Elia Group’s ‘Integrated annual report 2023

Fully charged for change

Electrifying the net-zero movement

TABLE OF CONTENTS

I. Strategic report

"The era of EU funding for fossil fuel infrastructure is over. It is now time to invest in energy infrastructure which is fit for a more flexible, decentralised and digitalised system, where consumers are also producers - and most of our energy comes from renewable sources."

Kadri Simson, European Commissioner for Energy, during the adoption of the European Commission's sixth list of Projects of Common Interest in November 2023

1. Opening interview

Interview with Catherine Vandenborre and Bernard Gustin, Elia Group’s interim CEO and President of the Board of Directors, respectively

We have reached a point of no return

IN TIME, IT WILL LIKELY BECOME CLEAR THAT 2023 WAS A TURNING POINT FOR ELIA GROUP. THE COMPANY CONCLUDED THE YEAR WITH THE ANNOUNCEMENT OF ITS LARGEST INVESTMENT PROGRAMME EVER: €30.1 BILLION. ALONG WITH THE NEW REGULATORY FRAMEWORKS AND UPDATED GRID DEVELOPMENT PLANS FOR BELGIUM AND GERMANY, THIS SETS OUT THE COMPANY’S PATH FOR GROWTH OVER THE NEXT FEW YEARS. ADDITIONALLY, FOR THE FIRST TIME EVER, THE GROUP ENTERED INTO A FIRM AGREEMENT TO ACQUIRE A STAKE IN A U.S. COMPANY. THIS STRATEGIC MOVE IS TRANSFORMING ELIA GROUP INTO A TRULY MULTINATIONAL COMPANY WHOSE RELEVANCE AND VOICE ARE GROWING IN GLOBAL ENERGY DEBATES DUE TO ITS INTERNATIONAL PRESENCE, HIGH OPERATIONAL PERFORMANCE, THE INNOVATIVE NATURE OF ITS PROJECTS AND HIGH-QUALITY STUDIES.

Bernard Gustin: "In 2023, major projects aimed at helping our strategy to materialise started to take shape. I’m thinking most notably of the Princess Elisabeth Island in Belgium and the SuedOstLink in Germany. We also made progress on the new tariff frameworks that cover our regulated activities in Belgium and Germany. This is a crucial element for successfully navigating the energy transition, as it ensures that the necessary financial investments in our grid are feasible."

High interest rates and increasing pressure on supply chains did not make the negotiations easy.

Bernard Gustin: "Indeed. But we have shown that it is possible to agree on a balanced deal with our regulators that reflects the interests of consumers and recognises that a huge and rapid amount of grid development is necessary. Our regulated activities in Belgium and Germany are important pillars for us today. At the same time, we are also positioning ourselves on the international stage. Two years ago, we established WindGrid in order to expand our offshore activities and strengthen Elia Group’s development of sustainable energy solutions. Through the firm agreement that we made to acquire a stake in the American company energyRe Giga, we are now off to a flying start and have taken a step towards being internationally recognised experts in electricity transmission. We have reached a point of no return."

Catherine Vandenborre: “The U.S. partnership we have established could turn out to be a pivotal moment for the Group. Our activity there holds a great deal of potential in terms of further growth and diversification. It will make Elia Group an even more relevant global player in terms of onshore and offshore high-voltage infrastructure. In our home markets, the new regulatory frameworks provide us with structure for our local activities. The profitability that our investors can expect is clearer, but we still need to work on making future conditions evolve so that we can keep delivering the infrastructure society needs and can keep succeeding. In short, our growth strategy was confirmed in 2023; at the same time, new initiatives are shaping our future direction."

Looking back to the start of 2023, did you think that you would be announcing a CAPEX programme of €30.1 billion at the end of the year?

Catherine Vandenborre: “Our investments anticipate the increase in electricity consumption and growth in renewable energy sources (RES) that are expected over the next few years. This increase is due to materialise faster than originally anticipated. The grid development plans in both Belgium and Germany were adjusted following consultations with our governments, local authorities, industry and civil society representatives. Given that the development of high-voltage infrastructure has a long lead time, we must anticipate trends and needs that will only be visible in about 5 to 10 years. If we fail to do so, we will hinder the completion of projects which will benefit industry and help society to quickly decarbonise. The risk of this is real, as demonstrated by the situation in some of our neighbouring countries. For the sake of society’s prosperity, we must absolutely avoid such a situation. At the same time, the electrification of mobility, heating and industrial processes is also offering up many opportunities. In our latest vision paper on flexible electricity consumption, we demonstrate that consumers adjusting their electricity consumption leads to more efficiency and cost reductions. It benefits both the system and consumers.”

Bernard Gustin: “Given our company’s valuation of €8.3 billion, our €30.1 billion investment programme elevates Elia Group into a higher league. Few companies would be able to announce such a large-scale investment plan. Following the adjusted grid development plans, our increased CAPEX programme, and new regulatory frameworks, we have defined the steps we will take to drive the much-needed energy transition forward over the next few years.”

Did the effects of the 2022 energy crisis continue to be felt in 2023?

Catherine Vandenborre: “The effects of the energy crisis were less acute, but we need to remain alert and take action to lower the risk of drastic price peaks. Lower prices today are not guaranteed to remain so in future. Due to geopolitical tensions, it has become crystal clear that energy is of strategic importance for socioeconomic prosperity and sovereignty. At the same time, initiatives like the North Sea summits in Ostend and Esbjerg have demonstrated that Member States and the European Union can quickly take back control of their own fates."

Bernard Gustin: “But let's not be short-sighted. Let's also consider the consequences of not investing in our energy systems. A successful energy transition is about much more than CO2 reductions or energy independence. Today, anchoring our businesses in Europe by reliably supplying them with the most affordable energy possible is also key. Current investments are enabling us to decrease our dependence on fossil fuels, in recognition of the fact that they will either become unavailable or unaffordable in the future.”

"Through the firm agreement that we made to acquire a stake in the American company energyRe Giga, we are now off to a flying start and have taken a step towards being internationally recognised experts in electricity transmission."

"A successful energy transition is about much more than CO2 reductions or energy independence. Today, anchoring our businesses in Europe by reliably supplying them with the most affordable energy possible is also key."

Bernard Gustin

Highlights from 2023

Catherine Vandenborre: “One highlight from 2023 is our firm agreement to acquire a stake in energyRe Giga in the U.S. We will be carrying out our work on another continent, so helping to accelerate the energy transition in a new context. And this will strengthen both our returns and our capabilities in our home markets. A second highlight was, of course, the tour of 50Hertz’s headquarters in Berlin which was undertaken by King Philippe and Queen Mathilde of Belgium and Germany’s president. It was a moment of great recognition for our innovative projects and our strong societal role in terms of solving the major energy challenges of our time.”

Bernard Gustin: “It’s not often that our Royal Highnesses and the German president meet with top Belgian and German CEOs at the headquarters of a Belgian company in Berlin. In addition to Belgium, the Board of Directors considers Germany to be one of the Group's home markets, and Germany’s authorities have shown their appreciation for the Group on numerous occasions. Just as our IPO and our acquisition of 50Hertz were visionary steps that have put us in a unique position in the TSO sector today, our partnership with energyRe Giga will once again add a new dimension to our activities and will make us stronger in Europe and abroad. It demonstrates that, along with the Board, we are delivering on our ambitious strategy."

Catherine Vandenborre: “More generally, I am very proud of our teams in Belgium and Germany and their daily achievements which keep driving the energy transition forward. Every day I see them working enthusiastically on accelerating the implementation of our investment programme, operating our grids, or helping to shape new market mechanisms. The conditions are far from simple. Permitting procedures take a long time, and the supply of equipment and materials is becoming more and more uncertain. Despite this challenging context, our

come

with new ideas every day.”

In November, the European Commission published its EU Action Plan for Grids. Given all the attention devoted to on- and offshore transmission, grid development was an important focal point in 2023.

Catherine Vandenborre: “The need to develop an offshore grid in an integrated manner is becoming increasingly important in order to harvest the potential of our sea basins. We are doing everything we can to accelerate our investments in this regard. High-voltage grids are at the centre of the energy value chain: there is no transition without transmission. Along with the relevant authorities, we are addressing bottlenecks in permitting procedures and discussing ways to make the deployment of grids faster and more efficient. At the same time, we are aiming to secure our supply chains and avoid delays. As a grid operator, we also have a major responsibility to realise investments in the most cost-effective manner possible. Ultimately, the impact on consumers must be a positive one. That's why we are prioritising projects which have the greatest impact on society. In Germany, for example, we are primarily focusing on infrastructure that reduces congestions, the cost of which are borne by German consumers."

Stefan Kapferer, the CEO of 50Hertz, and Catherine Vandenborre give King Philippe of Belgium, Queen Mathilde of Belgium and President Steinmeier a tour of 50Hertz’s headquarters in Berlin.

people

up

Elia Group was involved in almost every major energy debate in 2023: the phasing out of nuclear power, tomorrow’s energy mix, the transformation of our seas into the power plants of the future, the electrification of mobility and industry, etc. That's a lot to carry.

Bernard Gustin: “We can quite humbly say that Elia Group has become a competent and trusted advisor that is often mentioned by players from across the sector. However, sometimes responsibilities are assigned to us during public debates that are not ours to bear. Success also has a downside. I’m thinking here of the debate related to nuclear power in Belgium. We are a listed Group whose reference shareholder is a public shareholder; we carry out regulated activities in Belgium and Germany with a clear societal objective in mind. The energy transition and technological innovations have made electricity grids central societal assets. Add to that our listing on the stock exchange and the fact that we undertake activities in multiple countries and create value via our growth strategy, and you end up with a unique market player.

Catherine Vandenborre: "Energy affects everyone, given its importance for security of supply, affordability and carbon neutrality. As a grid operator which participates in societal debates, we aim to provide a balanced and trusted perspective which is based on fact-based analyses and scenarios. We asked key stakeholders last year to complete a survey about their views of us. They praised both our expertise and publications and gave us some hints about their future expectations."

In 2023, 50Hertz was granted the permits to construct 552 km of new grid infrastructure. That is a clear record. How is Elia Group preparing for this dynamic growth path?

Catherine Vandenborre: “During the energy crisis, it became clear how vulnerable Germany was. In 2022, the federal government chose to rapidly diversify its molecule imports and accelerate the deployment of renewable energy. The country’s latest grid development plan (2037/2045) describes for the first time an electricity grid that is climate neutral. This triggers a huge need for assets to implement all of these investments at short notice. Therefore, we are working with our suppliers to scale their production up. By providing them with sufficient certainty about the long-term perspective and the execution of our projects, they can invest in additional production capacity. Otherwise, new bottlenecks will arise. Additionally, we also need a lot of new and talented staff to execute our projects and maintain our infrastructure once it has been constructed. All these projects also need to be financed. In the future, we will need additional funding sources and a wide range of investors."

How are you keeping the cost of the energy transition affordable, given all of these investments?

Catherine Vandenborre: “Improving efficiency is high on our agenda. Year after year, regulators impose a cost reduction (compared with an agreed reference). We are achieving these cost reductions by focusing on digitalisation and automation and by improving our maintenance activities. We are transitioning from carrying out timebased maintenance to condition-based maintenance. In addition, we also want to make the system more efficient through flexible consumption and encourage customers to use most of their electricity when prices are low. Due to the geopolitical context, more focus has been placed on security as electricity grids are pieces of strategic infrastructure. We are therefore closely collaborating with the relevant authorities.”

"Our investments anticipate the increase in electricity consumption and growth in renewable energy sources that are expected over the next few years. This increase is due to materialise faster than originally anticipated."

"Ultimately, the impact on consumers must be a positive one. That's why we are prioritising projects which have the greatest impact on society."

Catherine Vandenborre

What are you looking forward to in 2024?

Catherine Vandenborre: “An important pillar of our strategy relates to changes to energy market mechanisms so that they are fit for a system which is based on variable renewables. Following the publication of our vision paper about flexible consumption, in 2024 more concrete actions are likely to be taken. We will work on issues such as real-time pricing and launch projects that allow our customers to benefit from offering their flexibility up to the market. While 2023 was a transitional year in terms of flexible consumption, the topic will become more tangible in 2024. It will fundamentally change the way the system is managed, and create value for consumers and for the system. In addition, I am looking forward to making progress on our energy island projects, on the reinforcement of our home countries' backbones, and our activities in the U.S."

Bernard Gustin: “In 2023, our work on expanding our offshore activities outside of our current home markets was made tangible. There is still a lot of work ahead, but with the right partners, we want to grow in the U.S. in a smart way that creates value. As part of this, we will help to de-risk the business with energyRe Giga and maximise the value of our investments. We are also exploring the possibility of achieving more projects than those which are currently part of our portfolio. Furthermore, I am looking forward to our next technological achievements in Belgium and Germany and offshore development in both countries. We are no longer a utility company but a high-tech company. Our engineers are realising incredible projects. The island concepts we have come up with are unique."

1.1. Our integrated reporting journey

2021

2022

2023

We started our <IR> journey in 2021 by adopting an integrated thinking approach and describing how Elia Group generates, preserves and erodes value over time. This entailed making significant changes to the way we communicate about our organisation’s governance model, strategy, business model and performance.

In 2022, we furthered this work by undertaking a double materiality assessment and aligning our climate reporting with the Task Force on Climate-Related Financial Disclosures (TCFD) framework. We also initiated our first Group-wide environmental, social and governance (ESG) external assurance process.

As part of our 2023 annual reporting process, we have incorporated our sustainability and financial reports into one complete Annual Integrated Report. Adopting a proactive approach, we have also begun shifting from ensuring that our reporting is compliant with the Global Reporting Initiative's sustainability reporting framework to ensuring that it is aligned with the European Sustainability Reporting Standards (ESRS). By undertaking a thorough assessment of the latter's requirements, we have developed new reporting processes and introduced additional indicators in line with ESRS guidelines. This has involved alignment across our entities and the establishment of robust data collection processes to ensure transparent communication with our external stakeholders.

In 2024, we will continue to work on being fully aligned with the EU Corporate Sustainability Reporting Directive (CSRD).

Board Approval

The Elia Group Board of Directors applied its collective mind in preparing this report. It acknowledges its responsibility for ensuring its integrity and for its alignment with the <IR> Framework.

Catherine Vandenborre

Bernard Gustin

Note: ‘Elia Group SA/NV’, ‘Elia Transmission Belgium SA/NV’ and ‘50Hertz Transmission GmbH’ are used throughout this document to refer to the legal names of each company, whilst the following are used to refer to their trade names: ‘Elia Group’; ‘Elia Transmission Belgium’ or 'ETB'; and ‘50Hertz Transmission’ or '50Hertz'.

2. Elia Group at a glance

2.1. Who we are & what we do

Elia Group is a unique European company which owns two transmission system operators (TSOs): Elia Transmission Belgium (ETB), which operates in Belgium; and 50Hertz Transmission (50Hertz), which operates in the north and east of Germany. It is through these regulated entities that the Group performs the four core societal tasks below, operates 19,460.5 km of highvoltage power lines and cables, and keeps the lights on for over 30 million end users.

Our unique position and commitment to innovation and collaboration has led us to develop some of the world's first projects of their kind, including the hybrid interconnector that links Germany to Denmark (Kriegers FlakCombined Grid Solution) and Belgium's artificial energy island in the North Sea (the Princess Elisabeth Island). Nemo Link, an interconnector which links Belgium to Great Britain and is subject to its own regulatory system, is one of the highest performing HVDC subsea interconnectors across the globe.

We harness the expertise and experience we have gained in Belgium and Germany and apply it via our non-regulated entities. These have secured our position as a truly international energy company and will allow us to keep growing and diversifying our value chain.

19,460.5 km of high-voltage power lines and cables

GRID MANAGEMENT SYSTEM OPERATIONS

MARKET FACILITATION

TRUSTEESHIP

Regulated activities Non-regulated activities

ETB is the Belgian TSO for high-voltage (30 kV to 70 kV) and extra-high-voltage (110 kV to 380 kV) electricity. It has a natural monopoly as the country’s only TSO and is driving its energy transition. ETB's grid, which lies at the heart of Europe’s energy system, is highly interconnected. As demonstrated by its work on the world’s first artificial energy island - the Princess Elisabeth Island - the company is a front-runner in offshore energy development. ETB’s strategic focus is on getting ready for a 50% increase in electricity consumption across its control area by 2032.

Elia Grid International (EGI) is an international engineering consultancy company which specialises in addressing complex power system challenges. Its multidisciplinary team of experts offers strategic, technical and regulatory advice in all fields related to on- and offshore power transmission, as well as a range of specialist solutions. EGI is able to harness the expertise of ETB and 50Hertz, each with a solid track record in delivering high-quality projects over many decades. Its clients comprise TSOs, regulators, public authorities and private developers which are primarily located in Europe, the Middle East, Southeast Asia and North America.

50Hertz is a TSO which holds a natural monopoly in the north and east of Germany. It is a crucial player in the realisation of the German energy transition. Its extra-high-voltage grid (150 kV, 220 kV and 380 kV) covers seven states, including the city states of Berlin and Hamburg, and serves 18 million people. 50Hertz also connects wind farms located in the Baltic Sea to its onshore grid; its projects will soon stretch to the North Sea, too. Its strategic focus is on ensuring that 100% of electricity consumption across its control area is met by green electricity by 2032.

WindGrid focuses on the development of international offshore electricity transmission solutions. It does this by leveraging the Group’s expertise and experience and supporting partners to connect offshore wind farms to onshore grids. WindGrid is contributing to the acceleration of the energy transition across the globe and maintaining the Group’s relevance in the long term. At the end of 2023, WindGrid entered into a firm agreement to acquire a 35.1% stake in energyRe Giga, a clean energy company in the U.S.

The Nemo Link interconnector is a joint venture between ETB and National Grid Interconnector Holdings Limited, a subsidiary of the British electricity and gas utility company National Grid Plc. Commissioned in January 2019, Nemo Link was the first HVDC subsea interconnector to link Belgium to Great Britain and it adheres to its own cap and floor regulation. Its cables have a voltage of ~400 kV and it allows the trade of up to 1,012 MW of electricity between both countries.

re.alto is a European marketplace dedicated to the exchange of energy data and services. The start-up enables the exchange of energy data through its innovative Application Programming Interface (API) platform. In doing so, it is supporting the energy sector to move towards a more widespread adoption of energy-as-a-service business models, ultimately encouraging the establishment of a consumer-centric energy sector and a low-carbon society.

2.2. Legal structure

*National Grid owns 50% of Nemo Link

**KFW holds 20% of Eurogrid GmbH

***WindGrid USA LLC holds 35.1% of energyRe Giga (closing February 2024)

Shareholder structure

21.8% of outstanding shares are held by institutional investors 47.0% of institutional shares are held by ESG focused funds

2.3. Key figures

Financial key performance indicators

€324.5 million

Net profit Elia Group share

€4.4 / per share

Earnings per share

6.9% ROE (adj.)

BBB / stable outlook

S&P financial rating (Group)

€12.2 billion RAB

€711.3 million

Total investments (CAPEX) in Belgium

€1,685.9 million

Total investments (CAPEX) in Germany

Non-financial key performance indicators

3,473

Number of employees

820

Number of female employees

157

Public information sessions related to grid projects

14.8 / low risk

Non-financial rating / Sustainalytics risk rating (Group)

53

Number of nationalities represented by our staff

3.9% Absenteeism rate

99.5%

EU Taxonomy aligned CAPEX

>99%

Grid reliability (resilience)

943.9 kt CO2e

Scope 1 emissions & Scope 2 emissions

Current target: well below 2 degrees trajectory (-28% absolute reduction of scopes 1 and 2 by 2030)

2.4. Key projects 2024-2028 Belgium

TritonLink Nautilus

Princess

Elisabeth Island

Nemo Link

Interconnectors

Projects to be defined

Projects to be realised

Existing lines

MOG 1

Borssele France Germany

Izegem

TritonLink

Horta

GENT

Doel Zandvliet

Massenhoven ANTWERP

Bruegel

André Dumont Heze

Meerhout

Bruegel

BRUSSELS

Drogenbos Avelgem

Courcelles Lixhe

Stevin Van Maerland Gezelle Villeroux Aubange

CHARLEROI LIEGE Lint Lillo Van Eyck

Gramme Rimière

BE – DE II

Tergnée Champion Achene Brume

The Netherlands Luxembourg

In May 2023, the Belgian government approved ETB's Federal Development Plan for 2024-2034. The rise in RES as well as the extensive electrification of mobility and heating have created emergencies that require additional investments to be made in the grid.

Over the period 2024-2028, ETB will invest €9.4 billion in its onshore and offshore infrastructure. These investments will aim to reinforce the grid's internal backbone, further integrate Belgium into the European electricity system through interconnectors, and prepare the system for the integration of rising amounts of renewable energy.

Moreover, the Ventilus and Boucle du Hainaut projects will increase the grid's capacity, ensuring that large amounts of offshore energy can be integrated into the system and transported across the country.

A significant portion of the investment budget will be allocated to the maintenance and reinforcement of existing infrastructure. Indeed, ETB continuously reinforces its 380 kV high-voltage grid, upgrading existing corridors and strengthening its exchange of electricity with neighbouring countries. For example, the Brabo project will enhance electricity transmission and will make it easier for Belgium to trade power with the Netherlands.

Key projects include those in the map on the left. One leading project is the Princess Elisabeth Island - an artificial energy island which will connect offshore wind farms to the mainland and will serve as a landing point for hybrid interconnectors with the UK (Nautilus) and Denmark (TritonLink), making it a crucial step in the establishment of an offshore energy hub in the North Sea.

NOR-11-1

NOR-12-3

NOR-x-3

NOR-x-9

NOR-x-12

*Grid Development Plan

Ost-x-2

Ost-x-1

HansaPowerBridge1&2

Gennaker

NordOstLink (DC31/DC32)

SuedOstLink+

SuedWestLink(DC42/DC42+)

OstWestLink(DC40/DC40+)

SuedOstLink

Bornholm Energy Island

Ost-x-3

Ost-x-4

Ostwind 3

GDP* 2035 projects

New projects from GDP* 2037/45

Responsibility of other TSO.

Germany

As Germany's electricity consumption is due to double by 2045, 50Hertz is working on bolstering the country's energy infrastructure in line with the government's ambitious climate neutrality targets. 50Hertz has therefore announced a CAPEX plan of €20.7 billion for the period 2024 to 2028. It will use this to fund its onshore and offshore projects, both in the North Sea and Baltic Sea.

One of 50Hertz's areas of focus lies in connecting offshore wind farms in the Baltic Sea to its onshore transmission grid through projects such as Ostwind 2, Ostwind 3, Ostwind 4, and OST-6-1.

Along with TenneT, 50Hertz is also working on the development of the North Sea Connector project. This is aimed at connecting two North Sea wind farms (2 GW each) to the German power grid by 2030.

Furthermore, 50Hertz will transform Bornholm Island into an energy hub with Energinet (Denmark). This hub will allow electricity to be traded between both countries, including green electricity generated by two Danish offshore wind farms.

Moreover, the SuedOstLink and SuedOstLink+ projects will act as HVDC corridors that will transport renewable energy from the north and east of Germany to load centres in the south. The SuedOstLink+ will double the capacity of the SuedOstLink route to 4 GW by extending it to the North.

In addition to building the grid of the future - a more powerful grid which will have a transmission capacity that is five times higher than today's - 50Hertz is adapting its current assets and sites, ensuring that its grid is climate resilient and prepared for dealing with and recovering from possible climate disasters.

2.5. Highlights

Island design materialises

In February, ETB awarded the engineering, procurement, construction and installation contract for the Princess Elisabeth Island to DEME and Jan De Nul, two global players in offshore construction. The world’s first artificial energy island will unlock offshore wind power in Belgium’s second planned offshore wind zone (3.5 GW) and serve as the landing point for future interconnectors.

In November, 50Hertz and the Danish TSO Energinet started the tendering process for key technologies linked to their joint Bornholm Energy Island project. The latter will centralise the electricity generated by nearby offshore wind farms before it is transported to onshore substations in Denmark and Germany.

Further integration of the EU electricity market

In February, during the Belgian-German energy summit in Zeebrugge, ETB signed an MoU relating to a second interconnector with Germany. ETB is also assessing the economic and technical feasibility of other interconnectors that would link its grid to TenneT’s grid in the Netherlands and Statnett’s grid in Norway.

During the Baltic Offshore Wind Forum in May, 50Hertz and its counterparts from Estonia, Latvia and Lithuania agreed to strengthen their cooperation. Via a letter of intent, 50Hertz and Elering (Estonia) agreed to work on a joint hybrid subsea cable project called the Baltic WindConnector.

SuedOstLink project kicks off in Germany

In March, a key milestone was reached as part of the SuedOstLink project: a groundbreaking ceremony was held at the Wolmirstedt substation near Magdeburg, marking the first day of construction work related to one of the SuedOstLink’s converter stations. Robert Habeck, the German Vice Chancellor, was among the guests of honour at the ceremony. Once completed, the SuedOstLink will serve as a 540 km European electricity highway, meaning it is a key project for the German energy transition. 50Hertz and TenneT are building the HVDC underground connection together.

Official partner of second North Sea Summit

In April, Belgium hosted the second North Sea Summit in Ostend, which brought together the heads of state and government and energy ministers from 9 countries, along with the President of the European Commission, Ursula von der Leyen. The aim of the summit was to shape concrete proposals relating to the development of the North Seas as Europe’s future sustainable power plant. Representatives from ETB and 50Hertz took part in several roundtable discussions and signed the ‘Offshore Renewable Industry Declaration’, which had been prepared ahead of the event.

Grid development plans address urgent needs

In May, the Belgian government approved the Federal Development Plan for 2024-2034. The rise in RES as well as the extensive electrification of the mobility and heating sectors have created emergencies that require additional investments to be made in the grid.

The German Grid Development Plan 2037-2045 is one of the main drivers behind 50Hertz’s revised CAPEX plan. The draft plan, published in March, describes for the first time an electricity grid that can help Germany to achieve climate neutrality by 2045. It assumes a five-fold increase in renewable installed capacity: up to 700 GW by 2045. One of its big developments is that 50Hertz will expand its operations so that they cover the German North Sea. The second draft of the plan has been submitted for public consultation and is due to be finalised at the start of 2024.

Long-term framework agreement relating to 3,500 km of cables

In September, 50Hertz signed project and framework contracts with NKT and Prysmian Group. These cover the production and installation of subsea and land cables that carry a total length of 3,500 km, and include a provision for an additional 2,700 km to be produced and installed. These contracts, which amount to a massive €4.6 billion, are groundbreaking. Global supply chains are under significant pressure due to the extensive investment plans of numerous European TSOs and other industries. 50Hertz has therefore adopted a proactive approach to sourcing the supplies it needs in order to guarantee the timely execution of its projects.

Nature inclusive design

In November, ETB presented its nature inclusive design approach for the construction of the Princess Elisabeth Island, which will boost biodiversity around the future artificial island. In consultation with nature conservation and marine environment experts, ETB selected seven concrete measures to pursue, based on their technical feasibility and expected positive impact. In adopting this approach, ETB aims to set the standard for the sustainable construction of future offshore infrastructure. By embedding biodiversityenhancing measures into the design and construction of offshore infrastructure, ETB is aiming to expand and accelerate the positive impacts of its assets and inspire developers to undertake similar initiatives as part of their own projects.

Electricity transmission tariffs approved

The Belgian regulator (the Commission for Electricity and Gas Regulation, or CREG) has approved the adapted tariff proposal submitted by ETB for the 2024-2027 regulatory period. The tariffs express ETB's desire to ensure it has the resources it needs to facilitate the energy transition and, more specifically, carry out its investment programme. In Germany, regulatory discussions have been constructive, resulting in revised returns for new investments. The German regulator (Federal Network Agency, or BNetzA) has acknowledged the importance of having an investment-friendly regulatory framework that can attract funding. For Germany, achieving energy sovereignty and climate neutrality by 2045 is of paramount importance.

First investment for WindGrid in the U.S.

In December, Elia Group entered into a firm agreement to acquire a 35.1% stake in energyRe Giga, a clean energy company in the U.S., via WindGrid. The acquisition, which amounts to $400 million, suits Elia Group’s international growth strategy and aim to support the development of transmission infrastructure that contributes to sustainable energy solutions.

energyRe Giga brings local expertise to the partnership and has a strong portfolio of near-term projects in the pipeline. It operates in a robust regulatory environment: the U.S. is undergoing a remarkable shift towards sustainability, supported by a wide range of incentives and a robust framework.

2.6. Trends in electricity generation & consumption

Generation

ETB in Belgium

In Belgium, renewable energy generation reached an all-time high in 2023 as wind and photovoltaic generation combined (two sources with complementary generation patterns) accounted for 28.2% of the country's electricity mix. A new monthly record was set in July, with Belgian wind farms and solar panels covering almost 35% of the nation's energy consumption.

Belgium's nuclear reactors maintained a high level of availability throughout the year, with nuclear power making up 41.3% of the country's electricity mix. By contrast, the share of gasfired generation dwindled to 25.2% - a historically low percentage. This decline was due to the rise in renewable energy, surging gas prices, and increased imports.

50Hertz in Germany

In Germany, renewable energy generation – particularly in terms of wind power - increased significantly in the last quarter of 2023 due to a rise in the number of RES across the country. The amount of solar power generated throughout the year remained constant, with a higher number of solar power sources compensating for the lower amounts of sunshine present. Coal’s contribution to the country’s energy mix declined due to higher prices and increased emission fees, and both imports and renewables replaced its use.

Consumption

ETB in Belgium

In 2023, Belgium's electricity consumption stood at 78.9 TWh, 3.5% lower than in 2022 - a historically low level overall. Despite a sharp decline in electricity prices during the year, they remained relatively high due to international developments, leading to a reduction in electricity consumption. However, this downward trend is temporary, as a significant surge in consumption is anticipated in the coming years, driven by the rapid electrification of industrial processes and a substantial growth in the ownership of electric vehicles and heat pumps. ETB is expecting electricity consumption across its control zone to increase by 50% by 2032.

50Hertz in Germany

Electricity consumption across 50Hertz's area declined throughout 2023 for the second year in a row, before plateauing in October. This decrease may have been due to the introduction of energy efficiency measures by the German government, or due to the country's industrial sector grappling with high energy prices. Electricity produced from RES made up 72% of the electricity consumption across the 50Hertz area.

Annual changes in renewable electricity consumption across our control areas*

Unit: TWh

72% of total consumption from across 50Hertz area came from RES

*according to the ENTSO-E category and scope of renewable sources

2.7. Installed capacity across our control areas

ETB in Belgium*

*in line with ENTSO-E category and scope of renewable sources

**status as of 31.12.2023 (calculated in January 2024 / source: MaStr Renewable Energies)

50Hertz in Germany**

2.8. Electricity imports & exports

Interconnectors enable the trading of electricity across national borders, so enhancing security of supply and levelling out price disparities between distinct markets. They facilitate the growing incorporation of renewable energy into the system by enabling the exchange of surplus green energy across borders. Interconnectors therefore play a pivotal role in the establishment of an interconnected European electricity grid and market, thereby aiding the EU to attain its energy and climate goals.

ETB's grid area

grid area

50Hertz's grid area

Total exports in 2023: 17.5 TWh

Total imports in 2023: 20.3 TWh

Net imports in 2023: 2.8 TWh

In 2023, due to diminished nuclear injection capacity, Belgium became a net importer of electricity for the first time since 2018.

50Hertz grid area

Total exports in 2023: 62.1 TWh

Total imports in 2023: 22.3 TWh

Net exports in 2023: 39.8 TWh

3. Elia Group in a rapidly evolving environment

3.1. Stepping stones on Europe's path to net zero

European Green Deal, European Commission

Fit for 55 package, European Commission REPowerEU Plan, European Commission

Corporate Sustainability Reporting Directive, European Parliament and Council

Baltic Sea Energy Security Summit, Marienborg

Green Deal Industrial Plan, European Commission

3.2. The four megatrends

OUR ACTIVITIES AND ABILITY TO CREATE VALUE OVER THE SHORT, MEDIUM AND LONG TERM ARE HEAVILY INFLUENCED BY THE CONTEXTS WE OPERATE IN, INCLUDING EUROPEAN AND NATIONAL TARGETS AND THE MEGATRENDS IN THE ENERGY SECTOR: DECARBONISATION AND ELECTRIFICATION; FLEXIBLE ELECTRICITY CONSUMPTION; SECTOR CONVERGENCE AND NEW TECHNOLOGIES; AND INCREASING INTERNATIONAL COOPERATION.

MEGATREND 1

Decarbonisation and electrification

Accelerating the energy transition is now widely understood to be more than just beneficial for the climate. The Russian invasion of Ukraine in 2022 and energy crisis have taught Europe that access to renewable energy and electrification offer long-term price stability and protect against inflation in the gas and electricity markets. Europe has continued to raise its climate ambitions, triggering changes on both the supply and demand side of the electricity system.

Key developments relating to Europe’s energy supplies have built on the European Green Deal (2019), which aims to make Europe the first climate-neutral continent, and the related Fit for 55 package (2021). These were swiftly followed by the publication of the European Commission’s REPowerEU Plan in May 2022. Aiming to reduce Europe’s dependence on Russian fossil fuels, the latter focuses on the diversification of Europe’s energy supplies, energy saving measures and increasing clean power. Member States have responded via different fora, including by committing to transforming the North Seas into Europe’s green power plant during the two North Sea Summits in Esbjerg (2022) and Ostend (2023); pledging to harness the renewable potential of the sea during the Baltic Sea Energy Security Summit (2022); and strengthening regional cooperation during the Baltic Offshore Wind Forum (2023). Four additional moments stood out in 2023 with regards to delivering the European Green Deal.

• In February 2023, the Green Deal Industrial Plan was published, which aims to provide a more favourable environment for scaling up the EU’s manufacturing capacity related to net zero technologies and products.

• In October 2023, the European Commission published its Wind Power Action Plan, which aims to ensure the success of Europe’s wind energy industry through measures such as an improved auction design, the faster deployment of projects, access to finance and the development of a skilled workforce.

• In November 2023, the EU Action Plan for Grids was published. This aims to address the main challenges in expanding, digitalising and using Europe’s grids and aims to ensure grids are rolled out faster, further and operate more efficiently. Measures outlined in the plan include stimulating faster permitting procedures for grid projects, improving and securing supply chains, and introducing regulatory incentives related to cost sharing for offshore projects.

• In December 2023, the Council and Parliament reached a provisional agreement regarding the reform of the electricity market design. The latter aims to reduce the dependence of electricity prices on fossil fuel prices, shield consumers from price spikes, and accelerate the deployment of renewable energy.

Member States will need to continue to proactively build grid infrastructure to avoid stranded renewable generation assets, invest in long-distance electricity transmission to connect remote RES to their grids, and connect areas that have complementary production patterns together.

Our response to accelerated decarbonisation and electrification

Throughout 2023:

• we made good progress on projects that will integrate higher amounts of renewable energy into the system, including the Princess Elisabeth Island, Ostwind 2 in the Baltic Sea, the SuedOstLink, and the NordOstLink;

• ETB developed and published the Belgian Federal Development Plan (2024-2034), whilst 50Hertz (alongside Germany’s three other TSOs) contributed to the development of the German Grid Development Plan 2037/45, which is due to be finalised at the beginning of 2024. These plans outline the investments that need to be made in each of their countries’ grids;

• we published ETB’s fourth biennial Adequacy and Flexibility study for Belgium (2024-2034), which outlines that any delays in the construction of the planned grid infrastructure or the unlocking of flexibility from across the system will result in additional capacity needs. It also highlights that investing in digitalisation will ensure that security of supply can be facilitated in the most costefficient way possible.

Risks and opportunities

The execution of our business plan and completion of our projects on time, within budget and to a high standard depend on access to funding and supply chains, and need permitting processes both in Germany and Belgium to be sped up. Hiring the right staff with the right skills in offshore development, HVDC systems and digitalisation will be crucial for our success over the coming years. Our proactive approach to grid development means we can stay ahead of the demand for electrification and are supporting economic development in Belgium and Germany. In turn, this strengthens our reputation, which will lead to further growth opportunities. See ‘Features of the Group’s internal control and risk management system’.

MEGATREND 2 Flexible electricity consumption

The rising number of electric cars and heat pumps, alongside the electrification of industrial processes, demonstrate that electrification is spreading across society both earlier and at a faster rate than anticipated. This process must be properly managed in order to maintain the stability and efficiency of the system – in particular by making use of the value that these new electrical devices carry.

The time at which such devices are charged or plugged in can be shifted. By being able to consume electricity in a flexible way, households and industry can take control of their consumption and bills. They will be able to avoid costly price peaks by mainly consuming electricity when there is lots of sunshine or wind available, and (cheaper) green electricity is abundant.

Flexible consumption will go beyond benefitting consumers: it will help to flatten consumption peaks and manage the variability of renewable energy. It will therefore contribute to security of supply, control system costs and will play an important role in reducing capacity needs linked to the rising demand for electricity. Whilst households are flexibility novices, industrial players have historically provided flexibility for the grid via ancillary services. It is the nature of their flexibility which

will therefore change: much broader opportunities will be offered up for industry on electricity markets, provided that the latter are properly developed. To unlock this flexibility from across the system, consumers will need to have access to devices which carry the required features and will need to be provided with financial incentives that reward flexible consumption. Additionally, seamless data access, allowing near real-time data to be shared with different market actors, will be required. In turn, system operators will be able to efficiently manage the grid and existing and new energy service providers will be able to offer better products and incentives to their customers - allowing consumers to monetise their flexibility and lower their electricity costs.

Our response to flexible electricity consumption

Throughout 2023:

• we focused on flexibility as the theme both of our annual stakeholder event in March and our annual viewpoint, which was published in November and explores barriers that lie in the way of unlocking flexibility across the energy system;

• we furthered work on projects that aim to encourage the provision of consumer flexibility, including by launching our Watts.Happening simulation tool – which provides companies with information about their flexibility options;

• we partnered up with Powerledger, a technology solutions provider for renewable energy trading, to explore the potential held in peer-to-peer energy trading.

Risks and opportunities

Flex-ready devices, policy changes, seamless data access and the provision of energy services by third parties will need to be in place for consumers at the right time so that they can help to balance the grid. However, this trend is allowing us to expand and strengthen the partnerships we hold with players from across the energy value chain. Successfully empowering consumers and industry to valorise their flexibility will carry great rewards: they will further the energy transition. See ‘Features of the Group’s internal control and risk management system’.

MEGATREND 3 Sector convergence and new technologies

The development of new technologies and digitalisation has led to the power sector being increasingly coupled with other sectors, such as heating, transport and industry. The owners of flexible appliances like heat pumps, electric vehicles and small batteries can be encouraged to shift their electricity consumption in time, so contributing to a more efficient operation of the system.

The rise of new technologies that are used for monitoring and maintenance purposes is also contributing to system efficiency. The internet of things and artificial intelligence are leading to the establishment of smart grids (which can be monitored on a continuous basis), automatic decisionmaking and enhanced risk prediction and incident analysis. The use of blockchain for digital identities is enabling the trading of energy between different parties and the tracking of green energy from source to consumer.

Access to the right data and using it as part of real-time decision-making will be necessary for managing this more complex electricity system. In turn, this will lead to data security and consent management becoming key areas of responsibility and concern.

Our response to sector convergence and new technologies

Throughout 2023:

• we promoted the importance of open data access and solid user authentication approaches for connecting disparate consumer assets to the grid and increasing transparency related to the origin of green electricity through research papers, projects and partnerships;

• we explored the importance of interoperability through projects like the InterOPERA consortium, which is working to establish a meshed offshore multi-vendor multi-terminal HVDC grid in Europe;

• we gave demonstrations of our Modular Control Center System (MCCS) tool, which will be used by our operators to manage an increasingly complex system. The tool will allow us to take full control of the software, digital technology and data that we use as part of our core operations, and is on track for being fully implemented in 2025;

• we continued to explore the use of innovative devices, including remote inspection technology to increase the efficiency, safety and sustainability of our asset monitoring activities. In May, for example, an autonomous robot was deployed in ALEGrO’s HVDC converter hall in Belgium, marking the first time that an autonomous robot has been used in this way in Europe;

• ETB became ISO/IEC 27001 certified, demonstrating our commitment to high information security standards.

Risks and opportunities

As digitalisation spreads, we are continuing to increase and improve our knowledge and skills related to cyber security and associated risks. We also need to make sure our workforce has the skills it needs to operate the emerging digital system. However, successfully harnessing the right technology will make our asset management and system operation activities more reliable and efficient. See ‘Features of the Group’s internal control and risk management system’.

MEGATREND 4 Increasing international cooperation

As described in Elia Group’s ‘Roadmap to Net Zero’ study (November 2021), Europe’s direct electricity demand can be met in 2050 – but only if Europe accelerates RES expansion by a factor of three, boosts electrification, increases efficiency and builds more on- and offshore interconnectors to balance out the uneven distribution of RES across the continent.

To make optimal use of the continent’s RES, Europe needs to set up frameworks for partnerships between countries with different levels of RES potential. Moreover, the full potential of the North and Baltic seas will need to be harnessed through an international approach.

The rise in hybrid interconnectors and energy islands will allow electricity to be exchanged between countries

whilst also connecting them to offshore wind farms. These interconnectors and energy islands are forming the first building blocks of a European meshed offshore grid.

The increasing integration of the European power system is requiring a supranational approach to be adopted by Member States. This can occur across European regions through Regional Coordination Centres (such as Coreso and TSCNET) or via continent-wide cooperation.

In 2023, the European Commission adopted its first list of Projects of Common Interest (PCI) and Projects of Mutual Interest (PMI) that are fully aligned with the European Green Deal. These cross-border projects, which will help the EU reach its energy and climate goals, will benefit from streamlined permitting and regulatory procedures and will become eligible for financial support.

Our response to increasing international cooperation

Throughout 2023:

• we continued to further our partnerships with international stakeholders, helping, for example, to organise both the North Sea Summit in Ostend and the Baltic Offshore Wind Forum in Berlin. These brought together politicians, heads of state and industry leaders in the name of transforming the North Seas into Europe’s green power plant, harnessing the potential held in offshore renewables and establishing an integrated European grid and market;

• we explored the feasibility of interconnectors that would link ETB’s grid to TenneT’s (the Netherlands), Amprion’s (Germany) and Statnett’s (Norway), and would link 50Hertz’s grid to Elering’s (Estonia – the Baltic WindConnector);

• we welcomed the EU’s recognition of Nautilus (Belgium’s second interconnector with the UK) as a PMI; and its recognition of TritonLink (which will link Belgium to Denmark) and Bornholm Energy Island (being worked on by 50Hertz and Energinet) as PCIs. Four of the Group’s projects (Brabo II, Brabo III and Lonny-Achêne-Gramme in Belgium and the SuedOstLink in Germany) maintained their PCI status.

Risks and opportunities

Partnerships can carry risks, particularly in terms of cost sharing and plans being reconsidered or delayed. They need to be established in time for their results to be enjoyed. Despite these challenges, working with a wide range of partners will increase efficiency, allow best practice to be exchanged, and will contribute to fast-forwarding the energy transition. See ‘Features of the Group’s internal control and risk management system’.

3.3. Regulatory changes

Developments in Belgium

In Belgium, the regulatory landscape has been affected by the approval of ETB's adjusted tariff proposal for the regulatory period which will run from 2024 to 2027. This approval from the Belgian regulator marks a pivotal step in the shaping of the financial framework for energy transmission during this period.

These approved tariffs are set against a backdrop of high inflation, reflecting the economic realities that influence the energy sector's financial dynamics. The primary objective of these tariffs is to equip ETB with the necessary financial resources to fulfil its crucial role in advancing the energy transition, notably through an ambitious investment programme. As part of regulatory considerations, electricity transmission tariffs are scheduled to experience an increase during the 2024-2027 time frame.

Additionally, the 2024-2027 tariffs consider a revaluation of remuneration to take into account the significant changes that have occurred in financial markets since the tariff methodology was established in the first half of 2022. This suggests that the global remuneration during the upcoming 2024-27 regulatory period is projected to increase by an additional fair remuneration of 1.49%, if the 10-year Belgian long-term obligation rate (Belgian OLO) remains at 3.27%, leading to a regulatory return of around 7.2% (compared with an initial regulatory return of around 5.7%). The mechanism outlines that the new component of the fair remuneration (1.49% of remuneration) will increase or decrease in a proportional manner based on whether the average Belgian OLO for a given year in the regulatory period surpasses or falls below the reference of 3.27%. When the Belgian OLO falls within the range of 0% to 1.68%, the global remuneration remains at around 5.7%, as initially outlined in the tariff methodology published in June 2022.

Developments in Germany

The German regulator plays a pivotal role in the setting of regulations and the cultivation of a resilient energy landscape. This role was clearly demonstrated through recent regulatory decisions that were taken for the upcoming regulatory period; these aim to maintain attractive economic conditions for our German TSO, especially given the country's ambitious aim of achieving energy sovereignty and climate neutrality by 2045.

