The strategy

With the 2025 Development Plan, Terna is further consolidating its role in serving the country for a sustainable and decarbonised future. The measures planned over the 2025-2034 ten-year horizon, with an investment programme of over €23 billion over the 2025-2034 period (up 10% compared with the previous ten-year Plan) and an overall value, beyond the ten-year horizon, of up to approximately €40 billion, are aimed at ensuring grid efficiency and resilience, sustainability, security and quality of service, as well as the integration of generation from renewable sources.

The new Plan, following the previous 2023 edition, in respect of which the Regulatory Authority for Energy, Networks and the Environment (ARERA) issued a favourable opinion, Opinion 4/2025/I/eel of 14 January 2025, was transmitted to the Ministry of the Environment and Energy Security (MASE) on 27 January 2025, following approval by Terna’s Board of Directors on 21 January, in line with the provisions of Legislative Decree no. 93/2011, as amended by Law 120/2020²⁷.

The Plan is consistent with the 2024 National Integrated Energy and Climate Plan (NECP), with the updated Terna-Snam scenarios (2024 Scenario Description Document, published in October 2024) and with the decarbonisation objectives, which impose new challenges on the electricity sector in line with the forecast of trends in energy needs and demand to be met.

The 2025 Development Plan responds to the country’s infrastructure needs, seeking to define development priorities, i.e. those projects that offer the greatest value for the system, facilitating the investments required for the energy transition. The investments envisaged in the 2025 Development Plan to enable the achievement of system benefits are grouped into the following main categories: NON-RES Connections, RES Connections, Large HVDC and Hypergrid Projects, Interconnections, VHV projects.

These projects serve four main purposes:
• develop enabling and innovative infrastructure to achieve the efficient target capacity to increase transit limits between market sections and maximise energy exchange;
• resolve local congestion, ensuring safe operation within market areas through intra-zonal planning;
• ensure the security of electricity systems and the integration of markets through interconnections, which allow flexible and balanced management of energy resources, facilitating exchanges between national grids;
• manage the huge demand for connecting renewables through innovative solutions such as the definition of a new model – Efficient Territorial Planning (ETP) – with the aim of ensuring efficiency in the implementation of grid works enabling the integration of new resources.

With regard to the latter need, the handling of a large number of connection requests, which have increased more and more in recent years, has caused administrative congestion and authorisation difficulties, as well as higher infrastructure costs due to the potential redundancy of grid works. The magnitude of the phenomenon calls for new variables to be considered in grid management in view of Terna’s regulatory obligation to connect all those who so request to the NTG.

This was the reason for the introduction of the aforementioned new model of Efficient Territorial Planning, adopted by Terna to ensure efficiency in the construction of works enabling the connection of new resources, minimising costs for the system and the impact of infrastructure on the local region. This approach will bring benefits in terms of speeding up the authorisation of works and accelerating the commissioning of new plants, taking into account the smaller grid developments required. This will also lead to a reduction in complexity due to the simplification of the dynamics of the technical meetings, a reduction in overall system costs and a lower local impact of grid works. The ETP will enable integrated and efficient planning of RES Connections, Storage and End Users, including Data Centres, together with grid development measures, and will facilitate the connection process, information sharing and transparency with permitting authorities thanks to the TE.R.R.A. digital portal.

The projects of the Development Plan 2025 pursue the objective of creating synergy with the development works already planned (in the 2023 Development Plan and earlier) and with the existing infrastructure, in order to ensure maximum safety and flexibility of operation. The grid architecture as at 2034 and post-2034 takes into account the synergy between the Hypergrid project and the VHV grid projects already planned, with planned investments of more than €23 billion over the ten-year horizon of 2025-2034.

Below are the main development projects planned for the years 2030, 2034 and post-2034.

It is a very challenging Development Plan but at the same time characterised by solid elements:
• the projects planned for 2030 have already been authorised and some of them are already under construction;
• projects for 2034 have already started authorisation processes;
• those planned for after 2034 are in the works budget conciliation phase.

Confirming the benefits of projects that contribute most to achieving decarbonisation targets and the energy transition, the cost-benefit analysis also demonstrated their full sustainability through robust System Utility Indices (SUI) notwithstanding a challenging environment of rising costs.

