Letter to stakeholders
Dear shareholders and stakeholders,
in recent years, the energy system has undergone a profound transformation. Growing electricity demand, the evolution of the energy mix and geopolitical tensions have brought security of supply and market stability back to the centre of debate. In this context, electricity infrastructure is becoming increasingly central to integrating renewable sources, strengthening countries’ energy independence and supporting the competitiveness of economic systems.
During the same period, energy markets have experienced strong volatility. The geopolitical tensions of recent years have had a major impact on markets and commodity prices. Russia’s invasion of Ukraine in 2022 caused a sharp increase in gas prices in Europe, with peaks of over €300 per MWh in August 2022. Over the last two years, prices have since stabilised at around €40 per MWh in 2025. However, both prices and their volatility remain above pre-crisis levels (€10-15 per MWh), indicating that the market equilibrium is still fragile. The recent conflicts in the Middle East are creating difficulties in the supply of imported fuels, causing volatility and a sharp increase in energy prices.
This situation shows that, alongside environmental and economic sustainability, the issues of energy security and energy independence are more important than ever.
Europe, and Italy to a greater extent, are net importers of traditional fossil fuels. In this context, the main strategy for strengthening security and independence lies in the gradual replacement of energy generated from fossil fuels with energy produced from renewable sources. Renewable energy sources (RES), being local resources, make it possible to reduce the vulnerability of energy prices to international geopolitical pressures. Moreover, the widespread adoption of electricity as an energy carrier would also make it possible to decarbonise sectors that are typically based on conventional fossil fuels – such as transport and heating – while at the same time improving the efficiency of the energy system.
In this scenario, Terna develops and ensures the evolution of the National Transmission Grid, contributing to the country’s energy independence and the security of the electricity system.
The electricity system plays a fundamental strategic role in the energy transition process and Terna, as owner and operator of the National Transmission Grid, is a central player. The initiatives and investments envisaged in the 2024-2028 Industrial Plan update are essential to ensure the integration of renewable energy into the electricity system, as well as to facilitate the transmission of energy from production areas to consumption centres, while at the same time ensuring grid security and stability.
Over the last twenty years, we have witnessed a structural change in the energy generation mix: the share of generation from RES in total domestic output has in fact tripled, rising from 17% to 48%. To date, the installed capacity of wind and solar plants in Italy exceeds 57 GW. Compared to the target set for the 2021-2025 period by the Decree on Suitable Areas of 21 June 2024, the target for new installed capacity has been exceeded by 1.6 GW.
In addition, as of today, 22 GW of plants have already been contracted through mechanisms such as FER1, Agrivoltaics, RES X and Energy Release, and will progressively enter into operation over the coming years.
The integration of energy generated from RES also makes it necessary to develop significant volumes of electricity storage at the same time. In 2025, Italy recorded almost 18 GWh of storage capacity. Over recent years, storage capacity in Italy has grown above all thanks to large utility-scale plants contracted through the Capacity Market mechanism.
In September 2025, Terna held the first MACSE auction, the Mechanism for the Procurement of Electricity Storage Capacity created to ensure the development of storage capacity in a coordinated way with the growth of RES. 10 GWh of storage capacity was awarded, to be operational by 2028. The auction results highlighted strong interest, with bids more than four times higher than demand and a weighted average award price equal to around one third of the reserve premium.
The Italian market is attractive to investors. Indeed, at the end of January 2026 there were more than 300 GW of connection requests from renewable generation plants, a figure six times higher than that required to achieve the NECP targets. Similar considerations also apply to storage plants. Added to these are almost 80 GW of connection requests from data centres, indirectly confirming confidence in the continuity and stability of the national electricity service, as well as in Terna’s ability to execute the investments needed to strengthen the grid.
Managing such a high volume of connection requests requires constant cooperation between Terna and national and local institutions. In this context, the Bollette Decree-Law introduces a series of simplifications that send a positive signal for the future. These include the reform of connections for RES plants and the introduction of a dedicated authorisation process for data centres, which will make the overall connection process more streamlined.