In this context, recent discussions have proven constructive, yielding a slightly improved outcome that aligns with the broader objectives of advancing both environmental sustainability and energy self-sufficiency.

In Germany, therefore, 50Hertz has achieved a 100% efficiency factor for the upcoming 2024-28 regulatory period, as confirmed by the BNetzA. The latter evaluates the operational costs of the country's four grid operators based on 2021 data to set their revenue caps. While inefficiencies are typically targeted during these periods, 50Hertz is exempt due to its 100% efficiency factor, which was calculated based on a comparison of its activities to a reference network. This efficiency factor contributes directly to the profitability of the company.

In June 2023, the BNetzA launched a public consultation regarding a possible increase to the regulatory Return on Equity (RoE) for onshore investments in response to an unexpected and substantial rise in interest rates. In line with the results of this consultation, the RoE for new onshore investments starting in 2024 will be determined annually, incorporating a fixed risk premium and an updated base interest rate for each specific year. This would mean an adjustment from 4.13% to 5.78% after tax for new projects added in 2024. As for existing investments up to 2023 and projects that have already been realised, the initial

unadjusted rate of 4.13% post-tax will be applied throughout the entire regulatory period. Following discussions with the BNetzA, it appears that the same regulations may also be extended to offshore assets. In total, the current proposal would lead at this stage to a 96 basis point higher average imputed return on equity over the period compared to the previous 4.13% initial post-tax return. The regulator’s final decision regarding the imputed return on equity is likely to be communicated during the first quarter of 2024.

4. Our vision, mission and strategy

4.1. Our vision & mission

Our vision outlines our long-term objective

A successful energy transition for a sustainable world.

Our mission statement outlines why we exist

In the interest of society, we make the energy transition happen and work towards the decarbonisation of energy systems by delivering the needed power infrastructure and shaping energy markets. We keep the lights on by operating a reliable and sustainable system and innovate to meet evolving consumer needs in an efficient way and to protect people’s safety. We create further value for society in the changing energy landscape.

4.2. Our strategy

OUR STRATEGY CONSISTS OF THREE PILLARS OF GROWTH, WHICH ARE DEPICTED IN THE INNER CIRCLE IN THE FIGURE BELOW. THESE THREE PILLARS OF GROWTH ARE SUPPORTED BY FIVE ENABLING AMBITIONS, WHICH ARE DEPICTED IN THE OUTER CIRCLE.

3

PILLAR 1: Deliver the infrastructure of the future & develop and operate a sustainable power system

Elia Group is committed to keeping the lights on around the clock, designing, delivering and operating the transmission infrastructure of the future, helping to shape a suitable market design, and enabling the energy transition in our home markets of Belgium and Germany and, by extension, across Europe. Our CAPEX projects, which we are dedicated to delivering on time, within budget and to a high standard of quality with a maximum focus on safety, actively contribute to shaping solutions that meet our stakeholder needs and create value for wider society.

PILLAR 2: Grow beyond current perimeter to deliver societal value

Our second pillar aims to expand our activities beyond their current perimeter in order to deliver additional societal value. Through our consultancy, EGI, we have developed a solid understanding of international markets and both detect and attract appealing business opportunities. Through WindGrid, we are leveraging the expertise we have gained through

our regulated activities and are shaping new growth opportunities. In December, for the first time ever, we entered into a firm agreement to acquire a stake in a company outside of our regulated markets: a 35.1% stake in energyRe Giga, a U.S. clean energy company (with the closing of this agreement due in early 2024).

PILLAR 3: Develop new services creating value for customers in the energy system

Through our third pillar, we are delivering new services which create value for energy customers and digital tools which benefit the international energy ecosystem. We aim to achieve this by utilising and driving the digitalisation of the power sector and spurring innovation. Leveraging our experience with consumer centricity as part of our regulated activities, we are exploring and contributing to fostering a range of new opportunities - from sector coupling through to the provision of new digital services with partners like re.alto. Ultimately, these activities will further hasten the energy transition.

4.3. ActNow: our sustainability programme

OUR ACTNOW PROGRAMME

EMBEDS SUSTAINABILITY INTO OUR CORE STRATEGY AND OUR BUSINESS ACTIVITIES BY ESTABLISHING CLEAR AND QUANTIFIABLE OBJECTIVES FOR THE ENTIRE GROUP TO ACHIEVE. AS SHOWN IN THE FIGURE ON THE RIGHT, ACTNOW COMPRISES FIVE DIMENSIONS THAT ARE GUIDED BY THE UN SUSTAINABLE DEVELOPMENT GOALS. IN 2023, WE REACHED A NUMBER OF SIGNIFICANT ACTNOW MILESTONES (SEE BELOW).

FOR A SUSTAINABLE WORLD

1 Climate Action

• Enabling decarbonisation of the power sector Carbon neutrality in system operations by 2040

• Carbon neutrality in our own activities by 2030

• Transition to a carbon-neutral value chain for new assets and construction works

• Increase climate resilence

2 Environment & Circular Economy

• Preservee and strengthen ecosystems and biodiversity

• Embed circularity in our core business processes

• Ensure compliance with environment performance standards

3 Health & Safety

• Going for zero accidents

• Build our safety culture

• We are all safety leaders

• We strive for heath and wellbeing of our staff

4 Diversity, Equity & Inclusion

• Inclusive leadership across the organisation and engaging all staff

• Inclusive recruitment and selection practices in hiring processes

• Equal opportunities for all staff

• Open and inclusive company culture and healthy work-life balance

• Recognition of societal DEI role

5 Governance, Ethics & Compliance

• Governance: Accountable rules & processes

• Ethics: Sustainable mindset & behaviours

• Compliance: Conformity with external & internal rules

• Transparency: Openness & meaningful stakeholder dialogue

Internal carbon price

We rolled out an Internal Carbon Price (ICP) across Elia Group, raising it to €200 per tonne of carbon dioxide equivalents, allowing us to assess and raise staff awareness about the financial value of greenhouse gas emissions generated across our organisation. Throughout the year, we also built an ICP linked to a bonus-malus system into our long-term cable supply tender – marking a significant moment for the Group and our sector. We implemented the same principle as part of the tender for the Princess Elisabeth Island AC modules. Additionally, we attained our Scope 3 data maturity goal, with emissions for 60% of our spend calculated using supplier-informed spend-based emission factors or better data sources. We also launched our Scope 3 Accounting Platform which was built in-house, which allows the calculation of our Scope 3 emissions using estimations based on input from our suppliers.

Nature inclusive design

We partnered up with environmental experts and organisations to ensure that our offshore infrastructure is constructed in such a way that it positively impacts marine life ecosystems right from the start. In 2023, we co-created a Nature Inclusive Design plan for the construction of the Princess Elisabeth Island off the coast of Belgium, effectively connecting climate action with the promotion of biodiversity.

Predictive monitoring

As part of a pilot project focused on the predictive monitoring of SF6, we deployed more than 200 sensors across our infrastructure. This has enhanced our ability to minimise SF6 leakage rates, since we are able to continuously monitor these assets for potential leaks and predict maintenance requirements at an early stage.

"ActNow, which is guided by the UN Sustainable Development Goals, serves as a compass for the Group. Its five key dimensions embed sustainability across our organisation, focusing on climate-related, environmental, social, health and governance areas. As a European power transmission system operator, we're driving the energy transition and building the necessary infrastructure that will help the continent to reach net zero by 2050. Embedding sustainability into our core business activities ensures our resilience, safety, and attractiveness as we tackle the challenges of the future and achieve our ambitious company goals."

Catherine Vandenborre

4.4. Fostering stakeholder interactions

We interact with our stakeholders on a regular basis, forming transparent and effective relationships with each relevant group. They inform our business activities in multiple ways: their feedback is incorporated into our daily work; their needs and interests are gathered as part of the identification of material topics for the Group; and we develop several activities related to our grid and market projects with them.

"The energy transition has had impacts on Neupré, given the extension of the Rimière electrical substation and the installation of high-voltage lines in the area. We benefitted from quality support and professionalism from ETB's employees, ensuring we were able to communicate with our fellow citizens in a well-structured and accessible manner."

Virginie Defrang-Firket - Mayor of Neupré

"Based in Berlin, 50Hertz is part of the energy debate: it is visible and credible. This is important. We really need people who work and manage the energy transition and don’t just talk about targets."

Carsten Rolle - World Energy CouncilGermany

"We are adding increasingly volatile energy sources to the system. It will be important for network operators to make the need for flexibility clear and to work with their customers to find solutions to unlocking it in an optimal way from across the system."

Andrees Gentzsch, Federal Association of Energy and Water industries

"It was a very big honour to win this prize. We are having discussions with ETB now about how we can further develop our idea. That’s very exciting."

Asako Bliek – Student KU Leuven and winner of ETB’s Student Challenge on flexibility

"The grid is going to be a very decisive factor in terms of getting to where we want to go. Therefore, it really depends on the TSOs, on their capabilities, on their knowledge to build this large grid we need as fast as possible – and, of course, at prices which don’t make the energy transition too expensive."

Holger Lösch - Federation of German Industries

"Thanks to our cooperation with 50Hertz and Elia Group, our master’s students were given the opportunity to work on practical and relevant projects and were able to demonstrate their creativity and professional skills."

Dr. Wojciech Stiller, Professor HWR Berlin

"Nobody can deny the change that is happening: the move from using radial systems to meshed offshore grids and the very important role played by transmission system operators in this change. These meshed grids are the way to ensure security of supply when our energy systems have a high amount of RES integrated into them."

Stefan Thimm – German Association of Offshore Wind Farm Operators

"Energy is one of the main focus points of Agristo’s sustainability strategy. The future energy landscape will be completely different compared with today’s. Digital tools and dashboards, flexibility and smart communication between our assets are the key to making it a success."

Peter Vos, Energy Manager, Agristo

"Some of our more entrepreneurial students complemented their studies this year by accepting ETB’s challenge and participating in its flexibility start-up competition. They were enthusiastic about the journey they went on. They were very proud to be able to present their results to the whole of Elia Group in Berlin as well!"

Dr. Geert Deconinck, Professor, KU Leuven

4.5. Double materiality matrix

Security of supply: As TSOs in Belgium and Germany, we act on behalf of national authorities to ensure the adequacy of power systems and transition to a net zero society in a secure and affordable way.

3 Grid development and system operations: We deliver and operate a safe & reliable transmission grid infrastructure in line with the European Network Codes and national legislation.

4 Intellectual Procurement & supply chain: We secure the delivery of the critical assets which are needed to realise our CAPEX programme.

5 IT security: We protect our systems against cyber-attacks.

6 Employees and subcontractors

Talent management & diverse workforce: We attract, develop & retain talent, providing equal opportunities for all staff.

7 Health & safety: We ensure the health, safety & wellbeing of our employees and subcontractors.

8 Society and relationships

9 Environmental

Effective governance practices: We co-create with the society that we serve and future-proof our organisational structures and run our daily activities in a responsible and ethical way.

Sustainable system and net zero society: We are driving the decarbonisation of the Belgian and German electricity systems by integrating renewable energy sources into our grids.

10 Sustainable corporate footprint: We are a good corporate citizen since we minimise the ecological footprint of our activities.

Please see the Sustainability report for further information about the materiality matrix.

5. Our business model

FINANCIAL

• Revenues from DSOs, clients who are directly connected to our grid, energy traders, end consumers and third parties

• Financing means through shareholders, investors and financial institutions

€2.6 billion of external debt funding raised in 2023

ASSETS

• Onshore and offshore assets, including lines, cables, substations and interconnectors

• Business, industrial and storage sites

19,461 km of lines and 880 substations

Permits received in Germany to construct 552 km of new lines

INTELLECTUAL

• TSO licences

• Knowledge about the energy sector, past studies, and research

Be a leaderinhealthandsafety & evolveourcultureandtalent Ensuresustainabilityinthe way weoperateourbusiness

5.1. Our business model

F i nance our future

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3

1 DELIVER THE INFRA STRUCTURE OF THE FUTURE & DEVELOP AND OPERATE A SU STAINABLE POWER SYSTEM

Realise our digita l trans fo r m a t i no

Increase efficiency realise synergies &optimise resource allocation

FINANCIAL

• Socioeconomic prosperity is generated for local communities

• The returns we make are reinvested to increase our financial strength

6.9% RoE (adj.)

€2.4 billion grid investments

ASSETS

• Our grid and assets are made more resilient, efficient and sustainable

1,350 MW connected offshore generation capacity

550 km of lines commissioned

INTELLECTUAL

• Knowledge and expertise that is acquired as a result of business experience, training and network collaboration is shared across the whole of the organisation

5 vision papers

EMPLOYEES & SUBCONTRACTORS

• Expertise in a wide range of areas, from grid development through to legal and regulatory environments

• Diverse workforce gives us strength and ensures innovation

3,473 employees (headcount based)

SOCIETY & RELATIONSHIPS

• Information from peers, partners and networks about energy flows within and across borders

• Community interactions at early stages of our grid projects

7 group association memberships

ENVIRONMENTAL

• Natural landscapes, fauna, and flora

• We draw on raw materials like copper and steel throughout asset lifecycles

System Planning

Trusteeship Services for Electrification Business Facilitators

System Operations Market Facilitation

Grid Operations and Maintenance

Infrastructure Design and Construction

EMPLOYEES & SUBCONTRACTORS

• Deepened expertise and skills in a wide range of areas, from grid development through to legal and regulatory environments

• Diverse workforce gives us strength and ensures innovation

2.3 TRIR

23.6% women in total workforce

SOCIETY & RELATIONSHIPS

• Keeping the lights on around the clock, providing society with a reliable electricity supply

• Strengthened brand reputation, which reinforces our partnerships

14.8 Sustainalytics ESG risk score (low risk)

ENVIRONMENTAL

• Biodiversity aspects are addressed through mitigation and compensation measures

• We measure and are working on reducing our corporate impact on the climate

942,677 tCO2 eq total scope 1 and scope 2

4,888 ha forested areas managed through ecological aisles

5.2. The resources we rely on

KNOWN AS THE ‘CAPITALS’ UNDER THE <IR> FRAMEWORK (SEE ‘GLOSSARY’), WE RELY ON THE FOLLOWING SIX RESOURCES TO UNDERTAKE OUR ACTIVITIES.

FINANCIAL RESOURCES

We depend on cash flow financing from a number of sources, such as:

Revenues from:

• DSOs and other parties that have access to our grid;

• clients who are directly connected to our grid;

• energy traders, for energy volumes imported or exported;

• end consumers, supplied via grid tariffs;

• third parties, for consultancy and other energy-related services.

Financing means:

• shareholders;

• debt investors;

• financial institutions.

We are also responsible for processing financial flows (as part of our role as trustees in Belgium and Germany).

ASSETS

We source and use the following manufactured assets:

• electricity assets and infrastructure, including our grid, substations, lines and cables;

• technology, from heavy machinery through to digital devices;

• business, industrial and storage buildings and sites;

• construction tools and equipment;

• public infrastructure and private facilities such as waste treatment plants.

INTELLECTUAL RESOURCES

The collective intellectual capital that our organisation holds includes:

• our TSO licences, which give us the mandate to operate in Belgium and Germany;

• our past studies and research, which have allowed us to accumulate an in-depth understanding of specific areas related to energy systems;

• our processes, methods and systems, which ensure quality and uniformity in the way we approach our work.

EMPLOYEES AND SUBCONTRACTORS

Our skilled workforce, alongside the subcontractors we hire, hold knowledge and expertise in a wide range of areas, such as:

• the legal and regulatory environments we work in;

• social, political and technological trends;

• (European) energy markets;

• financial, risk and project management;

• cutting-edge technologies and digital tools;

• consumer and societal needs;

• stakeholder engagement.

SOCIETY AND RELATIONSHIPS

We foster close interactions with society, engaging with our stakeholders on a regular basis. Examples of the stakeholder input that we rely on include:

• near-constant updates and information related to energy flows within and across borders;

• future electricity needs and socioeconomic changes;

• knowledge and understanding about technical, energy market and digital changes and innovations;

• knowledge and expertise to help shape our studies, research papers and grid development practices;

• local needs and expectations, to design and build our grid in line with the interests of society.

ENVIRONMENTAL RESOURCES

As we design and build our grid assets, we use the following natural resources:

• raw materials, including water, minerals, metals, gases, and wood;

• landscapes and habitats, including farmland, forests and marine environments.

5.3. Our business activities

5.3.1 System

Planning

We define electricity system needs

Our system planning teams plan and develop the on- and offshore grid infrastructure that allows the integration of increasing amounts of renewable energy into the system, supports the accelerated pace of electrification, and facilitates security of supply in Belgium, Germany and Europe more widely. They also make recommendations for a suitable electricity market design to accompany these changes. Their work feeds into national and Europe-wide publications, so ensuring that the energy system of the future will be efficient, reliable and secure.

Our work in this area can be clustered around three main activities, as follows.

• Identifying and investigating future energy system scenarios whilst taking into account changes in neighbouring countries and other sectors, such as the electrification of heat and mobility.

• Developing robust grid investment plans for our home countries that ensure that the future electricity grid will match the needs of society.

• Exploring whether Belgium, Germany and Europe will have sufficient generation, storage and reserve capacity to meet the future demand for electricity, and recommending courses of action to our home governments based on our findings.

KEY CONSIDERATIONS

Key considerations that our teams are guided by when undertaking system planning activities include:

• ensuring a high level of electricity network availability and reliability, especially as the system becomes more dispersed, localised and dependent on intermittent RES and flexible prosumer-owned appliances;

• the proactive planning and building out of our grid, given the long lead time of infrastructure projects, so that the electricity needs of households, industry and society more widely are met on time;

• having a sound understanding of new technologies which are likely to take off;

• ensuring that the recommendations we make and plans we publish are efficient;

• engaging with stakeholders in a transparent manner to ensure that our analyses, results and recommendations are sound.

Europe’s ability to balance the energy trilemma and the associated need for the continued expansion of RES, increasing European collaboration and the development of flexibility markets were all under discussion in 2023.

These were complemented by the need to ensure that electricity networks have enough reserve capacity and that grid infrastructure can both meet the rising demand for electricity and connect increasing RES to the system.

As Europe seeks to establish an integrated European energy market and link the energy infrastructure of different Member States together, countries continued to work with partners located much further away than their immediate neighbours.

PLEASE SEE THE CHAPTER ENTITLED 'FEATURES OF THE GROUP’S INTERNAL CONTROL AND RISK MANAGEMENT SYSTEMS' FOR INFORMATION RELATED TO THE MOST RELEVANT RISKS AND OPPORTUNITIES INVOLVED.

5.3.2 Infrastructure Design and Construction

We are building the grid of the future

Our infrastructure teams design and oversee the construction of state-of-the-art assets that support growing electrification and the integration of high amounts of renewable energy into electricity systems as our home countries work towards net zero.

Once electricity system needs have been defined, our staff cluster projects together by considering their feasibility, the current status of our assets, and future system and sustainability requirements. They then move onto planning out and designing these projects and securing the required permits for them. They regularly and transparently interact with local and regional stakeholders as part of this to identify the best possible solutions in terms of technology, routing and the environment. Once project permits have been granted, and specific work within each project has been tendered out and awarded to contractors, our solid project governance structures ensure that our projects are finished on time, within budget and to a high standard, with possible risks taken into account.

KEY CONSIDERATIONS

Key considerations that involve the construction of new infrastructure or the upgrading of current assets include:

• ensuring the health and safety of our staff and subcontractors;

• ensuring the security of the grid and serving our customers and end consumers with energy;

• enabling the system and market integration of renewable energy;

• ensuring efficiency, both in terms of cost and process;

• adhering to legal obligations and regulatory frameworks;

• from an early stage onwards, actively interacting with local communities, NGOs and relevant authorities;

• using innovative technology and assets that are more efficient and sustainable;

• supporting biodiversity and limiting the negative impact of our projects on the environment;

• navigating political sensitivities whilst providing robust evidence for our projects.

PLEASE SEE THE CHAPTER ENTITLED 'FEATURES OF THE GROUP’S INTERNAL CONTROL AND RISK MANAGEMENT SYSTEMS' FOR INFORMATION RELATED TO THE MOST RELEVANT RISKS AND OPPORTUNITIES INVOLVED.

Although disruptions to global supply chains slowly began to ease in 2023, shortages in key areas remained, as did high prices for raw materials – meaning countries moved towards reducing their dependence on raw materials and critical goods and businesses moved to secure their longterm asset needs. Moreover, in October, the Carbon Border Adjustment Mechanism entered into force in Europe –aiming to put a fair price on the carbon emitted during the

production of carbon-intensive goods entering the Union. Topics related to offshore development were high on the list of attention points in Europe. These included the need to speed up permit-granting procedures for renewable energy projects, the compatibility and interoperability of offshore technologies, the availability of a robust supply chain for critical offshore assets, and ensuring tomorrow’s workforce has the right skills needed to work in marine environments

with new technology. Furthermore, following the increase in extreme weather events that Europe has experienced due to climate change in recent years (such as heatwaves), the development and construction of assets that can withstand these featured as a prominent issue

5.3.3 Grid Operations and Maintenance

We operate and maintain safe and reliable infrastructure

We operate and maintain the transmission grid in a safe, reliable, sustainable and efficient manner, so that it fulfils the needs of our users.

Staff in our 4 maintenance zones in Belgium and 10 regional maintenance sites in Germany secure the highest possible level of grid availability and reliability for electricity consumers and producers through the maintenance of our overhead lines, underground cables, substations, interconnectors, subsea cables and other offshore assets. They track, manage and maintain these assets, their performance, associated risks and costs throughout their lifecycles. These tasks are becoming increasingly difficult, since the number and type of assets linked to the expansion of our grid, the number of ageing assets in our portfolio, the intermittent nature of RES and associated volatility of electricity flows and sustainability-related concerns are all growing. Innovative digital technology, such as AI-based predictive maintenance, is key for enabling our employees to keep abreast of these developments.

KEY CONSIDERATIONS

Key considerations for our teams as they work to prevent or quickly address outages include:

• ensuring the health and safety of our staff and subcontractors;

• monitoring and securing the highest level of grid availability and reliability on a 24/7 basis;

• ensuring efficiency, including by harmonising the methods and tools used across the Group;

• lowering the carbon footprint of our assets by replacing harmful substances and materials, using new technologies to upgrade them and further increasing their recycling rate;

• managing the risks associated with our assets and optimising their use and lifetime;

• supporting biodiversity and natural habitats around our assets;

• communicating openly with local communities, NGOs and relevant authorities;

• accessing and using innovative technology that will assist with all of the above

Grid operation and maintenance activities continued to be affected by disruptions to global supply chains in 2023. Additionally, ongoing concerns about the sustainability of electricity infrastructure were raised, particularly in terms of climate resilience (and the need for grids to be upgraded so that they can withstand extreme events such as flooding), carbon footprint (as grids are expanded and transformed to accommodate higher amounts of renewable energy) and their impact on natural environments. Moreover, as the energy transition is underway, electricity grids are being pushed to their limits. This increased stress and reduction in opportunities for planned outages to occur is requiring more flexibility from electricity systems and maintenance staff. It also requires new and talented staff and smarter and automated operational procedures, tools and systems.

PLEASE SEE THE CHAPTER ENTITLED 'FEATURES OF THE GROUP’S INTERNAL CONTROL AND RISK MANAGEMENT SYSTEMS' FOR INFORMATION RELATED TO THE MOST RELEVANT RISKS AND OPPORTUNITIES INVOLVED.

5.3.4 System Operations

We keep the lights on around the clock

ETB and 50Hertz are responsible for keeping the lights on around the clock for over 30 million people in Belgium and the north and east of Germany. As reflected by our grid’s reliability level of at least 99%, our control centre staff are dedicated to the secure transmission of electrical power, even as the energy transition triggers significant changes to the system.

Our work on maintaining the balance between electricity supply and demand across our control areas can be divided into five main activities, as follows.

• Balance management: this involves maintaining the balance between the amount of electricity injected into the system and the amount of electricity that is consumed on a continuous, real-time basis.

• Voltage management: this covers making sure that voltage levels remain within the appropriate limits, reducing losses, preventing assets from being damaged and avoiding the risk of voltage collapse.

• Congestion management: this involves optimising the grid’s topology and/or coordinating and altering generation or load patterns (known as redispatching) to change the physical flows of electricity across our grids to relieve congestions.

• Enabling maintenance and construction work: before isolating parts of the grid to allow maintenance work or projects to be undertaken safely, our teams must undertake predictive calculations to make sure that the outage doesn’t cause operational issues.

• Emergency management: this involves addressing any grid security incidents as quickly as possible and limiting the impacts of disturbances so that they don’t cause cascading effects within or even outside of the borders of ETB and 50Hertz’s control areas.

These activities are becoming progressively more complex: power flows are becoming increasingly volatile given the sharp rise in intermittent RES, cross-border electricity trading, and the arrival of new flexible technologies and players. Cooperation amongst neighbouring TSOs and across different regions of Europe is therefore commonplace.

KEY CONSIDERATIONS

Key considerations that our staff are guided by include:

• ensuring network availability and reliability on a continuous basis;

• ensuring cost and process efficiency;

• ensuring that legal and regulatory requirements are met;

• engaging in daily transparent communication about the state of the network with other TSOs, DSOs, regional coordination centres and market parties;

• responding to the integration of assets that can provide decentralised flexibility for the grid;

• sourcing, designing and applying the use of innovative digital technologies.

Increasing coordination between Member States was furthered throughout 2023 as renewable energy levels continued to rise and electricity continued to be shared across borders. This was accompanied by explorations of new technologies and the need to ensure that the workforce of the future has the right skills needed to manage an increasingly complex system that is being pushed to its operational limits

5.3.5 Market Facilitation

We facilitate the development of the electricity system

As market facilitators, ETB and 50Hertz have ultimate responsibility for ensuring that the balance between demand and supply is maintained across their control areas. They do this by employing flexibility that is provided by balancing service providers (BSPs) and, when the need arises, by procuring ancillary services.

Our teams are working towards the establishment of an integrated European energy market which strengthens security of supply and delivers fair prices for consumers. As energy systems come to rely more heavily on intermittent RES, corresponding reforms to energy markets are needed to unlock further flexibility and safeguard security of supply in our home countries.

The teams working in the area of market facilitation focus on a number of areas, as follows.

Firstly, they advocate for a stable framework which attracts investments that can support the spread of electrification across society. They participate in consultation mechanisms to support increases in RES and flexible demand.

Secondly, they work on further developing existing markets for system services such as balancing, for example – this involves our teams aiming to integrate new kinds of assets that can participate in providing balancing services. Our teams in Germany are also developing markets for reactive power, inertia and black start capability.

Thirdly, they support the integration of national and European energy markets, so that electricity can be broadly used, the intermittent nature of RES can be better dealt with, and so that consumers benefit from high security of supply and competitive electricity prices. They also encourage market reforms which allow consumers to valorise the use of their flexible appliances, help to balance the grid, and benefit from an efficient electricity system

KEY CONSIDERATIONS

Key considerations that our teams keep in mind as they work in this area include:

• encouraging different market players to provide system services;

• ensuring market player adherence with local legal and regulatory environments;

• working with other TSOs, DSOs, power exchanges, energy traders, consumers, regulators, governments and authorities to make the market evolve and secure more liquidity;

• developing a solid understanding of digital and technological changes occurring across society;

• in line with European goals, making sure consumers are placed at the heart of the energy transition and can valorise their flexibility.

To build a renewables-based system, protect consumers from extreme energy prices and mitigate price volatility, the European Commission presented its reform of the electricity market in March 2023, with co-legislators reaching a provisional agreement on the new rules in December. Similarly, the German Federal Ministry for Economic Affairs and Climate Action launched its ‘Climate Neutral Electricity

System Platform’ to help develop an electricity market design that is suited to the country’s future climate-neutral electricity system. Member States also studied the market and system integration of future offshore generation into energy systems and the role played by innovative transmission infrastructure, such as hybrid interconnectors, in this. The urgent need to unlock consumer flexibility (both

PLEASE SEE THE CHAPTER ENTITLED 'FEATURES OF THE GROUP’S INTERNAL CONTROL AND RISK MANAGEMENT SYSTEMS' FOR INFORMATION RELATED TO THE MOST RELEVANT RISKS AND OPPORTUNITIES INVOLVED.

industrial and residential) persisted as a point of interest throughout 2023 as a means to lower prices for consumers and efficiently manage an electricity system that is accommodating increasing amounts of intermittent RES

5.3.6 Trusteeship

The German and Belgian1 legislators transferred part of the responsibility for coordinating and processing legal levy systems that promote environmentally friendly technologies to the TSOs in their respective countries. ETB and 50Hertz therefore act as trustees, collecting levies from consumers in Belgium (at regional level) and Germany and playing an important organisational role in the remuneration of the producers of electricity generated by RES and some combined heat and power (CHP) plants (which qualify for such remuneration – known as ‘qualitative CHP’). As far as the federal level in Belgium is concerned, the levies have since been replaced by excise taxes, the collection of which has been transferred to the government’s finance ministry (FPS Finance).

We coordinate and process legal levy systems

GREEN CERTIFICATES MECHANISM IN BELGIUM

In Belgium, ETB must fulfil its public service obligation related to green and CHP certificates. These certificate mechanisms operate differently across the country’s different regions. As a general rule, specific electricity producers are legally entitled to receive green or CHP certificates in exchange for the production of electricity from RES or via qualitative CHP plants. These certificates are distributed to producers by public authorities. As stipulated by law and in accordance with its public service obligations, ETB is required to buy these certificates for a fixed or variable minimum price. The financing for these certificates is provided: by grid tariff surcharges that are imposed on grid users (based on their net offtake of energy) or through auctions, during which the certificates are sold back to market players, to the extent the law requires ETB to organise these auctions in order to reduce the grid tariff surcharges that result from the purchase of the certificates; or through fixed amounts paid by the state to ETB on a regular basis.

Additionally, electricity suppliers are required to return, on an annual basis, a predetermined number (or quota) of certificates to the CREG, meaning that they must purchase a certain number of such certificates throughout the year, either from a producer or from ETB

CAPACITY REMUNERATION MECHANISM IN BELGIUM

One of ETB’s public service obligations is the management of the country’s capacity remuneration mechanism (CRM), which was introduced by the government to guarantee Belgium’s long-term security of supply. In line with this, ETB is responsible for contracting capacity from different market participants that is then made available to the system in case it needs it. The capacity auctions are held at least one year in advance of the actual time at which the capacity needs to be available. ETB is refunded by the Belgian state for both the costs of organising the CRM and payments made to market participants for their contracted capacity volumes.

1 Both federal and regional

ENERGY SURCHARGES IN GERMANY

In Germany, TSOs are responsible for coordinating energy surcharges in accordance with the Energy Financing Act (Energiefinanzierungsgesetz, or EnFG). The costs 50Hertz incurs for processing these surcharges are remunerated via the surcharges themselves and do not affect the company's earnings.

EEG

The renewables surcharge, or EEG surcharge, was introduced in 2000 to support the expansion of green electricity production - mainly from solar, wind, biomass and hydropower plants. In line with this, the producers of electricity generated from renewable energy are granted a guaranteed amount of remuneration for 20 years. Depending on the nature of the producer, their financial income is linked either to the market price obtained for their electricity and a market premium surcharge which covers the difference between this and the guaranteed remuneration; or to a feed in tariff (FIT). In the latter case, 50Hertz and the country’s three other TSOs are responsible for selling the electricity on the market. Both the market premium surcharge on the one hand and the difference between the market price obtained and the guaranteed remuneration (FIT) on the other are covered by a levy and paid out by TSOs to DSOs and producers.

Up until 2022, this levy was paid by consumers through the EEG surcharge. In order to ease the financial burden on consumers, the German Government reduced the renewables surcharge for consumers from 1 July 2022 to 0 cent/kWh and decided to end it on 1 January 2023. Since then, TSOs have claimed federal grants from the German government to reward producers of green energy.

KWKG

A similar mechanism is in place to support the expansion of CHP plants in Germany (known as ‘Kraft-Wärme-Kopplung’, or KWK). 50Hertz collects the KWKG surcharge from electricity consumers, administrates it and coordinates its distribution to its KWK plant operators.

Strompreisbremse mechanism

In December 2022, the German government transferred some of the responsibility for the ‘Strompreisbremse’ mechanism to the four German TSOs to limit the impact of high electricity prices on consumers from early 2023 onwards. Throughout 2023, TSOs received around €13 billion from the government which they then paid out to energy suppliers. The payments were made via separate bank accounts, so did not affect TSO liquidity. The German government decided to stop this mechanism on 31 December 2023.

5.3.7 Services for Electrification

The Group delivers additional value for society via the provision of energy system services. These support electrification and the integration of renewable energy into systems both in Europe and beyond.

Netztransparenz Platform

We

facilitate electrification and decarbonisation at an affordable price

Elia Grid International is a global engineering consultancy company which specialises in complex power system challenges. Its multidisciplinary team of experts offers strategic, technical and regulatory advice in all fields related to on- and offshore power transmission, as well as a range of specialist solutions.

Our corporate start-up built the first European marketplace dedicated to the exchange of energy data and services. This enables the exchange of energy data through its API platform. Through the same platform, re.alto allows European energy service providers to connect to and control different kinds of electric assets, such as smart meters, electric vehicles and heat pumps. By combining data and asset control, energy service providers can provide new energy services to their customers.

WindGrid focuses on the development of international offshore electricity transmission solutions. It does this by leveraging the Group’s expertise and experience and supporting partners to connect offshore wind farms to onshore grids. WindGrid is contributing to the acceleration of the energy transition across the globe and maintaining the Group’s relevance in the long term.

The Energy Portal Interface for Customers (EPIC) provides all our customers with high-quality and user-friendly digital services. These customers range from companies which are directly connected to our grid through to companies that operate across our energy landscape and use our services. EPIC gives them better control over their available services, their data, energy consumption, and energy strategies more generally.

Along with the three other German TSOs, 50Hertz publishes a variety of data sets on the Netztransparenz Platform. These include data sets that are legally required and balancing data publications. 50Hertz also publishes its own statistical report related to installed capacity, redispatching and load.

This provides ETB’s stakeholders with simple and open access to all of its public grid data, including power generation, load, balancing, transmission and congestion. Users can explore these datasets, creating visualisations from them or sharing and reusing them for other purposes.

This developer portal gives energy transition entrepreneurs access, via APIs, to the building blocks they need to develop their own innovative products for customers or for their own internal processes. New use cases will therefore emerge, since these players are provided with improved and secure access to data related to the market and grid; customers; green certification and accounting; and transactions between energy accounts.

Watts.Happening

Aimed at Belgian companies who wish to valorise the flexibility of their electrical assets, this publicly available tool provides users with a way to calculate how much money their companies could make by using their assets in a flexible way - so helping to balance the grid and integrate intermittent RES into the energy system

KEY CONSIDERATIONS

In working on delivering these services, our teams are guided by the following considerations:

• the system and market integration of renewable energy and the spread of electrification;

• securing network reliability;

• access to and the development of innovative grid assets and technology;

• discovering new value streams by supporting the development of innovative services;

• skills development and the creation of employment opportunities;

• regular and effective stakeholder dialogue, to understand current and future customer needs.

In line with the IEA’s prediction that global renewable capacity additions would soar by 107 GW (the largest absolute increase ever) to more than 440 GW by the end of the year2, global decarbonisation efforts were strengthened in 2023. In December, global leaders agreed to “transition away from fossil fuels” during the COP28 conference3. The role played by electricity grids in the success of such efforts was not underestimated, as reiterated by the International Energy Agency: “modern, smart and expanded grids are essential for successful energy transitions”4.

Mirroring this sentiment, the EU published its Action Plan for Grids in November, which seeks to (amongst other things) accelerate the implementation of Projects of Common Interest, improve long-term grid planning, stimulate faster permitting processes for the deployment of grids and improve grid supply chains.

PLEASE SEE THE CHAPTER ENTITLED 'FEATURES OF THE GROUP’S INTERNAL CONTROL AND RISK MANAGEMENT SYSTEMS' FOR INFORMATION RELATED TO THE MOST RELEVANT RISKS AND OPPORTUNITIES INVOLVED.

2 International Energy Agency, ‘Renewable Energy Market Update – June 2023’, https://www.iea.org/reports/renewable-energy-market-update-june-2023 last accessed on 30/11/23

3 COP28 UAE, ‘COP28 delivers historic consensus in Dubai to accelerate climate action’, https://www.cop28.com/en/news/2023/12/COP28-delivers-historic-consensus-in-Dubai-to-accelerate-climate-action, last accessed on 18/12/23

4 International Energy Agency, ‘Electricity Grids and Secure Energy Transitions’, https://www.iea.org/reports/electricity-grids-and-secure-energy-transitions, last accessed on 30/11/23

5.3.8 Business Facilitators

Enabling the Group to accelerate the energy transition

Our business facilitators - which include our digital transformation, finance and procurement teamsgo beyond traditional corporate functions. Through the adoption of innovative and forward-thinking approaches, they make the Group’s business model more competitive and sustainable, allowing us to be true accelerators of the energy transition, both in our home markets and abroad.

DIGITAL TRANSFORMATION

Our Digital Transformation Office (DTO) was established in January 2022 to focus on the digital transformation of our business activities. It sought to ensure that the Group is able to navigate increasingly complex challenges linked to the decarbonisation of energy systems and electrification of society - and harness the associated opportunities. Throughout 2022 and 2023, the DTO laid down the foundations for the transformation of our business. It then embedded the responsibilities for its areas of focus into different teams across the organisation, so that these could be more efficiently implemented, before being dissolved. Collectively, therefore, staff from across the organisation are working towards our digital transformation in order to realise the following ambitions:

• meet customer demands for more electrification;

• maintain system security while integrating high amounts of RES into the system;

• accelerate the development of our infrastructure;

• reduce the total cost of ownership of our assets;

• take better decisions based on sound data analytics;

• increase the impact and efficiency of our corporate activities;

• remain resilient in the face of uncertainty.

Crucial to this digital transformation is the pursuit of a change in mindset, which in turn will attract talented and competent staff.

FINANCE

Our Finance Department ensures that the Group has the right funding we need to ensure liquidity for our daily operations and deliver our investment programme as we help to decarbonise society. The Group has robust accounting, controlling and risk management practices in place to secure efficiency, value creation, fair grid tariffs for consumers and solid returns for investors

ETB’s 'Green Finance Framework' demonstrated that its funding strategy is aligned with ActNow and that the Group is committed to channelling investments into projects which have clear environmental objectives. Moreover, our activities are aligned with the EU Taxonomy, a classification system which outlines environmentally sustainable economic activities.

PROCUREMENT

Our Procurement Department establishes the Group's purchasing policies and procedures and purchases all goods and services. Whilst aspects such as the safety, efficiency, quality and pricing of materials or resources are all considered, the department is also actively embedding ESG factors into its approach by encouraging suppliers from across the value chain to adopt sustainable practices and working with them to develop greener products. In 2023, for example, we rolled out an Internal Carbon Price across the Group.

KEY CONSIDERATIONS

Key considerations that the teams above keep in mind when working within their respective areas include:

• ensuring adherence to legal and regulatory environments;

• cost and process efficiency;

• the development of employee skills and expertise;

• communicating with stakeholders in a transparent and regular manner.

As outlined by the Clean Energy Technology Observatory5, Advanced Metering Infrastructure was one of two areas which experienced the most advancements in 2023. The AMI market was estimated to stand at $20 billion worldwide, demonstrating, alongside investments in digitalisation more generally, that businesses are enhancing their activities and offers.

The financing of the energy transition and reduction of carbon emissions remained priority areas throughout the year. For example, the European Commission adopted its first list of projects that are fully aligned with the Green Deal in November, making them eligible for funding, and the Union passed the Carbon Border Adjustment Mechanism. This puts a price on the carbon emitted during the production of carbon-intensive products entering the EU.

PLEASE SEE THE CHAPTER ENTITLED 'FEATURES OF THE GROUP’S INTERNAL CONTROL AND RISK MANAGEMENT SYSTEMS' FOR INFORMATION RELATED TO THE MOST RELEVANT RISKS AND OPPORTUNITIES INVOLVED.

5 Clean Energy Technology Observatory, 'Smart grids in the European Union', https://setis.ec.europa.eu/smart-grids-european-union-0_en, last accessed on 19/01/24

5.4. The impact of our activities

FINANCIAL RESOURCES

Our investors receive a return on their financial backing of the Group’s investment needs to drive the decarbonisation and electrification of society by developing and running a sustainable electricity system.

Our role as trustees of levy systems in Belgium and Germany ensures that renewable energy producers are financially supported and encourages the integration of environmentally friendly technologies into the grid

ASSETS

In carrying out our activities, our grid and assets are enhanced and rendered more resilient, efficient and sustainable. This means they are able to facilitate the integration of rapidly growing amounts of renewable energy into the system and meet consumer demands for electrification. They are also rendered more robust in the face of climate change, and their negative impacts on onshore and offshore environments is kept to a minimum. We encourage the development of different assets through our work, since our teams continuously identify useful technology that could be used to fulfil new and increasing system requirements

INTELLECTUAL RESOURCES

The knowledge and skills developed within each of our subsidiaries is shared across teams and departments, meaning that our collective expertise, organisational processes and systems are continuously refined and harmonised.

This collective knowledge means we are at the forefront of technological development in some areas.

EMPLOYEES AND SUBCONTRACTORS

Our activities facilitate the development of our staff, enabling them to refine and deepen their skills and knowledge about a wide range of areas. The Group's employment of subcontractors further encourages this, facilitating the exchange of new skills and best practice amongst organisations and across the sector. Our staff need to keep widening their skillset, which is a challenging task given their demanding responsibilities. We seek to manage this by putting clear health and safety measures in place.

SOCIETY AND RELATIONSHIPS

We provide society with a secure and reliable grid, integrating RES into the system and supporting socioeconomic prosperity. We regularly interact with stakeholders to ensure that the positive impact of our activities can be maximised, to minimise risks and interruptions to the system and allow actors to respond to technological, capacity and flexibility needs. Our grid projects can invite local resistance, so we address their concerns and limit possible harm to communities and landscapes.

ENVIRONMENTAL RESOURCES

Our infrastructure can cause harm to the environments in which they are constructed, which can trigger a need for broader maintenance works. However, we are strongly committed to limiting these effects by adopting innovative approaches and mitigation and compensation measures. We often work alongside local partners and NGOs to ensure the measures are as effective as possible and can be scaled up.

6. Our performance

IN TODAY’S DYNAMIC BUSINESS LANDSCAPE, WE HAVE BEEN TASKED WITH LEADING THE DECARBONISATION OF SOCIETY AND ACCELERATING OUR ACTIVITIES TO ENSURE NET ZERO IS ACHIEVED IN TIME. TO EFFECTIVELY NAVIGATE THESE CHALLENGES AND OPPORTUNITIES, WE HAVE ESTABLISHED THREE CATEGORIES OF KEY PERFORMANCE INDICATORS (KPIS): FINANCIAL, SUSTAINABLE AND OPERATIONAL. THESE KPIS WILL SERVE AS OUR GUIDING PRINCIPLES, HELPING US TO TAKE INFORMED DECISIONS TO SUPPORT OUR GROWTH.

This performance chapter relates to our core TSO business activities, meaning that most of the KPIs included relate to ETB and 50Hertz specifically. Values for ETB and 50Hertz are either presented separately or consolidated for the Group by adding up the two figures. As we work on establishing a ‘one Group, one mindset’ approach, some KPIs relate to one or more of our entities. These are highlighted throughout the accompanying notes.

6.1. Financial performance KPIs

As we navigate the challenges of the present while charting a course towards a sustainable future, our financial performance acts a vital compass for our activities. Robust financial performance remains crucial for attracting the necessary resources to fuel our expansion. Our financial stability will provide us with the capacity to roll out our CAPEX plan and will make our business attractive to potential investors and partners. This chapter explores three pivotal KPIs that encapsulate Elia Group's financial strategy

Please refer to the glossary for the definitions of terms used. The numbers displayed are consolidated for Elia Group.

REGULATORY ASSET BASE (RAB)

€12.2 bn 2023

UNIT: € BILLION

ANALYSING THE TREND

Fuelled by the realisation of our investment programme, Elia Group’s RAB grew by 12.4% in 2023. For the next five years, we project an annual RAB growth rate of nearly 19%, leading to a total RAB of €15.1bn in 2024. Elia Group expects this amount to double to €33.0bn by 2028, driven by the implementation of the €30.1 bn capital expenditure (CAPEX) plan across our two regulated markets.

€4.4

UNIT: €

ANALYSING THE TREND

EPS decreased by 8.2% (-€0.4 / share). This is the result of the execution of our investment programmes in Belgium and Germany and the solid operational performance of the regulated entities and of Nemo Link, although it was offset by higher interest expenses related to the hybrid securities and the one-off costs linked to the energyRe Giga investment. Given the investment plans we have in place at ETB and Eurogrid over the next 5 years, we expect the net profit Elia Group share to experience a compound annual growth rate of around 20%, based on current interest rate projections. In addition to this, we anticipate that we will achieve a double-digit level of growth in earnings per share over the next five years.