In the 2025 Development Plan for the National Transmission Grid, Terna aims to extract more value from existing assets through capital light. These projects based on innovative, low-capital-intensive instruments and solutions, which flank traditional infrastructure initiatives, make it possible to pursue benefits for the grid in terms of increased transit limits between Market Zones, mitigation of intra-zonal congestion, maximisation of RES production and reduction of curtailment, and maximisation and anticipation of the benefits expected from the entry into service of the individual works of the Development projects, including during the intermediate phases.

With the Hypergrid project, Terna has planned a number of new electricity backbones to support the integration of renewable capacity from Southern Italy into the load centres of the North: this is a major modernisation programme involving existing power lines along the peninsula’s Tyrrhenian and Adriatic backbones and towards the islands, also including submarine connections. The project, together with all those planned for the VHV grid and the capital light works included in the 2025 Development Plan, in continuity with the 2023 Development Plan, will make it possible to achieve the EU decarbonisation targets, favouring the connection of the expected renewable energy plants.

In a context characterised by the growing complexity of the energy system, the 2024-2028 Industrial Plan update – Empowering Tomorrow – strengthens the role of the Terna Group as an enabler of the country’s energy transition. The Plan, approved by the Board of Directors on 25 March 2025, leaves the underlying strategic lines unchanged and reinforces the Twin Transition: Energy and Digital concept, deemed crucial for ensuring a fair and inclusive Just Transition for all stakeholders.

The Industrial Plan update provides for total investments of €17.7 billion, in order to achieve the challenging decarbonisation targets set nationally by the National Integrated Energy and Climate Plan (NECP) and, at European level, by the Green Deal targets. The Terna Group’s development activities therefore continue to focus on two strategic lines: Regulated Activities in Italy and Non-Regulated Activities.

Over the course of the Plan, Terna will maintain a sound capital structure, supported by robust cash generation, which will help sustain investment growth and ensure an attractive dividend policy.

Regulated Activities in Italy represent the core business of the Terna Group, with total investment of €16.6 billion, the highest ever (+7% compared with the previous 2024-2028 Industrial Plan), to develop and strengthen the National electricity Transmission Grid. With these investments, the Regulated Asset Base (RAB) will reach around €32 billion in 2028, with a CAGR of 9% over the Plan period.

Investment in the development of the National electricity Transmission Grid amounts to €10.8 billion and is mainly related to:
• the construction of high-voltage direct current lines, to resolve grid congestion, increase transmission capacity between the different market zones, fully integrate renewable sources and improve service quality;
• the construction of submarine cable connections.

The flagship project is the Tyrrhenian Link, the power line that will connect Sardinia, Sicily and Campania, helping to accelerate decisively the development of renewable sources and to improve electricity exchange capacity between the three regions. The other projects include the Adriatic Link, the submarine power line between the Marche and Abruzzo regions; SA.CO.I.3, the interconnector linking Sardinia with Corsica and Tuscany, Elmed, the Italy-Tunisia interconnector, and the 380 kV Chiaramonte Gulfi-Ciminna power line in Sicily.

Further development of interconnections with foreign countries will also increase the reliability and security of the Italian electricity system, consolidating Italy’s role as an electricity hub for Europe and the Mediterranean area.

Investment of €3.6 billion is planned, compared with around €2.9 billion envisaged in the previous Plan, for the rationalisation of existing infrastructure and the replacement of obsolete components. These activities also include digitalisation measures in the transmission grid through the use of new data-driven technologies, the adoption of Artificial Intelligence-based solutions and the use of robotics.

Approximately €2.3 billion, compared with around €1.7 billion envisaged in the previous Plan, will be allocated to the Security Plan, with measures aimed at strengthening and enhancing the technical and technological functions of the electricity system and improving grid resilience. In particular, investments are planned in machinery for system security, as well as in the strengthening of cyber security initiatives and the digitalisation of assets and processes.

Terna stands out for its proven ability to manage projects throughout the entire execution process: from the authorisation phase and relations with local and national authorities, to the engineering, management, financial, organisational and decision-making capabilities that make it possible to complete these complex projects, including the procurement phase.

These capabilities are reflected in the significant progress made in the execution of the main projects: as of December 2025, around 92% of the works had already been authorised and around 88% were already covered by supplier contracts (compared with around 90% and around 80%, respectively, envisaged in the 2024-2028 Industrial Plan update).