Turning to the implementation of grid infrastructure, in the course of 2025 more than 300 km of electrical connections were completed, designed with the utmost attention to low-environmental-impact solutions. Among the main works were those for the Milan Cortina 2026 Olympic and Paralympic Winter Games, with investment of around €300 million in Lombardy, Trentino-Alto Adige and Veneto. This work was completed in synergy with the Group’s industrial companies, such as the Brugg Cables Group for cable supply. Last year, the Paternò-Pantano-Priolo corridor in Sicily was also completed, helping to improve continuity of service and support the integration of renewable sources. Construction work also began on the Chiaramonte Gulfi-Ciminna electricity connection. In 2025, the authorisation process was also launched for the Sardinian Link, the new electricity connection between Northern and Southern Sardinia, and for the Central Link between Umbria and Tuscany.
With the 2024-2028 Industrial Plan update, Terna has set the highest level of investment in the Group’s history, amounting to €17.7 billion overall, of which €2.7 billion was delivered in 2024 and €3.5 billion in 2025.
By the end of 2025, around 92% of projects had been authorised and around 88% were covered by procurement contracts.
Our investment plan is fully sustainable from a financial standpoint. This strength is recognised by investors and rating agencies. In 2025, in fact, both S&P Global Ratings and Moody’s upgraded Terna’s long-term rating, in the first case from “BBB+” to “A-” and, in the second, from “Baa2” to “Baa1”, both with a stable outlook. These are credit ratings we had not achieved for many years and they reflect Terna’s sound financial profile.
Terna maintains its leadership position in sustainable finance, confirming this strategy, in 2025 the company successfully launched the first €750 million European Green Bond and, in January 2026, an €850 million perpetual hybrid European Green Bond, recording the lowest subordination premium ever.
The year 2025 also marked 20 years of Terna as an independent company and, in February 2026, the company exceeded €20.5 billion in market capitalisation, one of the highest levels in the FTSE MIB, with the share price also rising above €10 per share, its highest level since the June 2004 listing.
Terna’s Industrial Plan is based on the concept of the twin transition, energy and digital, because the former cannot exist without the support of the latter. To this end, the company has allocated €2.4 billion to innovation and digitalisation within its investment plan.
The strengthening of monitoring systems and the development of predictive algorithms make it possible to optimise infrastructure maintenance and improve grid resilience to extreme weather events. Artificial intelligence is used, among other things, to support dispatching in forecasting national electricity demand, generation from renewable sources and the procurement needs for energy reserves. Artificial intelligence is also used in inspections carried out by helicopters and drones for asset monitoring, reducing by up to 60% the time required to process the data collected.
The ongoing transformation of the system also requires high safety standards. To this end, as per 2024-2028 Industrial Plan update, Terna has planned €2.3 billion of investment to increase the security of the National Electricity System. Based on what is set out in the Security Plan, Terna is proceeding with the installation of a series of assets, such as synchronous compensators, STATCOMs, reactors and stabilising resistors, which are essential to ensuring regulation and stability of the electricity system.
As regards innovation activities, within the framework of the open innovation model adopted by Terna, initiatives aimed at consolidating collaborations with national and international ecosystems are continuing. In 2025, three new innovation hubs, the Terna Innovation Zones, were inaugurated: in Tunis, in the Adriatic Region and in Turin. The TSO Innovation Alliance was also established, a collaboration among eight European operators whose main aim is to accelerate innovation for the energy transition.
Terna Energy Solutions S.r.l. (hereinafter also TES), the Group company that manages the market activities and serves as the reference hub for technological, innovative and digital solutions in the energy and industrial fields, was reorganised in 2025 through the integration of diversified expertise along the energy value chain. TES’ new structure enables the Altenia Group – into which the system integrator activities for the energy transition have been transferred – to operate alongside the Tamini Group and the Brugg Cables Group.