UNIT: %

ANALYSING THE TREND

Elia Group reported an ROE (adj.) in line with guidance of 6.9%. For 2024, Elia Group anticipates that the net profit of Elia Group share will range between €335 million and €385 million. This points towards an ROE (adj.) of between 7% to 8%.

6.2. Sustainable performance KPIs

As ActNow makes clear, our work on sustainability extends beyond the decarbonisation of the power sector. We are committed to making our activities carbon neutral, making our business processes more sustainable, and establishing a diverse workforce with a high level of wellbeing that is supported by clear organisational structures and procedures. This will enhance our work in the interest of society, strengthen our workforce, and demonstrate to stakeholders that we are a partner worth investing in. The following KPIs therefore track the progress we have made on 12 sustainable performance KPIs.

SF6 LEAKAGE RATE (2021 TO 2023)

SCOPE 1 EMISSIONS (2021 to 2023)

SCOPE 2 EMISSIONS (2021 to 2023)

1,133,626.0

1,024,414.0

852,601.0

75,598.0

68,407.0

UNIT: %

ANALYSING THE TREND

The use of SF6 as an insulating and extinguishing gas is a crucial aspect of our activities. Looking ahead to 2030, the Group has set a target to maintain consolidated figures which are well below 0.25%, in line with our SF6 phaseout programme. Additionally, a substantial reduction target of 50% for the volume of SF6 used in new assets installed by 2030 has been established, contingent on regulatory changes and permitting processes.

The offsetting of CO2 emissions resulting from SF6 losses through a certified compensation scheme since 2021 reflects a proactive approach to environmental sustainability. These developments indicate a clear trend towards greater environmental responsibility and a concerted effort to minimise the impact of SF6 usage on the climate.

UNIT: tCO2

ANALYSING THE TREND

For further insights relating to Scope 1 emissions, please consult the SF6 KPI located on the left-hand side of this page.

In Belgium, Scope 2 emissions declined, mainly because Belgian C02 intensity decreased due to the higher share of renewables in the grid’s electricity mix. However, this decrease is obscured by the switch from a production-based to a consumption-based calculation method for the power mix emission factor - making it appear that Scope 2 emissions increased slightly in 2023 compared with 2022. The new consumptionbased calculation method includes imports, which often have a higher C02 intensity than domestic electricity production.

In Germany, Scope 2 emissions followed the same trend and also decreased considerably due to stable grid loss figures and a higher share of renewables in the electricity mix. Due to our new, more precise method for calculating the power mix emission factor (moving to hourly and consumption-based calculations), emission levels have generally decreased for all electricity-focused Scope 2 categories and years since 2019.

Looking ahead to 2030, Elia Group aims to achieve a significant (28%) absolute reduction in Scope 1 and 2 emissions compared with 2019. Additionally, the goal for 2030, excluding grid losses, is to attain carbon neutrality through location-based approaches and offsetting measures, demonstrating that we are taking a proactive stance towards environmental sustainability in line with global climate change mitigation efforts.

ENVIRONMENTAL EU TAXONOMY ALIGNED CAPEX

SUSTAINALYTICS RISK INDEX SCORE

BIODIVERSITY: HIGH VOLTAGE LINES IDENTIFIED AS CRITICAL FOR BIRDS EQUIPPED

UNIT: % ANALYSING THE TREND

The ‘transmission of electricity’ is a business activity that enables the energy transition, as shown by the high percentage of alignment of our investments with the taxonomy. This is not expected to change in the future, due to a methodology which was externally audited this year for the first time. Complete information can be found in the dedicated chapter from the Sustainability report.

UNIT: # ANALYSING THE TREND

Over the past few years, Elia Group has received low risk scores. We were able to improve our risk score in 2023 by working on our ActNow programme and improving our reporting. Elia Group’s ESG Risk Rating places it in the fourth percentile in the electric utilities subindustry assessed by Sustainalytics. We will continue to focus on maintaining our low risk score even if the criteria become stricter.

UNIT: % ANALYSING THE TREND

Bird protection remained high on our priority list in 2023. We introduced a new procedure in Belgium to ensure bird protection is included both in new projects and in line upgrade projects. In addition, we collaborated with ornithologists to define a risk map which is allowing us to prioritise our efforts based on risks.

In Germany, 50Hertz started testing new bird protection markers in the “Mittlere Havelniederung” EU bird sanctuary in 2023. A major advantage of the new markers is that they can also be installed by drones without lines being disconnected. In both countries, we installed bird markers along nearly 25 km of our lines.

UNIT: % ANALYSING THE TREND

2023 was a very good year for our ecological aisle management programme, since nearly 138 ha (66.8 ha in BE and 71 ha in GER) were added during the year and we exceeded our targets in both countries. The Group target for 2030 is to expand this programme so that it covers 90% of the areas under our overhead lines, which represents 5,530 ha.

UNIT: #

ANALYSING THE TREND

The Group wants to make sure that the rate remains below 6.5 as it approaches 2030. As can be seen from the annual improvements to our TRIR over the past few years, our work and programmes related to safety have been effective. The Group is committed to continuous improvements in this area, as the next few years will be very challenging in terms of safety performance given the high CAPEX; the increased number of (high risk/offshore) projects (and the higher amount of hours delivered by subcontractors); and the anticipated growth in Elia Group’s workforce.

UNIT: % ANALYSING THE TREND

Elia Group’s target for 2030 is to maintain the rate below 5%.

After a slight increase in 2022, the absenteeism rate decreased again in 2023 to 3.8% which is well below our target and the industry average. We continuously invest in the wellbeing of our employees and are committed to continuing to do so, since the next few years will be challenging for employees given our considerable CAPEX plans.

The rate is calculated as: 100% minus the health rate.

UNIT: % ANALYSING THE TREND

Our retention policy focuses on maximising the allocation of our internal staff in a versatile way. This is demonstrated through the fact that employees are given opportunities to develop and grow in order to keep up with changing times.

UNIT: % ANALYSING THE TREND

Elia Transmission Belgium received the Top Employer award for the sixth year in a row; its most notable progress was made in the area of ‘diversity and inclusion’ (up nearly 12%). To exchange best practice with peers and further its commitment to making its workforce more diverse and inclusive, Elia Group has maintained its membership of the Equality platform for the energy sector, which was established by the European Commission.

Elia Group SA/NV, Elia Transmission Belgium SA/NV, Elia Grid International, Eurogrid International, WindGrid SA/ NV, 50Hertz Transmission and Eurogrid GmbH.

6.3. Operational performance KPIs

We develop and construct robust, reliable and innovative grid infrastructure that provides millions of consumers with electricity and will help our home countries to reach net zero. We harness the skills and expertise we have developed in Europe and apply these in new markets, so driving forward the energy transition abroad, too. Our high level of operational performance and sector-specific knowledge - illustrated by the 11 operational performance KPIs below - makes us an attractive partner for other TSOs, governments, NGOs and beyond.

GRID RELIABILITY

(BASED ON INTERUPTION TIME)

Applies to Elia Transmission Belgium (30-380 kV)

GRID RELIABILITY (BASED ON NUMBER OF INCIDENTS)

Applies to 50Hertz (220-380kV)

TOTAL INVESTMENTS

LENGTH OF NEW AND UPGRADED LINES

UNIT: %

ANALYSING THE TREND

Most interruptions take place across regional transmission grids, but this year, one specific customer was largely affected due to 3 interruptions across Elia Transmission Belgium’s grid. While it is not possible to forecast incidents, we strive to reduce interuptions completely.

UNIT: %

ANALYSING THE TREND

The value for 2023 is lower than for previous years. Due to icy conditions, 50Hertz experienced several grid incidents during the winter months.

UNIT: € BILLION

ANALYSING THE TREND

Shown above is the gross CAPEX of Elia Transmission Belgium and 50Hertz minus client contributions. CAPEX is an important metric for the Group, since it affects the RAB that serves as a basis for its regulatory remuneration. In 2023, Elia Group invested a total of €2.4 billion in CAPEX. For the period 2024-2028, Elia Group plans to invest €30.1 billion across our regulated markets in Belgium and Germany.

UNIT: KM

ANALYSING THE TREND

In Belgium, the figure shown for 2023 includes new overhead lines and the reinforcement of existing lines (HTLS). The largest project that underwent works in 2023 was the Massenhoven - Meerhout - Van Eyck project. In Germany, many of 50Hertz’s projects involved overhead lines near Berlin, alongside the construction of one offshore cable.

CONNECTED OFFSHORE GENERATION CAPACITY

RENEWABLE ENERGY COST OF CONGESTION MANAGEMENT (REDISPATCHING)

CONGESTION MANAGEMENT VOLUMES (REDISPATCHING)

UNIT: % ANALYSING THE TREND

In 2023 in Belgium, wind and photovoltaic generation reached a record high, constituting 28.2% of Belgium’s electricity mix. A new milestone was also reached in July when wind and solar power covered nearly 35% of the nation’s energy consumption.

In 2023, electricity produced from renewable energy sources made up 72% of the electricity consumption across the 50Hertz area. 50Hertz is aiming to have 100% of consumption across its control zone met with electricity generated from renewable energy sources

UNIT: MW ANALYSING THE TREND

50Hertz completed the grid connection for the Arcadis Ost 1 wind farm (which is owned by Parkwind) as part of the Ostwind 2 project. Furthermore, 50Hertz prepared the ground for more than 8 GW of grid connection capacity by entering into longterm cable supply contracts. Its priorities for 2024 will be the completion of the second Ostwind 2 section leading to the Baltic Eagle wind farm and supply chain activities to secure its project pipeline.

Elia Transmission Belgium focused on securing the environmental permits for the Princess Elisabeth Island and began conducting preliminary studies related to the project. It also published its nature inclusive design approach for the island.

UNIT: € MILLION ANALYSING THE TREND

UNIT: GWh

For 50Hertz, redispatching costs for conventional power plants decreased compared with 2022 due to decreased market prices. Since the introduction of Redispatch 2.0 (RD2.0) in November 2021, renewable power plants have been required to be 10 times more effective at relieving grid congestion than conventional facilities, leading to an increase in the amount of energy infeed that needs to be reduced. The rapid construction of renewable power plants and their outpacing of the expansion of the electricity grid has resulted in heightened grid pressure, leading to the need for increased redispatching measures.

The anticipated grid development projects that are due to be completed around 2027/2028 are expected to lead to a decrease in overall levels of redispatching in Germany, offering increased grid control and the flexibility to alleviate pressure on the grid.

For Elia Transmission Belgium, the costs linked to congestion management were significantly lowered in 2023 in comparison with the year before, mainly due to its less constrained network leading to less redispatching overall. The increased use of non-costly remedial actions on ALEGrO also helped to manage some of the congestion constraints more easily than in 2022.

NUMBER OF WINDGRID PARTNERSHIPS

ANALYSING THE TREND

A new partnership that WindGrid established with Parkwind will aid an ongoing bidding process in Norway, while WindGrid and energyRe have joined forces for the NY PPTN project in the US. This marks Elia Group’s first collaboration with energyRe on the development of a project, following Elia Group’s investment in energyRe Giga - a subsidiary of energyRe, where the project will be transferred to.

HIT RATE FOR CONSULTANCY SERVICES (EGI)

REVENUE FROM EXTERNAL CLIENTS

(EGI, Re.alto energy GmbH, WindGrid SA/NV, WindGrid USA LLC consolidated figures)

UNIT: % ANALYSING THE TREND

The figure shown is calculated as the number of offers contracted divided by the number of offers submitted. EGI reinforced its business development capabilities by fostering collaborations between its technical lines (Solution Domains) and local sales teams, leading to improved engagement with clients. Its sales teams were also reinforced across all regions: Europe, Asia and the Middle East. EGI also improved the governance relating to project signing, introducing improved follow-ups on project negotiations and a deeper scrutiny of commercial conditions. Lastly, EGI developed a new client base by working with new players (private developers, O&G industry, etc.) and new products (hydrogen, offshore grids). This is leading to new opportunities for EGI and increased chances of signing new contracts.

UNIT: € MILLION ANALYSING THE TREND

The significant surge in revenue can be attributed to a substantial rise in international consulting activities, which was driven in particular by the successful acquisition of contracts related to the Neom project. Neom, initiated by the Saudi Arabian King, aims to transition the country’s economy from its heavy reliance on oil to diverse sectors such as tourism and alternative forms of energy like solar power. Until now, WindGrid has not substantially contributed to Elia Group’s revenue.

7. Outlook for 2024

NEXT LEVEL OF INVESTMENT DELIVERY

The efficient and widespread deployment of electricity grids is crucial for achieving the goals of the European Green Deal. Access to abundant volumes of renewable energy will also offer long-term price stability and ensure that industrial competitiveness remains intact. To facilitate this, important investments in ‘leading’ grid infrastructure are needed.

Throughout 2024, Elia Group will do its utmost to accelerate the delivery of grid infrastructure. Along with the relevant authorities, we will address bottlenecks in permitting procedures and discuss ways to make the deployment of grids faster and more efficient. At the same time, we will work on securing our supply chains and avoiding delays to our projects.

Over the next five years, Elia Group will invest €30.1 billion into its projects in Belgium and Germany. That is a significant amount, and so a significant milestone in the history of our company. Consequently, we are preparing our organisation for the next level of investment delivery, supported by a new structure, new processes and additional staff. Our track record makes us confident that we will be able to deliver the new investments that society needs.

START OF A NEW REGULATORY PERIOD

In January 2024, new regulatory periods started in both Belgium and Germany, lasting 4 and 5 years respectively. The new tariff frameworks are crucial for Elia Group’s regulated activities. They will enable us to fulfil our mission, since they will provide us with the necessary resources to realise our investment plans.

In Belgium, in late 2023, we concluded our regulatory discussions with the CREG, following which the modifications to the methodology were then ratified. The newly approved framework is more reflective of current market conditions, with equity remuneration set to fluctuate in line with the Belgian 10-year OLO.

In Germany, the BNetzA launched industry discussions regarding the further development of the regulatory framework. The BNetzA is aiming to simplify the existing framework, reduce bureaucracy and accelerate cost refinancing whilst maintaining the framework’s reliability. The discussions will explore, among other things, a potential shortening of regulatory periods. We are committed to actively participating in this process to shape a regulatory framework that is aligned with the current challenges. A final decision from the BNetzA is due to be published in 2025.

IMPROVING EFFICIENCY THAT BENEFITS BOTH THE SYSTEM AND CONSUMERS

Elia Group has a major responsibility to realise investments in the most cost-effective manner possible. Ultimately, the impact on consumers must be a positive one. That's why we prioritise projects which have the greatest impact on society. In Germany, for example, we are focusing on infrastructure projects that reduce congestions, the cost of which are borne by German consumers.

Moreover, improving our operational efficiency will remain a top priority for us in 2024. We will achieve this by focusing on digitalisation and automation and by improving our maintenance activities. Additionally, the electrification of the mobility, heating and industrial sectors is offering up many opportunities.

Following the publication of our vision paper on flexible consumption in 2023, the topic is due to become more tangible during 2024. Elia Group will work on issues such as real-time pricing and launch projects that allow our customers to benefit from offering their flexibility up to the market. This will fundamentally change the way the system is managed and create value for consumers and for the system.

TOP EMPLOYER

The physical and mental safety of our staff is of paramount importance, especially given our immense CAPEX programme, the increase in offshore development (that is undertaken in challenging environments), and the pressure to accelerate grid delivery.

Throughout 2024, Elia Group will continue to focus on fostering a diverse, inclusive, and sustainable workplace to provide an excellent working environment for its employees. We believe these are important metrics to keep on attracting the right talent. In the years to come, we expect to hire around 500 new staff across the Group.

DIVERSIFIED FUNDING SOURCES

Over the next year, Elia Group will take further steps to secure diversified funding sources. We are committed to maintaining our presence in the capital markets, leveraging them to support our CAPEX plan. We strongly believe in the confidence investors have in our strategic direction amid Europe's transition to a low-carbon economy.

At the beginning of 2024, Elia Transmission Belgium successfully placed an €800 million green bond - its second green bond transaction to date. Eurogrid GmbH, 50Hertz’s parent company, secured funds totalling €1.5 billion through its third and fourth green bonds to continue to expand its grid and so drive the energy transition. This is the largest issuance amount in the company’s history. The bonds will be used to finance and/or refinance green projects that increase the integration and transmission of higher amounts of renewable electricity into the system.

Furthermore, we are strategising to broaden our funding sources and strengthen our liquidity, as demonstrated by the increased revolving credit facilities for ETB and Eurogrid GmbH during the first quarter of 2024. This diversification will provide us with the agility and resources needed to seize opportunities and effectively navigate evolving market conditions.

INCREASING OUR RELEVANCE BOTH IN EUROPE AND ON THE GLOBAL STAGE

At the end of 2023, WindGrid entered into a firm agreement to acquire of a 35.1% stake in the American clean energy company energyRe Giga (a move which was finalised in early 2024). Our distinct yet complementary capabilities will allow us to maximise the value creation of this investment. Our focus in 2024 will be on advancing the delivery of the three projects within our portfolio. As part of this, we will work on mitigating project risks and optimising the value of our investments. We will also explore opportunities to expand our project portfolio beyond its current scope.

Through our consultancy company, EGI, we will continue to help other TSOs establish renewable electricity systems.

SEARCH FOR A NEW GROUP CEO

The nomination committee of Elia Group initiated the process of selecting a new CEO following the departure of Chris Peeters at the end of 2023. A successor is expected to be announced throughout the course of 2024. Catherine Vandenborre was appointed as Elia Group’s interim CEO after Chris’ departure, so facilitating a seamless management transition process and ensuring continuity in terms of the pursuit of the Board of Directors' strategy. Marco Nix, 50Hertz’s CFO, temporarily took on Catherine’s responsibilities as the Group’s CFO.

A BIG YEAR IN TERMS OF ELECTIONS

We expect that 2024 will involve a dynamic political landscape of shifting governments. In Germany, Saxony, Thuringia and Brandenburg will hold state elections. In Belgium, elections at all political levels will be held. Moreover, European parliamentary elections will be held in June, and the U.S. will hold its next presidential election in November.

Given the current geopolitical context, we expect that governments will increase their focus on defence. The competitiveness of our companies is also gaining momentum, with energy playing a crucial role in this.

In 2024, Elia Group will continue to co-shape the evolution of energy markets by supporting new governments in their decision-making. At a Group level, we will be looking at how to fully exploit the renewable potential of our seas in the most efficient way. Today, we are faced with several open questions regarding the framework for this, including the cost allocation, spatial planning, and the integration of offshore wind into the European electricity system. Given Europe’s growing ambitions, these pending issues must be addressed. We’ll also be studying the most suitable energy mix for Belgium as it movs to net zero.

II. Governance & risk report

1. Corporate governance statement

This corporate governance statement contains the main aspects of Elia Group SA/NV’s corporate governance framework, including all relevant information on events affecting Elia Group SA/NV’s governance during the financial year 2023.

In 2023, Elia Group SA/NV’s corporate governance was based on the following pillars:

• The (Belgian) 2020 Code on Corporate Governance6, which Elia Group SA/NV has adopted as its benchmark code;

• The (Belgian) Code of companies and associations7;

• Elia Group SA/NV’s articles of association8;

• The Corporate Governance Charter of Elia Group SA/NV9 This corporate governance statement also includes the reasons for the deviations from the following provisions of the 2020 Code on Corporate Governance:

• Provision 5.6 on the maximum term of office of four years for a director;

• Provision 7.6 on the partial remuneration of a nonexecutive director in shares;

• Provision 7.9 on the setting of a minimum threshold of shares to be held by executives.

1.1. Compostion of the management bodies on 31 December 2023

BOARD OF DIRECTORS

CHAIRPERSON

• Bernard Gustin, non-executive independent director10

VICE-CHAIRPERSONS

• Bernard Thiry, non-executive director appointed upon proposal of Publi-T SC/CV11

• Geert Versnick, non-executive director appointed upon proposal of Publi-T SC/CV

DIRECTORS12

• Michel Allé, non-executive independent director

• Pieter De Crem, non-executive director appointed upon proposal of Publi-T SC/CV

• Laurence de l’Escaille, non-executive independent director

• Frank Donck, non-executive independent director

• Interfin SCRL/CVBA, permanently represented by Thibaud Wyngaard, non-executive director appointed upon proposal of Publi-T SC/CV

• Roberte Kesteman, non-executive independent director13

• Dominique Offergeld, non-executive director appointed upon proposal of Publi-T SC/CV14

• Pascale Van Damme, non-executive independent director

• Eddy Vermoesen, non-executive director appointed upon proposal of Publi-T SC/CV15

6 The (Belgian) 2020 Code on Corporate Governance can be found on the website of the Corporate Governance Committee (www.corporategovernancecommittee. be)

7 The (Belgian) Code of Companies and Associations can be found on the website of the ministry of justice (http://www.ejustice.just.fgov.be/cgi_loi/wet.pl).

8 The Articles of association of Elia Group SA/NV can be found on the website of Elia Group SA/NV (https://www.eliagroup.eu/en/about-elia-group/corporatebodies).

9 The Corporate Governance Charter of Elia Group SA/NV can be found on the website of Elia Group SA/NV (https://www.eliagroup.eu/en/about-elia-group/ corporate-bodies).

10 Bernard Gustin was reappointed as non-executive independent director by the ordinary general meeting held on 16 May 2023.

11 Bernard Thiry was appointed as non-executive non-independent director, upon proposal of Publi-T SC/CV, by the ordinary general meeting held on 16 May 2023 to replace Claude Grégoire whose mandate as non-executive non-independent director expired after the ordinary general meeting held on 16 May 2023. The mandate of Bernard Thiry started after the ordinary general meeting held on 16 May 2023.

12 The extraordinary general meeting held on 21 June 2023 approved a change to the articles of association, which now provide that the company is managed by a board of directors composed of twelve members instead of fourteen.

13 Roberte Kesteman was reappointed as non-executive independent director by the ordinary general meeting held on 16 May 2023.

14 Dominique Offergeld was reappointed as non-executive non-independent director by the ordinary general meeting held on 16 May 2023.

15 Eddy Vermoesen was appointed as non-executive director, upon proposal of Publi-T SC/CV, by the ordinary general meeting held on 16 May 2023 to replace Rudy Provoost whose mandate as non-executive non-independent director expired after the ordinary general meeting held on 16 May 2023. The mandate of Eddy Vermoesen started after the ordinary general meeting held on 16 May 2023.

ADVISORY COMMITTEES TO THE BOARD OF DIRECTORS

NOMINATION AND REMUNERATION COMMITTEE16

• Dominique Offergeld, Chairwoman

• Roberte Kesteman

• Laurence de l’Escaille

• Pascale Van Damme

• Geert Versnick

AUDIT COMMITTEE

• Michel Allé, Chairman

• Frank Donck

• Roberte Kesteman

• Dominique Offergeld

• Eddy Vermoesen

STRATEGIC COMMITTEE

• Geert Versnick, Chairman

• Michel Allé

• Pieter De Crem

• Bernard Gustin

• Bernard Thiry

• Frank Donck, standing invitee

• Dominique Offergeld, standing invitee

JOINT AUDITORS17

• EY Réviseurs d’Entreprises SRL/BV, represented by Paul Eelen

• BDO Réviseurs d’Entreprises SRL/BV, represented by Michaël Delbeke

EXECUTIVE MANAGEMENT BOARD

• Catherine Vandenborre (Chief Executive Officer ad interim and Chief Financial Officer)18

• Stefan Kapferer (TSO Head 50Hertz)

• Peter Michiels (Chief Human Resources, Internal Communication Officer and Chief Alignment Officer)

• Michael Freiherr Roeder von Diersburg (Chief Digital Officer)

• Marco Nix (Chief Financial Officer ad interim)19

SECRETARY GENERAL

• Siska Vanhoudenhoven

16 The extraordinary general meeting held on 21 June 2023 approved a change to the articles of association, which now provide that the nomination committee and the remuneration committee are merged into one new “nomination and remuneration committee”.

17 EY Réviseurs d’Entreprises/Bedrijfsrevisoren SRL/BV and BDO Réviseurs d’Entreprises/Bedrijfsrevisoren SRL/BV were reappointed as auditors of the company by the ordinary general meeting held on 16 May 2023, upon proposal of the works council of the company and at the proposal of the Board of directors after suggestion of the Audit Committee.

18 Catherine Vandenborre was appointed as Chief Executive Officer ad interim of Elia Group SA/NV by the Board of directors on 6 September 2023, following the voluntary resignation of Chris Peeters with effect from 31 October 2023.

19 Marco Nix has appointed as Chief Financial Officer ad interim of Elia Group NV/SA by the Board of directors on 10 November 2023 upon proposal of the nomination and remuneration committee.

1.2. Board of directors

Appointment procedure and term and expiry of directorships

Elia Group SA/NV is managed by a board of directors that is composed of twelve members. At least three members of the board of directors are independent directors in the meaning of the applicable legal (article 7:87 of the Code of companies and association and provision 3.5 of the 2020 Code on Corporate Governance) and statutory (article 13.3 of the articles of association) provisions. All members are appointed by the general meeting of shareholders and may be dismissed by it.

The independent directors are proposed for appointment by the board of directors to the ordinary general meeting based on the recommendation of the nomination and remuneration committee. The non-independent directors are appointed by the ordinary general meeting upon proposal of Publi-T SC/CV, in accordance with article 13.2 of the articles of association of Elia Group SA/NV.

The ordinary general meeting held on 16 May 2023 voted separately on each proposed (re-)appointment of a director in accordance with provision 5.7 of the 2020 Code on Corporate Governance20.

The directors of Elia Group SA/NV are appointed or reappointed for a maximum term of six years.

The maximum six-year term of the directorships deviates from the maximum four-year term recommended by the 2020 Code on Corporate Governance. The maximum six-year term is justified in light of the technical, financial and legal specificities and complexities that apply within the group and that require a certain level of experience achieved through continuity in the composition of the board of directors.

20 It concerns the reappointment of Bernard Gustin (independent director), the reappointment of Roberte Kesteman (independent director), the reappointment of Dominique Offergeld (appointed upon proposal of Publi-T SC/CV), the appointment of Bernard Thiry (appointed upon proposal of Publi-T SC/CV) and the appointment of Eddy Vermoesen (appointed upon proposal of Publi-T SC/CV).

Bernard Gustin Pieter De Crem Dominique Offergeld

Bernard Thiry Laurence de L’escaille Pascale Van Damne Geert Versnick Franck Donck Eddy Vermoesen

Michel Allé Roberte Kesteman Thibaud Wyngaard

Specific requirements for members of the board of directors

The articles of association stipulate that the board of directors is composed exclusively of non-executive directors.

In addition, in accordance with the articles of association, the members of the board of directors may not be members of the supervisory board, the board of directors or bodies that legally represent an undertaking that fulfils any of the following functions: production or supply of electricity. Nor may the members of the board of directors carry on any other function or activity, whether remunerated or not, in favor of an undertaking falling under the preceding sentence.

In addition to the legal requirements regarding their independence (see above), the independent directors are appointed partly for their knowledge of financial management and partly for their relevant technical knowledge of the company's activities.

In accordance with the articles of association and the Code of companies and associations, at least one third of the directors must be of the opposite sex to the remaining two thirds.

In accordance with the Corporate Governance Charter of Elia Group SA/NV and in line with the provision 5.5 of the 2020 Code on Corporate Governance, members of the board of directors may not accept more than five directorships in listed companies.

For the composition of the advisory committees, specific skills are required.

In addition to the legal and statutory selection criteria, the board of directors has approved on 6 April 2023, in application of provision 5.1 of the 2020 Corporate Governance Code, additional criteria applicable to all new directors. All these criteria can be found in the Corporate Governance Charter of Elia Group SA/NV published on the websites www.elia.be (under ‘About Elia’, ‘Corporate Governance’, ‘Articles of association & Corporate Governance

Charter’) and www.eliagroup.eu (under ‘About Elia Group’, ‘Corporate governance’, ‘Articles of association & Corporate governance charter’).

The composition of the board of directors guarantees that decisions are taken in the interest of Elia Group SA/NV. This composition is based on a gender mix and on diversity in general, as well as on the complementarity of skills, experience and knowledge. Additionally, when renewing the directorships of the members of the board of directors, care must be taken to ensure that a linguistic balance is achieved and maintained within the group of directors of Belgian nationality.

Current composition of the board of directors

The board of directors is currently composed of twelve directors. Six directors are independent non-executive directors, in the meaning of article 7:87 of the Code of companies and associations and provision 3.5 of the 2020 Code on Corporate Governance. The six other non-executive directors are non-independent directors appointed by the ordinary general meeting upon proposal of Publi-T SC/CV, as per the current shareholder structure and article 13.2 of the articles of association of Elia Group SA/NV (see also the ‘Shareholder structure’ section of this statement).

Diversity within the Board of Directors

Number of directors on 31 December 2023 2023

Men

Women

Aged 35 < 54 1

Aged ≥ 55 7

Aged 35 < 54 1

Aged ≥ 55 3

Changes in the composition of the Board of Directors

Luc De Temmerman tendered his voluntary resignation as non-executive independent director of Elia Group SA/NV with effect from 16 May 2023.

Cécile Flandre tendered her voluntary resignation as nonexecutive non-independent director of Elia Group SA/NV with effect from 30 January 2023 (24h00).

The mandate as non-executive non-independent director of Elia Group SA/NV of Rudy Provoost expired at the end of the ordinary general meeting held on 16 May 2023. The ordinary general meeting appointed Eddy Vermoesen on 16 May 2023 as non-executive non-independent director as from that date.

The mandate as non-executive non-independent director of Elia Group SA/NV of Claude Grégoire expired at the end of the ordinary general meeting held on 16 May 2023. The ordinary general meeting appointed Bernard Thiry on 16 May 2023 as non-executive non-independent director as from that date.

Term and expiry of directorships

The directorships of Bernard Gustin, Roberte Kesteman and Dominique Offergeld were renewed at the ordinary general meeting of 2023 for a six-year term, starting after the ordinary general meeting held on 16 May 2023 and expiring immediately after the 2029 ordinary general meeting relating to the financial year ending on 31 December 2028.

Frank Donck’s directorship expires immediately after the 2027 ordinary general meeting relating to the financial year ending on 31 December 2026.

Geert Versnick, Pieter De Crem and Interfin SCRL/ CVBA’s (permanently represented by Thibaud Wyngaard) directorships will expire immediately after the 2026 ordinary general meeting relating to the financial year ending 31 December 2025.

The directorships of Laurence de l’Escaille and Pascale Van Damme will expire immediately after the 2025 ordinary general meeting relating to the financial year ending 31 December 2024. This is also the case for the directorship of Michel Allé.

For the sake of clarity, the end of term of the mandate of each director referred to above is also mentioned in the following chart:

End of term immediately after the ordinary general meeting to be held in (relating to financial year ending)

Bernard Gustin, Chairman 2029 (2028)

Geert Versnick, ViceChairman 2026 (2025)

Bernard Thiry, ViceChairman 2029 (2028)

Michel Allé 2025 (2024)

Pieter De Crem 2026 (2025)

Laurence de l’Escaille 2025 (2024)

Frank Donck 2027 (2026)

Interfin SCRL/CVBA 2026 (2025)

Roberte Kesteman 2029 (2028)

Dominique Offergeld 2029 (2028)

Pascale Van Damme 2025 (2024)

Eddy Vermoesen 2029 (2028)

Competences of the Board of Directors

Elia Group SA/NV has a one-tier (“système moniste/ monistisch system”) structure as governance model. The board of directors has, in accordance with article 17.2 of the articles of association, the power to perform all acts necessary or useful for achieving the statutory purpose, with the exception of those acts reserved by law or by the articles of association to the general meeting. Thus, the board of directors has inter alia the following powers:

1° approval/amendment of the general, financial and dividend policy of the company, including the strategic orientations or options for the company as well as the principles and problems of a general nature, in particular with regard to risk management and personnel management;

2° approval, follow-up and amendment of the business plan and budgets of the company;

3° without prejudice to other specific powers of the board of directors, entering into any commitment where the amount exceeds fifteen million euros (EUR 15,000,000), unless the amount as well as its main characteristics are explicitly provided for in the annual budget;

4° decisions on the corporate structure of the company and of the companies in which the company holds a participation, including the issue of securities;

5° decisions on the incorporation of companies and on the acquisition or transfer of shares (regardless of the manner in which these shares are acquired or transferred) in companies in which the company directly or indirectly holds a participating interest, insofar as the financial impact of this incorporation, acquisition or transfer exceeds two million five hundred thousand euros (EUR 2,500,000);

9° decisions concerning the launch of or acquisition of participations in activities outside the management of electricity networks;

10° strategic decisions to manage and/or acquire new electricity networks outside Belgium;

11° in relation to (i) Elia Transmission Belgium SA/NV and Elia Asset SA/NV: monitoring their general policy as well as the decisions and matters referred to in 4°, 5°, 6°, 8°, 9° and 10° above; (ii) the key subsidiaries designated by the board of directors (other than Elia Transmission Belgium SA/NV and Elia Asset SA/NV): the approval and monitoring of their general policy as well as the decisions and matters referred to in 1° to 10° above; (iii) the subsidiaries other than the key subsidiaries: the approval and monitoring of their general policy as well as the decisions and matters referred to in the 4°, 5°, 6°, 8°, 9° and 10° above;

12° exercising general supervision on the executive management board; in that context, the board of directors shall also supervise the way in which the business activity is conducted and developed in order inter alia to assess whether the company’s business is being conducted in a due and proper way;

13° the powers granted to the board of directors by or by virtue of the Belgian Code of companies and associations or the articles of association.

In accordance with the provisions of the articles of association, the board of directors is supported by three advisory committees: the nomination and remuneration committee, the audit committee and the strategic committee. The board of directors ensures that these advisory committees operate in an efficient manner.

6° decisions on strategic acquisitions or alliances, significant divestments or transfers of core activities or assets of the company;

7° significant changes to accounting or tax policies;

8° significant changes in the activities;

In the framework of the risk management competence of the board of directors, the board of directors approved a reference framework for internal control and risk management, established by the executive management board, that is based on the COSO II framework. The board of directors has also appointed a Compliance Officer who is responsible for monitoring the company's compliance with laws and regulations and for applying the relevant internal guidelines. The Compliance Officer reports at least once a year to the board of directors on the execution of his mission.

With respect to the exercise of its supervision oversight responsibilities (see item 12° above), the board of directors is at least responsible for the following:

• exercising general supervision on the executive management board; in that context, the board of directors shall also supervise the way in which the business activity is conducted and developed in order to, inter alia, assess whether the company’s business is being conducted in a due and proper way;

• monitoring and reviewing the effectiveness of the advisory committees of the board of directors;

• taking all necessary measures to ensure the integrity and timely publication of the financial statements and other significant financial and non-financial information communicated to shareholders and potential shareholders;

• approving an internal control and risk management framework, set up by the executive management board and evaluating the implementation of this framework. The board of directors also describes in the annual report the main features of the internal control and risk management systems of Elia Group SA/NV;

• supervising the performance of the statutory auditors and the internal audit function, taking into account the review carried out by the audit committee.

• The special general meeting of shareholders held on 18 May 2021 conferred the power to the board of directors to acquire the company’s own shares, without the total number of own shares held by Elia Group SA/NV pursuant to this power exceeding 10% of the total number of shares, for a compensation that cannot be lower than 10% below the lowest closing price in the thirty days preceding the transaction and not higher than 10% above the highest closing price in the thirty days preceding the transaction.

This power is conferred for a period of five years as from 4 June 2021. It applies to the board of directors and, to the extent necessary, to any third party acting on behalf of the company.

Meetings and decision-making

The board of directors meets whenever required in the interests of the company and at least once per trimester. It must be convened whenever the company’s interests so require and whenever at least two directors so request. It deliberates validly in accordance with the rules that it lays down.

The meetings of the board of directors can be held via video conference, conference call or using other means of remote communication, provided that all the members agree and the organizational principles of the board are adhered to. The decisions of the board of directors can be taken in accordance with article 7:95, second paragraph of the Code of companies and associations by unanimous written agreement of the directors.

The board of directors constitutes a collegiate body in which the members strive for consensus in their deliberations.

The deliberations of the board of directors are set down in minutes. These minutes are filed in a special register.

Activity report

In 2023, the board of directors of Elia Group SA/NV met fourteen times.

The board of directors primarily focused on strategic issues, the financial and regulatory situation of the company and its subsidiaries, the digitalization, the progress on major investment projects, various governance matters and the follow-up of the internal audits and risks.

Members who were unable to attend usually granted a proxy to another member. In accordance with article 19.4 of the articles of association of the company, members who are absent or unable to attend may grant a written proxy to another member of the board of directors to represent them at a given meeting of the board of directors and vote on their behalf at that meeting. However, no member of the board of directors can hold more than two proxies.

Attendance rate

Bernard Gustin, Chairman 14/14

Geert Versnick, Vice-Chairman 14/14

Claude Grégoire, Vice-Chairman (until 16 May 2023) 3/4

Bernard Thiry, Vice-Chairman (as from 16 May 2023) 10/10

Michel Allé 14/14

Pieter De Crem 14/14

Laurence de l’Escaille 14/14

Luc De Temmerman (until 16 May 2023) 4/4

Frank Donck 11/14

Cécile Flandre (until 30 January 2023) 1/1

Interfin CVBA (permanently represented by Thibaud Wyngaard) 13/14

Roberte Kesteman 14/14

Dominique Offergeld 14/14

Rudy Provoost (until 16 May 2023) 3/4

Pascale Van Damme 13/14

Eddy Vermoesen (as from 16 May 2023) 10/10

Conflict of interest

The directors of Elia Group SA/NV must strictly comply with the provisions of article 7:96 of the Code of companies and associations. The procedure of article 7:96 of the Code of companies and associations was not applied in 2023, as there were no conflicts of interest of a patrimonial nature within the meaning of article 7:96 of the Code of companies and associations. In the case of sensitive or confidential information, directors consult with the Chairman of the board of directors, in accordance with the Corporate Governance Charter.

Advisory committees

As set out above, in order to carry out its tasks and responsibilities effectively, the board of directors is supported by three advisory committees: the nomination and remuneration committee, the audit committee, and the strategic committee (see below).

In principle, an advisory committee makes recommendations to the board of directors in certain specific matters for which it has the necessary expertise. The power of decision itself rests exclusively with the board of directors. The role of an advisory committee is therefore limited to providing advice to the board of directors.

The board of directors monitors the effectiveness of the advisory committees.

Members of the executive and senior management may be invited to attend advisory committee meetings to provide relevant information and insights into their areas of responsibility.

Each advisory committee reports to the board of directors after each meeting.

Secretary to the Board of Directors

The board of directors appointed a Secretary General who advises the board of directors on all matters of governance. The Secretary General performs all administrative duties of the Board of directors (agenda, minutes, filing, etc.) and ensures the preparation of documents necessary to carry out the tasks of the board of directors.

The role of the Secretary General includes inter alia:

• supporting the board of directors and its committees on all governance matters;

• preparing the Corporate Governance Charter and the corporate governance statement;

• ensuring a good information flow within the board of directors and its committees and between the executive management board and the board of directors;

• ensuring that the essence of the discussions and decisions at board meetings are accurately captured in the minutes; and

• facilitating induction and assisting with professional development as required.

Directors have individual access to the Secretary General.

Interactions with the Executive Management Board

The Chairman establishes a close relationship with the Chief Executive Officer and provides him/her with support and advice, while respecting the executive responsibility of the Chief Executive Officer.

The Chairman ensures effective interaction between the board of directors and the executive management board. There is a periodic, institutionalized interaction between the board of directors and the executive management board in the form of a statutory reporting obligation on the part of the executive management board to the board of directors.

The Chairman and Vice-Chairman of the executive management board may, together or individually, participate in the meetings of the board of directors in an advisory capacity.

Interactions with the shareholders

The Chairman of the board of directors ensures effective communication with shareholders and ensures that directors develop and maintain an understanding of the views of the shareholders and other significant stakeholders.

The Elia website also contains a calendar of periodic information and general meetings

Shareholders and interested parties can always address their questions directly to the Investor Relations department (see here for contact details).

Evaluation

The board of directors’ evaluation procedure is conducted in accordance with principle 9.1 of the 2020 Code on Corporate Governance.

The nomination and remuneration committee has prepared a new procedure in accordance with principle 9.2 of the 2020 Code on Corporate Governance for the evaluation of directors proposed for reappointment. This evaluation procedure is carried out by the nomination and remuneration committee and concerns:

• the attendance of the director at meetings of the board and, if applicable, the advisory committees to the board;

• the director’s engagement in discussions and decisionmaking;

• the director's constructive involvement in discussions and decision-making.

The Chairman of the nomination and remuneration committee organizes an exit interview with the directors who are not nominated for reappointment.

The results of the evaluations carried out in accordance with principles 9.1 and 9.2 of the 2020 Code on Corporate Governance are discussed by the board of directors and, as the case may be, in accordance with principle 9.3 of the 2020 Code on Corporate Governance, all necessary measures deemed appropriate for the proper functioning of the board of directors are taken.

1.3. Nomination & remuneration committee

Composition

The nomination and remuneration committee is composed of at least three and maximum five directors, of whom the majority are independent and at least one third nonindependent.

The nomination and remuneration committee is currently composed of five non-executive directors, of whom three are independent.

Competences

In addition to its usual support role to the board of directors, the nomination and remuneration committee is responsible, pursuant to article 7:100 of the Code of companies and associations and to article 16.1 of the articles of association, for advising and supporting the board of directors with regards to the appointment of directors, the CEO and the members of the executive management board and making recommendations to the board of directors, in particular regarding the remuneration policy and the remuneration of the members of the executive management board and of the board of directors.

In particular, the nomination and remuneration committee exercises the following powers:

• formulating proposals to the board of directors on the remuneration policy of the directors, the other executives referred to in article 3:6, § 3, last paragraph of the Code of companies and associations, and the members of the executive management board and, if applicable, on the resulting proposals to be submitted by the board of directors to the shareholders’ general meeting;

• formulating proposals to the board of directors on the individual remuneration of the directors, the other executives referred to in article 3:6, § 3, last paragraph of the Code of companies and associations, and the members of the executive management board, including the variable remuneration (including, for the other executives referred to in article 3:6, § 3, last paragraph of the Code of companies and associations and the members of the executive management board, exceptional remuneration in the form of bonuses) and long-term performance bonuses, whether or not linked to shares, in the form of stock options or other financial instruments, and severance payments, and, if applicable, on the proposals arising therefrom which the board of directors must submit to the shareholders’ general meeting;

• preparing the remuneration report which the board of directors attaches to the corporate governance statement mentioned in article 3:6, § 2 of the Code of companies and associations (that is submitted for consultative vote to the ordinary general meeting);

• Commenting on the remuneration report at the ordinary general meeting.

Activity report

The remuneration committee (prior to the merger) met four times between 1 January 2023 and 21 June 202321.

Attendance rate

Luc De Temmerman, Chairman 4/4

Pieter De Crem 4/4

Roberte Kesteman 4/4

Dominique Offergeld 4/4

Pascale Van Damme 4/4

Once a year Elia Group SA/NV evaluates its management staff in accordance with its performance management policy. This policy also applies to members of the executive management board. The nomination and remuneration committee approved the proposed collective and individual targets for the executive management board for 2023. Accordingly, the nomination and remuneration committee evaluates the members of the executive management board on the basis of a series of collective and individual targets, of both a quantitative and qualitative nature, also taking into account the feedback from internal and external stakeholders. The remuneration policy for members of the executive management board includes, among other things, an annual variable remuneration and long term incentive (LTI) spread out over the multi-year regulation period. The annual variable remuneration, which is connected to Elia Group SA/NV’s strategy, consists of two components: the attainment of collective quantitative targets and the individual performances, including progress on net profit, infrastructure projects, safety and culture, security of (electricity) supply linked to sustainability and efficiency targets. In addition, the remuneration policy foresees in the possibility to allocate exceptional cash bonuses for specific projects in specific, non-recurring cases.

21 The extraordinary general meeting of Elia Group SA/NV has decided on 21 June 2023 to merge the nomination committee and the remuneration committee of Elia Group SA/NV into one new nomination and remuneration committee.

During the financial year 2023, the following budget neutral changes were made to the remuneration policy:

• an adjustment of the emoluments of the directors and

• a reduction of the number of directors from fourteen to twelve. This remuneration policy was approved by the ordinary general meeting held on 16 May 2023.

In addition, the remuneration committee prepared the remuneration report (financial year 2022) for consultative vote of the ordinary general meeting held on 16 May 2023.