During 2025, 38 measures for the development of the National electricity Transmission Grid, for a total amount of around €927 million, were authorised by the Ministry of the Environment and Energy Security and the competent regional departments. The main projects authorised in the year include: the rationalisation of the grid in Brianza Ovest, the new substation at Volpago (Treviso) and the electrification of the quays at the Port of La Spezia, the first project of its kind in Italy. Also included are the reorganisation of Rome’s South-West Quadrant, to improve the efficiency of the Capital’s grid, and the construction of the new substation at Perdasdefogu (Nuoro), to ensure greater resilience in an area subject to frequent snowfall.

The Non-Regulated Activities will continue to generate new business opportunities through the development of innovative and digital technology solutions consistent with Terna’s institutional role.

The markets of reference are undergoing rapid expansion, driven for the most part by trends linked to the energy transition: increased demand for renewable generation plants, the renewal of grids and the growth of new industrial sub-sectors such as data centres and large power consumers. The Group’s Non-Regulated Activities include the following business lines: Equipment; Energy Services; Connectivity; Interconnector.

By leveraging the expertise developed in these areas and using strategic assets, these activities will seize market opportunities, contribute to the achievement of the energy transition creating value both for the Terna Group and for the country.

The Plan includes a series of initiatives designed to fully exploit the portfolio of businesses, introducing optimisation measures to strengthen financial performance and consolidate market leadership. Non-Regulated Activities are expected to make a contribution to the Group’s EBITDA of approximately €730 million cumulatively over the Plan period, against a limited investment commitment and a low risk profile.

For details of operating performance in 2025, please refer to the relevant paragraph in the section “The Terna Group’s operating performance”.

Terna’s people, with their world-leading technical expertise, are a key asset in enabling the Group to achieve the challenging goals the Group has set itself. The People strategy, built on three fundamental pillars, i.e., empowerment, experience and excellence, aims to place people at the centre, promoting their development and wellbeing through empowerment and a mutual commitment to collective growth.

Through its People strategy, Terna fosters a culture of excellence based on merit, respect, and the enhancement of the diversity and uniqueness of individuals.

The central role of the Terna Group’s people is confirmed by the significant acceleration in job creation.
In this regard, the Group has strengthened its commitment to attracting the best talent, setting itself the ambitious goal of growing the company by 1,400 people over the plan period. More than 800 hires were made in 2025.

Attention to people, in line with many other initiatives, must also be reflected in their well-being. The Group strongly believes in management by objectives and supports flexibility and work-life balance.

The increase in the workforce at 31 December 2025 (up 697 employees compared to 31 December 2024) directly reflects the needs arising from the implementation of the challenging investment plan envisaged in the 2024-2028 Industrial Plan update, the acquisition of STE Energy S.r.l. in May 2025 and Rete 2 S.r.l. at the end of September 2025, which resulted in an increase of 140 and 19 employees, respectively, as well as the strengthening of the Group’s distinctive skills.

Digitalisation and innovation are key pillars in managing the growing complexity of the electricity system and achieving the national energy transition targets. The Plan update plans to spend €2.4 billion for digital technology, amounting to approximately 15% of investments in Regulated Activities in Italy, in line with international forecasts and the ambitions of the main European TSOs.
The digital plan aims to further consolidate the importance of digitalisation in supporting the Development Plan, with a series of ambitious initiatives throughout the value chain. These include:
• engineering will introduce software to digitalise the planning of worksites (Building Information Modelling) and optimise the management of contracts, ensuring the on-time delivery of projects;
• dispatching will renew station ICT architecture through the adoption of Substation Automation System (SAS) solutions and develop advanced network forecasting and optimisation models for the safe and economical operation of the National Electricity System;
• asset management will maintain current quality standards by digitising the O&M process using technologies such as digital twin, Internet of Things (IoT) and predictive tools.

Advanced digital solutions will therefore be used to constantly guarantee safety, drive innovation and improve worker efficiency.

Terna strongly believes in the value of innovative ideas and therefore supports start-ups capable of transforming ambitious insights into concrete models and technological tools that can improve the management of the national electricity grid. A grid that, with the increasing integration of renewables, needs increasingly intelligent solutions to ensure stability and efficiency.

Below are the four ambitions that guide every corporate innovation initiative aiming to have an increasing impact on the business through the adoption of Open Innovation approaches:

The Open Innovation model is a strategic lever to support the evolution of the electricity system and promote a fair energy and digital transition. The open, collaborative approach fosters skills and knowledge, enhances the value of pilot projects and accelerates technological adoption. Terna also positions itself as an industrial validator, strengthening its presence and leadership in European and global ecosystems.