Over the medium to long term, Terna’s 2025 Development Plan provides for a total investment programme of over €23 billion in the period 2025-2034 (+10% compared to the previous Plan). By 2030, major strategic works are expected to be completed, such as the Tyrrhenian Link, for which the laying of the first submarine cables of the two links has been completed at a record depth of 2,150 metres, a world record for a high-voltage direct current submarine power line; the Adriatic Link (Marche-Abruzzo); SA.CO.I.3 (Sardinia, Corsica and Tuscany); and the Elmed interconnection, the energy bridge between Italy and Tunisia. By 2034, further infrastructure reinforcements are planned, including the Milan-Montalto HVDC link, the Foggia-Forlì Adriatic Backbone and the Central Link, the Montecorvino-Avellino-Benevento power line and GR.ITA.2 (the first phase of the project). Terna and IPTO signed an MoU in 2025 for the design and construction of the new electricity interconnection between Italy and Greece, which will complement the existing one, in operation since 2002.
A recent independent study highlighted the efficiency of Terna’s investments: the cost per GW of renewables integrated into the grid is half that incurred by the TSOs of Germany, France and the United Kingdom. This difference highlights the efficiency of the Italian model in integrating new renewable capacity, making a competitive contribution to decarbonisation targets in the context of the energy transition.
The National Transmission Grid is also a lever for the economic growth of the country system: according to research by OpenEconomics, every euro invested by Terna generates €1.31 of GDP, with positive effects along the entire supply chain and a significant impact above all in Southern Italy.
The management of the Terna Group’s business is guided by sustainability values and by compliance with ESG (Environmental, Social, Governance) criteria, in line with the ten principles of the United Nations Global Compact, to which the company has adhered since 2009. In these terms, Terna further strengthens its profile through inclusion in some of the main national and international ESG indices, including the MIB ESG and Stoxx Global ESG Leaders indices. According to the eligibility criteria introduced by the European Taxonomy, around 100% of Terna’s investments are considered sustainable.
Fondazione Terna, which began its activities in 2025 was created on the basis that the energy and digital transition has a strong social dimension. In this perspective, the Foundation has chosen to foster greater social inclusion through broader access to the world of energy, in terms of knowledge, awareness and new job opportunities.
To ensure implementation of the Industrial Plan and to broaden the Group’s distinctive capabilities, more than 800 people were hired in 2025, including more than 350 graduates in STEM disciplines, with women accounting for 36% of these hires, excluding operational staff, demonstrating the company’s ability to attract talent. At the end of 2025, the Group’s total workforce stood at 7,117 people, including more than 2,300 professionals holding STEM qualifications and around 26% women, excluding operational staff.
Since people are our Company’s most important asset, it is essential to nurture their potential by developing skills and active engagement in order to address ever more rapid change. Terna promotes activities and training paths aimed at the continuous enhancement of knowledge and skills, with the objective of developing flexibility and the ability to collaborate. Respect and merit are at the heart of Terna’s values. Respect means recognising equal dignity and opportunity for every person, promoting inclusion and responsibility; merit is the criterion guiding performance assessment and career paths. To this end, over the last two years, we have delivered more than 30,000 hours of training on inclusive language and overcoming stereotypes.
Confirming the value and strength of the People strategy, we obtained the Top Employers 2026 certification. At the end of 2025, Terna presented the 2025-2027 Strategic Plan for the Inclusion of Persons with Disabilities, through which the Group confirms its intention to promote an accessible, fair and sustainable organisational model. Inclusive selection and leadership, pay equity, and training and awareness-raising to foster an ever more respectful working environment are at the centre of the 2024-2026 Strategic Plan for Gender Equality.
The Company also helps bridge the gap between the demand for and supply of skills by strengthening the link between education, training and work. To this end, Terna has launched high-level academic programmes, such as the first edition of the second-level Master’s programme PoliTech Lab – in collaboration with the Polytechnics of Bari, Milan and Turin – and the fourth edition of the second-level Master’s programme within the Tyrrhenian Lab project, with the Universities of Cagliari, Palermo and Salerno.
Thanks to the skills and motivation of our people, we enable the transformation of the energy system by strengthening and digitalising the National Transmission Grid with innovative tools that facilitate the integration of renewable energy. By combining execution capability, industrial vision and a sense of responsibility, Terna is making progress in delivering the objectives set for 2030 and contributing to the country’s progress.
in recent years, the energy system has undergone a profound transformation. Growing electricity demand, the evolution of the energy mix and geopolitical tensions have brought security of supply and market stability back to the centre of debate. In this context, electricity infrastructure is becoming increasingly central to integrating renewable sources, strengthening countries’ energy independence and supporting the competitiveness of economic systems.