In view of provision 7.6 of the 2020 Code on Corporate Governance, the board of directors has decided to follow the recommendation of the remuneration committee according to which a share based remuneration is not suitable within Elia Group SA/NV as (i) Elia Group’s activities are by nature organized in such a way as to present a low risk profile and are focused on the long term and (ii) the shareholding structure is based on a reference shareholding that naturally pursues fixed long-term objectives and sustainability goals. In addition (and in deviation from provision 7.9 of the 2020 Code on Corporate Governance), the board of directors decided not to impose a minimum threshold of shares to be held by the members of the executive management board. The board of directors is indeed of the opinion that the way in which the remuneration of the members of the executive management board is structured sufficiently contributes to the long-term interests and the sustainability of the company (see also the remuneration report for explanations as to provisions 7.6 and 7.9 of the 2020 Code on Corporate Governance).

The nomination committee met seven times between 1 January 2023 and 21 June 202322.

Luc De Temmerman (until 16 May 2023)

Frank Donck

In accordance with its competences under the articles of association, the nomination committee dealt in 2023 in particular with the following matters: compliance with the requirements in the area of full ownership unbundling with regards to the non-executive directors (article 13.1 of the articles of association of Elia Group SA/NV), proposal for the (re-)appointment of non-executive directors, follow up of future board mandates to be renewed in 2023, and the composition of the advisory committees.

The nomination and remuneration committee met six times between 21 June 2023 and 31 December 202323

Offergeld, Chairwoman

22 On 21 June 2023, the extraordinary general meeting of Elia Group SA/NV has decided to merge the nomination committee and the remuneration committee of Elia Group SA/NV into one new nomination and remuneration committee.

23 On 21 June 2023, the extraordinary general meeting of Elia Group SA/NV has decided to merge the nomination committee and the remuneration committee of Elia Group SA/NV into one new nomination and remuneration committee.

1.4. Audit committee

Composition

The audit committee is composed of at least three and maximum five directors, of whom two shall be independent directors.

The audit committee is currently composed of five nonexecutive directors, three of whom are independent.

The members of the audit committee have a collective expertise in the field of the company's activities. At least one member of the audit committee must have sufficient expertise in terms of accounting and audit.

Pursuant to article 3:6, §1, 9° of the Code of companies and associations, the annual report must contain justification of the independence and accounting and auditing competence of at least one member of the audit committee. The internal rules of procedure of the audit committee require, in this respect, that all members of the audit committee have the sufficient experience and expertise required to exercise the role of the audit committee, particularly in terms of accounting, auditing and finance. The internal rules of procedure of the audit committee provide that the professional experience of at least two members of the audit committee must be detailed in this report. The experience of Michel Allé, Chairman of the audit committee, and of Dominique Offergeld, member of the audit committee, are described in detail below.

Michel Allé (non-executive independent director of Elia Group SA/NV, Elia Transmission Belgium SA/NV and Elia Asset SA/NV since 17 May 2016 and Chairman of the audit committee) has master degrees in physics civil engineering and economics (both from the Université Libre de Bruxelles (ULB)). Alongside his academic career as a professor of economics and finance (Solvay Brussels School, ULB’s Ecole Polytechnique), he worked for many years as a Chief Financial Officer. In 1979, he began his career in the service of the Prime Minister, as an advisor in the Science Policy Department. He was appointed director of the National

Energy R&D Program in 1982 and then director in charge of Innovative Companies. In 1987 he joined the Cobepa group where he held many positions, including Vice-President of Mosane from 1992 to 1995. From 1995 to 2000 he was a member of the Cobepa group’s executive committee. He then served as Chief Financial Officer of BIAC between 2001 and 2005 and as Chief Financial Officer of SNCB (Belgian Railways) between 2005 and 2015. He also has extensive experience as a director, including past and present directorships at Telenet, Zetes, Eurvest (Nicols), D’Ieteren, Epic Therapeutics SA, Neuvasq Biotechnologies SA and Dreamjet Participations SA. He has chaired the Zetes audit committee.

Dominique Offergeld (non-executive director of Elia Group SA/NV, Elia Transmission Belgium SA/NV and Elia Asset SA/NV, appointed upon proposal of Publi-T SC/CV) has a degree in economics and social science (specialisation: public economics) from the Université Notre Dame de la Paix in Namur. She has taken various extra-academic program, including the General Management Program at Cedep (INSEAD) in Fontainebleau (France). She started her career at the Générale de Banque (now BNP Paribas Fortis) in the corporate finance department in 1988, and was subsequently appointed as specialist advisor to the vicepresident and minister for economic affairs of the Walloon Region in 1999. In 2001 she became advisor to the deputy prime minister and minister for foreign affairs. Between 2004 and 2005, she was deputy director of the office of the minister for energy, subsequently becoming general advisor to the SNCB holding company in 2005. She was previously director of (among others) Publigas and government commissioner at Fluxys. She was also Chairwoman of the board of directors and the audit committee of SNCB. Between 2014 and 2016, she was director of the minister for mobility’s strategy unit, with responsibility for Belgocontrol and the SNCB. She has been CFO of ORES since August 2016, a position she also held between 2008 and 2014.

Competences

In addition to its usual support role to the board of directors, the audit committee is, pursuant to article 7:99 of the Code of companies and associations and article 15.1 of the articles of association, in particular responsible for:

• examining the accounts and exercising control over the budget;

• monitoring the financial reporting process;

• monitoring the information to be included in the so called non-financial statements of the annual reports (which are currently included in a sustainability report by the company) according to Belgian and European legislation as well as the financial information requested by the strategic committee and forming the basis for the compliance with the Taxonomy legislation by the Elia group:

• monitoring the effectiveness of the company’s internal control and risk management systems;

• monitoring the internal audit and its effectiveness;

• monitoring the statutory audit of the annual accounts, including follow-up on questions raised and recommendations made by the statutory auditors and, as the case may be, by the auditor responsible for monitoring the consolidated accounts;

• reviewing and monitoring the independence of the statutory auditors and, as the case may be, of the auditor responsible for monitoring the consolidated accounts, in particular regarding the provision of additional services to the company;

• formulating a proposal to the board of directors for the (re) appointment of the statutory auditors, as well as making recommendations to the board of directors regarding the conditions of their appointment;

• as the case may be, investigating the issues giving rise to the resignation of the statutory auditors, and making recommendations regarding all appropriate actions in this respect;

• monitoring the nature and extent of the non-audit services provided by the statutory auditors;

• reviewing the effectiveness of the external audit process. The audit committee makes recommendations on the selection, (re)appointment and resignation of the Head of Internal Audit.

At the beginning of each year, the audit committee asks the Head of Internal Audit for his or her "Annual Work Plan". The Audit Committee ensures that an appropriate balance is struck between financial and operational audit work. This "Annual Work Plan" is communicated by the Head of Internal Audit to the executive management board at the same time.

The audit committee evaluates at least once a year the effectiveness of the internal control and risk management systems with the Head of Internal Audit, the external auditors and any experts whose intervention the committee considers necessary.

The purpose of this evaluation is to ensure that the main risks (including risks related to fraud and compliance with applicable laws and regulations) are properly identified, managed and reported.

The audit committee reviews the comments on internal control and risk management included in this statement of the company's annual report.

In addition, the audit committee reviews the specific arrangements in place for the company's employees to raise concerns, in confidence, about possible irregularities in financial reporting or other matters.

The audit committee may investigate any matter that falls within its competences. For this purpose, it the required resources, has access to all information, with the exception of confidential commercial data regarding grid users, and can call on internal and external experts for advice.

Activity report

The audit committee met eight times in 2023.

Attendance rate

Michel Allé, Chairman

Frank Donck

Roberte Kesteman

Dominique Offergeld

8/8

6/8

8/8

8/8

Rudy Provoost (until 16 May 2023) 1/4

Eddy Vermoesen (as from 21 June 2023) 3/3

In 2023, the audit committee examined the 2022 annual accounts, under both Belgian GAAP and IFRS as well as the half-yearly results as at 30 June 2023 and the 2023 quarterly results, in accordance with Belgian GAAP and IFRS rules. The audit committee also reviewed the yearly budget process and the Elia Group Business Plan for 2024-2028, including the financial policy and fundings.

In addition, the audit committee followed up the risk management activity and took note of the internal audits carried out and the recommendations made. The audit committee follows an action plan for each internal audit carried out, in order to improve the efficiency, traceability and awareness of the areas audited and thus reduce the associated risks and assure that the control environment and risk management are appropriate. The audit committee followed the various action plans from a number of perspectives (timetable, results, priorities) on the basis, among other things, of an activity report from the Internal Audit department. The audit committee noted the strategic risks and the ad-hoc risk analyses based on the environment in which the group operates.

The audit committee also reviewed in 2023 the process of the capital increases in 2023 and it has assisted the strategic committee with potential M&A projects.

1.5. Strategic committee

Composition

The strategic committee is composed of not more than five directors, two of whom are independent.

The strategic committee is currently composed of five directors, two of whom are independent.

Two directors are invited on a permanent basis to the meetings of the strategic committee.

Since 21 June 2023, Geert Versnick chairs the strategic committee, while Dominique Offergeld is a standing invitee. The other members of the committee are Michel Allé, Bernard Gustin, Bernard Thiry and Pieter De Crem (and Frank Donck as a standing invitee).

Competences

Elia Group SA/NV respects provision 4.2 of the 2020 Code on Corporate Governance.

The Strategic Committee has an advisory role and is responsible for providing advice and recommendations to the board of directors on the matters entrusted to it. The strategic committee has no decision-making powers and has therefore no authority to decide on the strategy of Elia Group SA/NV.

The strategic committee is responsible for providing advice and recommendations to the board of directors regarding the company's business development activities and international investment policy in the broad sense of the term, including the method of financing.

The strategic committee also advices the board of directors on the sustainability policy of Elia Group SA/NV as well as on the reporting of non-financial information in the annual report according to the Belgian and European legislation, including the European taxonomy legislation.

The strategic committee examines the issues raised, without prejudice to the role of the other advisory committees set up within the board of directors.

Activity report

The strategic committee met nine times in 2023.

Attendance rate

Geert Versnick, Chairman (as from 21 June 2023) 7/7

Michel Allé 9/9

Pieter De Crem (as from 21 June 2023) 5/7

Claude Grégoire (until 16 May 2023) 2/2

Bernard Gustin 9/9

Dominique Offergeld (until 21 June 2023) 2/2

Rudy Provoost (until 16 May 2023) 2/2

Bernard Thiry (as from 21 June 2023) 7/7

1.6. Executive management board

Composition of the executive management board on 31 December 2023

As mentioned above, Elia Group SA/NV has a one-tier structure (“système moniste/monistich system”) as governance model. In accordance with the possibility provided for by article 7:121 of the Code of companies and associations, and pursuant to its articles of association, the board of directors delegated the day-to-day management to an executive management board (Collège de gestion journalière/College van dagelijks bestuur).

Catherine Vandenborre Chief Executive Officer ad interim & Chief Financial Officer

Marco Nix Chief Financial Officer ad interim

Stefan Kapferer Chief Executive Officer 50Hertz

Michæl Freiherr Rœder Von Diersburg Chief Digital Officer

Peter Michiels

Competences of the Executive Management Board

In accordance with Article 17.3 of the articles of association, the executive management board is responsible for, within the limits of the rules and principles of general policy and the decisions adopted by the board of directors of the company, all acts and decisions that do not exceed the needs of the daily management of the company, as well as those acts and decisions that do not justify the intervention of the board of directors for reasons of minor importance or urgency, including:

1° the day-to-day management of the company, including all commercial, technical, financial, regulatory and personnel matters related to this day-to-day management of the company, including, inter alia, all commitments (i) when the amount is less than or equal to 15 million euros (EUR 15,000,000) or (ii) when the amount as well as its main characteristics are explicitly provided for in the annual budget;

2° the regular reporting to the board of directors on its operational activities in the company in execution of the powers granted in accordance with article 17.3 of the articles of association, with due observance of the legal restrictions regarding access to commercial and other confidential data relating to net users and the processing thereof and the preparation of the decisions of the board of directors, including in particular: (a) timely and accurate preparation of the annual accounts and other financial information of the company in accordance with the applicable accounting standards and company policy, and the appropriate communication thereof; (b) preparation of the adequate publication of key non-financial information about the company; (c) preparation of the financial information in the half-yearly statements that will be submitted to the audit committee for advice to the board of directors as part of its general task of monitoring the financial reporting process; (d) implementation of internal controls and risk management based on the framework approved by the board of directors, without prejudice to the follow-up of the implementation within this framework by the board of directors and the investigation conducted by the audit

committee for this purpose; (e) submitting to the board of directors the financial situation of the company; (f) making available the information necessary for the board of directors to carry out its duties, in particular by preparing proposals on the policy issues set out in article 17.2 of the articles of association (see the competences of the board of directors above);

3° the regular reporting to the board of directors on its policy in the key subsidiaries designated by the board of directors and the annual reporting to the board of directors on its policy in the other subsidiaries and on the policy in the companies in which the company directly or indirectly holds a participating interest;

4° all decisions relating to proceedings (both before the Supreme Administrative Court and other administrative jurisdictions, as well as before the ordinary courts of law and arbitration tribunals) and in particular decisions in the name and for the account of the company to file, amend or withdraw an appeal and to appoint one or more lawyers to represent the company;

5° all other competences delegated by the board of directors.

The executive management board has all competences necessary, including the power of representation, and sufficient margin for maneuver to exercise the competences that have been delegated to it and to propose and implement a corporate strategy, without prejudice to the competences of the board of directors.

Meetings and decision-making

The executive management board generally meets at least once a month. A member of the executive management board who is unable to attend usually grants a proxy to another member of the executive management board. A proxy can be given through every means of written communication (of which the authenticity can be reasonably determined) to another member of the executive management board, in accordance with the internal rules of procedure of the executive management board. However, no member may hold more than two proxies. In 2023, the executive management board met on 21 occasions.

Each quarter, the executive management board submits a written report to the board of directors. The executive management board reports at each meeting of the board of directors on all its responsibilities, in particular the management by the Elia Group of the transmission system activities in the main Belgian and German affiliates of the Elia Group (Elia Transmission Belgium SA/NV, Elia Asset SA/NV and 50Hertz Transmission GmbH). As part of its reporting in 2023, the executive management board kept the board of directors informed on the company’s/the group’s financial situation, the follow-up of its investment program (including the monitoring and development of major investment projects), the follow-up on Elia Group’s infrastructure (including as to maintenance and operations), the evolutions in the energy policy field (including the main decisions taken by regulators and administrations), human resources matters, safety and security issues, M&A/business development matters and the evolution of the share price. The executive management board also follows-up the most important risks of the Elia Group and their mitigation measures in this regard as well as the recommendations of the internal audit.

Changes in the composition of the Executive Management Board

The composition of the executive management board changed in 2023. In September 2023, Chris Peeters submitted his voluntary resignation as Chief Executive Officer of Elia Group SA/NV as of 31 October 2023.

Following the voluntary resignation of Chris Peeters as Chief Executive Officer of Elia Group SA/NV, the board of directors decided on 6 September 2023 to appoint Catherine Vandenborre with immediate effect as Chief Executive Officer Ad Interim of Elia Group SA/NV, Elia Transmission Belgium SA/NV and Elia Asset SA/NV.

On 10 November 2023, the board of directors has decided to appoint Marco Nix with immediate effect as Chief Financial Officer Ad Interim of Elia Group SA/NV.

Frédéric Dunon, as of 12 December 2023 appointed by the respective boards of directors as Chief Executive Officer of Elia Transmission Belgium SA/NV and Elia Asset SA/NV, is invited to attend the executive management board of Elia Group SA/NV24.

The composition of the executive management board is based on gender diversity and diversity in general, as well as on the complementarity of skills, experience and knowledge. When searching for and when appointing new members of the executive management board, special attention is paid to diversity parameters in terms of age, gender and complementarity.

1.7. Joint auditors

The ordinary general meeting of Elia Group SA/NV held on 16 May 2023 reappointed EY Réviseurs d’Entreprises SRL/ BV and BDO Réviseurs d’Entreprises SRL/BV as auditors of the company for a period of three years. Their mandate will expire immediately after the 2026 ordinary general meeting, relating to the financial year ending 31 December 2025. EY Réviseurs d’Entreprises SRL/BV is represented for the exercise of this office by Paul Eelen. BDO Réviseurs d’Entreprises SRL/BV is represented for the exercise of this office by Michaël Delbeke.

24 The boards of directors of Elia Transmission Belgium SA/NV and Elia Asset SA/NV decided on 12 December 2023 to appoint Frédéric Dunon as Chief Executive Officer of Elia Transmission Belgium SA/NV and Elia Asset SA/NV. Catherine Vandenborre, Chief Financial Officer, was appointed as Chairwoman of the executive management board of Elia Transmission Belgium SA/NV and Elia Asset SA/NV.

1.8. Significant events in 2023

Amendments to the articles of association following implementation of the capital increase of 26 April 2023 reserved for staff members

The extraordinary general meeting of Elia Group SA/NV of 21 June 2022 approved the proposed two-fold capital increase reserved for members of staff of the company and its Belgian subsidiaries. This two-fold capital increase has a maximum amount of € 6,000,000 (maximum of € 5,000,000 in 2022 and maximum of € 1,000,000 in 2023), subject to the issuing of new Class B shares, with cancellation of the preferential subscription right of existing shareholders in favor of staff members of the company and its Belgian subsidiaries.

The issue price of the capital increase of 26 April 2023 was set at € 106.18 per share, i.e. an amount equal to the average of the closing prices of the last thirty calendar days preceding 6 March 2023, reduced by 16.66%. The total value of the April 2023 capital increase (including share premium) was € 635,381.12. 5,984 Class B shares in Elia Group SA/NV were issued.

Accordingly, articles 4.1 and 4.2 of the articles of association of Elia Group SA/NV relating to the share capital and the number of shares were amended on 26 April 2023.

Amendments to the articles of association on 21 June 2023

On 21 June 2023, the extraordinary general meeting of Elia Group SA/NV decided to amend the articles of association.

The amendments to the Articles of association relate to the alignment of the governance structure with the company’s needs (number of directors) and the merging of the Nomination Committee and the Remuneration Committee into one new Nomination and Remuneration Committee.

The latest version of Elia Group SA/NV’s Articles of association is available in full on the company’s website (www.eliagroup.eu, under ‘About Elia Group’, ‘Corporate governance’).

Other significant events

For the other significant events in 2023, see section Highlights of this report.

1.9. Code of Conduct, code of Ethics and Corporate Governance Charter

Code of conduct

Following the entry into force of European Regulation No. 596/2014 on market abuse (‘Market Abuse Regulation’), Elia Group SA/NV amended its code of conduct. The code of conduct aims to prevent members of key personnel and persons discharging managerial responsibilities in the group from potentially breaking the law on the abuse of privileged information and market manipulation. The code of conduct lays down a series of regulations and communication obligations for transactions by those individuals in relation to their Elia Group SA/NV securities, in accordance with the provisions of the Market Abuse Regulation and the Act of 2 August 2002 on monitoring of the financial sector and other financial services. This code of conduct is available on the website www.elia.be (under ‘About Elia’, ‘Corporate Governance’, ‘Articles of Association & Corporate Governance Charter’).

Code of ethics

Elia Group SA/NV’s code of ethics defines what Elia Group SA/NV deems as correct ethical conduct and sets out the policy and a number of principles on the avoidance of conflicts of interests. Acting honestly and independently with respect to all stakeholders is a key guiding principle for the behavior of all of our employees.

The board of directors and the executive management board regularly communicate about these principles in order to clarify the mutual rights and obligations of the company and its employees.

Corporate Governance Charter and internal rules of procedure of the board of directors, the advisory committees within the board of directors and the executive management board.

The Corporate Governance Charter and the internal rules of procedure of the board of directors, the advisory committees within the board of directors and the executive management board can be found on the website www. elia.be (under ‘About Elia’, ‘Corporate Governance’, ‘Articles of Association & Corporate Governance Charter’). The responsibilities of the board of directors and of the executive management board are described in detail in the articles of association of the company and are therefore not exhaustively reiterated in the internal rules of procedure of the board of directors and of the executive management board.

1.10. Disclosure obligations

Transparency rule - notifications

DISCLOSURE BASED ON THE ACT OF 2 MAY 2007 ON MAJOR SHAREHOLDINGS

In 2023, Elia Group SA/NV received no notifications within the meaning of the Act of 2 May 2007 on disclosure of major shareholdings in issuers whose shares are admitted to trading on a regulated market and laying down miscellaneous provisions, and within the meaning of the Royal Decree of 14 February 2008 on disclosure of major shareholdings.

In accordance with article 15 of the Act of 2 May 2007, Elia Group SA/NV published on 2 May 2023, as a result of Elia Group SA/NV’s capital increase reserved for its staff and for the staff of its Belgian subsidiaries and the issuance of 5,984 new shares, that it has issued a total of 73,521,823 shares. See the press release published on www.eliagroup.eu (under ‘News’, ‘Press releases’, ‘Regulated information’).

DISCLOSURE BASED ON THE ACT ON TAKEOVER BIDS OF 1 APRIL 2007

On 23 November 2007 Publi-T SC/CV communicated to the company that it held on 1 September 2007 more than 30% of the securities with voting rights in the company. No update of this notification was notified by 1 September 2023.

The shareholder structure on 31 December 2023, based on the transparency notifications received by Elia Group SA/NV up to that date, is the following:

Items to be disclosed pursuant to article 34 of the Royal Decree of 14 November 2007

In accordance with article 3:6, §2, 7° of the Code of companies and associations, Elia Group SA/NV discloses hereafter the items referred to under article 34 of the Royal Decree of 14 November 2007 on the obligations of issuers of financial instruments admitted to trading on a regulated market.

1.11. Capital structure

On 31 December 2023, the capital of the company amounted to € 1.833.762.393,56, represented by a total of 73.521.823 shares, among which 1.836.054 Class A Shares (2,50% of the total share capital and voting rights), 38.844.937 Class B Shares (52,83% of the total share capital and voting rights) and 32.840.832 Class C Shares (44,67% of the total share capital and voting rights). All shares have no par value and are fully paid-up.

Class A and Class C shares are respectively held by Publipart SA/NV and Publi-T SC/CV. Pursuant to article 4.3 of the articles of association, all shares have the same rights irrespective of the class to which they belong, unless otherwise provided for in the articles of association.

In this context, the articles of association provide that certain specific rights are attached to Class A and Class C shares with respect to (i) the appointment of members of the board of directors (article 13.2) and (ii) the approval of decisions of the general meeting (articles 28.2 and 33.1).

RESTRICTION ON THE TRANSFER OF SHARES

Articles 4.3 and 4.4 of the articles of association provide restrictions as to shareholding by electricity and/or natural gas companies within the meaning of the Belgian Act of 29 April 1999 on the organisation of the electricity market and the Belgian Act of 12 April 1965 on the transport of gaseous and other products through conduits or if otherwise performing any of the functions of production or supply of electricity and/or natural gas.

Besides, Class A and C shares are subject to a preemptive right to the benefit, respectively of Class C and A shareholders, in accordance with article 9 of the company’s articles of association.

HOLDERS OF SECURITIES WITH SPECIAL CONTROL RIGHTS

See above for Class A and C shareholders rights.

CONTROL MECHANISM OF ANY EMPLOYEE SHARE SCHEME WHERE THE CONTROL RIGHTS ARE NOT EXERCISED DIRECTLY

BY THE EMPLOYEES

There is no employee share scheme with such a mechanism.

RESTRICTIONS ON THE EXERCISE OF VOTING RIGHTS

Article 4.3 of the articles of association provides that voting rights attached to shares held directly or indirectly by electricity and/or natural gas companies within the meaning of the Belgian Act of 29 April 1999 on the organisation of the electricity market and the Belgian Act of 12 April 1965 on the transport of gaseous and other products through conduits, respectively, are suspended. In addition, article 11.2 of the articles of association stipulates that the company may suspend exercise of the rights attaching to securities that are subject to joint ownership, usufruct or pledge until such time as one person has been designated as the holder of these rights vis-a-vis the company.

SHAREHOLDERS’ AGREEMENT

The company is not aware of provisions of a shareholders’ agreement that would restrict the transfer of shares or the exercise of voting rights otherwise than as stipulated in the articles of association.

APPOINTMENT AND REPLACEMENT OF DIRECTORS

The appointment and replacement of directors are governed by articles 12 and 13 of the articles of association. Their main provisions are described above.

RULES FOR AMENDMENT OF THE ARTICLES OF ASSOCIATION

The rules governing the amendment of the company’s articles of association are provided by the Code of companies and associations as well as by article 29 of the articles of association. The articles of association may be amended by an extraordinary general meeting convened for that purpose. The object of the proposed amendments must be stated on the agenda. The extraordinary general meeting shall only validly adopt such resolution if at least 50% of the share capital is present or represented and with a majority of 75% of the votes cast, whereby abstentions are not taken into account either in the numerator or in the denominator. If the attendance quorum is not met at a first general meeting, a second general meeting may be convened and will decide without any attendance quorum requirement. If the amendments to the articles of association relate to the rights attached to a or several class(es) of shares, the quorum and majority requirements abovementioned apply within each category of shares. For certain specific matters (e.g. amendment of the purpose of the company), higher voting majorities may apply.

Pursuant to article 28.2 of the articles of association, as long as the Class A and/or Class C shares represent more than twenty-five per cent (25%) of the total number of shares, no decision can be adopted by the general meeting, without prejudice to the majority provided for in the articles of association and the Code of Companies and Associations, unless such decision is approved by a majority of the Class A and/or Class C shares that are present or represented. If, in the case of an increase in the capital of the company, the Class A and/or Class C shares are diluted and no longer represent more than twenty-five per cent (25%) of the total number of shares, the Class A and/or the Class C shares will retain the aforementioned right as long as the Class C shares represent more than fifteen per cent (15%) of the total number of shares.

POWERS OF THE BOARD OF DIRECTORS, IN PARTICULAR TO ISSUE AND BUY BACK SHARES

With regard to the powers of the board of directors in general, reference is made to the section ‘Competences of the board of directors’ (see above).

The special general meeting of shareholders of 18 May 2021 conferred the power to the board of directors to acquire the company’s own shares, without the total number of own shares held by the company pursuant to this power exceeding 10% of the total number of shares, for a compensation that cannot be lower than 10% below the lowest closing price in the thirty days preceding the transaction and not higher than 10% above the highest closing price in the thirty days preceding the transaction.

This power is conferred for a period of five years as from 4 June 2021. It applies to the board of directors of the company and, to the extent necessary, to any third party acting on behalf of the company. It also applies to the direct and, to the extent necessary, indirect subsidiaries of the company.

This power does not affect the possibilities of the board of directors, in accordance with the applicable legal provisions, to acquire own shares if no power by virtue of the articles of association or power by the General Meeting is required for this purpose.

Within the above framework, Elia Group SA/NV has entered into a liquidity agreement with Exane BNP Paribas providing the latter with the mandate to purchase and sale Elia Group SA/NV shares on the regulated market of Euronext Brussels. Exane BNP Paribas is acting on behalf and for the account of Elia Group SA/NV and within the framework of a discretionary mandate as authorized by the extraordinary general meeting of 18 May 2021. The purpose of the liquidity contract is to support the liquidity of the Elia Group SA/NV shares listed on Euronext Brussels.

SIGNIFICANT AGREEMENTS THAT MAY BE IMPACTED BY A CHANGE OF CONTROL OF THE COMPANY

There are no such agreements.

AGREEMENTS BETWEEN ELIA GROUP SA/NV AND ITS DIRECTORS OR EMPLOYEES PROVIDING FOR COMPENSATION IF THE DIRECTORS RESIGN OR ARE MADE REDUNDANT WITHOUT VALID REASON OR IF THE EMPLOYMENT OF THE EMPLOYEES CEASES BECAUSE OF A TAKEOVER BID

No specific dismissal arrangements have been agreed outside the legal framework.

2. Remuneration of board of directors and executive management board

This remuneration report relates to the remuneration of the members of the Board of Directors and of the Executive Management Board of Elia Group SA/NV during the financial year 2023.

The remuneration policy was modified by the Ordinary General Meeting of 16 May 2023, subject to the approval by the Extraordinary General Meeting25 of the reduction of the number of directors to twelve and the merger of the Nomination Committee with the Remuneration Committee of the Elia Group SA/NV in one single new committee, being the Nomination and Remuneration Committee. The Extraordinary General Meeting of 21 June 2023 implemented these conditions and this remuneration policy therefore applies as from 1 July 2023. This remuneration report is based on the remuneration policies applicable to Elia Group SA/NV in 2023 (i) being the one applicable until 30 June 2023 and (ii) the one applicable as from 1 July 2023.

All the information relating to the remuneration policy until 30 June 2023 is available in Appendix 1 to this remuneration report.

This remuneration policy was drafted and approved by the Board of Directors of 30 March 2023 on the basis of a reasoned opinion of the Remuneration Committee of Elia Group SA/NV on 30 March 2023.

The remuneration policy can be consulted using the following hyperlink: https://investor.eliagroup.eu/en/eliagroup-share/shareholder-meetings/2023-may-shareholdersmeeting-details

2.1. Total remuneration of the members of the Board of Directors

The Board of Directors of Elia Group SA/NV is composed of 12 non-executive board members. The present report gives an overview of their remuneration for all their mandates within Elia Group.

Some members of the Board of Directors of Elia Group SA/NV are not member of the Board of Directors of Elia Transmission Belgium SA/NV and Elia Asset SA/NV.

Independent director Frank Donck and independent director Pascale Van Damme are members of the Elia Group SA/NV Board of Directors only.

2.1.1 Fixed remuneration

The fixed remuneration of the directors consists of an annual base salary of €25,000 for Elia Group SA/NV, €12,500 for Elia Transmission Belgium SA/NV and €12,500 for Elia Asset SA/NV and an attendance fee per meeting of the Board of Directors of €1,000 for Elia Group SA/NV, €500 for Elia Transmission Belgium SA/NV and €500 for Elia Asset SA/NV, starting with the first Board meeting attended by the director. The base salary of the Chairman of the Board of Directors is composed out of an annual base salary of €60,000 for Elia Group SA/NV, €25,000 for Elia Transmission Belgium SA/NV €25,000 for Elia Asset SA/NV and an attendance fee per meeting of the Board of Director of €1,500 for Elia Group SA/NV, €750 for Elia Transmission Belgium SA/NV and €750 for Elia Asset SA/NV.

The annual base salary for each member of the Audit Committee is set at €6,000 for the Audit Committee of Elia Group SA/NV, €3,000 for the Audit Committee of Elia Transmission Belgium SA/NV and €3,000 for Elia Asset SA/ NV. The attendance fee, starting with the first meeting attended by the member, for each member of the Audit Committee is set at €1,150 per meeting of Audit Committee of Elia Group SA/NV, at €575 per meeting of the Audit Committee of Elia Transmission Belgium SA/NV and at €575 per meeting of the Audit Committee of Elia Asset SA/NV.

The remuneration of the Chairman of the Audit Committee (Elia Group SA/NV) is composed of an annual base salary of €10,000 and an attendance fee set at €1,300 per committee meeting.

25 This Extraordinary General Meeting was due to take place on 16 May 2023, but in the absence of a sufficient quorum, it was held on 21 June 2023.

The remuneration of the Chairman of the Audit Committee (Elia Transmission Belgium SA/NV and Elia Asset SA/NV) is composed of an annual base salary of €4,000 and an attendance fee set at €650 per committee meeting.

The annual base salary for each member of the Nomination and Remuneration Committee (Elia Group SA/NV) and of the Strategic Committee (which only exists in Elia Group SA/NV) is set at €4,000 per committee. The attendance fee, starting with the first meeting of the Nomination and Remuneration Committee / Strategic Committee attended by the member, for each member of such committee is set at €1,000 per committee meeting.

The remuneration of the Chairman of the Nomination and Remuneration Committee (Elia Group SA/NV) and of the Chairman of the Strategic Committee (Elia Group SA/NV) is composed of an annual base salary of €8,000 and an attendance fee set at €1,300 per committee meeting.

The annual base salary for each member of the Remuneration Committee (Elia Transmission Belgium SA/ NV and Elia Asset SA/NV) and of the Corporate Governance Committee (Elia Transmission Belgium SA/NV and Elia Asset SA/NV) is set at €2,000 per committee. The attendance fee, starting with the first meeting of the Remuneration Committee / Corporate Governance Committee attended by the member, for each member of such Remuneration Committee / Corporate Governance Committee is set at €500 per committee meeting.

The remuneration of the Chairman of the Remuneration Committee (Elia Transmission Belgium SA/NV and Elia Asset SA/NV) is composed of an annual base salary of €3,500 and an attendance fee set at €650 per committee meeting.

The remuneration of the Chairman of the Corporate Governance Committee (Elia Transmission Belgium SA/NV and Elia Asset SA/NV) is composed of an annual base salary of €3,000 and an attendance fee set at €650 per committee meeting.

The above mentioned attendance fees are submitted to the additional following limitation: a maximum of eight attendance fees per year is allowed for the meetings of the Board of Directors and a maximum of five attendance fees per year is allowed for the meetings of an advisory committee, even if there are more than eight meetings of the Board of Directors or more than five meetings of a committee per year.

Notwithstanding the preceding paragraphs, the attendance fees of the directors of Elia Transmission Belgium SA/NV and Elia Asset SA/NV who are also directors of Elia Group SA/NV are limited to 30% of the amounts of the above mentioned attendance fees at Elia Transmission Belgium SA/NV and Elia Asset SA/NV.

The annual base salaries and attendance fees are indexed each year in January according to the consumer price index for the month of June 2023.

The annual base salaries and attendance fees cover all expenses, with the exception of (a) expenses incurred by directors domiciled outside Belgium during the exercise of their mandate (such as transport and subsistence expenses), insofar these directors are domiciled outside Belgium at the time of their appointment or, if the directors in question change their domicile after their appointment, after approval of the Nomination and Remuneration Committee (Elia Group SA/NV) and the Remuneration Committee (Elia

Transmission Belgium SA/NV and Elia Asset SA/NV), (b) all expenses incurred by directors in the event a meeting of the Board of Directors is organized outside Belgium (e.g. in Germany) and (c) all expenses incurred by directors during their travels abroad in the framework of their mandate, at the request of the Chairman or the Vice-Chairmen of the Board of Directors.

All costs and fees are charged to the relevant company's operating expenses.

At the end of each first, second and third quarter an advance on the annual fees is paid to the directors. A final settlement is made in December of the current year.

The table below reflects the total fixed remuneration (including indexation) paid out to each director for all mandates within the Elia group during the financial year 2023 in execution of the rules set out above.

26 Director until the Ordinary General Meeting of 16 May 2023.

27 Frank Donck’s fees are paid to the company Ibervest NV. Frank Donck is not a director in Elia Transmission Belgium SA/NV and Elia Asset SA/NV.

28 Cécile Flandre’s fees are paid to the company Publi-T SC. The mandate of Cécile Flandre ended on 30 January 2023.

29 Director until the Ordinary General Meeting of 16 May 2023.

30 Director as from the Ordinary General Meeting of 16 May 2023.

31 Director as from the Ordinary General Meeting of 16 May 2023.

The tables below give a detailed overview of the fixed remuneration (including indexation) paid out to each director for their mandates within Elia Group SA/NV, Elia Transmission Belgium SA/NV and Elia Asset SA/NV respectively.

32 An attendance fee has been granted for 8 out of the 14 meetings of the Board of Directors of Elia Group SA/NV held in 2023.

33 An attendance fee has been granted for 5 out of the 8 meetings of the Audit Committee of Elia Group SA/NV held in 2023.

34 An attendance fee has been granted for 5 out of the 9 meetings of the Strategic Committee of Elia Group SA/NV held in 2023.

35 An attendance fee has been granted for 4 out of the 5 meetings of the Remuneration Committee of Elia Group SA/NV held between 1st January and 30 June 2023. An attendance fee has been granted for 5 out of the 7 meetings of the Nomination Committee of Elia Group SA/NV held between 1st January and 30 June 2023. An attendance fee has been granted for 2 out of the 6 meetings of the Nomination and Remuneration Committee of Elia Group SA/NV held between 1st July and 31 December 2023. Being a total of 11 attendance fees granted for the 18 meetings of these committees held in 2023 (two separate committee before the merge into one single committee on 1 July 2023).

Vice-Chairman of the Board of Directors and Chairman of the Corporate Governance Committee

36 Ms Saskia Van Uffelen and Ms Els Neirynck are directors of Elia Transmission Belgium SA/NV, but are not directors of Elia Group SA/NV. Their remuneration is therefore not disclosed in the present remuneration report, in accordance with applicable legislation. However, please note that their remunerations are in line with the remuneration policy and, thus, in line with the remuneration of the other directors of Elia Transmission Belgium SA/NV.

37 An attendance fee has been granted for 8 out of the 13 meetings of the Board of Directors of Elia Transmission Belgium SA/NV held in 2023.

38 An attendance fee has been granted for 5 out of the 6 meetings of the Audit Committee of Elia Transmission Belgium SA/NV held in 2023.

39 An attendance fee has been granted for 7 out of the 13 meetings of the Corporate Governance Committee of Elia Transmission Belgium SA/NV held in 2023.

40 An attendance fee has been granted for 6 out of the 9 meetings of the Remuneration Committee of Elia Transmission Belgium SA/NV held in 2023.

SA/NV

Vice-Chairman of the Board of Directors and Chairman of the Corporate Governance Committee

41 An attendance fee has been granted for 8 out of the 13 meetings of the Board of Directors of Elia Asset SA/NV held in 2023.

42 An attendance fee has been granted for 5 out of the 6 meetings of the Audit Committee of Elia Asset SA/NV held in 2023.

43 An attendance fee has been granted for 7 out of the 13 meetings of the Corporate Governance Committee of Elia Asset SA/NV held in 2023.

44 An attendance fee has been granted for 6 out of the 9 meetings of the Remuneration Committee of Elia Asset SA/NV held in 2023.

2.1.2 Variable remuneration

The members of the Board of Directors do not receive any variable remuneration.

2.1.3 Pension

The members of the Board of Directors do not receive any additional remuneration or contribution to finance any pension costs.

2.1.4 Other components of remuneration

The members of the Board of Directors do not receive any remuneration other than the fixed remuneration.

2.1.5 Extraordinary items

The members of the Board of Directors have not received any non-recurring remuneration in the financial year 2023.

2.1.6 Total remuneration of the members of the Board of Directors in 2022 and in 2023

The total remuneration of the members of the Board of Directors in 2023 for all their mandates within the Elia group amounted to € 965,722.33 and is reflected in the table under heading 2.1.1., as no other remuneration than fixed remuneration has been paid to the members of the Board of Directors during the financial year 2023.

The total remuneration of the members of the Board of Directors in 2022 for all their mandates within the Elia group amounted to €1,005,415.22. No other remuneration than fixed remuneration has been paid to the members of the Board of Directors during the financial year 2022.

2.2. Total remuneration of the members of the Executive Management Board

The Executive Management Board of Elia Group SA/NV is normally composed of 5 members. However, its composition changed subsequent to the resignation of Chris Peeters as Chief Executive Officer of Elia Group SA/NV and Chairman of the Executive Management Board of Elia Group SA/NV with effect as from 31 October 2023. As from 6 September 2023, Catherine Vandenborre has been appointed as Chief Executive Officer ad interim and as from 10 November 2023, Marco Nix has been appointed as Chief Financial Officer ad interim. Between 31 October 2023 and 10 November 2023, the Executive Management Board of Elia Group SA/ NV was composed of 4 members (instead of 5) but as from the appointment of Marco Nix as Chief Financial Officer ad interim on 10 November 2023, the Executive Management Board of Elia Group SA/NV is composed of 5 members.

Three of the members (Chris Peeters – the Chief Executive Officer45, Catherine Vandenborre – the Chief Executive Officer ad interim46 and Chief Financial Officer and Peter Michiels – Chief Human Resources & Internal Communications Officer, Chief Alignment Officer) also serve as member of the Executive Management Board of Elia Transmission Belgium SA/NV and of Elia Asset SA/NV, one member (Stefan Kapferer) also serves as CEO of 50Hertz Transmission GmbH and one member (Michael Freiherr von Roeder von Diersburg) exclusively acts as member of the Executive Management Board of Elia Group SA/NV.

All the members of the Executive Management Board of Elia Group SA/NV have employee status47.

2.2.1 Fixed remuneration

The table below gives an overview of the total fixed remuneration, i.e. the annual base salary paid in cash to the members of the Executive Management Board of Elia Group SA/NV for the services rendered by them to any company of the Elia Group during the financial year 2023.

MEMBER OF THE EXECUTIVE

Chris PEETERS € 527,587.69

Chief Executive Officer –Chairman until 31 October 2023

Catherine VANDENBORRE

Chief Financial Officer

Chief Executive Officer ad interim – Chairman as from 6 September 2023

Marco Nix48 N/A

Chief Financial Officer ad interim as from 11 November 2023

Stefan KAPFERER € 447,204.50

Chief Executive Officer 50Hertz

Michael FREIHERR VON

VON DIERSBURG € 333,734.70

Chief Digital Officer

45 Until 31 October 2023.

46 As from 6 September 2023.

47 The employment agreements of Chris Peeters, Catherine Vandenborre, and Peter Michiels are subject to Belgian law. The employment agreements of Marco Nix , Stefan Kapferer and Michael Freiherr von Roeder von Diersburg are subject to German law.

48 On November 10th, 2023, Mr Marco Nix was appointed as Chief Financial Officer ad interim by the Board of Directors. As this is only an interim position, the Board of Directors considers it appropriate to mention only the remuneration received by Mr Marco Nix from Elia Group SA/NV for performing this interim position.

Peter MICHIELS € 319,786.93

Chief Human Resources & Internal Communications Officer

Chief Alignment Officer

2.2.2 Variable remuneration

The table below gives an overview of the total variable remuneration of the members of the Executive Management Board of Elia Group SA/NV for the services rendered by them to any company of the Elia Group during the financial year 2023.

MEMBER OF THE EXECUTIVE MANAGEMENT BOARD

Chris PEETERS50

Chief Executive Officer – Chairman until 31 October 2023

Catherine VANDENBORRE

Chief Financial Officer

Chief Executive Officer ad interim – Chairman as from 6 September 2023

Marco Nix52

Chief Financial Officer ad interim as from 11 November 2023

Stefan KAPFERER

Chief Executive Officer 50Hertz

Michael FREIHERR VON ROEDER VON DIERSBURG

Chief Digital Officer

Peter MICHIELS

Chief Human Resources & Internal Communications Officer

Chief Alignment Officer

€ 0

€ 216,212.81 € 158,577.3251

N/A N/A

€ 209,291.71 € 134,161.3553

€ 133,493.88

€100,120.4154

€ 159,513.72 € 120,430.9055

49 The amount of the variable short-term remuneration for the members of the Executive Management Board that also serve as members of the Executive Management Board of Elia Transmission Belgium SA/NV and Elia Asset SA/NV, includes (i) a Bonus Pension Plan and (ii) an amount in cash in execution of the Collective Labour Agreement 90.

50 No variable remuneration has been granted to Chris Peeters due to the fact that he was no longer an employee of Elia Group SA/NV as from 1st of November 2023. For the amounts paid to Chris Peeters subsequent to the termination of the contractual relationship, please refer to Section 2.4. (Severance Pay).

51 This amount relates to the multi-year variable remuneration provision for the financial year 2023. The multi-year variable will be paid in March 2024, on condition that the member concerned is still acting as member of the Executive Management Board on 31 March 2024. The total multi-year variable for the period 2020-2023 amounts to € 461,671.44 of which Mrs Catherine Vandenborre received a pay-out of € 340,968.46 in March 2024 and € 120,702.98 in March 2022.

52 On November 10th, 2023, Mr Marco Nix was appointed as Chief Financial Officer ad interim by the Board of Directors. As this is only an interim position, the Board of Directors considers it appropriate to mention only the remuneration received by Mr Marco Nix from Elia Group SA/NV for performing this interim position.

53 This amount relates to the multi-year variable remuneration that was assigned during the financial year 2023 and will be paid in 2026, on condition that the member concerned is still acting as member of the Executive Management Board on 31 December 2025. Note that Mr Stefan Kapferer received a pay-out during the financial year 2023 related to the financial year 2020-2022 (€ 169,368.33).

54 This amount relates to the multi-year variable remuneration that was assigned during the financial year 2023 and will be paid in 2026, on condition that the member concerned is still acting as member of the Executive Management Board on 31 December 2025. Note that Mr Michael Freiherr von Roeder von Diersburg did not receive a pay-out during the financial year 2023 (first time pay-out will be during the financial year 2025).

55 This amount relates to the multi-year variable remuneration provision for the financial year 2023. The multi-year variable will be paid in March 2024, on condition that the member concerned is still acting as member of the Executive Management Board on 31 March 2024. The total multi-year variable for the period 2020-2023 amounts to € 385,675.94 of which Mr Peter Michiels received a pay-out of € 302.776,74 in March 2024 and € 82,899.20 in March 2022.

The amount of the variable remuneration reported is paid in cash.

The remuneration policy deals with the determination of an appropriate balance between fixed and variable remuneration, and between annual and deferred remuneration.

