the 2022 Scenario Description Document (a 55% cut in CO₂ emissions by 2030 compared with 1990 levels and a share of final consumption met from renewable energy sources of at least 65%).

To achieve these challenging objectives, in addition to the projects previously included in the 2021 Development Plan, the 2023 Development Plan envisages the launch of innovative initiatives as part of the Hypergrid project, amounting to approximately €11 billion, to meet future targets. This marks an increase and acceleration in investment for the benefit of the country, with total capital expenditure over the ten-year life of the Plan from 2023 to 2032 up at an all-time high of over €21 billion.

Hypergrid projects, marking the principal addition to the Plan, are innovative projects that will exploit HVDC technologies to achieve energy transition and security objectives: in brief, Terna aims to carry out a major programme of modernisation of existing power lines forming the country’s eastern and western backbones, extending them to include the southern regions and the islands, accompanied by new 500kV submarine connections. This will boost the lines’ performance, reducing their environmental impact to a minimum and transferring a growing amount of renewable energy generated in southern Italy to areas where demand is highest in the north.