Letter from President of the Management Board TAURON Polska Energia S.A.

The year 2022 will be remembered as a year full of challenges. The biggest of them was the energy crisis caused by Russia’s invasion of Ukraine. The energy sector, which relies on a stable supply of commodities, was hit the hardest. Throughout the year, the uncertainty in the energy market was stabilized by regulations at the national and European level. We did not remain indifferent to the tragedy in Ukraine and supported those in need on many levels, providing material and financial assistance to rebuild the energy infrastructure. Our aid also reached the refugees who needed it the most, including children.

All our actions resulted from our Strategy “TAURON’s Green Turn. Electricity around the clock”, which we announced in June 2022. This document set clear development directions and positioned our company in the process of dynamic changes in the European and global energy sector. In the new strategy, we adopted a sustainable growth path in line with global trends, including the UN Sustainable Development Goals.

The mission of the TAURON Group is to take care of customers and protect the planet. Our main goal is to ensure universal access to reliable and modern energy services at acceptable prices. Our strategy, whose long-term goal is to achieve climate neutrality in 2050, is based on the development of renewable energy sources that will contribute to a significant reduction of CO₂ emissions. As a result of many years of investment in distribution networks and digitalization, we supply almost 6 million customers with electricity and heat without interruption. TAURON’s investments also include the development of renewable energy sources. Our investment program envisages that by 2025, the Group will have renewable energy sources with a total capacity of 1.6 GW, and 3.7 GW by 2030. This will reduce our emission intensity by 80% to 160 kgCO₂/MWh in 2030.

One of the key factors causing changes in the energy sector is the ongoing technological transformation, which introduces digital solutions, digitalization and new IT services that support the activities of TAURON Group companies. These solutions, some of which use artificial intelligence, improve business processes, enable the provision of services that are better suited to the needs of our customers. They also enable the integration of distributed generation sources, better network management and monitoring, and support the improvement of energy efficiency among customers. TAURON implements digital transformation by introducing modern technological solutions that improve customer comfort, security of services and support climate protection.

In 2022, we consistently decarbonized the activities of the TAURON Group. There have been visible changes in our value chain.  At the end of last year, the State Treasury acquired 100% of the shares in TAURON Wydobycie. As a result of this organizational change, the Group will no longer be a coal producer as of 2023. We have another challenge ahead of us: the transfer of coal-fired generation assets to the National Energy Security Agency.

Our organizational culture is built on the foundation of values: Partnership, Development and Boldness, as well as ethical standards and respect for human rights. We are taking steps to minimize the potential negative social impacts associated with the transformation of the energy sector. Transparent dialogue with social stakeholders is important to us.

I would like to reiterate that sustainability issues are very important for our organization. The implementation of the adopted directions will help prevent the negative impacts of our activities and will have a positive effect on the economy, the environment and society. Our priority is to achieve growth in a manner that is complementary to respect for human rights and international action to implement the sustainable development goals.