In accordance with provision 7.10 of the Corporate Governance Code 2020, the short term variable remuneration has been capped. The policy provides for the following caps for the short term as for the long term variable remuneration:

• for the short term: max. 34% for the Chief Executive Officer and 29% for the other members of the Executive Management Board of the total fixed and variable remuneration;

• for the long term: max. 20% for the Chief Executive Officer and 22% for the other members of the Executive Management Board of the total fixed and variable remuneration.

The requirements of section 7:91, second paragraph of the Belgian Code of Companies and Associations do not apply since Board of Directors of Elia Group SA/NV is composed of 12 non-executive board members.

2.2.3 Pension

The table below gives an overview of the total pension contributions paid for the members of the Executive Management Board of Elia Group SA/NV for the services rendered by them to any company of the Elia Group during the financial year 2023.

All pension plans for members of the Executive Management Board of Elia Group SA/NV for their services within the Elia Group during the financial year 2023 were of the defined contribution type, with the amount paid before tax being calculated on the basis of the annual fixed remuneration.

All pension contributions are fixed.

MEMBER OF THE EXECUTIVE MANAGEMENT BOARD

Chris PEETERS

Chief Executive Officer – Chairman until 31 October 2023

Catherine VANDENBORRE

Chief Financial Officer

Chief Executive Officer ad interim –Chairman as from 6 September 2023

Marco Nix56

Chief Financial Officer ad interim as from 11 November 2023

Stefan KAPFERER

Chief Executive Officer 50Hertz

Michael FREIHERR VON ROEDER

VON DIERSBURG

Chief Digital Officer

Peter MICHIELS

Chief Human Resources & Internal Communications Officer

Chief Alignment Officer

Total

2.2.4 Other components of the remuneration

The other benefits granted to the members of the Executive Management Board of Elia Group SA/NV for their services within the Elia group during the financial year 2023 including guaranteed income in the event of longterm illness or an accident, healthcare and hospitalisation insurance, invalidity insurance, life insurance, energy tariff allowances, assistance with public transport costs, provision of a company car and related costs and other minor benefits, are in line with the regulations applying to all company executives and local market standard.

2.2.5 Extraordinary items

€ 221,437.96

€ 99,529.39

A non-recurring remuneration of € 89,215.68 has been awarded to Mrs Catherine Vandenborre in 2023 her services provided as CEO ad interim as from 6 September 2023 to 31 December 2023, on the condition that she is still working for Elia Group SA/NV on 31 March 2024.

N/A

€ 107,708.34

N/A57

A total amount of € 50,000 has been awarded to Mr Marco Nix as non-recurring remuneration, to cover the period for his services as CFO ad interim as from 11 November 2023 to 31 March 2024, on the condition that he is still working for Elia Group SA/NV on 31 March 2024. Out of the amount of € 50,000, an amount of € 20,000 relates to his services provided during the financial year 2023. Effective payment of the total amount will occur in 2024.

Mrs Catherine Vandenborre and Mr Peter Michiels have been awarded a non-recurring remuneration of respectively € 9,048.7 and € 7,521.46 as compensation for not having been entitled to participate to capital increase reserved for the staff Elia Group SA/NV and its Belgian subsidiaries in December 2022 and April 2023.

€ 71,389.78

€ 500,065.47

56 On November 10th, 2023, Mr Marco Nix was appointed as Chief Financial Officer ad interim by the Board of Directors. As this is only an interim position, the Board of Directors considers it appropriate to mention only the remuneration received by Mr Marco Nix from Elia Group SA/NV for performing this interim position.

57 Mr Michael Freiherr von Roeder von Diersburg did not receive pension contributions for the financial year 2023.

2.2.6 The relative share of fixed and variable remuneration

The table below gives an overview of the relative share of fixed and variable remuneration in 2023 of the members of the Executive Management Board of Elia Group SA/NV for their services within the Elia Group in the financial year 2023.

To determine the relative share of fixed and variable remuneration, the relative share of the fixed remuneration was obtained by dividing the sum of the fixed components (in particular: the fixed remuneration (including the other benefits) and the pension contributions) by the amount of the total remuneration, multiplied by 100. The relative share of the variable remuneration was calculated by dividing the sum of the variable components (i.e. the variable remuneration and the extraordinary items of the remuneration) by the amount of the total remuneration, multiplied by 100.

MEMBER EXECUTIVE MANAGEMENT BOARD

Chris PEETERS

Chief Executive Officer – Chairman until 31 October 2023

Catherine VANDENBORRE

Chief Financial Officer

Chief Executive Officer ad interim –Chairman as from 6 September 2023

Marco Nix58

Chief Financial Officer ad interim as from 11 November 2023

Stefan KAPFERER

Chief Executive Officer 50Hertz

Michael FREIHERR VON ROEDER

VON DIERSBURG

Chief Digital Officer

Peter MICHIELS

Chief Human Resources & Internal Communications Officer

Chief Alignment Officer

RELATIVE SHARE OF FIXED AND VARIABLE REMUNERATION PAID BY THE ELIA GROUP

100% - 0%

53.69% - 46.31%

0% - 100%

62.47% - 37.53%

60.15% - 39.85%

60.34% - 39.66%

58 On November 10th, 2023, Mr Marco Nix was appointed as Chief Financial Officer ad interim by the Board of Directors. As this is only an interim position, the Board of Directors considers it appropriate to mention only the remuneration received by Mr Marco Nix from Elia Group SA/NV for performing this interim position.

2.2.7 Total remuneration of the members of the Executive Management Board in 2023

MEMBER OF THE ELIA GROUP SA/NV EXECUTIVE MANAGEMENT BOARD

59 For the amounts paid to Chris Peeters subsequent to the termination of the contractual relationship, please refer to Section 2.4. (Severance Pay).

60 On November 10th, 2023, Mr Marco Nix was appointed as Chief Financial Officer ad interim by the Board of Directors. As this is only an interim position, the Board of Directors considers it appropriate to mention only the remuneration received by Mr Marco Nix from Elia Group SA/NV for performing this interim position. For his function as Chief Financial Officer of 50Hertz Transmission GmbH his total remuneration in 2023 amounts to 514,563.40.

61 The non-recurring remuneration of € 50,000 awarded to Mr Marco Nix to cover the period for his services as CFO ad interim as from 11 November 2023 to 31 March 2024 will be paid in the financial year 2024, it being understood that € 20,000 relates to the services provided during the financial year 2023.

2.3. Sharebased remuneration

Board of Directors

The members of the Board of Directors do not receive any share-based remuneration.

In view of provision 7.6 of the Corporate Governance Code 2020, the Remuneration Committee has examined in 2020 whether a share-based compensation should be granted to the members of the Board of Directors as from 2021.

The Board of Directors of November 2020 has followed the recommendation of the Remuneration Committee and has decided that until further notice such share-based remuneration is not suitable within Elia Group SA/NV as (i) Elia's activities are by nature organized in such a way as to present a low risk profile and are focused on the long-term and (ii) the shareholding structure is based on a reference shareholding that naturally pursues fixed long-term objectives and sustainability goals.

Executive Management Board

The members of the Executive Management Board did not receive any share-based remuneration.

The members of the Executive Management Board, however, have the possibility to acquire Elia Group SA/NV shares either via the capital increases reserved for the staff of Elia Group SA/NV and its Belgian subsidiaries or via an offer to acquire shares for the staff of 50Hertz Transmission GmbH.

In addition, the members of the Executive Management Board are free to buy Elia Group SA/NV shares on the market.

In deviation of provision 7.9 of the Corporate Governance Code 2020, the Board of Directors has decided that there is no minimum number of shares to be held by the members of the Executive Management Board.

As at 31 December 2023, the members of the Executive Management Board held the following number of shares of Elia Group SA/NV:

ELIA GROUP SA/NV MEMBER OF THE EXECUTIVE MANAGEMENT BOARD ON

2.4. Severance pay

The following payments were made in 2023 to Chris Peeters (member of the Executive Management Board and Chief Executive Officer):

Departure holiday pay €96,860 Non-compete €269,898

2.5. Any use of the reclaimright

Premiums paid for the previous period may be recovered in cases of proven fraud or financial statements containing significant errors.

During the financial year 2023 there was no reason to exercise this right to claim-back.

2.6. Information on how the remuneration complies with the remuneration policy and how performance criteria were applied

2.6.1 Information on how the remuneration complies with the remuneration policy

The total compensation paid out to the members of the Executive Management Board in the financial year 2023 is aligned with the remuneration policy and application of performance criteria. As reflected in the table under 2.2.7, the total remuneration was made out of (i) base salary, (ii) other benefits, (iii) short-term (one year) variable pay (STI), (iv) long-term (multi-year) variable pay (LTI) and (v) pension contributions.

The level of the fixed remuneration (determined by the use of the Hay method and in line with practice in the energy/ utility sector) ensured that the Elia Group could rely on professional and experienced management. The granting of the short-term bonus ensured the realization of the individual and collective objectives that translate the Elia Group’s strategic ambitions. The long-term success of Elia Group SA/NV was further stimulated by the long-term incentive plan, including long-term objectives of 4 different orders for the years 2021-2024 (i) ‘Financing the Future’, (ii) ‘Transformation’ (including digital transformation), (iii) ‘Infrastructure’ and (iv) ‘Sustainable Development’. In accordance with the remuneration policy, the total (shortterm and long-term) variable remuneration was capped at (i) max. 70% of fixed remuneration if all objectives were reached at 100% (zone B) and max. 105% of fixed remuneration if all objectives were reached at their maximum (zone C).

2.6.2 Information on how performance criteria were applied

SHORT-TERM VARIABLE REMUNERATION

The first pillar of variable remuneration is based on the achievement of a number of targets/objectives set by the Remuneration Committee at the beginning of 2023 ('short-term incentive plan') (STI), it being understood that variable remuneration linked to short-term objectives (for both individual and collective objectives) may vary between 40 and 60%62 (50% to 75%63 for the CEO) of the fixed remuneration. The total short-term variable remuneration is capped at:

• max. 24% (25% for the CEO) of total fixed and variable remuneration if all objectives are reached at 100% (zone B);

• max. 29% (34% for the CEO) of total fixed and variable remuneration if all objectives are reached at their maximum (zone C).

These amounts are determined at the end of each year based on the degree of achievement of each of the shortterm objectives criteria (Zone A, B or C).

With regard to individual short-term objectives, the table below gives an overview of the individual targets, their relative weight, their degree of achievement as well as their impact on the pay-out.

62 Assuming that all short-term objectives have been reached at their maximum (i.e. overperformance versus business plan).

63 Assuming that all short-term objectives have been reached at their maximum (i.e. overperformance versus business plan).

In view of the fact that nearly all individual short-term objectives were achieved or exceeded, the individual shortterm remuneration awarded during the financial year 2023 amounts to € 62,249.37 (not including € 89,215.68 as ad interim CEO special bonus) for Mrs Catherine Vandenborre, to €56,884.35 for Mr Stefan Kapferer, to €42.050.61 for Mr Michael Freiherr von Roeder von Diersburg, and to €44,419.04 for Mr Peter Michiels. With regard to the collective short-term targets, the table below gives an overview of the overall collective short-term targets of the Executive Management Board members and their relative weight, as defined for the financial year 2023, their degree of achievement as well as their impact on the pay-out.

Sustainable Grid Development

Windgrid project development:

•Potential projects screened (at least 10)

•Pre-qualified projects concretely assessed (at least 4)

•Tender participations (at least 1)

projects screened

projects concretely assessed

Re.alto reach 2000 B2C subscriptions 2011 registrations

progress on Top 8 Group intra projects

progress on major infrastructure projects was made, but 9 milestones were not completed before the set deadline

A

In view of the fact that nearly all collective short-term objectives were achieved or exceeded, the collective shortterm remuneration awarded during the financial year 2023 amounts to € 153,963.44 for Mrs Catherine Vandenborre, to € 146,003.16 for Mr Stefan Kapferer, to € 108,957.80 for Mr Michael Freiherr von Roeder von Diersburg, and to € 115,094.68 for Mr Peter Michiels.

LONG-TERM VARIABLE REMUNERATION

The second pillar of the variable remuneration is based on multi-year criteria set for four years ('long-term incentive plan') (LTI)), it being understood that such variable remuneration linked to collective long-term objectives may vary between 30% and 45% of the fixed remuneration. The total long-term variable remuneration is capped at:

• max. 18% (17% for the CEO) of total fixed and variable remuneration if all long-term objectives are reached at 100% (zone B);

• max. 22% (20% for the CEO) of total fixed and variable remuneration if all long-term objectives are reached at their maximum (zone C).

These amounts are determined at the end of each year based on the degree of achievement of each of the longterm objectives criteria (Zone A, B or C).

The table below gives an overview of the overall collective long-term targets of the Executive Management Board members for the financial year 2023, their relative weight, their degree of achievement as well as their impact on the pay-out.

In view of the fact that most of (collective) long-term objectives were achieved or exceeded, the long-term remuneration received during the financial year 2023 amounts to € 158,577 for Mrs Catherine Vandenborre (i.e. €118,933 as Chief Financial Officer and €39,644 as Chief Executive Officer ad interim), to € 146,003.16 for Mr Stefan Kapferer, to € 108,957.80 for Mr Michael Freiherr von Roeder von Diersburg, and to € 120,431 for Mr Peter Michiels.

•Carbon Footprint

•Environment

•Governance

•Introduction of physical Scope 3 data measurement (In place in: 55-65% of spent)

•Ecological Corridor management/expansion: 4805 to 4835 hectares to Manage 90% of all corridors sustainably by 2030

•Progress on ESG Governance score

•In place in: 55-65% of spent

B

•Compliance score <9/12

•ESG Governance score <8/12

2.7. Derogations and deviations from the remuneration policy and from the procedure for implementationits

There have been no derogations nor deviations from the remuneration policy as this policy was approved in 2023.

2.8. informationComparative on the change of remuneration and the Elia Group performance

The table below first gives an overview of the evolution in time over the last five years of respectively the total remuneration of the members of the Board of Directors of Elia Group SA/NV for all their mandates within the Elia Group and of the total remuneration of the members of the Executive Management Board of Elia Group SA/NV for all their mandates within the Elia Group. The table below also gives an overview of the evolution of the performances of the Elia Group.

The average remuneration (on a full-time equivalent basis) of the employees of the Elia Group in 2023 amounts to €106,190.70. The average remuneration of all employees is calculated as the total (IFRS-based) labour costs (exclusive social security contributions of the employer) divided by the number of employees on an FTE basis.

The ratio between the highest remuneration of a member of the Executive Management Board and the lowest remuneration of an employee of the Elia Group, expressed on a fulltime equivalent basis, in 2023 was 23.04.

2.9. Information on shareholder vote

The general meeting of shareholders of Elia Group SA/ NV of 17 May 2023 approved (with advisory vote) the 2022 remuneration report of Elia Group SA/NV with a majority of 78.33%.

3. Features of the Group’s internal control and risk management systems

3.1. Risks and opportunities management system

Elia Group’s ambition to deliver the infrastructure of the future and ensure the energy transition is a success for the benefit of consumers is being fulfilled amidst a highly challenging context. The complexity of the Group’s activities - particularly those of its two transmission system operators - is characterised by the need to manage the 3 dimensions of the energy trilemma. This involves balancing energy sustainability, security and affordability.

Elia Group’s approach involves incorporating this complex environment and these issues into a risk intelligence system that helps the organisation to anticipate unwanted events, supports the prioritisation of resources and, ultimately, fosters the Group’s resilience.

Our risk and opportunity management system allows us to identify, understand and manage the effect uncertainties have on the achievement of our objectives. As explained by risk management expert James Lam: “The only alternative to risk management is crisis management and crisis management is much more expensive, time consuming and embarrassing.”64

3.1.1 Outline of the Group’s approach to risk management

Uncertainties may be the source of desirable events (opportunities) and unwanted events (risks). Both fall within the scope of risk management. The most relevant opportunities are integrated into our strategy. Its implementation as well as the achievement of our objectives could be adversely impacted by a number of risks. To ensure that they are comprehensively and systematically managed, their potential impact is analysed across a range of ‘risk dimensions’, including health and safety, continuity of supply and profitability.

3.1.2 Risk management process and framework

The reference framework for internal control and risk management, established by the Executive Management Board and approved by Elia Group’s Board of Directors, is rooted in the COSO II Framework, which includes best practice related to the assessment of business risks and ISO frameworks (e.g. ISO31000). The COSO Framework has five basic components which are closely linked to one another: control environment; risk management; control activities; information and communication; and monitoring. These provide an integrated procedure for internal control and risk management systems. The use and inclusion of its concepts in the Group’s various procedures and activities enables the company to control its activities, improve the effectiveness of its operations, optimally deploy its resources, and ultimately achieve its objectives.

double materiality assessment in line with the upcoming Corporate Sustainability Reporting Directive (CSRD) requirements. The output of this exercise was fed back into our risk and opportunity process. This demonstrates how the Group is applying integrated thinking and supports the Group’s ability to create and sustain value over time. It is illustrated by the graph below.

64 James Lam (2014), 'Enterprise Risk Management', Wiley Finance

Our risk management system is constantly being improved. It is adapted in line with the changing context and new insights. As an example, in 2023, the Group conducted an exercise to improve its risk and opportunity disclosures and

Risk identification

Risk assessment

Upcoming reporting requirements

External context

Internal context

3.1.3 Risk management governance

In line with the above, risk management is carried out at different levels across the organisation (strategic, business/ operational, project…) and relies on the Group’s strategy and risk appetite (or the level of risk our organisation is prepared to accept in pursuit of its objectives). Our risk management framework is intended to support decisionmaking. Our risk appetite is based on five dimensions which capture financial, reputational, health and safety and operational impacts as well as the estimated probability of each risk. Once a risk is identified as substantive based on the organisation’s risk appetite, the risk owner, risk manager, experts and relevant stakeholders discuss it to ensure that all relevant contextual factors have been adequately considered in its assessment, and analyse its impact on our strategy and value creation.

Risk Framework/documents

Risk policy

Group risk report

Risk policy

Group risk report

Concerned actors

Board of Directors & Audit Committee

Executive Management Boards (both at Group and TSO levels)

Action Result

Challenge risk reporting

Validation of the Group’s strategy

Challenge risk reporting

Validation of the organisation’s risk appetite

Definition of the strategy

Processing of contextual information

Preparation of the Group’s risk reporting exercise

Oversight from the top of the organisation

Tone setting

Oversight from the top Tone setting

Maintain corporate risk register

Group & local risk departments

Management of business risks

Maintain business risk register

Accountable directors and senior management

Support for risk assessment

Advice to business

Monitoring of progress on action plans

Translation of strategy into roadmaps

Oversight of business risks

Input to Group risk reporting

Holistic view of risks and uncertainties

Consistent risk assessment

Simultaneously employing a top-down and bottom-up approach enables Elia Group to identify and, where possible, anticipate forthcoming events and react to any incidents that occur inside or outside of the organisation which might affect the attainment of our objectives.

The Group Risk Reports were reviewed twice in 2023 by the Board of Directors and Audit Committee; alongside the Executive Management Boards, the latter contributed to the evaluation of the measures adopted in response to different risks. Action plans or specific, theme-based risk assessments were carried out whenever there was a perception of potential threats or opportunities.

In order to identify new risks or evaluate changes to existing risks, the Risk Manager and the Executive Management Board discuss and look out for any changes that may call for the relevant risk assessment and associated action plans to be amended. This dialogue takes place as part of the risk management process, typically during the presentation of the Group risk reports or during ad hoc risk exercises.

Different criteria are used to determine the need to reevaluate financial reporting procedures and associated risks. Operational management assesses the relevant risks and puts forward action plans. The Board of Directors, in line with advice from the Audit Committee, must approve any significant changes to assessment rules. Risk Management is instrumental for Elia Group to maintain its value for its stakeholders and the communities it serves. The process involves work with all departments in order to optimise the organisation's ability to achieve its strategic objectives, and involves advising the organisation's management about the nature and potential effects of future risks.

Business continuity plans

Maintain business risk register Action owners

More resilient processes

Coordination of action plans

Carrying out action plans

Risk reduction

3.1.4 What is a ‘substantive risk’?

The aims of our processes are to: identify substantive risks; assess them; define and implement appropriate responses to them; communicate them to the Executive Management Board, Audit Committee and Board of Directors; and monitor the effectiveness of mitigation measures. All the information collected throughout these processes is recorded in risk registers. Regular discussions held by risk managers and risk owners allow these registers to be kept up to date. Key elements and their potential impacts on value creation and the implementation of our strategy are summarised in risk reports.

Risk dimensions or equivalent Metrics highlighting the substantive nature of risks

Continuity of supply

Reputation

Cash flow

Profit and loss

Health and safety

Threat to the implementation of our strategy or to value creation

Number of people impacted by supply disruption. A threshold of 250 thousand people is considered as substantive.65

An example of a substantive reputational impact would be a failure to deliver transmission infrastructure that supports the integration of renewable energy in a timely way.

Risks which, if they materialise, would lead to at least 10% of our total available liquidity being impacted.

Risks which, should they materialise, would lead to an impact of 1.5% on our profit and loss.

Risks which, if they materialise, would lead to staff injuries and/or staff absences from work.

Any threat which, if it materialises, may have an adverse impact on the implementation of our strategy. As an example, a threat to value creation in line with our key strategic initiatives concerning grids, system operations, market facilitation or to supporting the energy transition and especially its decarbonisation dimension.

65 This threshold is in line with the European Programme for Critical Infrastructure Protection (EPCIP), the EPCIP directive and the definition of critical infrastructure

An assessment of the criticality of each substantive risk is carried out by Group-wide and local risk management staff along with relevant internal stakeholders. Criticality is a combination of the likelihood of a risk’s occurrence, the estimated impact of it and the nature and volume of control and mitigation measures that would reduce its likelihood and/or impact.

We also assess when a risk is likely to emerge, as outlined in the table below.

Finally, we assess the development of these risks by assessing how their criticality has changed since the previous reporting exercise.

A similar process is used when assessing opportunities.

Assessment of the impact of risks in accordance with different time frames (in years)

From To Examples

Short-term risks 0 1

Medium-term risks 2 5

Long-term risks 6 10

Operational risks such as those related to security of supply and cyber-attacks could materialise within a year or two. Exceptions: extreme weather events and climate risks. Their frequency of return is typically in the order of 1 in every 100 years. This justifies the widening of the time frame for short-term risks: between 0 and 5 years.

The tariff methodologies are set for periods of 4 years in Belgium and 5 years in Germany. Exception: for climate risks, a different range is used, spanning from 5 to 10 years.

The network development plans that we publish, which outline the future investments which are needed in the national transmission networks, each span periods of 10-20 years.

Our sustainability ambitions, outlined in our ActNow programme, include targets for 2030 and 2040.

Exception: as we explore different climate scenarios and undertake vulnerability assessments, longer time horizons are considered: 2050 and 2085. These horizons are aligned with the lifetime of major investments and new assets. This justifies the use of a wider range for what is considered to be ‘long term’: between 10 to 80 years.

3.1.5 Monitoring

Elia Group continually re-evaluates the adequacy of its risk management approach. Evaluation procedures include monitoring activities carried out as part of normal business operations and specific ad hoc assessments of selected topics.

The Internal Audit Team plays a key role in these monitoring activities, as it conducts independent reviews of key financial and operational procedures, including risk mitigating actions. The findings of these reviews are reported to the Audit Committee to help it monitor internal control and risk management systems and corporate reporting procedures.

3.1.6 Climate risk management

In order to foster the continuous improvement of its management of climate risks, Elia Group has implemented several key measures. The most important of these lies in the design of its strategy: this aims to tackle the root causes of climate change, rather than just its consequences. Other relevant actions that seek to improve climate risk management include undertaking a climate vulnerability assessment in line with EU Taxonomy requirements (see below); benchmarking exercises undertaken with other TSOs; reviews of risks in line with recommendations from the Task Force on Climate-Related Financial Disclosures (TCFD); and the improved mapping of transitional and physical risks to our grid installations, including subsequent measures to increase resilience towards heat, flooding or storms.

Vulnerability assessment

The physical climate risks to which the Group is subject fall into two categories: chronic and acute. Our climate vulnerability assessment is carried out in line with the technical screening criteria of the EU Taxonomy Delegated Act. This assessment highlights the possible harmful effect of heatwaves, cold waves/winter incidents, storms, flooding, droughts and wildfires. All these phenomena are acute physical risks, which could lead to less favourable operating conditions for the Group’s assets or even damage them. Such circumstances may trigger disruptions to business continuity and may need contingency plans to be activated. Given the critical nature of the Group’s infrastructure and the fact that its assets are spread over a wide territory (in particular its overhead line infrastructure), the Group’s assets are regarded as facing a heightened vulnerability to physical climate risks, as is the case for other system operators and utilities.

Local climate scenarios

In 2023, with support from climatologists from the University of Hamburg (Hereon Climate Service Center), local climate scenarios were developed for Belgium and Germany, considering two time horizons which were chosen in line with the technical lifetime of our infrastructure: 2050 and 2085. Three state-of-the-art climate scenarios were considered: RCP 2.6, RCP 4.5 & RCP 8.5. The first scenario relates to a low emission scenario and stringent policies, while the third scenario relates to a high emission scenario and the least stringent policies. The aim of the exercise was to check whether major weather events or conditions which could impact the smooth operation of our network will be strengthened by climate change and if so, by how much. Conclusions relating to the risk of heatwaves, cold waves, flooding and wildfires were able to be drawn. However, it was not possible to come to a final conclusion relating to the risk of extreme storms. This is due to the limitations of current climate models, notably in terms of resolution. We expect updates to be made to our climate vulnerability assessment as new information becomes available.

Risks Overview

CLIMATE

Physical climate risks may lead to asset damage, business contingency events and disruptions to business continuity. The transition to a lower carbon economy is likely to involve extensive policy, legal, technology and market changes that should be adequately anticipated to avoid adverse reputational impacts.

Physical climate risk

1 2

Transitional risks & ESG regulatory environment

RESPONSES CRITICALITY

Triggered by the occurrence of extreme weather events such as storms, heat waves or flooding

Examples include EU Taxonomy, CSRD, CBAM, EU F-GAS and PFAS REACH regulations !

ACTNOW

• Elia Group’s sustainability programme focuses on 5 key dimensions that are aligned with the United Nations Sustainable Development Goals

INFRASTRUCTURE DESIGN

• Considering stringent climate conditions and rolled out across all our infrastructure projects

CLIMATE VULNERABILITY ASSESSMENTS

• In line with EU Taxonomy requirements

IMPROVEMENT OF OUR CLIMATE SCENARIOS

• Considering 3 scenarios (RCP 2.6, 4.5 and 8.5) and two time horizons in line with the technical lifetime of our assets

Links with business activities

Links with TCFD categories

Physical climate risks

Policy & legal Technology

SECURITY OF SUPPLY

The security of electricity supply may be impacted in a number of ways, including through risks related to balancing, a failure to maintain the balance between demand and supply, and risks related to the adequacy of the system (if there is a shortage of energy supply). In turn, these may lead to adverse impacts, such as load shedding.

1

Balancing risk

2

Adequacy risk

RESPONSES CRITICALITY

Growth in the number of renewable energy units & increased volatility of energy flows

Electrification, closure of some baseload production units & higher share of RES

• Integrated balancing market at EU level

• National & international collaboration for grid control

• Balancing risk stress tests at national & ENTSO-E levels

• Market reforms to unlock more flexibility

• Adequacy & flexibility studies

• Belgium: Capacity remuneration mechanism (CRM) & actions taken to increase success of CRM auctions

Links with business activities

Links with TCFD categories Market Energy sources Products/services Reputational risks

CONTINGENCY EVENTS AND BUSINESS CONTINUITY DISRUPTION

Even if the transmission systems operated by the Group are very reliable, the unavailability of one or more network elements (also called contingency events) may occur because of unforeseen events. In most cases, thanks to the meshed structure of our grid, the smooth operation of the network is challenged - and nothing more. However, in more exceptional cases, incidents across the electricity system can lead to business continuity being disrupted.

Extreme weather events

1 2 3

Cyberattacks

Sabotage & terrorism

4

Equipment failure

The transmission grids are spread across large geographical areas

Resource constraints for equipment maintenance & new technology may increase the probability of failure

SABOTAGE AND TERRORISM

• Physical access management: security screening for critical functions, limited access to control and data rooms, additional security layers for critical infrastructure

• Implementation of (IT) security measures, such as redundancy, which is built into our physical infrastructure and servers by design, or high availability of critical applications

EQUIPMENT FAILURE

• Asset condition monitoring to support timely maintenance activities and reduce the risk of unplanned failures

Links with business activities

Links with TCFD categories Technology Reputational risks

PERMITTING

The Group is subject to environmental and zoning laws, and is managing increased public expectations and concerns. These may impair its ability to obtain relevant permits and realise its planned investment programme in a timely manner, or may result in additional costs.

1 2 Permitting delays

Complex and changing environmental and wildlife protection regulations

The timely approval of project permits is important for the prompt implementation of projects which support the energy transition

RESPONSES

• Contact with authorities and key stakeholders

A stricter regulatory framework or enforcement policy may emerge, leading to additional costs for the group & delays to its projects

• Frequent information sessions for communities impacted by our projects

• Transparency: external experts are responsible for demonstrating the relevance of our projects, validity of the technical choices made and management of environmental impacts. Cost & benefit analyses are made public

• Close follow-up of (emerging) regulations aiming to help speed up the realisation of projects

• Act Now includes concrete examples of actions that aim to avoid, reduce and offset the environmental impacts of our projects, such as bird diverters, ecological corridor management schemes, measures to enhance the biodiversity around the Princess Elisabeth Island, etc.

Links with business activities

Links with TCFD categories

Policy & legal Energy sources Reputational risks

CYBER & ICT

Despite all of the many precautions taken by the Group, significant system hardware and software failures, compliance process failures, ICT failures, computer viruses, malware, cyber-attacks, accidents or security breaches could still occur. Such events would have an adverse impact on continuity of supply or could result in a breach of the Group’s legal or contractual obligations.

Digitalisation and the adoption of new technologies

Data protection

1 2 3

Critical infrastructure

Examples: IoT, more connectivity, long- distance drones, robots, etc

The group collects and stores sensitive data (its own data, that of its suppliers and business partners)

RESPONSES

• See also ‘Contingency events’

European, national and sectorspecific regulations (EPCIP, NIS, directive on critical infrastructure, network code on cybersecurity…)

• Implementation of preventive, detective and response IT security measures (e.g: IT segmentation, redundancy, backup, failover mechanisms)

• Compliance with relevant regulations and implementation of IT security frameworks such as ISO 27000 (Information Security)

• Employee awareness raising and training

Links with business activities

Links with TCFD categories

Market

Energy sources

Reputational risk Technology

SUPPLY CHAIN

The Group depends on a limited number of suppliers and their ability to deliver high-quality equipment and/or carry out infrastructure work in a timely manner. Any cancellation or delay in the completion of the Group’s projects could have an adverse effect on the Group’s contribution to the energy transition and ultimately impact the Group’s reputation and organic growth. Increases in the price of equipment and work lead to higher project costs, which in turn result in higher financing needs.

Capacity risk

Price risk

1 2 3

Delivery risk

CRITICALITY

High demand, capacity bottleneck & long lead times and high dependence on some key suppliers

RESPONSES

CAPACITY

• Forecast improvements

• Earlier order placement

Significant price increases in 2023, especially for offshore equipment

Raw material and component risk, tense geopolitical context and dependencies on some countries

• Transversal projects to enhance harmonisation, standardisation and coordination between Elia Transmission Belgium and 50Hertz

PRICE

• Regulatory framework & pass-through costs

• Analysis of technical alternatives to reduce project costs

RAW MATERIAL AND KEY COMPONENTS

• Risk analyses of the availability of raw materials to achieve the EU renewable energy targets

• Risk analysis of our direct and indirect suppliers across the value chain

Links with business activities

Links with TCFD categories Reputational risk Market Resilience to transitional risks

TIMEFRAME

Long term Critical Short term Low risk

CHANGE IN PROFILE

Higher project costs increase financing needs

Over €16 billion of early order placed in 2023 as a capacity risk mitigation measure

REGULATORY

Any modification to the tariff methodologies, permits, certifications, laws and regulations needed to operate our grid or the Group’s trusteeship obligations could affect the revenue, profits and/or financial position of the Group. This could, in turn, have an adverse effect on the implementation of the Group’s infrastructure programme and its timely contribution to the energy transition.

1 2 Changes to the tariff methodologies

Modification of TSO permits and certification processes

CRITICALITY

Parameters of the remuneration, incentives, eligibility of costs

RESPONSES

• Regular contact with European & national authorities

• Proactive anticipation of new directives & regulations

Withdrawal, amendment, addition of new conditions

• Membership of ENTSO-E, which can advocate for changes that are aligned with our strategy

• Safeguarding security of supply and enhanced and accelerated CAPEX delivery are our top priorities

• Strong governance processes in place with a focus on compliance with regulatory decisions

Links with business activities

Links with TCFD categories Market Policy & legal Reputational risks

TIMEFRAME

CHANGE IN PROFILE

On 9 November 2023, the Belgian regulator (the CREG) approved the adapted tariff file submitted by Elia Transmission Belgium for 2024-2027.

The German regulator (the BNetzA) should normally approve in Q1 2024 an upward revision of the return on equity compared to the initial proposal

FINANCING

The ability of the Group to access global sources of financing to cover its financing needs and fund its plans and refinance its existing indebtedness is a key component of the Group’s business and strategic plan. Additionally, the development of activities outside of the Group’s regulated home markets may result in a lower predictability of results and cash flow. Finally, there may be an adverse impact on the Group’s working capital resulting from trustee obligations.

1

Long-term financing, attractiveness for investors & affordability

2

Short-term cash flow

CRITICALITY

Credit rating, ESG rating

Certain trustee obligations may temporarily impact the group’s working capital; the inorganic growth strategy may result in less predictable results

RESPONSES

LONG-TERM FINANCING, ATTRACTIVENESS FOR INVESTORS & AFFORDABILITY

• Analysis of technical alternatives to reduce project costs

• Analysis of alternative funding options

• Diversified (including green) financing sources in equity and debt instruments and good balancing of the maturities of its funding

• Measures to improve profitability and intensive efforts to attract new investors

SHORT-TERM CASH FLOW

• Close monitoring of EEG mechanism

• Ring-fenced structure with separate S&P ratings for ETB, Elia Group and Eurogrid GmbH

Links with business activities

Links with TCFD categories Reputational risks

Policy & legal Products/services

TIMEFRAME

More than €30 billion CAPEX over the next 5 years Introduction of a new model for the EEG mechanism in 2024

Downgrade of Elia Group and Eurogrid GmbH from BBB+ to BBB; outlook stable

The rating of ETB remains at BBB+ with a stable outlook

New regulatory framework starting in Belgium and Germany with an upward revision of return on equity compared the initial tariff proposal

TALENT

A lack of qualified staff may result in insufficient expertise and know-how which is needed to realise the Group’s strategic objectives. Given the highly specialised and complex nature of the business, if the Group does not manage to attract the human resources and expertise it needs, the risk of failing to implement its strategy will increase which will consequently impact the energy transition.

Talent attraction and retention

Wellbeing

1 2 3

Alignment between culture and strategy

Specific technical expertise needed to support Elia Group’s development and digital transformation

RESPONSES

TALENT ATTRACTION AND RETENTION

• Updated hiring strategy

High societal expectations related to the energy transition place significant pressure on our teams

The Group’s culture must be fully aligned with its strategy in order for it to be fully implemented, and this process takes time

• Active promotion of ETB and 50Hertz, job fairs held in schools, promotion of the organisation via social media and prominent recruitment campaigns

• New way of working policies

• Diversity, equity & inclusion initiatives

WELLBEING

• Wellbeing initiatives & tailored support provided by a wellbeing officer & psychologists via platform/app ALIGNMENT BETWEEN CULTURE AND STRATEGY

• Transformation journey and transformer community

• Elia Group leadership model

• Promotion of behaviours: feedback, simplification, impact

Links with business activities

Links with TCFD categories

Market

Reputational risks

HEALTH AND SAFETY

A lack of qualified staff may result in insufficient expertise and know-how which is needed to realise the Group’s strategic objectives. Given the highly specialised and complex nature of the business, if the Group does not manage to attract the human resources and expertise it needs, the risk of failing to implement its strategy will increase which will consequently impact the energy transition.

1 2 3 Human errors

Lower levels of general wellbeing and our staff’s ability to focus may cause human errors, leading to health & safety incidents

RESPONSES

Contractor’s risk

Alignment between culture and strategy

Contractor safety cultures which are not aligned with the Group’s may lead to health & safety incidents

Offshore assets and work require safety procedures to be adapted and updated

• Global Prevention Plan: health and safety system, process and procedure management, unwanted event follow-ups, proactive site visits

• 50Hertz is ISO 45001 certified, ETB has been assessed as carrying a level 3 on the Safety Culture Ladder

• Safety cultural change initiative rolled out across the Group

• Safety program ‘Go for Zero’, continued

• Internal and external staff required to be fully trained and certified

• Initiatives to decrease inherent safety risks by performing inspections with safer technology, for example drones, robots, etc.

• Wellbeing initiatives and tailored support provided by a wellbeing officer and psychologists via platform/ app

Links with business activities

Links with TCFD categories

Reputational risks Market

Opportunities Overview

GREEN FINANCING

If we successfully embed sustainability considerations into our business model, then we will have access to financing linked to ESG criteria which will facilitate our ability to finance our infrastructure portfolio. Furthermore, adhering to the EU taxonomy creates opportunities to draw on diverse sources of debt funding and appeal to equity investors.

1 2

Unclear or changing requirements

Large number of non-financial frameworks

Related to non-financial reporting

Possibly conflicting or can generate burdens

RESPONSES

• Reporting in line with EU taxonomy

• 023 – development of state-of-the-art climate scenarios with support from climatologists for our climate vulnerability assessment

• 2023 – anticipation of CSRD requirements and improvement of our risk reporting and double materiality exercise

• 2023 – update to Elia’s Green Finance Framework

• 2023 – first green bond issued by ETB (€500 million)

• 2023 – syndicated green loan for Eurogrid GmbH (€600 million)

Links with business activities

Links with TCFD categories

Reputational risks Market Policy & legal

Execution of investment plans requires an important increase in green financing

Solid and improving ESG ratings, with 8.7 (negligible) risk rating for Sustainalytics

LEVERAGING THE EXPERTISE ACQUIRED IN BE AND GE

Supporting the energy transition outside of our regulated home markets (especially through offshore development) may lead to new accretive growth opportunities for the Group.

1

Competition

2 3 Country specificities

Partnership risks

Understanding of local markets

RESPONSES

• Creation of WindGrid

Other players with a local presence

Ethical standards, financial strength

• In December 2023, Elia Group entered into a firm agreement to acquire a 35.1% stake in energyRe Giga, a clean energy company, to work on sustainable infrastructure projects in the U.S.

• EGI is one of the Group’s subsidiaries which offers consultancy expertise to international customers

• Build-up of country knowledge through working with local actors and analysis of regulatory frameworks

• Active exploration of business development opportunities

Links with business activities

Links with TCFD categories

Reputational risks

Market Products/services

Energy sources

ENERGY TRANSITION GRID INFRASTRUCTURE PROJECTS

The energy transition is a unique opportunity for Elia Group to create wealth and growth by delivering grid infrastructure projects. This supports the decarbonisation of society, as well as the development of European markets, and enhances European security of supply. Industrial players and end consumers are increasingly interested in having access to green energy, hence the importance of grid infrastructure to transport this energy.

1 Anticipate future infrastructure needs

Uncertainties related to the timing of the energy transition (e.g.: EV integration into the system, electrification of industrial processes, widespread adoption of heat pumps)

RESPONSES

• Projections of future electricity needs including long-term studies

• Key energy transition projects, e.g. Princess Elisabeth Island, Ostwind 2 and SuedOstLink

• In December 2023, Elia Group entered into a firm agreement to acquire a 35.1% stake in energyRe Giga to develop green infrastructure projects in the U.S.

• Enhanced CAPEX delivery to implement the grid development plans

• Risk management of infrastructure projects to support the delivery of projects on time and within budget

• Harmonisation of equipment specifications to support efficiency, simplification and cost control

Links with business activities

Links with TCFD categories

Market

Energy sources

Reputational risks

CRITICALITY

Low risk

TIMEFRAME

Short term

Long term Critical

CHANGE IN PROFILE

Steep increase in future investments to implement the grid development plans

DIGITALISATION TO MANAGE INCREASING COMPLEXITY

Elia Group believes a new way of managing the future power system is required in order to maximise the benefits of the energy transition. This will be enabled by digitalisation, which will connect all electrical devices and players from across the system together. The emergence of new digital technologies will enhance our data gathering, transferring, processing and visualisation capabilities, and will increasingly automate the management of the power system.

1 2 Speed of transformation process

Cyber-attacks

For both internal processes and society

Proper implementation of digitalisation, limiting vulnerabilities and the grid’s exposure to attacks

CRITICALITY TIMEFRAME

RESPONSES

• Development of our own Modular Control Centre System (MCCS), a new digital grid control system

• The rollout of a Consumer-Centric Market Design to eliminate the barriers in the current market design which prevent small flexibility assets from participating in the market; see also ‘Consumer empowerment’

• Embracing new technologies such as the cloud, big data, the internet of things, AI and blockchain within an appropriate governance framework

• In December 2023, re.alto launched Xenn, an energy API solution dedicated to residential customers, which aims to help them better understand their bills and ultimately reduce their costs

Links with business activities

Links with TCFD categories Resource efficiency Market Energy sources

CHANGE IN PROFILE Long

TRAINING

The digitalisation of our activities increases the need for new expertise; this can be ensured by retraining our employees. Training helps to improve performance management as well as staff skills; it also increases their knowledge and may eventually lead to higher levels of job satisfaction.

1

Ability of employees to cope with change and apply newly acquired skills

Technical skills, digital skills & soft skills

RESPONSES

• Staff training in different areas (including technical, economic, IT, language, and soft skills) is delivered via Elia Academy

• 2023 – Updated onboarding process

• 2023 - LinkedIn Learning is integrated into Elia Academy’s training programmes

• Elia Group’s digital academy and its Digital Online Training School (DOTS) provide digital learning trajectories for staff

• Agility of our processes

CRITICALITY TIMEFRAME

CHANGE IN PROFILE

DIVERSITY AND INCLUSION

New ways of working and diversity, equity and inclusion are opportunities for attracting new and talented staff to work for the Group and increasing the performance and resilience of the organisation. Different backgrounds and mindsets are directly linked to innovation - one behaviour we want to develop.

Adapting our working processes in line with the needs of new employees

1 2

Attractiveness of the Group as an employer

Work policy

Sustainability, ESG, governance, flexibility

RESPONSES

• Diversity, equity and inclusion are an integral part of our talent management strategy

• Our hiring processes are designed to support inclusive recruitment practices

• The company’s culture aims to foster inclusive leadership styles

Links with business activities

Links with TCFD categories Resource efficiency Energy sources Market

CRITICALITY TIMEFRAME CHANGE IN PROFILE

ETB was awarded the “Top Employer” label for the sixth time in a row in January 2023

CONSUMER EMPOWERMENT

If the right market signals are provided to consumers, they will be encouraged to help to keep the system and grid in balance by adapting their consumption habits and shifting their use of electricity to times when the availability of renewable (and therefore cheaper) energy is higher.

1

Speed of digitalisation

2

Time to reach an agreement with interested parties

As it is an enabler for empowerment

This includes, for example, DSOs and car manufacturers

RESPONSES

• Customer centricity initiatives which aim to encourage the large-scale participation of demand side flexibility, such as our Consumer-Centric Marked Design

• The publication of our 2023 viewpoint, ‘The Power of Flex’, explores how widespread consumer-side flexibility can deliver benefits for both consumers and the electricity system

• In 2023, Powerledger, a technology solutions provider for renewable energy trading, and Elia Group announced a joint research and development project to explore the potential of peer-to-peer (P2P) energy trading

Links with business activities

Links with TCFD categories Market Energy sources Products/services

3.2. Internal control system

GRI 2-15, GRI 2-16, GRI 2-26

3.2.1 Organisation of internal control system

Elia Group’s internal control system supports the company’s risk assurance processes and relies on clearly defined roles and responsibilities across all levels of the organisation. Pursuant to Elia Group’s articles of association, the Board of Directors established an Executive Management Board as well as various committees to help it fulfil its duties: the Audit Committee, the Strategic Committee, the Remuneration Committee and the Nomination Committee. The Audit Committee is, pursuant to Article 7:99 of the Belgian Code of Companies and Associations and the articles of association, responsible in particular for items (ii), (iii), (iv) and (v) below. The Board has charged the Audit Committee with the following tasks:

• examining the accounts and exercising control over the budget;

• monitoring the financial reporting process;

• monitoring the effectiveness of the company’s internal control and risk management systems;

• monitoring the internal audit process and its effectiveness;

• monitoring the statutory audit of annual and consolidated accounts, including following up on any issues raised or recommendations made by external auditors;

• reviewing and monitoring the independence of external auditors;

• formulating a proposal for submission to the Board of Directors for the (re-)appointment of the statutory auditors, as well as making recommendations to the Board of Directors regarding the conditions of their appointment;

• monitoring the nature and extent of the non-audit services provided by the statutory auditors;

• reviewing the effectiveness of the external audit process. The Audit Committee generally meets on a quarterly basis.