Supporting Terna’s Open Innovation strategy is the Terna Ideas³⁰ platform, a meeting space between internal creativity and the external talent of start-ups, researchers, innovative companies and solvers from around the world. Through challenges dedicated to energy-transition themes, the most promising proposals are turned into concrete solutions.

Terna Innovation Zones (TIZs) are outposts and hubs designed to generate value for the electricity system of the future. The first centre was opened in 2024 in Silicon Valley, with the aim of establishing a direct presence in one of the world’s most dynamic innovation environments. The San Francisco Innovation Zone was developed together with the Italian Innovation Centre at INNOVIT, the Consulate General of Italy in San Francisco, and the partner Mind the Bridge. In 2025, Terna continued to expand its national and international network with three new strategic initiatives: on 29 January 2025, another Terna Innovation Zone was inaugurated in Tunis, an initiative closely linked to the Elmed infrastructure project; on 9 September 2025, the Adriatic Innovation Zone headquarters were inaugurated in Ascoli Piceno; and on 1 October 2025, the Terna Innovation Zone Turin was inaugurated, a hub that strengthens the Group’s presence in the main European innovation ecosystems.

Among the strategic initiatives promoted within the Turin hub, the TSO Innovation Alliance stands out. Established in July 2025 through the signing of a Memorandum of Understanding (MoU), it brings together eight of Europe’s largest electricity grid operators to accelerate innovation in support of the energy transition. The common goal is to develop shared solutions to increase grid resilience and efficiency, especially in light of the effects of climate change. The alliance’s first initiative was an open challenge dedicated to the theme “Climate change and grid resilience”. The alliance will also promote annual programmes, open calls for start-ups and joint research and testing activities.

With these new openings, Terna is consolidating an international network spanning the United States, Africa and Europe, strengthening its ability to identify cutting-edge technologies, create synergies between different ecosystems and actively contribute to building an increasingly sustainable, resilient and innovative electricity system. The Terna Innovation Zones are thus confirmed as central tools in the Group’s strategy, serving as meeting points for knowledge, technology and international collaboration.

Through its Corporate Venture Capital vehicle, Terna Forward S.r.l., established in November 2022, the Terna Group supports promising start-ups through strategic investments, encouraging the development of technologies capable of improving the efficiency and resilience of electricity infrastructure. With an approach based on Open Innovation, Terna Forward S.r.l. not only finances the most disruptive initiatives, but also makes its expertise available to accompany them in their growth, contributing concretely to the transformation of the energy system.

During 2025, in addition to the investments pursued indirectly through membership of and active participation in CDP Venture Capital’s Corporate Partners I fund, the Company completed three direct investments in start-ups: Eoliann S.r.l. società benefit, Hibot Corporation³¹ and Hypermeteo S.r.l. Taking these transactions together with the investments made in 2024 (Wesii S.r.l., Melaworks, D-Orbit and Unusuals World), as at 31 December 2025 the total direct investments made by Terna Forward S.r.l. amounted to approximately €7 million.

Terna’s journey in the Twin Transition shows how innovation can become a driver of sustainability. Through these initiatives, the company actively engages in driving change with vision and determination.

As at 31 December 2025, there were 85 titles, including patents, design models and copyrights (including obtained and deposited).

To evaluate the solidity and reliability of Terna’s Industrial Plan and respond to the needs of the Company’s key stakeholders, the Terna Group has adopted a methodology that integrates uncertainty assessment and quantification into the business planning process.

To conduct this activity, the Administration, Finance and Control department uses a tool that assesses the degree to which the Group’s risk profile is compatible with its strategic goals. The identification and quantification of risks and opportunities (uncertainties) is applied to the Terna Group as a whole and requires the direct involvement of all the relevant departments in the form of specific interviews under a bottom-up approach.

The process requires that, once uncertainties have been identified and quantified, they are aggregated using a proprietary Monte Carlo simulation model that, starting from the data collected, generates a large number of alternative scenarios based on likely developments in the variables underlying the Industrial Plan. The methodology thus enables the Company to estimate the overall volatility of the financial targets deriving from the occurrence of key risk events and opportunities and to assess the resilience of the Industrial Plan.

