Foreword by the Chairman of the Board

F O R E W O R D B Y T H E C H A I R M A N

O F T H E B O A R D

The Elia Group achieved solid financial and operational results in 2015. Over the course of the year, it continued to grow as one of the leading players on the European electricity market.

Miriam Maes Chairman of the Board of Elia Group

The Group’s development is characterised by the international activities conducted by both Elia and 50Hertz, particularly at regional European level (Central West Europe and Central East Europe).

In 2015, the Board of Directors appointed Chris Peeters as the new CEO of the Elia Group. Chris took up his post in July 2015 and has moved to continue ongoing projects. He is also working closely with the Board to conduct a more in-depth examination of the Group’s strategic activities and objectives. On behalf of the Board of Directors, I would like to thank François Cornelis, who stepped in as the Group’s interim CEO for the first half of 2015. During his tenure, François served the Group expertly and with the utmost professionalism, ensuring that operations continued uninterrupted. I firmly believe that thanks to the unwavering dedication of its staff, the Elia Group is ideally placed to figure prominently in the energy transition and fully accomplish its role as a transmission system operator in both Belgium and Germany, for the benefit of the community as a whole. All the more so since the agreements signed at the COP21 conference in Paris in December 2015 emphasised the importance of cutting carbon emissions – and thus integrating renewables – for mitigating the impact of climate change. Safety is always Elia’s number-one operational priority, whether in interventions, maintenance or the construction of new electricity infrastructure, and whether the staff concerned are employed by Elia or its subcontractors.

EUROPEAN ENERGY UNION

This year, the Elia Group continued to build new energy transmission structure and consolidate its grid operation activities, with an eye to achieving the three core targets of offering a reliable, affordable and low-carbon electricity system. The ultimate aim of the European energy policy, as formally presented by the European Commission in 2015, is to establish a European Energy Union comprising a model of fully integrated electricity markets and grids, capable of handling increasingly large volumes of renewable energy. The strategy pursued by the Elia Group’s companies dovetails perfectly with this road map. The Group’s developments, such as its major interconnection projects linking Belgium with neighbouring countries or its off-shore electricity grids, demonstrate the international scope of Elia and 50Hertz’s activities.

“I am delighted with the progress made in 2015, not least the launch of the flow-based market coupling system in the Central West Europe region, which is testament to the Group’s commitment to playing a pioneering role in integrating European energy markets.”

ORGANIC GROWTH

The Elia Group’s companies are thus playing an active role in drawing up European grid development plans. Consequently, organic growth remains a top priority for the Group. The opportunities afforded by European policies on energy, climate change and infrastructure are taking the form of ambitious investment plans in Belgium and Germany, intended to upgrade the respective national grids, develop ‘electricity highways’ and establish international interconnections to carry renewable energy from where it is generated to the consumers who will use it. Last but not least, the Elia Group is developing offshore grids in the Baltic Sea and will soon begin a similar project in the North Sea. For these investments to be financed successfully (which will require around five billion euros between now and 2020), the regulatory frameworks in Belgium and Germany must remain stable and there must be a prospect of sufficient return to attract the necessary capital.

THANK YOU

I would like to thank the entire staff of the Elia Group for their professionalism and their devotion. Thanks, too, to my colleagues on the Board of Directors for their support and for the energy they bring to the Elia Group. Finally, the Elia Group is pleased to have the support of its shareholders, the regulators and the federal and regional governments, and we would like to thank them all.

Miriam Maes Chairman of the Board of Elia GroupVALUE CHAIN EXPANSION

The Group’s second strategic objective remains the expansion of our operational activity and the effective integration of renewables (value chain expansion). Elia has taken a number of market facilitation measures and is involved in building both the integrated European market and the European Energy Union. I am delighted with the progress made in 2015, not least the launch of the flow-based market coupling system in the Central West Europe region, which is testament to the Group’s commitment to playing a pioneering role in integrating European energy markets. This development improved price convergence in the region and substantially reduced electricity wholesale prices on some markets. It also highlights the benefits of international cooperation with our colleagues in other countries. The Group also plans to shore up international partnerships between system operators and electricity exchanges by developing new products to integrate new resources – such as demand-side management and storage – into the electricity system. Within the strategic framework of value chain expansion, 2015 was a year of further growth for Elia Grid International (EGI), a 50/50 joint venture between Elia and 50Hertz. This unprecedented initiative will enable maximum benefit to be derived from the two companies’ expertise through offering technical design, procurement management and grid infrastructure construction services abroad. In 2015, EGI worked with several consortia on projects in the Middle East, Chile, Australia and Japan.