3.2.2 Main control activities

Elia Group has established internal control mechanisms across different organisational levels to ensure compliance with standards and internal procedures that are geared towards the proper management of identified risks. These include:

• clear task separation, preventing the same person from initiating, authorising and recording a transaction – policies have been drawn up regarding access to information systems and the delegation of powers;

• an integrated audit approach, so as to link end results with the transactions supporting them;

• data security and integrity through the appropriate allocation of rights;

• the appropriate documentation of procedures through the use of the Business Process Excellence Intranet, which centralises policies and procedures; departmental managers are responsible for establishing activities that control the risks which are inherent to their departments.

3.3. Internal control and risk management system related to the financial reporting process

The Group's financial reporting objectives include:

• ensuring financial statements comply with widely accepted accounting principles;

• ensuring that the information presented in financial results is both transparent and accurate;

• using accounting principles appropriate to the sector and the company’s transactions;

• ensuring the accuracy and reliability of financial results.

The activities undertaken by Elia Transmission Belgium SA/NV and 50Hertz Transmission GmbH, as electricity transmission system operators which own physical assets, contribute in a significant manner to the group’s financial results. Therefore, appropriate procedures and control systems have been established to ensure that an exhaustive and realistic inventory of physical assets can be drawn up.

3.3.1 Roles and responsibilities

Under the supervision of the Chief Financial Officer, the Accounting and Finance Department is responsible for statutory financial and tax reporting and the consolidation of Elia Group’s subsidiaries. The Finance Department helps the Executive Board by providing, in a timely manner, correct and reliable financial information to aid decisionmaking (related to monitoring the profitability of activities) and the effective management of corporate financial services. External financial reporting – one of Elia Group’s duties – includes (i) statutory financial and tax reporting; (ii) consolidated financial reporting; and (iii) specific reporting obligations applicable to listed companies. The Controlling Department monitors the performance of the Group and its subsidiaries. The Investor Relations Department is responsible for specific reporting applicable to listed companies. With regard to the financial reporting process, the tasks and responsibilities of all employees in the Accounting and Finance Department are clearly defined, so enabling the production of financial results that accurately and honestly reflect Elia Group’s financial transactions. A detailed framework of tasks and responsibilities identifies the main control duties and the frequency with which tasks and control duties are performed. An International Financial Reporting Standards (IFRS) Accounting Manual is used by all entities within the scope of consolidation as a reference for accounting principles and procedures, thus ensuring that all accounting and reporting activities across the group are consistent, comparable and accurate. The Accounting and Finance Department has the appropriate means (including IT tools) to perform its tasks; all entities within the scope of consolidation use the same enterprise resource planning

software, which has a range of integrated controls and supports task separation as appropriate. The roles and responsibilities of all employees are clearly defined in line with the Business Process Excellence methodology. The structured approach developed by Elia Group helps to ensure that financial data is both exhaustive and precise, and takes into account activity review deadlines and the actions of key players, so as to ensure that control and accounting processes are adequate.

3.3.2 Risk management

Financial risk assessments primarily involve the identification of:

1. significant financial reporting data and its purpose;

2. major risks involved in the attainment of objectives;

3. risk control mechanisms, where possible.

3.3.3 Control activities

For all significant financial reporting risks, Elia Group adopts appropriate control mechanisms to minimise the probability of error. Clearly defined roles and responsibilities related to the closing procedure for financial results are in place. Measures that ensure that each stage is appropriately followed up on are in place; this includes the publication of a detailed agenda of all activities undertaken by Elia Group's subsidiaries. Control activities are performed to ensure quality and compliance with internal and external requirements and recommendations. During the financial closing period, a specific test is performed to ensure that unusual and significant transactions, accounting checks and adjustments and company transactions and critical estimates are all under control. The combination of all these elements ensures that our financial results are reliable. Regular internal and external audits also contribute to the quality of our financial reporting. As it identifies the risks that may affect the achievement of financial reporting objectives, the Executive Board takes into account the possibility of any misreporting associated with fraud and takes appropriate action where internal control needs to be strengthened. The Internal Audit Team performs specific audits based on the risk assessment related to potential fraud, with a view to avoiding and preventing any instances of fraud.

3.3.4 Information and communication

The members of staff who are responsible for financial reporting regularly meet with other internal departments (operational and control departments) to identify financial reporting data. They validate and document the critical assumptions underpinning booked reserves and the company’s accounts. At the group level, the consolidated results are broken down into segments and validated through a comparison with historical figures and through a comparative analysis of forecasts and actual data. This financial information is sent to the Executive Board on a monthly basis and is discussed each quarter with the Audit Committee. The Chairman of the Audit Committee then reports to the Board of Directors.

3.3.5 Monitoring

Monitoring activities in the financial reporting process include:

(i) the monthly reporting of strategic indicators to the Executive Board and management;

(ii) following up on key operational indicators at a departmental level;

(iii) a monthly financial report, including an assessment of variations in relation to the budget, comparisons with preceding periods and events which are liable to affect cost controlling.

Consideration is also given to third-party feedback from a range of sources, such as:

(i) stock market indices and reports published by ratings agencies;

(ii) the share value;

(iii) reports published by federal and regional regulators relating to compliance with legal and regulatory frameworks;

(iv) reports published by financial analysts and insurance companies.

Comparing information from external sources with internally generated data and ensuing analyses allows the group to keep on making improvements to its monitoring activities.

Besides the activities performed by the Internal Audit Team that ensure the effectiveness of the internal control and risk management system of the financial reporting process, Elia Group’s legal entities are also subject to external audits, which generally entail an evaluation of internal control processes and notes relating to their (annual and quarterly) statutory and consolidated financial results. External auditors make recommendations for improving the Group's internal control systems. For subsidiaries that have an Audit Committee, the recommendations, action plans and their implementation are reported annually to that Committee, which in turn reports to the Board of Directors regarding the independence of the auditor or statutory audit firm and drafts a motion for a resolution on the appointment of external auditors.

3.4. Internal control and risk management system related to the non-financial reporting process

Sustainability lies at the heart of our business strategy. Elia Group has therefore established an internal control and risk management system for the non-financial reporting process. Non-financial information is often defined as Environmental, Social and Corporate Governance (ESG) information. This ESG information is mostly disclosed through key performance indicators (KPIs). The complete set of ESG KPIs can be found in the ESG section of this report. We have integrated ESG objectives into our strategic planning and resource allocation processes and have set targets related to priority ESG topics (please see our ActNow programme, and our Financial Report). These priority topics are identified following the double materiality assessment. We have established processes and controls that ensure the regular monitoring, measuring, validating and reporting of these KPIs.

The relevant roles and responsibilities regarding ESG KPIs are explained in the ESG section of this report. In order to prepare for the implementation of the European Corporate Sustainability Reporting Directive (CSRD), Elia Group has voluntarily opted to gradually increase the number of audited KPIs that are published in the ESG section of this report. In this vein, the Group is preparing a non-financial accounting manual for all KPIs including a Risk & Control Matrix so it has appropriate control mechanisms in place to minimise the risk of errors.

3.4.1 Integrity and ethics

Elia Group’s integrity and ethics are a crucial aspect of our internal control environment. The Board of Directors and the Executive Management Board regularly communicate and revisit these principles in order to clarify the mutual rights and obligations of the company and our employees. These rules are shared with all new employees, and compliance with them is formally included in employment contracts.

Elia Group’s Code of Ethics (the “Code of Ethics”) defines what Elia Group regards as correct ethical conduct and sets out the policy and a number of principles related to the avoidance of conflicts of interest. Acting honestly and independently with respect to all stakeholders is a key guiding principle for all of our employees. The Code of Ethics expressly states that bribery in any form, the misuse of privileged information and market manipulation is prohibited. This is confirmed by Elia Group’s Code of Conduct (the “Code of Conduct”), that helps to prevent employees from breaching any Belgian legislation with regard to the use of privileged information or market manipulation.

Senior management consistently ensures that employees comply with internal values and procedures and – where applicable – takes any actions deemed necessary, as laid down in the company regulations and employment contracts. Elia Group and its employees do not use gifts or entertainment to gain competitive advantage over other organisations. Facilitation payments are not permitted by the group. Disguising gifts or entertainment as charitable donations is also a violation of the Code of Ethics. Moreover, the Code of Ethics prohibits all forms of racism and discrimination, promotes equal opportunities for all employees, and ensures the protection and confidential use of IT systems.

All parties involved in procurement must abide by the group’s Supplier Code of Conduct and all associated regulations. The Supplier Code of Conduct contains internationally accepted principles regarding ethical conduct, the protection of human rights, health and safety practices, and environmental and social considerations. In order to use this set of principles to positively impact our supply chain, a risk-based approach is in place. For all purchasing categories, we assess the risks based on traditional supply chain risks and supply chain sustainability risks.

Elia Group offers its employees the opportunity to express their concerns about possible breaches of the Code of Ethics without fear of negative repercussions or unfair treatment. Issues can also be raised with local management teams, HR, and the Compliance Officer. In addition to internal reporting channels, external reporting systems exist that allow all internal employees and external stakeholders to anonymously raise issues about possible breaches of the Code of Ethics which may harm the group’s reputation and/ or its interests via a dedicated platform (‘EthicsAlert’). All raised issues are handled in an objective and confidential manner, in line with the whistleblowing procedure, which was designed in compliance with EU Directive 2019/1937 and its transposition into national law.

The Internal Audit Team’s annual activities include a number of actions and verification audits designed to act as specific safeguards against fraud. Any findings are reported to the Audit Committee. In 2023, no relevant findings relating to financial fraud were reported in the audits that were part of the 2023 annual audit plan.

3.5. Climate-related disclosures (task force on climate-related disclosures [TCFD] report)

Task Force on Climate-Related Disclosures [TCFD] report

Governance Strategie

a) Toezicht door de raad van bestuur op klimaatrisico’s en -opportuniteiten

Zie III. Duurzaamheidsverslag - 1.2.1. De rol van bestuurlijke, leidinggevende en toezichthoudende organen

b) Rol van het management bij het beoordelen en beheren van klimaatrisico’s en -opportuniteiten

Zie III. Duurzaamheidsverslag - 1.2.1. De rol van bestuurlijke, leidinggevende en toezichthoudende organen

a) Door de organisatie geïdentificeerde klimaatrisico’s en -opportuniteiten op korte, middellange en lange termijn

Zie III. Duurzaamheidsverslag - III.2.2.1. Strategie

b) Impact van klimaatrisico’s en -opportuniteiten op de zakelijke, strategische en financiële plannen van de organisatie

Zie III. Duurzaamheidsverslag - III.2.2.2 Beheer van de impact, risico’s en opportuniteiten

c) Veerkracht van de strategie van de organisatie in verschillende klimaatscenario’s, waaronder een scenario van 2°C of minder.

Zie III. Duurzaamheidsverslag - III.2.2.1. Strategie

Risicobeheer

a) Processen van de organisatie voor het identificeren en beoordelen van klimaatrisico’s

Zie 3.1. Beheerssysteem voor risico’s en opportuniteiten

b) Processen van de organisatie voor het beheren van klimaatrisico’s

Zie 3.1. Beheerssysteem voor risico’s en opportuniteiten

c) Hoe de processen voor het identificeren, beoordelen en beheren van klimaatrisico’s zijn geïntegreerd in het algemene risicobeheer van de organisatie

Zie 3.1. Beheerssysteem voor risico’s en opportuniteiten

Indicatoren en doelstellingen

a) Indicatoren die de organisatie gebruikt om klimaatrisico’s en -opportuniteiten te beoordelen in lijn met haar strategie en risicobeheersproces

Zie III. Duurzaamheidsverslag - III.2.2.3. Indicatoren en doelstellingen

b) Scope 1, scope 2 en, indien van toepassing, scope 3 broeikasgasemissies en betrokken risico’s

Zie III. Duurzaamheidsverslag - III.2.2.3. Indicatoren en doelstellingen

c) Doelstellingen die door de organisatie worden gebruikt om klimaatrisico’s, -opportuniteiten en prestaties ten opzichte van deze doelstellingen te beheren

Zie III. Duurzaamheidsverslag - III.2.2.3. Indicatoren en doelstellingen

4. Elia Group on the stock exchange

4.1. Elia Group on the stock exchange

In 2023, European utilities experienced significant sell-offs due to increasing bond yields and concerns about the outlook for renewable energy. The uncertainty surrounding regulatory changes and rapidly shifting financial landscape further affected Elia Group's stock performance. However, at the end of December during its second Capital Markets Day, Elia Group provided clarity on regulatory returns, its upcoming CAPEX plan, and future funding requirements. This clarity has bolstered the Group's stock, helping it to recover some of the losses incurred throughout the year.

Elia Group's share performance was initially impacted by increasing interest rates but rebounced after regulatory revisions and its new investment plan were announced. CHANGES IN ELIA GROUP'S SHARE TRACKED AGAINST THE BEL20 INDEX CHANGES IN PRICE AND TRADED VOLUMES CHANGES IN ELIA GROUP'S SHARE TRACKED AGAINST THE SHARE PRICES OF ITS EUROPEAN COUNTERPARTS

Driven by the highly regulated nature of our activities, Elia Group delivered solid financial results linked to the realisation of investments in Belgium and Germany and the strong performance of Nemo Link.

Elia Group's share price closed the year at €113.30, meaning it decreased by 14.94% compared with 2 January 2023 (when it stood at €133.20). The share price was at its highest on 6 January (€139.40) and at its lowest on 4 October (€87.00). The approved dividend of €1.91 for 2022 was paid.

Elia Group was one of several Belgian companies that were selected to be part of BEL®ESG, a new stock market index which was launched in February 2023 by Euronext and is directly linked to sustainability. This index is designed to meet an increasing market demand for improved visibility of sustainable investment tools.

The liquidity of Elia Group's share decreased to 57,312 in shares traded per day in 2023 from 66,626 in shares traded per day in 2022. With 73,521,823 shares outstanding, the company’s market capitalisation stood at €8,330,022,545.90 at the end of December 2023.

4.2. Information on the treasury share - liquidity agreement

The Special General Meeting of Shareholders held on 18 May 2021 conferred the Board of Directors with the power to acquire the company’s own shares, without the total number of own shares held by Elia Group SA/NV pursuant to this power exceeding 10% of the total number of shares, for a compensation that could not be lower than 10% below the lowest closing price in the thirty days preceding the transaction and not higher than 10% above the highest closing price in the thirty days preceding the transaction. This power was conferred for a period of five years from 4 June 2021 onwards. It applies to the Board of Directors of Elia Group SA/NV and, where necessary, to any third party acting on behalf of Elia Group SA/NV.

In view of the above, Elia Group SA/NV entered into a liquidity agreement with Exane BNP Paribas, providing the latter with the mandate to purchase and sell Elia Group shares on the regulated market of Euronext Brussels. Exane BNP Paribas is acting on behalf and for the account of Elia Group SA/NV and within the framework of a discretionary mandate as authorised by the Extraordinary General Meeting of 18 May 2021. The purpose of the liquidity contract is to support the liquidity of the Elia Group SA/NV shares listed on Euronext Brussels.

Table I provides an overview of the treasury shares acquired or disposed of in 2023 within the framework of the liquidity agreement. Table II provides a more specific overview of the disposals of treasury shares in 2023.

TABLE 1: TREASURY SHARES ACQUIRED OR DISPOSED OF IN 2023

TABLE II: OVERVIEW OF THE DISPOSALS OF TREASURY SHARES

The voting rights of all treasury shares are suspended by law. As of 31 December 2023, Elia Group SA/NV had 22,079 treasury shares that were not entitled to dividend rights.

FINANCIAL CALENDAR

19 April 2024

21 May 2024

22 May 2024

3 June 2024

24 July 2024

29 November 2024

Publication of 2023 Annual Report

General meeting of shareholders

Quarterly statement for Q1 2024

Payment of 2023 dividend

Publication of 2024 half-year results

Quarterly statement for Q3 2024

66 As the shares were disposed of on Euronext Brussels, Elia Group SA/NV holds no information about the identity of their acquirers.

Dividend

SHAREHOLDER STRUCTURE

Based on transparency declarations received by the company (in accordance with the Act of 2 May 2007 and the Royal Decree of 14 February 2008).

49.2% contribution of Germany to the net profit attributable to Elia Group

€1.99 gross dividend per share

On 29 March 2024, Elia Group SA/NV’s Board of Directors decided to propose a nominal dividend of €146.3 million or €1.99 per share (gross) to the general meeting of shareholders on 21 May 2024, in accordance with the dividend policy and subject to approval of the profit appropriation by the annual general meeting of shareholders. This constituted an increase in dividend for the eight consecutive year. This resulted in a net dividend of €1.393 per share.

The following paying agents will pay out dividends to shareholders: BNP Paribas Fortis, ING Belgium, KBC and Belfius. Dividend payouts for shares held in a stock account will be settled automatically by the bank or stockbroker. Elia Group SA/NV will pay out dividends on registered shares directly to shareholders.

Dividend policy

On 21 March 2019, the Board of Directors formally approved the policy it intends to apply when proposing dividends to the general meeting of shareholders. This policy states that the full-year dividend growth is intended not to be lower than the increase in the Consumer Price Index (“inflation”) in Belgium. The policy supports the Group’s long-term ambition to offer a secure dividend in real terms to shareholders while at the same time enabling the Group to sustain a strong balance sheet that is needed to fund the Group’s investment programme.

Nevertheless, future dividends will remain dependent upon the results of the Group (which are affected by a number of factors which are outside of the company’s control) as well as the company’s financial situation, financing needs (capital expenditures and investment plan in particular) and business perspectives. The proposed dividend represents a payout ratio of 45.1% of the IFRS reported profit attributable to owners of ordinary shares.

INVESTORS

For any questions regarding Elia Group and its shares, please contact:

Elia Group

Investor Relations, Boulevard de l’Empereur 20 1000 Brussels, Belgium

Tel.: +32 2 546 74 29

Fax: +32 2 546 71 80

E-mail: investor.relations@elia.be

Information about the Group (press releases, annual reports, share prices, disclosures, etc.) can be found on Elia Group's website www.eliagroup.eu

4.3. Key figures

Other key figures

(*) A detailed glossary of definitions is included in the Appendix

1. The adjusted net result was introduced in 2019 as an Alternative Performance Measure; this represents the Normalised net result in prior years

2. In 2019, the composition of the RAB no longer included EEG and similar surcharges due to changes in regulation

5. Management report and analysis of 2023 results

5.1. 2023 highlights

• We've committed substantial investments totaling to €2,397.2 million in the grid, contributing significantly to society's decarbonization efforts. This has led to a regulatory asset base of €12.2 billion, marking a notable increase of 12.4%.

• Very high grid reliability of 99.9% and 99.7% in Belgium and Germany respectively, while ensuring operational excellence, quality and efficiency

• Executing its international strategy, Elia Group has made its first strategic investment in the US

• Electricity transmission tariffs and adjusted methodology approved in Belgium and onshore German regulation approved

• The net profit Elia Group share totalled €324.5 million leading to a ROE(adj.) of 6.91% in line with guidance, excluding M&A cost the ROE (adj.) would be 7.14%

• Elia Group utilized sustainable funding in the debt market to boost liquidity for future grid expansion

• CAPEX plan of €9.4 billion for Belgium and €20.7 billion for Germany for the period 2024-2028 and the financial outlook for 2024 have been reaffirmed

• A dividend of €1.99 per share will be proposed at General Meeting on 21 May 2024

“In 2023, crucial steps were taken in the implementation of our strategy, marked by a tangible acceleration. Many of our projects anticipate the rapid rise of electrification. Both in Belgium and Germany, we worked on an upgrade of the federal grid development plan and negotiated a new regulatory framework. This strengthens our organic growth and provides the means to achieve the increased investment plan of €30.1 billion. Additionally, our first partnership in the US marks a significant step shaping the future of the Elia Group. Our non-regulated activities have the potential to enhance our relevance and push forward the Group’s growth. All of this makes it clear that 2023 brought us to a point of no returning.”

Catherine Vandenborre, CEO Elia Group ad interim

5.2. Elia Group

Results

Elia Group’s adjusted net profit increased by 0.8%, reaching €411.4 million:

Elia Transmission (Belgium) delivered a robust performance, reporting an adjusted net profit of €180.9 million (+€24.0 million). The higher result is mainly due to a higher fair remuneration driven by the increase of equity, a higher performance on incentives and the activation of costs linked to ETB’s Green bond issuance. Prior year result benefited from a one-off tariff compensation for the financial costs linked to the capital increase.

50Hertz Transmission (Germany) (on a 100% basis) recorded a lower adjusted net profit of €218.5 million (-€17.6 million). The decrease is primarily attributed to a lower financial result linked to the discounting of long-term provisions as well as increasing depreciations. However, only partially compensated by the increase in investment remuneration resulting from asset growth and higher base year revenues as well as lower Opex costs and higher energy bonus.

The non-regulated segment and Nemo Link recorded a decreased adjusted net profit of €12.1 million (-€3.1 million). This reduction can be attributed to the lower contribution of Nemo Link, which reached the cumulative cap in 2023 and by higher costs incurred for WindGrid, offset by a decreasing loss at the holding due to higher interest income on cash deposits and better results at EGI.

The net profit decreased to €399.5 million, as it includes the one-off costs linked to the energyRe Giga investment (€11.9 million).

The net profit of Elia Group attributable to the owners of ordinary shares (after deducting the €44.1 million in noncontrolling interest and €31.0 million attributable to hybrid securities holders) decreased to €324.5 million. This is due to higher interest expenses related to the hybrid securities and the one-off costs linked to the energyRe Giga investment.

The execution of the investment programme in Belgium and Germany and a solid operational performance of the regulated entities and Nemo Link could partly offset this, resulting in an earnings per share of €4.4 for the year.

Capital expenditures

In 2023, Elia Group invested €2,397.2 million. Focusing on strengthening the internal backbone in both the Belgian and German grids, the development of the necessary offshore infrastructures allowing the integration of increasing amounts of renewable energy into the grid and to further support the digitalisation of our infrastructure, leading to a growth of the Regulatory Asset Base (RAB) of 5.98%.

Good progress made on major infrastructure works

BELGIUM

Throughout 2023, ETB dedicated a total investment of €711.3 million to its activities leading to a RAB growth of 9.5% to €5.9 billion. The primary focus remained on fortifying and expanding the 380 kV grid, laying the groundwork for offshore grid expansion and the seamless integration of renewable energy. Specifically, €158.5 million was allocated to offshore developments, €321.7 million to regional grid reinforcements, and client connections, while approximately €145.2 million supported 203 replacement projects across the Belgian grid. €83.7 million was invested towards digitalization and the development of innovative tools, aligning the company with technological advancements.

GERMANY

50Hertz invested €1,685.9 million in 2023, up 55.3% compared to last year increasing the RAB by +15.2% to €7.9 billion (100% 50Hertz). In total, €1,102.2 million were invested in onshore projects, while offshore investments amounted to €494.3 million. Additionally, €89.4 million were spent on IT projects.

Significant onshore investments include the DC line SuedOstLink (€289.7 million), crucial for connecting growing offshore production in northern Germany to southern consumption centers. Additionally, a major focus of the year was on reinforcing the existing grid, with the 380 kV overhead line between Röhrsdorf and Remptendorf as a major project, costing €137.3 million. Other important reinforcement projects involve the southern Uckermark region (€118.0 million) and the northern Uckermark region (€25.5 million) overhead lines, and the 380 kV overhead line section between Pulgar and Vieselbach (€54.6 million). Other noteworthy onshore projects to strengthen the grid include the restructuring of the Lauchstädt substation with STATCOM and MSCDN (€44.7 million), as well as the restructuring and reinforcement of the Wolmirstedt to Güstrow (€44.4 million) overhead line.

Regarding offshore investments, focus primarily lies on the Ostwind 3 project (€212.0 million), while the Ostwind 2 project (€118.7 million) is nearing final commissioning in 2024. Additionally, progress is being made in realising the connection for the offshore wind park Gennaker, with an investment of €110.7 million.

Net debt & credit metrics

(in € million)

2023 2022

Elia Group carried a total net financial debt, excl. EEG and similar mechanisms of €8,994.5 million (+€1,626.9 million) at the end of 2023. The primary factor for this increase was related to the realisation of the investment program in Belgium and Germany which relied partially on funding from operating cash flow as well as on liquidity stemmed from last year’s capital increase.

Furthermore, Elia Group actively participated in the debt market to enhance its liquidity position for future grid expansion. In line with the Group's sustainable finance ambitions, ETB successfully issued its first green bond of €500 million with a fixed rate of 3.625%, dedicated to funding eligible green projects. Moreover, in March Eurogrid syndicated a Green Loan of €600 million from seven banks with a ten-year term, which was fully drawn at year-end. In April, Eurogrid made a re-entry into the market, issuing a 7-year bond of €650 million at an interest rate of 3.722%. In October, Eurogrid tapped on the bond issued in April, issuing an extra €150 million under this series at the prevailing market price with a re-offer yield of 4.534%. Finally, Eurogrid concluded a private placement of €50 million and syndicated another €120 million bank loan. Furthermore, Elia Group has secured two bilateral Revolving Credit Facilities, amounting to a total of €120 million, of which €100 million was drawn at the end of 2023.

Elia Group proactively managed its hybrid layer by refinancing part of its outstanding €700 million hybrid. It issued a new €500 million hybrid bond, accompanied by a capped tender offer on its existing hybrid security. The newly issued hybrid bond carries a coupon of 5.85% until June 15, 2028.

At the end of 2023, Elia Group's average cost of debt stood at 2.6% (+70 bps). Standard & Poor's has revised Elia Group's credit rating, lowering it to BBB with a stable outlook.

5.3. Elia Transmission in Belgium

Elia Transmission's revenue was down by 11.4% compared with 2022, decreasing from €1,561.3 million to €1,383.9 million. Revenue was impacted by a higher regulated net profit, higher depreciations linked to the growing asset base, more than offset by lower net financial cost due to interest income from cash deposits and a strong drop in costs for ancillary services. The lower ancillary services were driven by lower balancing activation and reservation costs, resulting from the drop in gas and electricity prices as prior year was marked by the start of the war in Ukraine.

EBITDA rose to €510.2 million (+7.1%) due to a higher regulated net profit, higher depreciations linked to the growing asset base, partially offset by lower net finance costs, all passed through into revenue. The EBIT increase was more pronounced (+10.9%), driven by higher dismantling provision for the Modular Offshore Grid covered by the tariffs, while already capitalised under IFRS in previous years. Also the depreciations for intangible assets expensed during the previous regulatory period and thus not covered by the tariffs decreased. The contribution of equity-accounted investments slightly increased to €2.8 million, linked to the contribution from HGRT.

Net finance cost decreased (-12.3%) compared with the previous year. This was mainly driven by the activation of borrowing costs due to the growth of the asset base (+€3.1 million), but the increasing interest rate environment also led to higher interest income on cash deposits. This was partly offset by higher interest costs linked to ETB’s bond issuance. Beginning 2023, ETB tapped the debt capital market with its inaugural €500 million Green Bond for funding its eligible green projects. ETB proactively anticipated the rising interest rate environment by concluding interest rate swaps and this fully to the benefit of consumers. Consequently, the average cost of debt only marginally increased to 2.0% (+10 bps) at the end of 2023, and all outstanding debt has a fixed coupon.

(Adjusted) net profit rose by 15.3% to €180.9 million, mainly due to the following:

1. A higher fair remuneration (+€7.7 million) due to asset growth and higher equity.

2. Increase in incentives (+€12.9 million), reflecting a strong operational performance, primarily linked to a higher efficiency gain on controllable costs despite the growth of our activities and a better performance on the incentive for interconnection capacity driven by lower congestion costs. The net contribution from incentives was slightly negatively impacted by an increase of the average tax rate.

3. Activation of the Green Bond issuance costs under IFRS while fully covered by the tariffs (+€2.1 million).

4. Higher capitalised borrowing costs due to a higher level of assets under construction and the slight uptick in average costs of debt (+€3.2 million).

5. A one-off tariff compensation recognized in 2022 for the financial costs linked to the capital increase (-€3.5 million).

6. Other (+€1.5 million): this was driven by lower sharebased payment expenses linked to the capital increase in favour of members of staff (+€1.6 million), higher dismantling provisions for the Modular Offshore Grid covered by the tariffs while capitalized under IFRS (+€3.4 million) and lower depreciation of software and hardware (+€0.7 million) as some of the assets acquired during the previous regulatory period and covered by the regulatory methodology are written off. This is partially offset by slightly more damage to electrical installations compared with the previous year (-€2.1 million) and deferred tax effects (-€2.5 million).

Total assets increased by €429.2 million to €8,277.8 million due to the realisation of the investment programme. Net financial debt increased to €3,479.1 million (+19.3%), as ETB’s CAPEX programme was partially financed by cash flows from operating activities, which were negatively impacted by lower cash inflows from levies, and the issuance of a €500 million Green bond. The sustainability-linked RCF (€650 million) and the commercial paper (€300 million) were fully undrawn at the end of 2023. Elia Transmission Belgium is rated BBB+ with a stable outlook by Standard & Poors.

Equity remained flat at €2,915.7 million (+€8.6 million) mainly due to: the reservation of the 2023 profit (+€180.9 million) and the capital increase reserved for staff, including share-based payment expenses (+€0.7 million). This was fully offset by the dividend payment to Elia Group (-€139.7 million), the change in fair value of an interest rate hedge (-€18.8 million), a higher allocation of equity towards Nemo Link (-€11.7 million) and by the revaluation of postemployment benefit obligations (-€2.8 million).

5.4. 50Hertz Transmission in Germany

50Hertz Transmission's total revenue and other income decreased compared to 2022 (-0.6%), from €2,592.6 million to €2,578.2 million.

EBITDA increased to €710.9 million (+16.3%). The growing onshore and offshore asset base benefitted the investment remuneration (+€75.0 million). Base year revenues increased due to a higher remuneration (inflation adjustment) of the capital costs and the Opex compared to last year (+€9.5 million). The operational costs remained well under control (+€4.6 million), driven by lower maintenance costs and partially offset by important expenditures in digitalisation and IT in order to manage the increasing complexity of operating the system. Furthermore, the EBITDA benefitted from a higher energy bonus (+€11.1 million), especially for grid losses. 50Hertz continued to expand its talent pool in order to keep up with the increasingly larger and more complex investment programme, leading to additional staff costs (-€34.1 million). This was offset by higher own work capitalised and revenues from service level agreements (+€48.6 million). Finally, last year’s EBITDA was marked by significant one-off regulatory settlements as the offshore lump sum for 2018 was settled (-€14.8 million). Also, the EBIT increased (+20.6%) despite the higher depreciations (-€34.7 million) following the execution of the investment programme. Furthermore, operating provisions remained flat.

The net financial result decreased to -€59.8 million (-€87.1 million), mainly related to the valuation of the long-term provision for congestion income from interconnectors included in the regulatory accounts (-€74.2 million). Last year was marked by a strong drop in the valuation of this liability due to the spike of forward interest rates, while the sudden drop in interest rates in December 2023 caused an increase of the provision. Furthermore, the funding costs increased due to Eurogrid’s bond and green loan issuances in an environment of increasing interest rates over the first three quarters of 2023 (-€9.7 million). This is partially offset by higher capitalised borrowing costs due to the ongoing investment programme (+€7.1 million).

(Adjusted) net profit decreased to €218.5 million (-7.5%) as a result of:

1. Higher investment remuneration (+€52.5 million) following the growth of the asset base.

2. Decreased Opex and other costs (+€10.5 million) mainly driven by higher base year revenues and lower operating cost more than offsetting the lower regulatory settlements.

3. Higher energy bonus (+€4.6 million), mainly due to the bonus for grid losses.

4. These effects were partially compensated by:

5. Lower financial results (-€60.9 million), driven primarily by last year’s revaluation of long-term provisions and the higher interest costs.

6.Higher depreciations (-€24.3 million) due to the commissioning of projects.

Total assets declined by -€1,551.5 million compared with 2022 mainly due to decreasing cash and cash equivalents linked to the decreasing energy prices and therefore a strong drop of the EEG cash balance, partially compensated by the good progress on the investment programme and therefore increasing assets under construction. The free cash flow totalled -€3,403.7 million and was heavily affected by the realisation of investment programme (€1,685.9 million) and the net cash outflow for EEG and similar mechanisms (KWK and SPB ) (-€2,578.6 million) driven by the decreased energy prices. 50Hertz acts as a trustee for these mechanisms.

The net financial debt, excl. EEG and similar mechanisms increased by €854.6 million compared to end of 2022, up to €5,045.9 million. The execution of the investment programme was partially financed from operating cash flow, while Eurogrid also accessed the debt market on several occasions. Including EEG and similar mechanisms, the net financial debt increased by €3,438.0 million due to the drop of the cash balance for EEG and similar mechanisms. As of December 2023, the cash position for these schemes decreased and amounted to €352.6 million.

In 2023, Eurogrid continued to tap the debt market to finance its investment plan. It secured and drew on a €600 million Green Loan with a term of ten years and refinanced under KfW’s “Climate Protection Programme for Companies”. The funds are used to co-finance the offshore grid connection for the Gennaker wind farm project. Additionally, Eurogrid issued a new bond of €650 million with a tenor of 7 years and at a fixed rate of 3,722% on which it tapped an additional €150 million in November (re-offer yield at 4.534%), in order to refinance a €750 million bond with a maturity in 2023. Finally, a syndicated bank loan of €120 million with a tenor of 10 years was secured in November to partially finance the Uckermark line and Berlin cable tunnel, while Eurogrid also agreed on a new private placement of €50 million. Following these transactions, the average cost of debt increased to 2.01% (+21 bps) at the end of 2023.

The total equity decreased by €42.2 million to €2,138.4 million. This decrease is primarily driven by the drop in hedge reserves (-€248.2 million) offsetting the result reservation for 2023 (€218.5 million). Since 2021, 50Hertz applies hedge accounting for the purpose of reducing the risk of fluctuations in the expected amount of grid losses. Due to the drop in energy prices, the fair value of these contracts decreased to -€224.8 million. Considering a deferred tax effect, a hedge reserve amounting to -€157.4 million was recorded in other comprehensive income. As the costs for grid losses are almost fully passed through to the tariffs, the fair value of the future contracts has no relevance for the current and future profitability of the company. Eurogrid's shareholders, the Elia Group and KfW, remain committed to successfully shaping the energy transition. This commitment is reflected by an equity injection totalling €120 million for 2023. This was offset by the dividend payments to the shareholders.

5.5. Non regulated activities & Nemo Link

Non-regulated activities and Nemo Link

Non-regulated revenue increased by 54.4% to €69.0 million compared to 2022. Elia Grid International (‘EGI’) achieved a strong increase in revenues (+€8.3 million) by effectively utilizing its well-established consulting expertise in the energy industry to support countries in their pursuit of energy transition objectives. Furthermore, the intersegment transactions increased mainly between Elia Group SA, Elia Transmission Belgium and 50Hertz.

Equity-accounted investments contributed €27.3 million to the Group’s result, which is almost entirely attributable to Nemo Link. Despite the Nemo Link’s strong performance in 2023, it contributed €9.8 million less to the overall result compared to prior year. This decline can be fully attributed to the fact that Nemo Link reached the cumulative cap for the 5-year assessment, while prior year result still partially benefitted from lower performance for the years 2019-2021.

In 2023, the European and British electricity markets settled following the tumultuous state in 2022. The year saw significant power flow towards Belgium due to a more favorable gas supply situation in Great Britain, but this difference faded as EU gas storages hit record highs and reliance on Russian gas decreased. This improved supply scenario led to a significant drop in gas prices compared to 2022, reducing price spreads and flows towards Belgium. Carbon emission prices, which significantly impact power prices, also showed a downward trend in the UK relative to the EU, further reducing price differences between these markets. Consequently, the average hourly market spread came down from €41.3/MWh in 2022 to a more normal level of €13.7/MWh in 2023. The operational availability of the interconnector remained high at 96.1% in 2023, despite more extensive maintenance due to the first 5 years of operations.

Adjusted EBIT decreased to €17.3 million (-€6.3 million). This decrease was mainly due to lower contribution from Nemo Link (-€9.8 million), higher costs at WindGrid, mainly related to the establishment of WindGrid US (-€3.4 million) and partly offset by lower costs at the holding company (+€1.7 million). In addition, adjusted EBIT was negatively affected by higher costs for re.alto (-€0.4 million). Following the increase in revenues, EGI's contribution experienced an increase (+€4.8 million), while other non-regulated costs decreased (+€0.8 million). Taking into account the one-off costs associated with the acquisition of a minority stake in energyRe Giga (€11.9 million), EBIT totalled €5.4 million.

Net finance costs decreased to €5.0 million, and mainly included interest expenses related to the bond loan (€5.2 million), costs related to the private placement of Nemo Link (€2.6 million) and other financial costs linked to Elia Group

NV, mainly due to financing costs related to the capital injection in Eurogrid GmbH. These costs were partially offset by interest income, mainly from cash deposits (€4.3 million). Indeed, these benefited from the higher interest rate environment and the Group's improved liquidity position following last year's capital increase. During 2023, the Group successfully refinanced its hybrid security of €700 million by using cash and issuing a new hybrid security of €500 million with a capped offer to purchase the existing hybrid securities. All costs related to this transaction were recognised directly in equity under IFRS.

Adjusted net profit decreased by -20.4% to €12.1 million, mainly as a result of:

1. Lower contribution from Nemo Link (-€9.6 million).

2. Higher costs driven by the expansion of international offshore activities of WindGrid (-€3.2 million).

3. Lower loss for the holding (+€5.3 million) driven mainly by higher interest income on cash deposits and lower business development cost as cost linked to energyRe Giga are presented as an adjusted item.

4. Higher contribution from EGI (+€4.0 million).

5. Other items (+€0.4 million) primarily driven by lower other non-regulated cost (+€0.2 million), financial income at Eurogrid International (+€0.7 million), partially offset by higher costs for re.alto (-€0.4 million).

Total assets decreased by 5.2% amounting to €1,844.9 million (-€101.6 million) as the refinancing of the hybrid security was partially financed from existing liquidity following last year’s capital increase, while the dividend paid to shareholders (-€140.4 million) was covered by the dividend proceeds from subsidiaries. Additionally, the Group increased its participation in Eurogrid GmbH, by drawing €100 million from its Revolving Credit Facilities. This also led to a rise in net financial debt of €209.4 million to €469.6 million.

Finally, as part of the investment in energyRe Giga, Elia Group SA has secured a bridge facility of €400 million, fully undrawn at year end. It also has unused Revolving Credit Facilities amounting to €55 million, while the commercial paper worth €35 million remains fully undrawn.

5.6. Adjusting items - reconciliation table

III. Sustainability report

1. General information

1.1. Basis for preparation

1.1.1 General basis for preparation

This report provides transparency on Elia Group’s sustainability performance in 2023 and describes the integration of sustainability into our business model and corporate strategy. According to the Corporate Sustainability Reporting Directive (CSRD), Elia Group is due to report in accordance with the European Sustainability Reporting Standards (ESRS) in the first wave, starting with reports published in 2025 (for financial year 2024).

We welcome these new developments and, accordingly, we have already moved into the transition process. This annual report partially reflects the rationale, structure and key disclosure requirements of the future ESRS. In parallel, we will gradually phase out the Global Reporting Initiative (GRI) disclosure requirements and replace them with the future-proofed ESRS. Selected GRI indicators will continue to be used throughout this report. In particular, we are maintaining the GRI Sector Standards for Electric Utilities until a corresponding ESRS Sector Standard is published.

In this annual report, we focus on the best level of fulfilment of ESRS 2 General Disclosures, ESRS E1 Climate Change and S1 Own Workforce. We indicate their use by naming the corresponding ESRS. If no ESRS is mentioned, we generally reference the GRI Standards. This is indicated by naming the corresponding GRI standard. In this way, we also ensure that we report comprehensively on environmental, social and governance matters during the transition phase.

Scope of consolidation

This is Elia Group’s sixth annual sustainability report, covering the period from 1 January 2023 to 31 December 2023.

In accordance with the ESRS guidelines, we began a process of aligning our sustainability reporting with the same scope used for financial reporting. Nevertheless, the specific nature of the Group’s structure and the mix of different business activities require more analysis of the feasibility of systematically applying the ESRS to all entities.

Elia Group is a consolidation of three segments. The correspondence with financial consolidation and the exceptions can be seen in the table below.

Sustainability consolidation

1. Elia Transmission (Belgium)

All activities of Elia Transmission Belgium SA/NV

Elia Engineering SA/NV

Elia Asset SA/NV

Elia Re SA

Not included. They qualify as investments accounted for using the equity-method in the consolidated financial statements.

2. 50Hertz Transmission (Germany)

50Hertz Transmission GmbH

50Hertz Offshore GmbH

50Hertz Connectors GmbH (new in 2023)

Eurogrid GmbH

Not included. They qualify as investments accounted for using the equity-method in the consolidated financial statements.

3. Non-regulated activities

Elia Group SA/NV

Eurogrid International SA/NV

EGI (Elia Grid International SA/NV, Elia Grid International GmbH, Elia Grid International LLC

Saudi Arabia, Elia Grid International Inc Canada)

WindGrid SA/NV

WindGrid USA Holding LLC (new in 2023)

WindGrid USA LLC (new in 2023)

Included in the consolidation done for the first segment

Not included. They qualify as investments accounted for using the equity-method in the consolidated financial statements.

Not included due to very limited impact on people and environment of its operations.

Financial consolidation

1. Elia Transmission (Belgium)

The regulated activities of Elia Transmission Belgium SA/NV

Elia Engineering SA/NV

Elia Asset SA/NV

Elia Re SA

HGRT SAS and Coreso SA/NV

2. 50Hertz Transmission (Germany)

50Hertz Transmission GmbH

50Hertz Offshore GmbH

50Hertz Connectors GmbH (new in 2023)

Eurogrid GmbH

Other shareholding

3. Non-regulated activities and Nemo Link

Elia Group SA/NV

Eurogrid International SA/NV

EGI (Elia Grid International SA/NV, Elia Grid International GmbH, Elia Grid International LLC Saudi Arabia, Elia Grid International Inc Canada)

WindGrid SA/NV

WindGrid USA Holding LLC (new in 2023)

WindGrid USA LLC (new in 2023)

The non-regulated activities of Elia Transmission Belgium SA/NV

Nemo Link Ltd.

Re.alto Energy SRL/BV, Re.alto Energy GmbH

Our core business is electricity transmission. Accordingly, the first step was to best prepare the first two segments for reporting in accordance with the ESRS, focusing on E1 Climate Change and S1 Own Workforce.

Please note that the business activities and operations of the entities included in the third segment have an immaterial impact on the environment (climate, biodiversity, circular economy, water consumption and pollution) and people (workers in the value chain, end users and customers, affected communities). Documenting these matters is a work in progress within the double materiality assessment.

Sustainability information for Elia Transmission (Belgium) and 50Hertz Transmission (Germany) is also made available in the two local reports.

External Assurance

A selection of 2023 key metrics were externally verified by one of Elia Group’s joint financial auditors and are marked in this report with the 'V' sign. The External Assurance report is available in the section '5.1. Limited Assurance Report'.

For an overview of the Disclosure Requirements (DR) prepared in accordance with the ESRS, see the correspondence table in section '1.4.3. List of Disclosure Requirements prepared in accordance to the ESRS'.

No omissions were made regarding material sustainability topics for reasons of confidentiality of intellectual property, expertise or results from innovation processes.

1.1.2 Specific circumstances

(standards and certifications)

Various International Organization for Standardization (ISO) standards are used in Belgium and Germany. The 'environmental management' criterion is used in Germany and certified in accordance with ISO 14001, while in Belgium there is a roadmap to obtain it in 2024. The 'occupational health and safety management' criterion is used in Germany in accordance with ISO 45001. The corresponding management systems are implemented and recertified in accordance with the respective audit programmes.

1.2. Governance

1.2.1 The role of the administrative, management and supervisory bodies

Sustainability is rooted in the very nature of Elia Group's business activities, as expressed in the Group's vision: 'A successful energy transition for a sustainable world'. To be able to fulfil this vision in the best possible way, we have clearly defined sustainability-related roles and responsibilities across the organisation. These enable sustainability-related targets and activities to be embedded across Elia Transmission (Belgium) and 50Hertz Transmission (Germany) and closely managed. Elia Group officers have been put in place at Group level for a number of key areas, including Security and Safety, Risk Management, Talent Management, Procurement, Strategy and EU Affairs.

Elia Group's CEO is responsible for sustainability-related issues across the entire Group. At local level, the management of these areas and different responsibilities are described in the figures below.