During the same period, energy markets have experienced strong volatility. The geopolitical tensions of recent years have had a major impact on markets and commodity prices. Russia’s invasion of Ukraine in 2022 caused a sharp increase in gas prices in Europe, with peaks of over €300 per MWh in August 2022. Over the last two years, prices have since stabilised at around €40 per MWh in 2025. However, both prices and their volatility remain above pre-crisis levels (€10-15 per MWh), indicating that the market equilibrium is still fragile. The recent conflicts in the Middle East are creating difficulties in the supply of imported fuels, causing volatility and a sharp increase in energy prices.
This situation shows that, alongside environmental and economic sustainability, the issues of energy security and energy independence are more important than ever.
Europe, and Italy to a greater extent, are net importers of traditional fossil fuels. In this context, the main strategy for strengthening security and independence lies in the gradual replacement of energy generated from fossil fuels with energy produced from renewable sources. Renewable energy sources (RES), being local resources, make it possible to reduce the vulnerability of energy prices to international geopolitical pressures. Moreover, the widespread adoption of electricity as an energy carrier would also make it possible to decarbonise sectors that are typically based on conventional fossil fuels – such as transport and heating – while at the same time improving the efficiency of the energy system.
In this scenario, Terna develops and ensures the evolution of the National Transmission Grid, contributing to the country’s energy independence and the security of the electricity system.
The electricity system plays a fundamental strategic role in the energy transition process and Terna, as owner and operator of the National Transmission Grid, is a central player. The initiatives and investments envisaged in the 2024-2028 Industrial Plan update are essential to ensure the integration of renewable energy into the electricity system, as well as to facilitate the transmission of energy from production areas to consumption centres, while at the same time ensuring grid security and stability.
Over the last twenty years, we have witnessed a structural change in the energy generation mix: the share of generation from RES in total domestic output has in fact tripled, rising from 17% to 48%. To date, the installed capacity of wind and solar plants in Italy exceeds 57 GW. Compared to the target set for the 2021-2025 period by the Decree on Suitable Areas of 21 June 2024, the target for new installed capacity has been exceeded by 1.6 GW.
In addition, as of today, 22 GW of plants have already been contracted through mechanisms such as FER1, Agrivoltaics, RES X and Energy Release, and will progressively enter into operation over the coming years.
The integration of energy generated from RES also makes it necessary to develop significant volumes of electricity storage at the same time. In 2025, Italy recorded almost 18 GWh of storage capacity. Over recent years, storage capacity in Italy has grown above all thanks to large utility-scale plants contracted through the Capacity Market mechanism.
In September 2025, Terna held the first MACSE auction, the Mechanism for the Procurement of Electricity Storage Capacity created to ensure the development of storage capacity in a coordinated way with the growth of RES. 10 GWh of storage capacity was awarded, to be operational by 2028. The auction results highlighted strong interest, with bids more than four times higher than demand and a weighted average award price equal to around one third of the reserve premium.
The Italian market is attractive to investors. Indeed, at the end of January 2026 there were more than 300 GW of connection requests from renewable generation plants, a figure six times higher than that required to achieve the NECP targets. Similar considerations also apply to storage plants. Added to these are almost 80 GW of connection requests from data centres, indirectly confirming confidence in the continuity and stability of the national electricity service, as well as in Terna’s ability to execute the investments needed to strengthen the grid.
Managing such a high volume of connection requests requires constant cooperation between Terna and national and local institutions. In this context, the Bollette Decree-Law introduces a series of simplifications that send a positive signal for the future. These include the reform of connections for RES plants and the introduction of a dedicated authorisation process for data centres, which will make the overall connection process more streamlined.