The Terna Group’s strategy for the five-year period from 2024 to 2028, updated in 2025, is based on a unified vision of its role in serving the country and means that the Industrial Plan is fully integrated with the Sustainability Plan, with ESG objectives being given the same priority as industrial and financial objectives. This allows to Terna to guide both its day-to-day actions and its investments for the future: the Sustainability Plan, together with the Industrial Plan, are fundamental building blocks for the full implementation of the Group’s Mission, Vision and Purpose (see page 1).

The two common threads running through both the Sustainability Plan and the Industrial Plan are linked to environmental and social considerations:
• on the one hand, given its role as a TSO with a vital part to play in delivering the energy transition, thus leaving future generations with a carbon-free environment, sustainability is inherent in the very nature of Terna, making it “Green by Nature”;
• on the other hand, Terna’s business activities are carried out within the framework of a solid structure of protections and safeguards aimed at the maximum protection of stakeholders’ rights and demands, with a constant commitment to listening to local communities. As a result, the Group is sustainable also by choice and therefore “Social by purpose”.

Compared with the priority objective of the Industrial Plan, namely the delivery of the Energy and Digital Transition (Twin Transition), these two strands, i.e., Green by Nature and Social by Purpose, point to the need to take social impacts into account as well, in other words to raise the Group’s level of ambition and deliver a Just Transition.

The Plan, which also takes into account the results of the Double Materiality Analysis (see page 186), is structured around four pillars, all serving the priority objective of a Just Transition.

Each pillar is organised into strategic action areas, which in turn are broken down into activities and projects, with a series of qualitative and quantitative objectives supported by measurable short, medium and long-term targets:
• Energy transition: this pillar focuses on the delivery of a transition to a new, more sustainable energy paradigm, based on the use of energy from renewable sources. In addition to a progressive reduction in the carbon footprint and in related CO₂ emissions, there are also considerations on the security and resilience of the National Electricity System and, therefore, of the country’s production and social system;
• Sustainable value chain: this pillar aims to establish a new, increasingly inclusive and sustainable value chain through the adoption of new development models that promote sustainable supply chain management, value creation for Terna’s people, transparency in customer relations and the development of circularity in business practices;
• Shared value creation: the objective of this pillar is to strengthen the business model in terms of sustainability, understood as balancing profit, care for the environment and the consolidation of social license to operate, i.e., engagement with and support for the communities affected by Terna’s presence and activities.
• Sustainable growth: this pillar aims to guarantee sustainable long-term growth through:
- the focus of investments in innovation and digitalisation on the energy transition;
- the development of an open innovation ecosystem;
- the development of new businesses to support growth;
- the strengthening of financing instruments capable of supporting the just transition.

The process for defining the Sustainability Plan involves all company departments, which are called upon both to report on the previous year’s performance and to assess new objectives for the future on the basis of inputs arising from the external context and business developments.

The latest update of the Plan took into account the requirements of the Corporate Sustainability Reporting Directive (CSRD), extending the scope of targets across the Plan period to the whole Group, in line with the consolidated scope required by the legislation. Topics identified as material under the new European Sustainability Reporting Standards (ESRS) were also included. The 2025 update also included objectives linked to the Corporate Sustainability Due Diligence Directive (CSDDD), ensuring an increasingly transparent and structured approach to reporting and managing sustainability impacts along the value chain.

The mechanism for reviewing and updating the Plan includes:
• first, discussion between the Sustainability function and the various company departments;
• subsequently, review by the Board Committee “Sustainability, Governance and Scenarios”.

Monitoring of the Plan is crucial to ensuring that the objectives set are achieved; accordingly, a specific system of procedures and safeguards has been adopted. In particular, an interdepartmental coordination group has been established, responsible for monitoring the Plan and maintaining a continuous exchange of information with the company structures that own the KPIs and the Plan targets, thereby ensuring constant updating and effective management of activities. The main KPIs set out in the Plan are then reported to the board committees on a periodic basis. In January 2026, a workshop dedicated to the Sustainability Plan was held, with the aim of strengthening shared understanding of its contents, implementation and monitoring methods, as well as encouraging discussion among the functions involved. More than one hundred employees from all company departments took part, through a mixed format, both in person and remotely. The workshop alternated framing sessions, contributions focused on indicators and monitoring methods, and group work sessions.

Targets and results of the Plan linked to ESRS policy themes and actions are presented in the Consolidated Sustainability Statement.