Our sustainability programme, ActNow, and related ambitions are defined at Elia Group level by the Group Sustainability Office (GSO). The GSO then ensures the consistency of the actions taken by the Group and ensures it continuously improves its sustainability performance.

ActNow comprises five dimensions, each of which includes specific targets for the Group, Elia Transmission (Belgium) and 50Hertz Transmission (Germany) to reach. At the local level, the respective Sustainability departments and their Sustainability Boards are accountable, as shown in the figure below. For a detailed description of our ActNow programme and its dimensions, please see section '4.Our vision, mission and strategy' in the Strategic Report.

Incentives and remuneration

Elia Group transparently discloses the total remuneration of each of the members of the Board of Directors and of the Executive Management Board in the Governance & Risk Report, (see section '2.Remuneration of Board of Directors and Executive Management Board') in the Governance & Risk Report. This includes details about the basic features of the remuneration system and the fixed and variable total remuneration of management staff as well as their company pensions and other benefits they receive.

Board of Directors

Sustainability Manager

Sustainability Committee Elia Transmission (Belgium)

Green Finance Committee

Sustainability sponsorship Elia Transmission (Belgium) EXCO Dimension

50Hertz Transmission (Germany)

Sustainability sponsorship

Sustainability Manager

Sustainability Committee

50Hertz Transmission (Germany)

Audit Committee & Strategic Committee

CEO

CEO Elia Transmission (Belgium)

Elia Transmission (Belgium)

Chief Financial Officer

Corporate security, risk management, internal control, data protection

Chief HR Officer

50He r tz Transmission (Ge rmany)

Chief Technical Officer

CEO

50He r tz Transmission (Ge rmany)

Chief HR & Internal communication Officer

Health & Safety, Human Resources and Corporate Governance

Corporate development

Corporate security, ICS and compliance, Risk management, data protection, Health Protection, Occ H&S, strategic environmental protection

Quality assurance on construction sites, inspection, Env Protection, Nature conservation

Further development, Implementation planning

Group offi cers

Group level Board of Directors (BoD)

Elia Group Management Board (EGMB)

Main tasks

• The Strategy and Audit Committees validate the strategy (including sustainability targets) on a yearly basis and issue general recommendations in relation to these

• Endorses the strategic changes that the Group undergoes, including in terms of its sustainability dimensions

• Undertakes regular strategy review to validate major changes in overall strategy, ambitions and targets

• Takes key decisions relevant for Group strategy

• Raises relevant topics with BoD

• Provides sponsorship for sustainability aspects

-Chief Financial Officer for Dimensions Climate Action, Environment & Circularity

-Chief Alignment Officer for Dimensions H&S, DEI, Governance/Ethics/Compliance

Sustainability-related responsibilities

• Endorses the sustainability-related areas of the Group’s strategy

• Endorses sustainability-related areas (such as top KPIs) in the Group’s strategy

• Develops ambition levels of ActNow over time

Group Sustainability Office (GSO)

Local level

Local Executive Management Committees (ExCo)

Local Sustainability Boards

• Defines ESG vision, mission and targets & Adapts global strategy to reflect ESG

• Discusses conceptual topics and development of respective approaches/positions (e.g. anticipated legislative requirements, reporting standard, application of voluntary frameworks)

• Proposes changes to Group sustainability strategy & targets to EGMB

• Monitors risks related to the implementation of the sustainability strategy

• Serves as a sounding board for sustainability communication

• Enriches discussion & fosters dialogue on sustainability issues Drives strategic initiatives

• Sets up working groups to work on sustainability related topics

• If needed, steers Group-level implementation projects Reviews progress of overall sustainability ambitions

• Monitors overall progress in the various dimensions

• Reviews Group-level ambitions for Act Now

• Ensure group-wide consistency of sustainability efforts

• Endorse action plans, implementation plans and roadmaps

• Resolve local issues that cannot be decided by Local Sustainability Boards

• Validate local roadmap & targets once a year

• Take all decisions on local sustainability matters that don't need to be decided by local ExCo according to statutory

• Give guidance & support on key sustainability matters (including local roadmaps)

• Resolve local issues (key topics put on the agenda by Sustainability Manager)

• Trigger bottom-up engagement from local departments

• Get input and positions on high-level sustainability issues/ questions

• Coordinates Group-wide projects

• Local Sustainability Sponsorship

• Local Sustainability Steering and Development

Local Sustainability Managers

Dimension leaders

• Translate ESG requirements into needed local activities (roadmap, milestones, activities)

• Track & report local progress with respect to ActNow ambitions

• Coordinate local implementation projects & activities

• Manage key implementation projects

• Participate in and contribute to Group Sustainability Office

• Ensure regular communication of successes, etc.

These 5 staff members occupy various roles across the Group; they are each appointed to one of the ActNow dimensions. They monitor and steer the development and implementation of local action plans.

• Support local Sustainability Managers in the development of dimension activity roadmaps & milestones

• Facilitate activities and deliver on sustainability targets in their dimension

• Measure performance and share progress made on their dimension

• Define Local Roadmaps (including KPIs, milestones & activities)

• Coordinate local projects & activities

• Secure local ESG Ratings

• Organise and ensure quality management of data collection

• Define Local Roadmaps (including KPIs, milestones & activities) along with Sustainability Managers

• Coordinate local projects & activities

• Monitor progress of ActNow

1.2.2 Information provided to and sustainability matters addressed by the entity’s administrative, management and supervisory bodies

Informative sessions and workshops are organised to increase the Group’s and the local Executive Management Committees’ awareness on various sustainability-related topics, e.g. current and emerging ESG regulations and their operational impact.

1.2.3 Integration of sustainabilityrelated performance in incentive schemes

See section '2. Remuneration of Board of Directors and Executive Management Board' from the Governance & Risk Report for details about how sustainability matters are reflected in the variable remuneration schemes for the members of the Group’s Executive Committees.

1.2.4 Statement on due diligence

This disclosure requirement is currently in preparation as per ESRS guidelines.

1.2.5 Risk management and internal controls over sustainability reporting

See section '3.4. Internal control and risk management system related to the non-financial reporting' in the Governance & Risk Report.

1.3. Strategy

1.3.1 Strategy, business model and value chain

For an overview of the business model, business strategy and integration of the sustainability programme, ActNow, see sections '4.Our vision, mission and strategy' and '5. Our business model' in the Strategic Report. The value chain diagram can be found on our website.

1.3.2 Interests and views of stakeholders

The main categories of stakeholders with whom Elia Transmission (Belgium) and 50Hertz Transmission (Germany) engage are reflected in section '4.4 Fostering stakeholder interactions' of the Strategic Report. See below a detailed description of the engagement methods with each category.

Stakeholder groups

Consumers

Why we interact

• To ensure our operating practices are open and transparent and meet consumer needs

• To unlock additional flexibility in the system

Electricity system operators

How we interact

How our performance is impacted by these interactions Methods Frequency

• Consumer surveys

• Working groups

• Project-specific meetings

• Daily with direct customers

• 1-2 times per year during conferences and information sessions

Energy producers

Shareholders and investors

• To safeguard system stability by aligning our activities with those of neighbouring DSOs and TSOs

• To develop joint solutions for the (European) grid, system and market as electrification spreads

• To facilitate security of supply, maintain system reliability and coordinate the provision of system services

• To connect RES to the grid

• To deliver the necessary infrastructure for a successful energy transition

• To secure the Group's future growth and expansion

• Direct contact through control and regional centres

• Working groups for TSOs/DSOs

• Information sessions

• Conferences and events

• Direct contact through control and regional centres

• Working groups

• Information sessions

• Conferences and events

• External publications

• Events

• Daily through system operations staff

• Regular working groups

• 1-2 times per year during main events

• Understanding future consumer needs means our activities can meet these early on, thus contributing to socioeconomic prosperity and enhancing our reputation

• Unlocking flexibility in the system supports the balancing of the grid

• The stability of our grid is maintained in real time around the clock

• Our system operations activities are enhanced, particularly given the increasing amounts of RES

• Daily through system operations staff

• 1-2 times per year during main events

• The stability of our grid is maintained in real time round the clock

• Regularly through Investor Relations Team

• At regular intervals, in line with external publication dates (i.e. quarterly, yearly)

• 1-2 times per year during main events

• We secure the financing we need to carry out our activities and projects

Employees

• To strengthen cohesion, creativity and cooperation and enhance our effectiveness

• To foster a shared sense of purpose and ensure the importance of our role in the energy transition is understood

• Performance management and training sessions

• Internal communication campaigns

• Internal events

• Daily

• Our staff share a strong sense of purpose, enhancing our work

• Our staff are committed to our activities and business, contributing to the success of our work

Suppliers

• To ensure we have access to highquality materials, tools and services at affordable prices

• To meet our future needs for new materials and tools

• Ad hoc and direct contact, including through tenders and contracts

• Meetings

• Publications

• Regularly through procurement and project teams

• We have access to the technology and tools we need at the time we need them at affordable prices

• The sustainability of our value chain is enhanced

Stakeholder groups

Local communities

Why we interact

• To design our projects with the needs and interests of local communities in mind

• To keep local communities informed of the status of our projects and their relevance for the energy transition

Governments and public authorities

How we interact

How our performance is impacted by these interactions Methods Frequency

• In-person and virtual information and consultation sessions during projects

• Dedicated project websites and external publications

• Regularly through project communication teams

Press and the general public

• To align our activities with government policy and act as a trusted advisor to policymakers

• To ensure regulatory frameworks deliver value for end consumers and a fair return for our investors

• To maintain alignment with the interests of society and provide updates on our progress

• To inform public debate about the best methods for reaching net zero

• Meetings with regulatory authorities and policymakers

• Publications and studies

• Frequent

• Feedback from communities impacted by our projects is taken into account as we carry out our activities

• Regular interactions with local communities ensure they understand how our activities are linked to decarbonisation, thus securing their commitment to our mission

• We provide governments and regulatory authorities with trusted advice and research related to decarbonisation and the energy system, supporting them in decision-making on issues such as security of supply

Federations, NGOs and academics

• Press conferences and site visits

• External publications

• Digital channels

• To ensure our research is as rigorous as possible and share and test innovative technology and approaches

• Membership organisations and associated meetings

• Specific projects

• To minimise any negative impacts of our activities

• Daily with the press via direct contact with external communications team or digital channels

• Regular publications

• Daily contact during specific projects

• Monthly or quarterly membership or partnership meetings

• The general public is kept informed of our work and its importance to the energy transition, securing their commitment to our activities, and thus enhancing our reputation

• The negative impacts of our projects (for example, on the environment) are minimised

• Our activities are enhanced through innovation

1.4. Impact, risks and opportunity management

1.4.1 Double materiality process

2018: first materiality exercise on sustainability-related matters

The Group’s material topics were assessed for the first time in 2018 and they have been monitored and reviewed regularly ever since. The reiterations of the material topics, their ranking and the process were a consequence of:

• trends and developments in the context in which we operate;

• internal assessments in the course of the recurrent review of our strategy;

• external interactions with stakeholders, such as government officials, authorities, associations, clients, Industry, DSOs and TSOs, Environmental NGOs, local communities, suppliers, academia and the media in our regular dialogue formats;

• developments in the reporting frameworks;

• materiality analysis by leading international organisations, such as the World Energy Council.

2022: From 'impact only' to 'impact and financial materiality'

Throughout 2022, we worked on updating our materiality matrix, taking into account two perspectives - impact and financial materiality - and screening our TSO activities in Germany and Belgium.

The process and methodology that we used were aligned with the guiding principles of the GRI 2021 standards. In line with these, companies are expected to identify the topics which are relevant to both their business and their stakeholders.

The material topics that we identified were based on the following:

• the Group’s 2021 materiality exercise;

• the GRI Sector Standards for Electric Utilities;

• the standards published by the Sustainability Accounting Standards Board (SASB);

• benchmarking exercises and round-tables with industry as well as our peer group of TSOs;

• analysis of media coverage and trend radars;

• draft ESRS guidance on double materiality.

The material topics identified in this way reflect our impact as well as the risks and opportunities in our business activities, including our upstream and downstream value chain. Accordingly, a stakeholder mapping exercise was carried out, taking into consideration stakeholders from across the Group’s value chain. The 'shareholders and debt investors', 'government and public authorities', 'associations, NGOs and academics' as well as 'suppliers' and 'employees' stakeholder groups were identified as the most important interest groups. German and Belgian members of these groups were assigned to internal experts within the Group. Specific materiality interviews were then conducted with all stakeholders. In these interviews, the stakeholders assessed negative and, where applicable, positive impacts based on their severity and likelihood.

Based on these assessments, each topic was assigned a score along the two dimensions:

• ‘financial’ (‘outside in’: the extent to which the company’s financial value can be influenced by the risks and opportunities linked to a topic);

• ‘impact’ (‘inside out’: effect of the company on the environment, people and society).

These scores were added together, resulting in a ‘consolidated score’ (representing their average). Senior management then prioritised the topics, ranking them in accordance with the final score of each topic.

The result was presented to the Group Sustainability Board and approved by the CEO.

2023: The matrix, a reflection of the times – Moving from GRI to ESRS

The sustainability reporting framework has gained greater clarity in the past year, indicating that ESRS principles and guidelines will become the future benchmark for European companies. For financial year 2023 we have taken steps in that direction by taking a more risk-centred approach when re-evaluating the materiality of the topics identified last year and, in so doing, enriched the existing materiality exercise. Sustainability aspects are embedded in our overall risk management process.

The materiality matrix and the material cards provide more insights on sustainability aspects. Compliance with the ESRS methodology for determining material topics is targeted for the reporting for financial year 2024. We have launched a dedicated internal task-force In order to implement this transition.

For reporting on 2023, the material topic cards have been restructured in line with ESRS in order to disclose the following information:

• Impact materiality (inside out)

• Financial materiality (outside in)

• Management’s ambitions

• Actions and decisions

The past year has been one of exceptional challenges, especially for the energy sector. To accommodate the dynamic developments that we observe - based on internal assessments and numerous external interactions with our various stakeholder groups to ensure our activities remain aligned with the interests of society - it became necessary to re-assess the prioritisation of the 16 material topics. The assumptions taken for the reassessment were based on the implementation of the Grid Development Plan 2037/45 in Germany and the Federal Development Plan 2024-2034 and the Adequacy and Flexibility Study for Belgium 2024-2034.

Material topics for the 2022 report

Affordability

Security of supply

Intellectual

Security of information & IT systems

Resilient supply chain practices

Talent acquisition & development

Diverse & inclusive workforce

Employee health safety & wellbeing

Transparent & open communication with stakeholders

Community development & engagement

Responsible governance practices

Environmental

Sustainable supply chain practices

Sustainable energy system

Decarbonisation

Preserving our ecosystems

Minimising waste & promoting circularity

Affordability, financeability and cost of energy transition

Grid development and system operations

Security of supply

Intellectual

IT security

Procurement & supply chain

Talent management & diverse workforce

Health & safety

Effective governance practices

Environmental

Sustainable system & net zero society

Sustainable corporate footprint

We re-evaluated the naming of the topics and their descriptions and managed to boil them down to the 10 most material ones Elia Group can have an impact on by grouping them according to their influence on each other or on strongly interdependent risk influences. Based on international studies, dialogue with associations, clients, industry, DSOs, environmental NGOs, Unions, local communities, supplier, academia, media in our regular dialogue formats, our own research as well as close dialogue with government officials, authorities and TSO peers, we re-evaluated the risks and opportunities against the events of 2023 and decided to amend the positioning of the material topics.

As a result, four topics were identified as having a significantly higher impact on the company’s materiality compared to 2022. Below we describe the rationale for the shift in priority for the relevant topics. Based on these findings, the 2022 materiality matrix was updated by adding arrows that indicate the shift towards higher financial materiality and higher impact for society for these specific material topics. A re-assessment of all material topics will be conducted as part of the CSRD-compliant exercise.

This updated matrix and the described updates were confirmed by the Group Sustainability Board.

Material topic: Affordability, financeability and cost of energy transition

• Impact on industry as well as citizens: The observed CAPEX increase, coupled with high inflation and a tight supplier market, drives up the cost of infrastructure development and as a result leads to an increase in energy bills for industry and citizens via tariffs. More generally, households as well as industry become increasingly worried about energy prices, putting quality of life and the competitiveness of European businesses at risk. The development of the grid will help to dampen the increase in energy prices. A cost-efficient energy transition will therefore be critically important to the acceptance and feasibility of the European Union's carbon-neutrality targets.

• Impact on Elia Group: Increased infrastructure costs and a growing portfolio of infrastructure to be built lead to higher funding needs, which represents a significant challenge for both, 50Hertz Transmission (Germany) and Elia Transmission (Belgium) and post an additional challenge to our ratings.

Material topic: Talent management and diverse workforce

• In less than a decade, the number of Elia Group employees has grown from 2,000 to 3,000. In order to realise our significantly increased CAPEX projects we need to make sure that we are able to hire all the additional experts needed. Given the scarcity of individuals with technical skills on the European market this will be a challenge. We will not only need to attract and recruit the talent, but also need to make sure that we onboard them efficiently without jeopardising ongoing processes and project execution. Another component is employee retention.

• At the same time, we see that our activities are becoming increasingly international - with our affiliates working in Europe, North America, the Middle East and East Asia. We consider this as an opportunity to leverage synergies and foster knowledge sharing across the Group.

Material topic: Procurement and supply chain

• The procurement of grid equipment and services for the Elia Group's investment plan is under pressure due to extensive competition from many European TSOs and other industries which have similar expansion plans. The unexpected surge in demand creates a discrepancy with existing manufacturing capacities, leading consequently to longer delivery times and limited room for negotiation, which in turn drives prices up.

• In order to master this challenge we are intensifying our partnerships with suppliers, simplifying our tendering procedures to broaden the supplier base and proactively reserving production slots for key assets across projects. An example of this is a longterm contract for the production and installation of submarine and land cables covering a total length of 3,500 km which 50Hertz Transmission (Germany) secured this year - a groundbreaking milestone in our proactive procurement efforts.

• Additionally, the change in the global environment is creating additional risks in the supply chain of the suppliers, further increasing the risk on delivery of the necessary grid equipment.

Material topic: Effective governance practices

• Good Governance and Compliance: Good corporate governance is aimed at ensuring the responsible conduct of corporate affairs and management of resources. The CSRD sets a new, very comprehensive ESG standard in Europe.

• Effective organisational structures: The digitalisation and acceleration of the energy transition has forced us to transition our organisational structures from a classical assetdriven company to an innovative and digital knowledge business.

Outlook for 2024 – Compliance with ESRS

After the approval of the ESRS in July 2023, we are working towards disclosing the financial year 2024 materiality matrix in line with the new requirements. The plan is to further enhance the materiality assessment already applied by introducing a risk-based financial impact analysis considering the following categories:

• Extent, scope and irreversibility of the impact;

• Likelihood and potential extent of risks and opportunities for financial development.

We will embed the materiality aspects with our risk management approach.

1.4.2 Double materiality results

The results of the materiality assessment help confirm the relevance of our mission, vision and core values and guide us in operationalising our strategy.

The updated double materiality will serve:

• as a compass for strategic decision-making processes and the operationalisation of our strategic ambitions;

• as a means of revalidating Elia Group’s mission and strategy;

• as a basis for the double materiality assessment for the Group’s ESRS reporting.

As described in the previous section, four topics were re-assessed in 2023 due to the dynamic environment witnessed especially in the energy sector and the interactions with our stakeholders over the past year.

The four topics positioned highest are related to the Group’s core business and are critically important in enabling the Group to fulfil its mission of driving a successful energy transition in order to decarbonise Europe. Nevertheless, we also consider the other topics as material, acknowledging that there are several interdependencies between them.

4 Intellectual Procurement

5

6 Employees and subcontractors Talent management & diverse workforce:

7 Health & safety: We ensure the health, safety & wellbeing of our employees and subcontractors.

8 Society and relationships

9 Environmental

10

Materiality Impact

Effective governance practices: We co-create with the society that we serve and future-proof our organisational structures and run our daily activities in a responsible and ethical way.

Sustainable system and net zero society: We are driving the decarbonisation of the Belgian and German electricity systems by integrating renewable energy sources into our grids.

Sustainable corporate footprint: We are a good corporate citizen since we minimise the ecological footprint of our activities.

AFFORDABILITY, FINANCEABILITY AND COST OF ENERGY TRANSITION

We ensure investment in the transmission grid infrastructure needed to decarbonise society in a cost-effective way.

IMPACT MATERIALITY (INSIDE OUT)

Short term Medium term Long term

POTENTIAL IMPACTS

• Climate ambitions trigger a massive investment programme to deliver the energy transition, including grid investments that will be beneficial for society for several decades but have an immediate impact on the electricity bill via transmission tariffs.

• This is triggering legitimate concerns from our end users. Households are increasingly concerned about losing quality of life as the risk of fuel poverty increases, while our industry and businesses are afraid to lose competitiveness due to rising energy costs.

• Costs for technical assets has significantly increased due to a tight supplier market, high inflation and a surge in interest rates.

• Driven by the local grid development plans in Belgium and especially Germany we are looking at a CAPEX investment of €20.7 billion in 50Hertz Transmission (Germany) over the next 5 years and €9.4 billion in Elia Transmission (Belgium) over the next 4 years. Funding this increased CAPEX will be one of the main challenges Elia Group has to face in the upcoming years.

FINANCIAL MATERIALITY (OUTSIDE IN)

Short term Medium term Long term

RISKS

• Financing risk: The ability of the Group and its affiliates to access global sources of financing to cover their financing needs to fund their plans and refinance their existing debt is a key component of the Group’s business and strategic plan.

• Regulatory risk: Allowed return on equity in order to achieve investment plans does not reflect macro-economic environment.

• Affordability: Decreasing societal support for the energy transition due to the fear of an excessive cost burden.

• Lower competitiveness of industry and businesses if the costs of the transition are not kept under control.

OPPORTUNITIES

• Convince authorities to further accelerate grid projects to lower congestion costs

• Convince stakeholders to increase efficiencies and unlock more flexibility in the electricity system in order to lower overall transition costs

• Ensure scarce resources are spent where they make the biggest impact.

• Develop innovative solutions and proposals to lower overall grid project costs.

• Increase attractiveness via effective ESG activities.

CORRESPONDANCE WITH THE ESRS

The double materiality exercise in line with the ESRS methodology is due to be published in the next annual report. Consequently, the mapping of material topics in line with the ESRS is currently a work in progress and will be among the main outputs of this assessment.

MANAGEMENT’S AMBITION

• We anticipate and accelerate grid projects to lower system costs (especially congestion costs).

• We push activities to unlock more consumer flexibility at all levels to lower asset needs and congestion management activities.

• We ensure financing for our activities under the best possible conditions while leveraging various financing sources.

• We ensure a fair return for our shareholders supporting our growth path.

• We drive long-term sustainable value creation while ensuring strong governance and control.

• We ensure projects are delivered in a cost-effective way (on time, budget and quality) and submit proposals to adapt costly boundary conditions

• We push standardisation to lower asset costs.

ACTIONS AND DECISIONS IN 2023

INFRASTRUCTURE DELIVERY

• Several internal activities to speed up grid delivery (new matrix organisation, etc.).

• Contributing to an affordable energy system by integrating increasing amounts of RES in our system: 72% of this year’s electricity demand covered by RES in 50Hertz Transmission (Germany) control area (from 65% in 2022). In Belgium, renewable energy generation reached an all-time high in 2023 as wind and photovoltaic generation combined accounted for 28.2% of the country’s electricity mix.

• Actively seeking to obtain capital grants linked to PCIs (projects of common interest) and PMIs (projects of mutual interest).

CAPITAL MARKETS & REGULATORY FRAMEWORK

• Diversification of our funding sources: First green bond issued by Elia Transmission (Belgium), partial refinancing of a hybrid bond at Group level and at Eurogrid level, a green loan as well as the refinancing of a bond.

• Organisation of a Capital Markets Day in December to shed light on our long-term strategy, regulatory updates, financial policy and funding needs.

• Successful dialogue with regulators in both Belgium and Germany, followed by remuneration decisions that led to a recalibrated regulatory return for both countries for the period 2024-2027 (Belgium) and 2024-2028 (Germany).

2

SECURITY OF SUPPLY

As TSOs in Belgium and Germany, we act on behalf of national authorities to ensure adequate power systems and the transition to a net zero society in a secure and affordable manner.

IMPACT MATERIALITY (INSIDE OUT)

POTENTIAL IMPACTS

• There is a structural gap in the current European market design for building adequate generation capacity or flexibility to ensure security of supply.

• Renewable targets and support schemes defined at national level impact the merit order of generation units, leading to an accelerated phase-out of fossil fuel-based generation capacity in favour of new renewables energy sources. However, their intermittent character does not fulfill the same adequacy need.

• At the same time, the electrification of additional sectors across society will lead to greater demand for electricity. The growth in renewable energy sources may be too slow to cover this increased demand. Similarly, barriers limiting the participation of decentralised energy resources remain.

• A higher short-term adequacy risk driven by the gas crisis and the unexpected unavailability of nuclear power plants in neighboring countries has emerged.

FINANCIAL MATERIALITY (OUTSIDE IN)

RISKS

• Climate Risk: Physical climate risks may lead to asset damage, business contingency events and disruptions to business continuity.

• Adequacy risk:

– An adequacy issue would have severe negative consequences (load shedding) for the territories we serve. Especially for Elia Transmission (Belgium), which has a central role in preparing the Belgian adequacy analysis, this would directly affect our reputation and relevance to society.

– Whether or not this risk actually materialises, difficulties in implementing capacity remuneration schemes for legal and political reasons could negatively affect our reputation.

OPPORTUNITIES

• Acting as the trusted advisor to authorities makes us relevant to society and secures our rolse as system operator.

• Creating an enabling framework to unlock flexibilities allows us to shape the future rather than suffer from it.

• Better anticipating how the root causes are evolving allows us to better plan for market and infrastructure needs.

The double materiality exercise in line with the ESRS methodology is due to be published in the next annual report. Consequently, the mapping of material topics in line with the ESRS is currently a work in progress and will be among the main outputs of this assessment.

CORRESPONDANCE WITH THE ESRS MANAGEMENT’S AMBITION

• Elia Group is the trusted policy advisor and market data provider for EU / National Regulatory Authorities (NRAs) and ministries actively shaping an efficient energy transition.

• We play a leading role in shaping the market to ensure system adequacy and flexibility at the lowest possible cost, accommodating radical shifts in generation mix and accelerated demand due to electrification.

• We are implementing a robust, integrated and efficient European market design capable of accelerating the integration of RES that maximises EU socioeconomic welfare whilst ensuring secure system operations and stable investment signals.

• We enable a smooth integration of new and distributed e-usage (e.g., EVs, decentralised RES) to increase flexibility through an upgraded market design.

ACTIONS AND DECISIONS IN 2023

TRUSTED ADVISOR OF AUTHORITIES

• Winter, summer and emergency plans at national and ENTSO-E level.

• Adequacy and flexibility studies and the provision of highly relevant information to the authorities.

• Assessment of barriers to access small scale flexibilities.

MARKET FACILITATOR

• Implementing reforms to the European and national market design to unlock more flexibility for adequacy and balancing.

• Capacity remuneration mechanism in Belgium.

3 GRID DEVELOPMENT AND SYSTEM OPERATION

We deliver and operate a safe and reliable transmission grid infrastructure in line with the European Network Codes and national legislation.

IMPACT MATERIALITY (INSIDE OUT)

Short

POTENTIAL IMPACTS

• As TSOs we need to plan and build an efficient grid to serve our customers and society at largein line with national and European climate targets - and operate it efficiently.

• Decarbonisation targets trigger massive grid investment, electrification and decentralisation of generation units (RES) and lead to increasing complexity in the system with potentially millions of small-scale active users whose behaviour will be much less predictable.

• The grid is operated more often up to its limit as a higher number of outages is requested for CAPEX delivery, thus requiring greater flexibility from our workforce.

• The occurrence of extreme weather events such as storms, cold snaps, heatwaves, flooding, drought and wildfires constrains grid operations and triggers risk factors related to contingency events and business continuity disruptions.

CORRESPONDANCE WITH THE ESRS

The double materiality exercise in line with the ESRS methodology is due to be published in the next annual report. Consequently, the mapping of material topics in line with the ESRS is currently a work in progress and will be among the main outputs of this assessment.

MANAGEMENT’S AMBITION

• We want to maximise infrastructure usage in line with desired risk levels and physical asset limits. This implies new IT solutions and further automation of control actions as well as appropriate specifications of assets, ancillary service products and grid connection rules.

• We want to unlock flexibility from consumers, producers and storage facilities in a world of rising production intermittency and rising electrification.

• We want to further evolve towards a dynamic condition-based and system risk-based asset management to enable fast CAPEX delivery (while maintaining efficiency, quality, sustainability and safety).

• We want to rely on a comprehensive approach towards optimising outage scheduling, leveraging system and workforce flexibilities.

• In Belgium, we aim to have a grid ready for a 50% increase in electrical consumption by 2032.

• For the 50Hertz Transmission (Germany) area, we aim to cover 100% of renewable consumption by 2032.

FINANCIAL MATERIALITY (OUTSIDE IN)

RISKS

• Climate Risk: Physical climate risks may lead to asset damage, business contingency events and disruptions to business continuity.

• High costs for redispatch and RES curtailment due to delayed grid expansion can lead to considerable reputational damage.

• Delayed grid expansion also leads to the inability to further connect new demand.

• Equipment failure, especially if insufficient means and resources are invested in the maintenance of equipment.

• Loss of system control and/or stability (e.g. due to significantly reduced inherent operational reserves, more complex behaviour of decentralised actors as well as dynamics and harmonics challenges due to power electronics, reduced inertia, etc.).

OPPORTUNITIES

• High societal relevance of power grid for energy transition is clearly acknowledged.

• Large growth potential in the core business.

• Elia Group’s high digital focus provides the right prerequisites for the necessary transformation.

ACTIONS AND DECISIONS IN 2023

GRID DEVELOPMENT

• Development of efficient project pipeline as a basis for shaping organic growth.

• Climate vulnerability assessment for future infrastructure design in line with EU taxonomy requirements.

• Quantification of future flexibility needs as a support for the development of a consumer centric market design.

• 50Hertz Transmission (Germany): First transmission grid for climate neutrality in 2045 published within the official planning process.

• Elia Transmission (Belgium): Approval of the Federal Development plan 2024-2034.

SYSTEM AND GRID OPERATION

• Increased national and international collaboration for grid control.

• Tackling the challenges posed by new dynamic and harmonics phenomena.

• Unlocking small-scale flexibilities to keep the system balanced and adequate.

• Becoming Digital System Operators, developing future-proof system operation solutions for a RES-based, decentralised and electrified future (e.g. Modular Control Center System).

• 50Hertz Transmission (Germany): Commissioning a new cutting-edge redispatch tool to increase the efficiency of the national redispatch process in Germany.

4 PROCUREMENT AND SUPPLY CHAIN

We secure the delivery of critical assets needed to realise our CAPEX programme.

IMPACT MATERIALITY (INSIDE OUT)

Short term Medium term Long term

POTENTIAL IMPACTS

• The procurement of equipment and services is essential to ensuring the maintenance and grid expansion needed to achieve our strategic objectives. Delays in delivery of critical projects, including due to supply chain issues, may have a significant impact on the pace of the integration of renewable energies as well as the electrification of industrial players.

• Our Group Procurement has defined a Supplier Code of Conduct (SCoC) obliging our suppliers to comply with international standards in ethical conduct, health and safety, environmental and social aspects. In addition, our suppliers are requested to acquire an Ecovadis certification to demonstrate their commitments.

CORRESPONDANCE WITH THE ESRS

The double materiality exercise in line with the ESRS methodology is due to be published in the next annual report. Consequently, the mapping of material topics in line with the ESRS is currently a work in progress and will be among the main outputs of this assessment.

MANAGEMENT’S AMBITION

• We secure delivery of critical assets and the related supply chain by further diversifying the supply base geographically.

• Closer collaboration with suppliers to simplify contracts, processes and potentially technical standards to make Elia Group more attractive in a tight market.

• We ensure the robustness of the sourcing strategies of key suppliers and take necessary actions to mitigate identified risks.

• We ensure a seamless digital way of working and experience in the procurement process for our stakeholders to focus on.

• We streamline our specifications to make it easier for suppliers to submit offers.

FINANCIAL MATERIALITY (OUTSIDE IN)

Short term Medium term Long term

RISKS

Procurement

• The current competition on the equipment market is forcing TSOs to buy more in advance and at a premium, compared to the pre-Covid/Ukraine war period. In some categories of equipment, orders to be placed are beyond the regulatory period, which creates uncertainty.

• In addition, sustainability and other ESG criteria are creating additional constraints in an already cumbersome tendering process that TSOs are obliged to follow and making them less attractive administratively, especially when industrial and US players have greater financial resources.

Supply chain

• Global disruptions such as conflicts and trade tariffs create more strain for manufacturers due to complex supply chains, leading to greater uncertainty about price and delivery.

• Delays in critical projects due to supply chain risks may create a cascading effect in the delivery of the portfolio due to increasingly complex logistics as well as the interlinks between projects, leading directly to impacts on CAPEX plans.

OPPORTUNITIES

Procurement

• Closer interaction and collaboration with OEMs and other TSOs in setting standards for new types of equipment (offshore HVDC platforms, 525kV cables, etc.) to benefit from economy of scale and other synergies (spare parts availability).

ACTIONS AND DECISIONS IN 2023

PROCUREMENT

• Proactively securing 3500 km of cables for the German CAPEX, with an option for an additional 2700 km.

• Adoption of the TenneT standards for HVDC platforms to achieve a more liquid supplier market and long-term market signals regarding future needs, in cooperation with other German TSOs.

• InterOpera cooperation: defining technical frameworks and standards for electricity transmission to ensure that HVDC systems, HVDC transmission systems and HVDC components from different suppliers are interoperable.

• In addition, ordering critical assets with high delivery time or work activities with capacity risk, appropriate mitigation measures are being taken.

SUPPLY CHAIN

• Analysis of supply chain to identify future bottlenecks in order to be able to take early mitigation measures.

• Cooperation with other TSOs in discussing and mitigating risks linked to SF6, HVAC and HVDC qualification standard, supply chain resilience.

5 IT SECURITY

We protect our systems from cyber attacks.

IMPACT MATERIALITY (INSIDE OUT)

Short term Medium term Long term

POTENTIAL IMPACTS

The power sector is especially vulnerable to cyber threats, taking into consideration the following drivers:

• As with most industries, grid operators increasingly use digital technologies to better manage grid and business operations, which is further reinforced by sustainability imperatives, enabled by a more decentralised energy system.

• Grid companies have an expansive and growing footprint arising from geographical and organisational complexity, which makes it harder to protect. Decentralisation is also adding to this dynamic. In the future, we will rely on energy and flexibility resources located at distribution level to keep the power system balanced, thereby increasing our cyber exposure to the distribution grid operators located in the territories we serve.

• Digital systems, IT/OT convergence and the growing number of devices and sensors relying on public Internet networks, throughout the grid and in homes, are increasing our exposure, as each element provides an additional entry point for cyber criminal organisations. This may affect our own workforce as well as end users within our grid areas.

• Increasing number of threat vectors, state(-sponsored) actors or cyber criminals seeking to cause security and economic disruption. There is growing evidence that cyber attacks against grid operators are growing rapidly.

FINANCIAL MATERIALITY (OUTSIDE IN)

Short term Medium term Long term

RISKS

• Cyber: Significant system hardware and software failures, compliance process failures, ICT failures, computer viruses, malware, cyber attacks, accidents or security breaches could occur, leading to an adverse impact on continuity of supply or could result in a breach of legal or contractual obligations.

• Compliance risk: We are seeing an increasingly demanding regulatory and legal framework for critical infrastructure with recent legislative initiatives at EU and national level with the addition of sector-specific requirements (EPCIP, NIS, directive on critical infrastructure, network code on cyber security, etc.). This increases the risk of non-compliance.

OPPORTUNITIES

• Establishing sound and secure digital foundations and harnessing the scalability and flexibility of cloud technology to secure our critical infrastructure.

The double materiality exercise in line with the ESRS methodology is due to be published in the next annual report. Consequently, the mapping of material topics in line with the ESRS is currently a work in progress and will be among the main outputs of this assessment.

CORRESPONDANCE WITH THE ESRS MANAGEMENT’S AMBITION

Ensure inherent built-in security

• Since digital networks are becoming increasingly connected and exposed to the public Internet while the threat vector is intensifying, we need to ensure that our systems are protected from basic and more sophisticated cyber attacks.

• We aim to establish a security mindset throughout the Group – applications have security builtin, not as an add-on. We quickly adapt new cyber security frameworks.

Build and establish future-proof IT infrastructure

• We are facing the challenge of digitalising our critical infrastructure. We want to tap into the intrinsic benefits of cloud technology while remaining blackout proof and resilient to internet outages when needed.

ACTIONS AND DECISIONS IN 2023

• Implementation of preventive, detective and response IT security measures (e.g. IT segmentation, redundancy, backup, failover mechanisms).

• Compliance with relevant regulations and implementation of IT security frameworks, such as ISO 27001 (Information Security).

• Employee awareness raising and training.

6

TALENT MANAGEMENT AND DIVERSE WORKFORCE

We attract, develop and retain talent, providing equal opportunities for all staff.

IMPACT MATERIALITY (INSIDE OUT)

Short term Medium term Long term

POTENTIAL IMPACTS

• One of the challenges we are facing is a scarcity of individuals with technical skills in the European market. Other TSOs as well as energy service and infrastructure providers are competing with us to hire good talent.

• Demographic change heightens this challenge.

• Human capital is crucial to our success, in terms of both our organic and inorganic activities. In order to reach our CAPEX goals we need to be able to staff our infrastructure projects accordingly.

• Diversity is a crucial factor, not only to attract talent but also to achieve the best possible outcome/solutions.

• As a Group, we have a strong engineering focus with a predominantly male driven workforce, hence reaching gender diversity goals is a challenge.

FINANCIAL MATERIALITY (OUTSIDE IN)

Short term Medium term Long term

RISKS

• Talent attraction: Not being able to find the talent needed will slow down the CAPEX plan and affect our reputation in the long run. Not being perceived as an attractive and sufficiently diverse employer will limit recruitment success.

• Talent retention: If onboarding does not happen efficiently we risk slowing down ongoing activities and negatively impacting the mental wellbeing of our employees. An alignment between culture and strategy is needed.

• Business transformation not adequately supported through upskilling and reskilling.

OPPORTUNITIES

• Being perceived as a good employer will secure our talent needs for the future.

• Being able to leverage expertise even outside of the Group may lead to new inorganic growth opportunities.

• A more diverse workforce makes us more resilient, able to adapt to the rapidly changing needs of society and will help us reach better outcomes.

The double materiality exercise in line with the ESRS methodology is due to be published in the next annual report. Consequently, the mapping of material topics in line with the ESRS is currently a work in progress and will be among the main outputs of this assessment.

CORRESPONDANCE WITH THE ESRS MANAGEMENT’S AMBITION

• We are implementing the recruitment plan: Achieve a net growth of over 1400 additional FTEs over the next 4 years.

• We are continuing to professionalise our employer branding, also leveraging Elia Group´s role as an important enabler of the energy transition.

• We ensure efficient onboarding in order to quickly put the additional resources to good use while ensuring ongoing activities are not slowed down.

• We are retaining and further developing our workforce by developing individual. development pathways, aligning their purpose with the company’s goals.

• We are increasing the diversity of our workforce: 25% women in total workforce by 2028 and further increasing the percentage of women in leadership positions every year. We are dedicated to keeping our rate of female new hires above 30%.

• We are developing an Academy for most critical and scarce knowledge (especially in digital, offshore and project delivery) to speed up talent evolution.

ACTIONS AND DECISIONS IN 2023

• Actively enlarging the pool of candidates by working on different levels:

– Tapping into international recruitment markets;

– Improving our visibility in the market and our employer branding;

– Assessing candidates’ potential with a focus on their mindset and capacity to adapt;

– Evolving instead of looking for candidates with the ‘perfect’ CV.

• Ensuring that we are growing in a sustainable way:

– Growing project teams;

– Upskilling employees on crucial capabilities;

– Using digitalisation to leverage efficiencies;

• Emphasising knowledge management and learning communities;

• Centralising onboarding.

• Top Employer’ label 2023 (6th year in a row) for Elia Transmission (Belgium).

• ‘Most Wanted Employer’ label 2023 for 50Hertz Transmission (Germany).

7

HEALTH AND SAFETY

We ensure the health, safety and wellbeing of our employees and subcontractors.

IMPACT MATERIALITY (INSIDE OUT)

POTENTIAL IMPACTS

• At Elia Group, our staff work with high-voltage equipment, at height and increasingly in offshore environments. The safety of everyone, everywhere, is always our number one priority, be it for our own staff (in the field and at administrative sites) or our contractors, be it physical or mental health. Our people are the very assets that make the energy transition happen and we continuously invest in safety and work in a responsible and safe manner.

• Safety: The management of the power grid remains an industrial activity which can involve fatal risks. Elia Group strives to have zero accidents for all of our staff and contractors. Any fatal accident during our activities will have a devastating impact on the family involved, co-workers and the organisation and will have a detrimental impact on public trust and Elia Group’s reputation.

• Health: Our very critical activities and the transformation of Elia Group may be a source of stress and mental burden for our employees. We cooperate constructively with our employee representatives and works councils to ensure a climate where everybody is ready to support the growth of the company while staying true to our core values and culture. This is of the utmost importance in ensuring that Elia Group remains an attractive employer.

FINANCIAL MATERIALITY (OUTSIDE IN)

RISKS

• Health & Safety Risks: Accidents may harm one of our employees.

• Reputational risk: Safety incidents may call into question the reliability of the TSO as system operator licence holder. It will also be detrimental to the employer’s branding and the attractiveness of working for Elia Group (as employee or contractor).

OPPORTUNITIES

• Promoting a safe work environment is essential in order to attract talents in an ever more dynamic market.

CORRESPONDANCE WITH THE ESRS

The double materiality exercise in line with the ESRS methodology is due to be published in the next annual report. Consequently, the mapping of material topics in line with the ESRS is currently a work in progress and will be among the main outputs of this assessment.

MANAGEMENT’S AMBITION

• With our Go4Zero programme we strive to minimise our accidents as much as possible: all employees are true safety leaders who are concerned about the safety and wellbeing of their co-workers and contractors, based on a strong H&S culture

• We place particular emphasis on the H&S of our contractors, integrating them into the Elia Group safety mindset : Group TRIR including contractors below 6.5 by 2030.

• We continue to make the wellbeing of employees a clear priority: we aim to keep the absenteeism rate below 5%.

ACTIONS AND DECISIONS IN 2023

• Compared to 2022, we have:

– Reduced the Frequency Rate of accidents by 65%;

– Managed to reduce the Severity Rate (of accidents) by 40%;

– And consequently our Total Recordable Incident Rate (TRIR) has decreased by 51%.

• Elia Transmission (Belgium) has been named as a Top Employer in Belgium several times now. This year, we also won the Belgian Trends Impact Award for our Let´s talk about burnout community. Safety is crucial, but so is wellbeing.

• Our 3.9% absenteeism rate is well below our target of 5%. We trace this success back to the numerous initiatives taken over the last couple of years: awareness campaigns, concrete guidance for our colleagues on how to avoid digital overload, stress or burn-out.

8

EFFECTIVE GOVERNANCE PRACTICES

We co-create with the society that we serve and future-proof our organisational structures and run our daily activities in a responsible and ethical way.

IMPACT MATERIALITY (INSIDE OUT)

Short term Medium term Long term

POTENTIAL IMPACTS

• Good Governance and Compliance: Good corporate governance is aimed at ensuring the responsible conduct of corporate affairs and management of resources. The CSRD sets a new, very comprehensive ESG standard in Europe.

• Effective organisational structures: A transformation towards a more appropriate organisational and digital structure is necessary to deliver our CAPEX program at reasonable costs and to pursue our organic and/or inorganic growth ambitions.

• Stakeholder engagement: We are in an ongoing dialogue with public and regulatory authorities to ensure the legal environment and regulatory framework necessary to achieve our climate objectives. We seek the support of a diverse group of stakeholders, including the communities around our infrastructure, to extend the grid in a sustainable manner. Our shareholders as well as investors of all kind are also key in providing the capital means.

The double materiality exercise in line with the ESRS methodology is due to be published in the next annual report. Consequently, the mapping of material topics in line with the ESRS is currently a work in progress and will be among the main outputs of this assessment.

CORRESPONDANCE WITH THE ESRS MANAGEMENT’S AMBITION

• We rely on intensive dialogue with society to develop or co-create solutions, as trusted advisors in energy matters and policies on a European level as an international Group.

• ESG risks and opportunities are embedded in our core strategy (through Governance Index, Compliance Index, etc.) and are a vital part of our corporate culture.

• We dialogue with local communities to de-risk and enhance our grid projects while considering earlier and better the local needs and limit (perceived) cost increases wherever possible.