Turning to the implementation of grid infrastructure, in the course of 2025 more than 300 km of electrical connections were completed, designed with the utmost attention to low-environmental-impact solutions. Among the main works were those for the Milan Cortina 2026 Olympic and Paralympic Winter Games, with investment of around €300 million in Lombardy, Trentino-Alto Adige and Veneto. This work was completed in synergy with the Group’s industrial companies, such as the Brugg Cables Group for cable supply. Last year, the Paternò-Pantano-Priolo corridor in Sicily was also completed, helping to improve continuity of service and support the integration of renewable sources. Construction work also began on the Chiaramonte Gulfi-Ciminna electricity connection. In 2025, the authorisation process was also launched for the Sardinian Link, the new electricity connection between Northern and Southern Sardinia, and for the Central Link between Umbria and Tuscany.
With the 2024-2028 Industrial Plan update, Terna has set the highest level of investment in the Group’s history, amounting to €17.7 billion overall, of which €2.7 billion was delivered in 2024 and €3.5 billion in 2025.
By the end of 2025, around 92% of projects had been authorised and around 88% were covered by procurement contracts.
Our investment plan is fully sustainable from a financial standpoint. This strength is recognised by investors and rating agencies. In 2025, in fact, both S&P Global Ratings and Moody’s upgraded Terna’s long-term rating, in the first case from “BBB+” to “A-” and, in the second, from “Baa2” to “Baa1”, both with a stable outlook. These are credit ratings we had not achieved for many years and they reflect Terna’s sound financial profile.
Terna maintains its leadership position in sustainable finance, confirming this strategy, in 2025 the company successfully launched the first €750 million European Green Bond and, in January 2026, an €850 million perpetual hybrid European Green Bond, recording the lowest subordination premium ever.
The year 2025 also marked 20 years of Terna as an independent company and, in February 2026, the company exceeded €20.5 billion in market capitalisation, one of the highest levels in the FTSE MIB, with the share price also rising above €10 per share, its highest level since the June 2004 listing.
Terna’s Industrial Plan is based on the concept of the twin transition, energy and digital, because the former cannot exist without the support of the latter. To this end, the company has allocated €2.4 billion to innovation and digitalisation within its investment plan.
The strengthening of monitoring systems and the development of predictive algorithms make it possible to optimise infrastructure maintenance and improve grid resilience to extreme weather events. Artificial intelligence is used, among other things, to support dispatching in forecasting national electricity demand, generation from renewable sources and the procurement needs for energy reserves. Artificial intelligence is also used in inspections carried out by helicopters and drones for asset monitoring, reducing by up to 60% the time required to process the data collected.
The ongoing transformation of the system also requires high safety standards. To this end, as per 2024-2028 Industrial Plan update, Terna has planned €2.3 billion of investment to increase the security of the National Electricity System. Based on what is set out in the Security Plan, Terna is proceeding with the installation of a series of assets, such as synchronous compensators, STATCOMs, reactors and stabilising resistors, which are essential to ensuring regulation and stability of the electricity system.
As regards innovation activities, within the framework of the open innovation model adopted by Terna, initiatives aimed at consolidating collaborations with national and international ecosystems are continuing. In 2025, three new innovation hubs, the Terna Innovation Zones, were inaugurated: in Tunis, in the Adriatic Region and in Turin. The TSO Innovation Alliance was also established, a collaboration among eight European operators whose main aim is to accelerate innovation for the energy transition.
Terna Energy Solutions S.r.l. (hereinafter also TES), the Group company that manages the market activities and serves as the reference hub for technological, innovative and digital solutions in the energy and industrial fields, was reorganised in 2025 through the integration of diversified expertise along the energy value chain. TES’ new structure enables the Altenia Group – into which the system integrator activities for the energy transition have been transferred – to operate alongside the Tamini Group and the Brugg Cables Group.
Over the medium to long term, Terna’s 2025 Development Plan provides for a total investment programme of over €23 billion in the period 2025-2034 (+10% compared to the previous Plan). By 2030, major strategic works are expected to be completed, such as the Tyrrhenian Link, for which the laying of the first submarine cables of the two links has been completed at a record depth of 2,150 metres, a world record for a high-voltage direct current submarine power line; the Adriatic Link (Marche-Abruzzo); SA.CO.I.3 (Sardinia, Corsica and Tuscany); and the Elmed interconnection, the energy bridge between Italy and Tunisia. By 2034, further infrastructure reinforcements are planned, including the Milan-Montalto HVDC link, the Foggia-Forlì Adriatic Backbone and the Central Link, the Montecorvino-Avellino-Benevento power line and GR.ITA.2 (the first phase of the project). Terna and IPTO signed an MoU in 2025 for the design and construction of the new electricity interconnection between Italy and Greece, which will complement the existing one, in operation since 2002.
A recent independent study highlighted the efficiency of Terna’s investments: the cost per GW of renewables integrated into the grid is half that incurred by the TSOs of Germany, France and the United Kingdom. This difference highlights the efficiency of the Italian model in integrating new renewable capacity, making a competitive contribution to decarbonisation targets in the context of the energy transition.
The National Transmission Grid is also a lever for the economic growth of the country system: according to research by OpenEconomics, every euro invested by Terna generates €1.31 of GDP, with positive effects along the entire supply chain and a significant impact above all in Southern Italy.
The management of the Terna Group’s business is guided by sustainability values and by compliance with ESG (Environmental, Social, Governance) criteria, in line with the ten principles of the United Nations Global Compact, to which the company has adhered since 2009. In these terms, Terna further strengthens its profile through inclusion in some of the main national and international ESG indices, including the MIB ESG and Stoxx Global ESG Leaders indices. According to the eligibility criteria introduced by the European Taxonomy, around 100% of Terna’s investments are considered sustainable.
Fondazione Terna, which began its activities in 2025 was created on the basis that the energy and digital transition has a strong social dimension. In this perspective, the Foundation has chosen to foster greater social inclusion through broader access to the world of energy, in terms of knowledge, awareness and new job opportunities.
To ensure implementation of the Industrial Plan and to broaden the Group’s distinctive capabilities, more than 800 people were hired in 2025, including more than 350 graduates in STEM disciplines, with women accounting for 36% of these hires, excluding operational staff, demonstrating the company’s ability to attract talent. At the end of 2025, the Group’s total workforce stood at 7,117 people, including more than 2,300 professionals holding STEM qualifications and around 26% women, excluding operational staff.
Since people are our Company’s most important asset, it is essential to nurture their potential by developing skills and active engagement in order to address ever more rapid change. Terna promotes activities and training paths aimed at the continuous enhancement of knowledge and skills, with the objective of developing flexibility and the ability to collaborate. Respect and merit are at the heart of Terna’s values. Respect means recognising equal dignity and opportunity for every person, promoting inclusion and responsibility; merit is the criterion guiding performance assessment and career paths. To this end, over the last two years, we have delivered more than 30,000 hours of training on inclusive language and overcoming stereotypes.
Confirming the value and strength of the People strategy, we obtained the Top Employers 2026 certification. At the end of 2025, Terna presented the 2025-2027 Strategic Plan for the Inclusion of Persons with Disabilities, through which the Group confirms its intention to promote an accessible, fair and sustainable organisational model. Inclusive selection and leadership, pay equity, and training and awareness-raising to foster an ever more respectful working environment are at the centre of the 2024-2026 Strategic Plan for Gender Equality.
The Company also helps bridge the gap between the demand for and supply of skills by strengthening the link between education, training and work. To this end, Terna has launched high-level academic programmes, such as the first edition of the second-level Master’s programme PoliTech Lab – in collaboration with the Polytechnics of Bari, Milan and Turin – and the fourth edition of the second-level Master’s programme within the Tyrrhenian Lab project, with the Universities of Cagliari, Palermo and Salerno.
Thanks to the skills and motivation of our people, we enable the transformation of the energy system by strengthening and digitalising the National Transmission Grid with innovative tools that facilitate the integration of renewable energy. By combining execution capability, industrial vision and a sense of responsibility, Terna is making progress in delivering the objectives set for 2030 and contributing to the country’s progress.
IGOR DE BIASIO
Chairman
GIUSEPPINA DI FOGGIA
Chief Executive Officer and General Manager