• We are developing a matrix organisation to speed-up and scale project delivery capabilities, use scarce resources more effectively and increase cross-project learnings to speed-up delivery. Similarly, for digitalisation, we are rolling out a Product Operating Model to develop and run digital product cluster across the Elia Group.

• We adapt our overall planning, monitoring and steering model to encompass all IT/digital activities across Elia Group entities.

FINANCIAL MATERIALITY (OUTSIDE IN)

Short term Medium term Long term

RISKS

• Reputational Risk: Risks of penalty payments and loss of reputation if we fail to meet legal obligations, co-creation with and support from diverse stakeholder groups needed to achieve objectives.

• Permitting risk: Timely permit approval is an important challenge for the timely implementation of projects supporting the energy transition. The rollout of new (critical) infrastructure is highly dependent on support from affected communities.

• Regulatory Risk: Modification of TSO permits and certification – keeping our licence to operate:

– Slowing down CAPEX delivery due to inefficient processes and inadequate organisational structures;

– Ineffective digital developments due to inadequate governance;

– Ineffective planning and allocation of resources.

OPPORTUNITIES

• The organisational transformation future-proofs our business model, enable us to seize opportunities and scale further our organic and inorganic growth, attract new and more diverse investors.

• Close collaboration with local communities and industrial players allow a better understanding and anticipation of the needs and allow a faster grid development and to identify growth opportunities.

• Innovation is spurred by working together with peers, suppliers and academia.

ACTIONS AND DECISIONS IN 2023

COMPLIANCE

• Successfully completion of the first voluntary ESG audit and development of a non-financial accounting manual.

• Update to our whistleblowing procedure, the scope of which has also been expanded to include all Group affiliates.

• Commitment to Governance Index reached in 2023: Develop an ESG journey, including an annual sustainability governance workshop, with the Board.

• Commitment to Compliance Index reached in 2023:Annual Report according to IIRC as from 2023.

ORGANISATIONAL STRUCTURES

• Kick-off of matrix structure for project delivery at 50Hertz Transmission (Germany) as of 1 January 2024.

• Rollout of the Product Operating Model for 5 Group-wide digital product clusters as of 1 January 2024.

• Development of a new governance for the entire IT portfolio (encompassing run, project and product resources).

• Greater demarcation of tasks and activities between Elia Group and Elia Transmission (Belgium) reached through appointment of the Elia Transmission (Belgium) CEO

STAKEHOLDER ENGAGEMENT

• Multilateral/Bilateral collaboration: North Sea Summit in Ostende; Baltic Wind Forum in Berlin; Collaboration with TSOs (especially Energinet) on the development of the Modular Control Center System; Organisation of a parliamentary evening at 50Hertz Transmission (Germany) on the subject of potential cost savings in infrastructure development.

• Innovation, Research & Development Hackathons; Elia Group’s viewpoint: Power of Flex; Launch of Elia Transmission (Belgium) Academic Board.

• Local communities and customers: Regular engagement (Dialog-Mobil, Information Fairs, etc.); Energy Market Dialogue in Berlin.

• Investors: Capital Markets Day.

9

SUSTAINABLE SYSTEM AND NET ZERO SOCIETY

We are driving the decarbonisation of the Belgian and German electricity systems by integrating renewable energy sources into our grids.

IMPACT MATERIALITY (INSIDE OUT)

Short term Medium term Long term

POTENTIAL IMPACTS

• European and national authorities are defining climate objectives in line with the Paris Agreement and defining pathways to achieve them. In this context, the critical role of electricity in the global energy mix to achieve net-zero targets has been recognised and confirmed.

• In the electricity sector, the transmission grid has a critical role to play in harvesting the potential of renewable energy resources that are often located far away from consumption centres. This includes the need to go offshore but also to develop stronger interconnections with neighbouring countries to accommodate the intermittent nature of the major renewable energy sources to make the green supply cheaper and safer.

• Last but not least, achieving a net-zero society makes the role of system operator even more relevant and critical for coping with the dramatic increase in the complexity and variability of the power system.

CORRESPONDANCE WITH THE ESRS

The double materiality exercise in line with the ESRS methodology is due to be published in the next annual report. Consequently, the mapping of material topics in line with the ESRS is currently a work in progress and will be among the main outputs of this assessment.

MANAGEMENT’S AMBITION

• Achieving a sustainable energy system is fundamentally changing every single part of the way we conduct our activities. We have therefore developed flagship programmes, directly endorsed at the highest executive level, in order to engage in a transformation journey and remain fit for the challenges ahead:

– Accelerating grid development;

– Ensuring the reliable integration of huge amounts of variable RES into the electricity market and real-time system operations;

– Better anticipating the future electricity needs of society and industry;

– Taking new and innovative approaches to ensure the higher utilisation of assets;

– Reviewing our asset standards and maintenance policies.

• We have two strategic initiatives that combine the various activities driving the above:

– For Elia Transmission (Belgium) The +50% by 2032 strategic objective catalyses transformation internally and increases our collaboration with our key stakeholders (especially DSOs);

– For 50Hertz Transmission (Germany): The 100% by 2032: New Energy for a Strong Economy strategic objective, which aims to achieve full coverage of renewables for energy consumption in the 50Hertz Transmission (Germany) area by 2032.

FINANCIAL MATERIALITY (OUTSIDE IN)

Short term Medium term Long term

RISKS

• Climate Risk: Transitional risks and ESG regulatory environment.

• The transition to a lower-carbon economy implies extensive policy, legal, technology and market changes that should be adequately anticipated in order to avoid reputational impacts.

• Becoming a bottleneck in the energy transition: Achieving climate targets implies the development of several major projects related to infrastructure, market development and system operations.

• Being blamed for transformation costs.

• Difficulty acquiring the necessary regulatory leeway to transform and operate a reliable net-zero system.

OPPORTUNITIES

• Act in line with climate targets set by authorities and meet society’s expectations in terms of sustainability to bolster our relevance and ultimately allow us to thrive and grow.

• Underline the relevance of TSOs by contributing solid proposals to speed up decarbonisation.

• Showcase how to run a system dominated by variable RES.

• Demonstrate that regions with high RES-penetration are attractive to future-proof businesses.

ACTIONS AND DECISIONS IN 2023

INFRASTRUCTURE DELIVERY AND MARKET FACILITATOR

• Development of required infrastructure to connect renewable energy sources and digital solutions to allow them to access markets.

SYSTEM OPERATIONS

• Further milestones in the development of our Modular Control Centre System (MCCS) and the Elia Digital Platform (EDP) enabling us to meet the growing demand for flexibility, adaptability and scalability in order to guarantee system stability in the future.

TRUSTED ADVISOR

• The 50Hertz Transmission (Germany) Together. Faster. Climate Neutral initiative, together with stakeholders, developed suggestions for the government on fostering climate neutrality.

• Parliamentary evening at 50Hertz Transmission (Germany) on the topic of potential cost savings in infrastructure development.

• Establishing SPOCs for industry wishing to decarbonise in our areas to speed up activities needed to electrify fast (at Elia Transmission (Belgium) and 50Hertz Transmission (Germany)).

• Multilateral discussions around developing the offshore potential in the North Sea and Baltic Sea (summits in Ostende, Esbjerg, Marienborg, etc.).

10

SUSTAINABLE CORPORATE FOOTPRINT

We are a good corporate citizen since we minimise the ecological footprint of our activities.

IMPACT MATERIALITY (INSIDE OUT)

Short

POTENTIAL IMPACTS

• While our activities contribute to the energy transition, they – and our infrastructure more generally – have a local impact on the environment, which we try to minimise. In line with our core value of Acting in the interest of society, Elia Group is committed to conducting its operations in a sustainable way, going beyond the legal minimum while ensuring the effectiveness of its initiatives.

• Two key aspects linked to our TSOs’ activities can be highlighted:

• Biodiversity and ecosystems are impacted by the presence of our grid infrastructure, e.g. birds by overhead lines or marine life by offshore cable and platform installations.

• Carbon neutrality: our activities cause direct and indirect emissions, notably from emissions due to SF6 leakages, grid losses, or in our value chain (scope 3).

CORRESPONDANCE WITH THE ESRS

The double materiality exercise in line with the ESRS methodology is due to be published in the next annual report. Consequently, the mapping of material topics in line with the ESRS is currently a work in progress and will be among the main outputs of this assessment.

MANAGEMENT’S AMBITION

Preserve and strengthen ecosystems and biodiversity

• Manage 90% of all forest corridors in a way that supports biodiversity.

• Installation of bird beacons in all critical bird protection areas.

• Minimise impact on marine life.

Embed circular economy principles in our processes

• Maximise the utilisation of our assets in order to minimise the production of waste over time, e.g. lifetime extensions, reuse of assets before recycling, as a last resort.

Carbon Neutrality

• Reach carbon neutrality in own activities.

• Reach carbon neutrality in system operations.

FINANCIAL MATERIALITY (OUTSIDE IN)

RISKS

• New regulations on SF6 and PFAS impact directly the type of assets that can be integrated into the grid (e.g. gas-insulated switchgear).

• Depending on future political developments in the US, a strong ESG performance may not be beneficial to generating investments from US-based funds.

OPPORTUNITIES

• Sustainability is an important factor for local public acceptance of our projects, corporate reputation as well as attractiveness as an employer.

• A solid ESG performance broadens the spectrum of financing options and potentially lowers financing costs compared with conventional products, ultimately benefiting tariffs.

• Adoption of sustainable practices will lead to improved financial performance:

– Better chances to win grants due to ESG criteria linked to them;

– Recycling of materials lowers costs of decommissioning;

– Positive business case for rooftop PV.

ACTIONS AND DECISIONS IN 2023

PRESERVE AND STRENGTHEN ECOSYSTEMS AND BIODIVERSITY

• Nature-inclusive design for the Princess Elisabeth Island

• ISO14001 certification for environmental management system for 50Hertz Transmission (Germany) confirmed by certification audit

• Progress on Elia Transmission (Belgium) efforts to achieve ISO 14001 certification by 2024

CARBON NEUTRALITY

• Gradual integration of an Internal Carbon Price into tenders, e.g. onshore and offshore power cables and Bornholm Energy Island tenders for 50Hertz Transmission (Germany) and Princess Elisabeth Island AC modules for Elia Transmission (Belgium).

• Successful launch of proprietary Scope 3 accounting platform enabling us to calculate upstream emissions based on physical data and estimations from suppliers.

• Target of increasing the maturity level of carbon footprint data to more than 60% of our investment activities has been reached.

1.4.3 List of Disclosure Requirements prepared in accordance with the ESRS

We consider this to be a transition year, marking the evolution that impacted the general European corporate sustainability reporting landscape. Accordingly, we strove to prepare our reporting 'in accordance with' for ESRS 2, E1 and S1, while reporting in compliance with the rest of the standards assessed to be material will remain a milestone for the next annual report. Name

ESRS

ESRS

1.5. Policies adopted to manage material sustainability matters

Elia Group's commitment to responsible corporate governance is described in its sustainability programme, ActNow, and set out in Elia Group's Code of Ethics.

The Code of Ethics is based on the core labour standards of the International Labour Organization (ILO) and the ten principles of the UN Global Compact (UNGC), of which both Elia Transmission Belgium SA/NV and 50Hertz Transmission GmbH are members.

Due to their legal status as transmission system operators, Elia Transmission Belgium SA/ NV and 50Hertz Transmission GmbH are subject to a large number of legal and regulatory regulations in their respective countries (see section 3.3. Regulatory changes from the Strategic report ). Elia Group companies always base their actions on applicable law.

The following international frameworks lie at the core of our business:

International framework

International Labour Organization

UN Global Compact

Details

Core labour standards: ILO: C87, C98, C111, C135

10 Principles: Corporate governance, Anti-corruption, Labour standards, Environmental protection, Human Rights, Fulfilment of the 2030 Sustainable Development Goals.

Employees are provided with central access to the organisational principles, binding policies and valid company regulations via the company-wide intranet. The Code of Ethics and the guidelines derived from it specify what is meant by correct corporate behaviour and make it clear that all employees must comply with the law. These principles are also part of organisational regulations that apply throughout the company.

The previously listed international frameworks are translated into various policies.

Name of the policy Topics covered

Environmental Social Governance Code of Ethics

• Corporate governance

• Anti-corruption

• Labour standards

• Environmental protection

• Human Rights

• Principles of International Labour Organisation

Remuneration policy

• Talent acquisition

• Rewarding performance

• Organisational culture

• Staff development

• Gender equality

Whistleblowing policy

Supplier code of conduct

Human rights policy

• Raising concerns

• Ethics alert

• Ethical conduct: anti-corruption and bribery, conflict of interests, confidentiality of information, fair competition, appropriate handling of intellectual property rights and the anti-money laundering statement

• Health and safety;

• Environmental areas;

• Child labour

• Human rights

• Anti-discriminatory behaviour

• Fair payment and legal compliance practices X

• Health & Safety

• Diversity

• Equity and inclusion

• Ethical behavior and compliance

• Union coverage

• Labour rights

• Environmental protection

• Compliance & risk mitigation

• Sustainability

• Public acceptance

a. Code of Ethics

Integrity and ethics are a crucial aspect of our internal control environment. The Board of Directors and the Executive Management Board regularly communicate about these principles to clarify the mutual rights and responsibilities of the company and its employees. These rules are communicated to all new employees, and compliance with them is formally included in staff employment contracts. The Code of Ethics and all associated policies define what Elia Group considers to be proper ethical behaviour. They establish a set of clear principles which seek to avoid any conflicts of interest. They also seek to ensure that employees do not violate any laws regarding the use of privileged information, market manipulation or suspicious activities. Senior management consistently ensures that employees comply with internal values and procedures and, where applicable, takes appropriate action, as set out in company regulations and employment contracts

b. Human rights policy

We have a Group-wide Human Rights Policy which outlines our commitment to human rights and explains how we implement this commitment in our business operations. Clear links are made with our ActNow programme and sustainability topics. Topics such as discrimination, data protection, working conditions and environmental impact are clearly addressed and their importance for our operations described. Furthermore, the policy explains how we take responsibility for our supply chain - a move which is also increasingly expected by political leaders and society. The Human Rights Policy is a further step towards meeting the existing legal requirements that will soon apply in Germany as well as the expected EU Directive on human rights due diligence. Within the framework of the EU Taxonomy, the required “minimum social safeguards” can thus continue to be addressed. We are also improving our human rights due diligence in general, including through systematic risk assessments, a grievance mechanism that is provided to staff, procedures for remediation and comprehensive reporting on our progress. Our commitment to human rights comprises an acknowledgement of and support for internationally recognized instruments, such as the Universal Declaration of Human Rights and the two Covenants that implement it, as well as the International Labour Organization’s Declaration on Fundamental Rights and Principles at Work. Our Human Rights Policy document was drawn up following guidance published by the UN Global Compact, to which we are a signatory. At Group level, the Chief Alignment Officer is responsible for implementing the policy.

c. Health and Safety policies

The prevention of accidents and work-related illnesses is a top priority at Elia Transmission (Belgium) and 50Hertz Transmission (Germany). Occupational health and safety are integrated into the Group's strategy and form part of the Group-wide sustainability programme ActNow. Differentiated guidelines, which are binding for all employees, reinforce the obligations in the areas of health, occupational safety and environmental protection. Occupational health and safety in particular is continuously and systematically developed as part of a continuous improvement process. In addition to creating safe and healthy workplaces, the focus is on strengthening a culture of prevention by integrating occupational safety as a corporate value with the aim of anchoring the topic in the thoughts and actions of all employees and implementing it in all support and core functions. This commitment is reflected in the respective management systems, the Safety Ladder in Belgium and ISO 45001 in Germany. Both management systems extend beyond the company's own workforce and include the labour force of external companies on construction sites.

d. Environmental policy

In formalising our environmental commitment, we have defined three main pillars.

Regulatory compliance and risk mitigation: Compliance with minimum legal requirements. This includes training our employees so that they understand their responsibilities and the impact their work can have on the environment.

Sustainability: A central aspect of the Elia Group's mission towards the energy transition. It includes our goal to continuously improve our environmental performance, resource and energy efficiency and emissions.

Public acceptance: Cooperation with citizens. This involves engaging with our various stakeholders on environmental issues (both internally and externally) to help ensure that we have a "licence to operate".

e. Remuneration policies

Fair pay for employees is a matter of extreme importance for Elia Group. Additional pension and health benefits round off our offering as an attractive employer. The remuneration systems are further developed in line with requirements in order to remain an attractive employer for our employees in the future.

The above listed policies are translated into various internal binding guidelines and internal procedures addressing matters such as:

• Crisis Management;

• Data Protection Management and Transparency;

• Information Security;

• Compliance, Anti-corruption and Whistleblowing;

• Grid Management;

• Asset Management;

• Incident Management;

• Procurement;

• Complaints Management;

• Internal Audit Charter;

• Mobility and fleet allocation;

• Education and training;

The Elia Group actively monitors the emergence of European, national or local regulations and adapts the existing guidelines accordingly. Elia Group is subject to the rules of good governance applicable to listed companies. Additional relevant information can be found in the Governance & risk report.

1.6. Additional disclosure requirements from sector-specific ESRS

The GRI sector-specific disclosure requirements for ‘Electric Utilities’ apply the most to Elia Group, due to the fact that transmission of electricity is its core economic activity. Until the ESRS sector-specific requirements are adopted, we will continue to report in accordance with GRI for these requirements,in order to ensure a complete overview of the Group’s activity complementing the one provided by reporting along the sector-agnostic ESRS.

Security and emergency management and asset management

For Elia Group, security does not stop at company boundaries. For example, staff are trained in crisis management and crisis communication with internal and external stakeholders during regular crisis team exercises. Not only are the existing structures, processes and reporting channels reviewed and continuously improved, but crisis team members and employees are also intensively trained in the skills needed to deal with unexpected and high-stress events in a level-headed manner and are also trained to take quick and appropriate crisis management decisions. These and other measures serve to continuously increase Elia Group's resilience in a holistic manner. In addition to the training offered to all members of the crisis team, reviews are undertaken of property protection concepts and general corporate security is further developed.

Emergency and restoration

Should a crisis occur (as a result of e.g. a natural disaster, a malicious attack or a fuel shortage), Elia Transmission (Belgium) and 50Hertz Transmission (Germany) have crisis management procedures to follow which consist of three main plans, as outlined below.

a. Crisis management plan

This describes the roles, responsibilities and processes related to crisis management. Emergency management is planned for based on different emergency scenarios known as Standardised Emergency Preparedness Plans (SEPPs). The emergency plans contain appropriate measures and reporting and information processes which must be followed.

b. System defence plan

This includes automatic and manual measures which aim to prevent abnormal situations from developing (including blackouts), limit the impact of disturbances and stabilise the electric power system when it is in an ‘Emergency’ state. These measures aim to return the system to a ‘Normal’ or ‘Alert’ state as soon as possible with minimal impact on grid customers and society. In accordance with the system defence plan, both Elia Transmission (Belgium) and 50Hertz Transmission (Germany) have established load shedding and other plans to be executed by themselves or associated distribution operators; these include demands which need to be manually or automatically performed to prevent the worsening of an electricity crisis.

c. Restoration plan

This includes a set of actions that can be used after a disturbance which has had largescale consequences (e.g. a blackout). These actions are intended to return the electricity system to a ‘Normal’ state. Both Elia Transmission (Belgium) and 50Hertz Transmission (Germany) regularly train their operator teams by organising simulated exercises with relevant stakeholders and partners (such as distribution system operators or generation companies). In general, system operators regularly practice handling abnormal and crisis situations by undertaking theoretical and practical training. TSOs must regularly test their ability to restart the system. These restart tests - also called black start tests - are part of TSO grid reconstruction plans. TSOs must regularly test this capability in their respective grid areas so that the power supply can be restored as quickly as possible after a power outage. Simulations and theoretical training sessions related to emergency and restoration plans are provided for the operators of the national control centre and the regional control centres.

Asset management

Our employees play an important role in the management of the life cycles of our assets, from their technical development through to the development of asset fleet strategies. Decisions regarding our assets are taken based on incident analyses, reviews, technical analyses, condition monitoring, risk analysis and associated impacts. Decisions are always based on technical expertise, taking into account the impact of costs (OPEX and CAPEX) and risks.

Other emissions

Electromagnetic fields (EMFs)

Electrical transmission and distribution systems in Europe are mainly operated with alternating voltage levels and a frequency of 50 Hz. They therefore emit electromagnetic fields (EMFs) which have an extremely low frequency, as is the case for all electrical devices, including domestic appliances.

Strict regulations apply to electromagnetic fields in Germany, which are governed by the Federal Immission Control Act. 50Hertz Transmission (Germany) complies with these limits. 50Hertz Transmission (Germany) takes the concerns of stakeholders seriously, carries out onsite measurements with them and implements associated measures if necessary.

Although no direct causal link can be established between exposure to such fields (through electricity transmission infrastructure) and human health, Elia Transmission (Belgium) takes EMFs very seriously, considering each grid project carefully and supporting scientific studies that improve understanding in this area. Elia Transmission (Belgium) makes annual financial contributions to scientific research on the subject. In this vein, it supports the Belgian Bio-ElectroMagnetics Group (BBEMG), whose scientific independence is enshrined in a cooperation agreement. At international level, Elia Transmission (Belgium) has signed a research contract with the Electric Power Research Institute (EPRI), a non-profit organisation that conducts research related to energy and the environment. This agreement grants Elia Transmission (Belgium) access to the results of international research studies carried out in the area. Elia Transmission (Belgium) communicates transparently on EMFs using a number of different channels: a dedicated website, information leaflets, a brochure, newsletters, information sessions (attended by independent experts where possible), and, following requests from local residents, it carries out free measurements of EMFs via its Contact Centre. As projects undertaken by Elia Transmission (Belgium) are assessed, this process must include an analysis of magnetic fields. In accordance with the precautionary policy established in Flanders and Brussels, Elia Transmission (Belgium) assesses future exposure to such fields by means of specific calculations (modelling); mitigation/reduction measures are applied where necessary.

Noise

Noise can be caused by transformers in high-voltage substations, high-voltage lines, pylons and other equipment.

Underground lines do not cause any noise. Strict guidelines apply to both Elia Transmission (Belgium) and 50Hertz Transmission (Germany) (no noise pollution). The main source of noise pollution across the grid is associated with transformers. The purchase of transformers which produce a low level of noise has been part of Elia Transmission (Belgium)

environmental policy for many years. If necessary, soundproofing measures, such as soundproof walls, are provided for in the design phase of the project so that our (new and existing) infrastructure meets the noise standards outlined in environmental regulations.

Elia Transmission (Belgium) always carries out soundscape studies prior to the realisation of its infrastructure projects to ensure that noise levels are not exceeded. In addition, when a new substation is built or the transforming capacity of an existing substation is increased, a noise study is carried out. Based on measurements of the noise emitted by existing transformers, a simulation is carried out of the situation after the construction or upgrade of a transformer in order to estimate the level of noise it will produce. Elia Transmission (Belgium) also conducts noise studies when it receives complaints.

Length of lines and submarine cables and other assets in our infrastructure

*The Nemo Link interconnector (140 km) is a 50-50 joint venture between National Grid Interconnector Holdings Limited, a subsidiary company of the UK’s National Grid Plc, and Elia Transmission Belgium SA/ NV.

Substations and switches

Grid reliability

Absolute values of grid losses

Connectivity table for other sector-specific disclosures

1.7. Additional disclosure requirements from entity-specific ESRS

The majority of the disclosure requirements and the datapoints relevant to our business are covered by the sector-agnostic ESRS and the GRI sector-specific for ‘Electric utilities’. For an overview of the financial KPIs and other 'company-specific' ESG indicators, please see section “6. Our performance” from the Strategic report.

1.8. Table of all datapoints deriving from sustainability reference frameworks

The overview of the datapoints deriving from other sustainability reporting frameworks is available here

2. Environmental information

2.1. Disclosures pursuant to article 8 of regulation 2020/852 (Taxonomy regulation)

2.1.1 Context

The Taxonomy Regulation 2020/852 established a European classification system for economic activities that are environmentally sustainable and that substantially contribute to one or more of six environmental objectives, while not harming the other five objectives and in compliance with minimum social safeguards.

The EU Taxonomy and its disclosure requirements – which can be narrowed down to three main metrics or KPIs – provide a high-level view of a non-financial organisation’s contribution to environmental objectives. They are also an opportunity for companies to demonstrate to market participants that their economic activities are in line with the transition to a net-zero society and are resilient in the long run.

Sustainable finance has a key role to play in the EU delivering on its climate and sustainability ambitions and policy objectives that it has outlined both in the Green Deal and in its international commitments.

By enabling businesses to thrive while disconnecting economic growth from environmental pressure, the EU Taxonomy channels financial flows into sustainable investments. Moreover, by defining what is environmentally sustainable, the Taxonomy Regulation helps financial stakeholders plan and report on their efforts to support the transition to a climate-neutral economy.

This chapter contains the disclosures for Elia Group’s KPIs, as required by Regulation EU 2020/852 and the related Delegated Acts.

2.1.2 Elia Group, an early adopter

Sustainability lies at the heart of the Group’s business activities and it is enshrined in our vision, our societal mission and our Group strategy. We are committed to operating a sustainable business, which involves transparency and taking a proactive approach in our reporting.

We followed the development of the EU Taxonomy very closely, from its inception until it became a regulation. We seized the opportunity to move to reporting in line with its requirements ahead of time, making us a front-runner among our European peers in this regard: in 2021, we published our EU Taxonomy Case Study, which assessed the Taxonomy alignment of our activities, and voluntarily disclosed our methodology and implementation process. The EU Taxonomy has provided us with an opportunity to fine-tune our strategic approach and we are committed on a best-effort basis to maintaining strong alignment with it.

Elia Group key figures 2023

99.5% Taxonomy-aligned CAPEX

99.4% Taxonomy-aligned turnover

99.1% Taxonomy-aligned OPEX

Elia Group’s detailed EU Taxonomy disclosures are available in the Excel table attached to the QR code

2.1.3 Our process

The assessment of Elia Group’s eligibility and alignment with the EU Taxonomy was prepared in line with the following:

• the EU Taxonomy Regulation 2020/852 of the European Parliament and of the Council of 18 June 2020;

• the Climate Delegated Act and its amendments from the Sustainable finance package published on 13 June 2023;

• the Disclosure Delegated Act and Annex 1 (Commission Delegated Regulation (EU) 2021/2178 of 6 July 2021);

• the Report on Minimum Safeguards published by the Platform on Sustainable Finance in July 2022;

• the EU Commission FAQs on the EU Taxonomy published on 19 December 2022.

Our EU Taxonomy eligibility and alignment assessment incorporated a five-step approach. Economic activities that meet the requirements along these steps are considered ‘aligned’ with the Taxonomy. The last step involved the calculation of corresponding percentages for eligible and aligned turnover, CAPEX and OPEX.

1. Eligibility: the economic activity needs to be 'Taxonomy eligible' (i.e. covered by the criteria in the Climate Delegated Acts and its annexes);

2. Technical Screening Criteria (TSC): the economic activity is analysed based on the fulfilment of criteria for 'substantial contribution' to at least one environmental objective out of the following six:

a. Climate change mitigation;

b. Climate change adaptation;

c. Sustainable use and protection of water and marine resources;

d. Transition to a circular economy;

e. Pollution prevention and control;

f. Protection and restoration of biodiversity and ecosystems.

3. Do No Significant Harm analysis: while substantially contributing to one of the environmental objectives, the economic activity should not harm any of the other remaining five;

4. Compliance with Minimum Social Safeguards: the economic activity should respect social principles while contributing to environmental objectives;

5. KPI calculation: percentages for Taxonomy eligible and aligned turnover, CAPEX and OPEX are calculated based on compliance with the Technical Screening Criteria

2.1.4 Taxonomy-eligible and noneligible economic activities

The decisions on eligibility and non-eligibility were based on comparing the economic activities of each Elia Group entity with the activities described in the Climate Delegated Acts. Please see the chapter entitled 'The Elia Group at a glance' in the Strategic report for a full overview of Elia Group’s legal structure.

This exercise was conducted in relation to affiliates reported in the different segments as explained in sections 4 (‘Segment reporting’) and 7 (‘Group structure’) of the Financial report. Based on Taxonomy guidelines and notices published by the European Commission, the legal entities Nemo Link, JAO, HGRT, Coreso, TSCNET, EEX and Decarbon1ze were excluded from the eligibility and alignment assessment (both from the numerators and denominators of the KPIs), since they qualify as investments accounted for using the equitymethod (joint ventures and associates) in the consolidated financial statements.

SEGMENT: ELIA TRANSMISSION (BELGIUM)

SEGMENT: 50HERTZ TRANSMISSION (GERMANY)

80% of this is owned by Elia Group; it comprises the activities of 50Hertz, the German TSO. The remaining 20% is held by the German state-owned Bank Kreditanstalt für Wiederaufbau («KfW»).

SEGMENT: NON-REGULATED ACTIVITIES

2.1.5 Interpretation and assessment of the Technical Screening Criteria (TSC)

The Taxonomy regulation requires non-financial undertakings to assess the alignment of their business activities with at least one of the six environmental objectives.

The Group's main activity - "Transmission of electricity" - is eligible for climate change mitigation and climate change adaptation objectives. According to the amendments to the Delegated Act published in the EU Official Journal in November 2023, "where an economic activity contributes substantially to multiple environmental objectives, non-financial undertakings shall indicate, in bold, the most relevant environmental objective (...) while avoiding double counting. We followed thoroughly this rationale in order to avoid double counting and thus we disclosed 0% for CAPEX alignment to climate change adaptation.

Corresponding OPEX is immaterial.

'Transmission of electricity' is not an eligible economic activity for the remaining four environmental objectives.

Eligibility to climate change adaptation

While we consider the transmission of electricity and the integration of renewable energy into the grid to be economic activities which drive the energy transition and the fight against climate change, we also take measures to increase the adaptation and the resilience of our assets against climate risks.

In particular, these measures include:

• ensuring compliance with construction standards;

• defining stringent climate parameters in electrical equipment specifications;

• enhanced climate scenarios for future assessments of grid and market needs;

• aligning with the risk preparedness plan for the electricity sector and with preventive, preparedness and emergency response measures (business continuity plan and restoration plan);

• implementing regular crisis exercises.

Climate change adaptation features are embedded into the construction of our grid from the design phases onwards. Grid reliability is one of the most important objectives for a TSO and many existing measures and processes foster climate change adaptation elements.

In alignment with the vulnerability assessment undertaken in 2023 and with the conclusions of the benchmark with peers from the sector, we identified CAPEX associated with projects that increase the resilience of our grid against storms and strong winds. The share out of the total Elia Group 2023 CAPEX is 2.3%, corresponding to a value of €56.22 million. Especially due to specific conditions in Belgium, the plan is to extend the scope of this reporting in the next years, to include also CAPEX dedicated to measures against flooding risk.

Substantial contribution to climate change mitigation

In accordance with the eligibility table of the Group's activities that we disclosed above, for assessing the alignment we considered the criteria outlined in section ‘4.9 Transmission and distribution of electricity’ from Annex I and Annex 2 of the Climate Delegated Act.

According to criteria outlined in the Climate Delegated Act, 'Transmission and distribution infrastructure or equipment' is in an electricity system that complies with at least one of the following criteria:

a. the system is the interconnected European system, i.e. the interconnected control areas of Member States, Norway, Switzerland and the United Kingdom, and its subordinated systems;

b. more than 67% of newly enabled generation capacity in the system is below the generation threshold value of 100 gCO2e/kWh measured on a life cycle basis in accordance with electricity generation criteria, over a rolling five-year period;

c. the average system grid emissions factor, calculated as the total annual emissions from power generation connected to the system, divided by the total annual net electricity production in that system, is below the threshold value of 100 gCO2e/kWh measured on a life cycle basis in accordance with electricity generation criteria, over a rolling five-year period”.

We opted for criteria (a), which is a direct fit for the Group’s transmission activities. Interconnectors that link energy transmission grids in different countries together contribute to the sustainability of the European energy sector by enabling the trading of energy and increasing energy efficiency. Interconnectors do this by reducing the cost of meeting electricity demand while improving security of supply and facilitating the costeffective integration of the growing amount of renewable energy sources into the system. A well-integrated energy market is a fundamental prerequisite to achieving the EU’s energy and climate objectives in a cost-efficient way.

Furthermore, the TSC for transmission of electricity specifies which parts of the infrastructure should be considered as ‘non-aligned’.

More precisely, the TSC refer to infrastructure dedicated to creating a direct connection or the expansion of an existing direct connection between a substation or network and a power generation plant that is more greenhouse gas-intensive than 100 gCO2e/kWh (measured on a lifecycle basis). The revenues, CAPEX and OPEX associated with these identified connection parts were evaluated as ‘non-aligned’ and eliminated from the numerators of the KPIs during the assessment process.

The following TSC refers to the installation of metering infrastructure, which must meet the requirements of smart metering systems outlined in Article 20 of Directive (EU) 2019/944. Article 20 of Directive 2019/944 provides that where the deployment of smart metering systems is positively assessed as a result of the cost-benefit assessment, or where smart metering systems are systematically deployed after 4 July 4 2019, Member States shall deploy smart meters in accordance with European standards that meet certain requirements. Elia Group’s electricity transmission business activities in Belgium and Germany comply with European and national regulatory requirements regarding smart meter rollout and are aligned with the activities of our peers in this regard.

2.1.6 Do No Significant Harm (DNSH)

Meeting the DNSH criteria means that an activity which significantly contributes to one of the environmental objectives does no significant harm to any of the other objectives. Once our electricity transmission activities were assessed against the climate change mitigation criteria for their significant contribution to it, we performed further assessments of the five remaining objectives in relation to DNSH. Note that the DNSH criteria for 'climate change mitigation' is not applicable, as we had already performed the substantial contribution analysis on this objective; moreover, the 'sustainable use and protection of water and marine resources' objective of ‘4.9. Transmission and distribution of electricity’ had not been published by the EU at the time of our reporting, meaning it was not evaluated.

Climate change adaptation

The Group’s vulnerability assessment

The physical climate risks to which the Group is subject fall into two categories: chronic and acute. Our climate risk and vulnerability assessment is carried out in line with the technical screening criteria of the EU Taxonomy Delegated Act. This assessment highlighted the possible harmful effect of heatwaves, cold snaps/winter incidents, storms, flooding, droughts and wildfires. All these phenomena are acute physical risks, which could lead to less favourable operating conditions for the Group’s assets or even damage them. Such circumstances may trigger business continuity disruption and may need contingency plans to be activated. Given the critical nature of the Group’s infrastructure and the fact that its assets are spread over a wide territory (in particular its overhead line infrastructure), the Group’s assets are regarded as facing a heightened vulnerability to physical climate risks, as is the case for other system operators and utilities.

Local climate scenarios

In 2023, with the support of climatologists from the University of Hamburg (Hereon Climate Research Center), local climate scenarios were developed for Belgium and Germany, considering two time horizons chosen in line with the technical lifetime of our infrastructure: 2050 and 2085. Three state-of-the-art climate scenarios are considered: RCP 2.6, RCP 4.5 and RCP 8.5. The first scenario relates to a low-emission scenario and stringent policies, while the third scenario RCP 8.5 relates to a high-emission scenario and the least stringent policies. The aim was to check whether the main climate signals susceptible to impact the smooth operation of the grid will be modified by climate change and if so, to what extent. As of this writing, conclusions could be drawn for the heatwave, cold snap, flooding and wildfire risks. It was not possible however to provide a final conclusion on the extreme storm risk. This is due to the limitations of current climate models, notably in terms of resolution. We expect updates in our climate risk and vulnerability assessment, as new information becomes available. The assessment of the adaptation solutions is ongoing and a rolling plan for implementation will be set up.

Transition to a circular economy

For this objective, Elia Transmission (Belgium) applies a waste hierarchy criteria to the waste flow of maintenance and infrastructure works and has established a list of guidelines for subcontractors (general technical specifications) for different types of projects. Moreover, Elia Transmission (Belgium) has established a waste management policy for its administrative and local technical sites (service centres), which includes contracts with authorised collectors who specialise in the collection, transport and recycling of hazardous and non-hazardous waste. When required, Elia Transmission (Belgium) appoints an independent expert to draw up a demolition plan (‘sloopopvolgingsplan’) in line with relevant regulations. On its pathway to gaining ISO14001 certification by 2024, Elia Transmission (Belgium) is currently developing an environmental data management tool which covers waste management. The tool will allow us to track and report on the waste flows in our upstream and downstream value chain and provide information on related impacts, risks and opportunities. For example, the tool will provide visualisations of where and how much waste has been withdrawn, consumed or discharged during Elia Transmission's (Belgium) activities and services.

50Hertz Transmission (Germany) implements a waste management plan across all its buildings and projects and the disposal routes for all of its materials are clearly defined and checked. This process is standardised using internal guidelines and is in line with the EU Taxonomy requirements, as it ensures maximum re-use and waste separation.

Pollution prevention and control

The activities of Elia Transmission (Belgium) are aligned with the International Finance Cooperation’s (IFC) Environmental, Health and Safety Guidelines related to construction site activities for overhead high-voltage lines. Moreover, Elia Transmission (Belgium) complies with EU regulations 1999/519/EG and 2013/35/EU related to electromagnetic fields (0-300 GHz). Finally, less than 1% of Elia Transmission's (Belgium) transformers contain polychlorinated biphenyls (PCB) and a phasing-out plan is currently being implemented for its transformers to be PCB-free by 2024. The amounts related to transformers containing PCB were excluded from the calculations for the alignment KPIs.

In 2023, 50Hertz Transmission (Germany) was recertified in accordance with ISO 45001 (health and safety management) and certified with 14001 (environmental management) in 2022. The ISO certifications confirm the IFC guidelines and compliance with legal requirements. Our substations and overhead lines are planned, built and operated in accordance with the technical and legal requirements for electromagnetic fields. 50Hertz Transmission (Germany) does not have any PCB in its assets.

Protection and restoration of biodiversity and ecosystems

Elia Transmission (Belgium) publishes Environmental Impact Assessments (EIA) or screening depending on the specific characteristics of a given project, an Appropriate Assessment (AA) where applicable in accordance with Directive 2011/92/EU, and carries out environmental assessments in accordance with Directive 2009/147/EC (Birds) and 92/43/ EC (Habitats). Elia Transmission (Belgium) goes beyond merely respecting the associated obligations: it engages in dialogue with local communities, non-governmental organisations and different government organisations to define how each project should be realised in the most efficient and respectful way in terms of local and nature impacts. In the future, the status of compensation and mitigation measures will be followed up on by Elia Transmission (Belgium) 'staff based on a Community Relations Passport (CR Pass).

In Germany, 50Hertz Transmission (Germany) set up a tool for monitoring the implementation of compensation and mitigation measures in line with the aforementioned EU regulations. 50Hertz Transmission (Germany) can confidently state that it is fully aligned with the requirements of the EU Taxonomy.

2.1.7 Requirements of the Minimum Social Safeguards

In accordance with the Taxonomy Regulation, for a business activity to be considered as ‘aligned’, a process must be established to ensure compliance with the following guidelines and international legislation:

• the OECD Guidelines for Multinational Enterprises;

• the UN Guiding Principles on Business and Human Rights;

• the fundamental conventions identified in the Declaration of the International Labour Organization (ILO) on Fundamental Principles and Rights at Work;

• the International Bill of Human Rights.

The Minimum Social Safeguards set out social and governance criteria so that entities that carry out environmentally beneficial activities are not doing significant harm to the rest of the objectives.

This interpretation was strengthened by the draft report published by the Platform on Sustainable Finance. In this light, the substantive topics which are material for the analysis are:

• human rights (including labour and consumer rights);

• bribery, bribe solicitation and extortion;

• taxation;

• fair competition.

Elia Group complies with international guidelines which extend beyond its collective agreements and company agreements, such as the core labour standards of the International Labour Organization (ILO: C87, C98 and C135) and worker’s rights set out in the UN Global Compact. Elia Group is also subject to the rules of good governance applicable to listed companies, including the Belgian Corporate Governance Code.

The Group’s Code of Ethics and Human Rights Policy are available online.

Moreover, strategic suppliers entering into new framework agreements are required to have an EcoVadis rating, which evaluates how well a company has integrated the principles of sustainability and corporate social responsibility into its business activities. 50Hertz Transmission (Germany)’s purchasing policies are also built on the basic principles of the UN Global Compact with respect to human rights, terms of employment and anti-corruption. Most of Elia Group’s suppliers are located inside the EU, which leads to a lower risk of violations of human and labour rights.

Other measures addressing human rights include:

• asking suppliers to sign a binding code of conduct before starting their mission;

• carrying out risk assessments for suppliers where necessary;

• introducing a functional grievance mechanism for bribery and corruption, which will be extended to other human rights issues in future.

Furthermore, a Group-wide working group was set up in 2022 to monitor the development of the supply chain law in Germany and to continuing seeking alignment between the Minimum Social Safeguards and the future Corporate Sustainability Due Diligence Directive (CSDDD).

Elia Group also confirmed it has good governance practices in place, in particular with respect to:

• sound management structures, as described in the ‘Roles & Responsibilities’ pages of the its website;

• employee relations: Elia Group is committed to freedom of association, collective bargaining and the protection of employee representatives; particular emphasis is placed on trust and constant cooperation with all trade unions;

• staff remuneration: Elia Group transparently discloses management team salaries in its remuneration report, including fixed and variable total remuneration as well as company pensions and other benefits for management;

• tax compliance and transparency as outlined in the company’s Tax Guidelines, with a particular focus on a risk-averse tax strategy, which always aligns with our general conduct of business

2.1.8 Taxonomy KPIs and accounting methods

The accounting methods for calculating the shares of eligible and aligned activities were based on the provisions of Annex 1 of Delegated Regulation 2178/2021.

The concepts of ‘numerator’ and ‘denominator’ apply as follows: if X/Y, then X = numerator and Y = denominator.

Double counting in the allocation in the numerator of turnover, CAPEX and OPEX across economic activities was avoided as each entity undertakes one economic activity only. Consequently, turnover, OPEX and CAPEX cover economic activities that are either completely Taxonomy-eligible or not at all. The only exception is Elia Transmission Belgium SA/NV, which undertakes two economic activities, out of which one is Taxonomy-eligible and the other one not, as reflected in the table above. The turnover of the activity that is not Taxonomy-eligible is well delineated, OPEX is not material and CAPEX does not exist for this activity.

The expenditure funded by the issuance of green bonds (at the level of Eurogrid/50Hertz Transmission Germany) is consolidated in the numerators and the denominators of the Group's CAPEX.

The adjusted aligned CAPEX for the usage of the financial undertakings was calculated according to the guidelines from the EU Commission FAQs on EU Taxonomy from December 2022.

Turnover

The turnover used in the KPI calculation is based on the accounting policies mentioned in section 3.4.1 ‘Income’ (IFRS 15 Revenues) of the Financial report and the consolidated results reported in 4.5 ‘Reconciliation of information on reportable segments to IFRS amounts’ which report the revenues for the different segments under which the following items are considered:

Numerator(*) Denominator

Revenues (including grid revenues, last mile connection and other revenue)

Net income (expense) from settlement mechanism

Yes Yes

Yes Yes

(*) Numerator is adjusted for the legal entities / activities not qualifying as taxonomy-eligible.

Therefore, the total considered turnover in 2023 which was included in the denominator of the turnover KPI was €3,742.87 million

Capex

The CAPEX used in the KPI calculation is based on general accounting policies, as mentioned in the sections 3.3.1 ‘Property, plant and equipment’ ('PPE') (IAS 16), 3.3.2 ‘Intangible assets’ (IAS 38) and 3.3.16 ‘Leases’ (IFRS 16) of the Financial report.

The movements related to these assets are disclosed in section 4.5 ‘Reconciliation of information on reportable segments to IFRS amounts’ from the Financial Report, under the subtitle ‘capital expenditures’ and are included in the calculation as follows:

Numerator(*) Denominator

Additions for PPE (including leases)

Additions for intangible assets (including leases)

Yes Yes

Yes Yes

(*) Numerator is adjusted for the legal entities / activities not qualifying as taxonomy-eligible

The total considered CAPEX in 2023 which was included in the denominator of the CAPEX KPI was €2,477.45 million

Opex

For determining the OPEX KPI, we applied the definition as described in the Reporting Delegated Regulation and the ESMA final report entitled 'Advice on Article 8 of the Taxonomy Regulation', which was published on 26 February 2021, according to which OPEX covers direct non-capitalised costs that relate to research and development, building renovation measures, short-term lease, maintenance and repair and any other direct expenditures relating to the day-to-day servicing of items of property, plant and equipment that are necessary to ensure the continued and effective functioning of such assets.

The OPEX KPI in 2023 was €202.45 million

A correspondence table with the Financial Report is available below.

Denominator Section from the Financial Report

Elia Group 2023 turnover 5.1. Revenue, net income (expense) from settlement mechanism and other income

Elia Group 2023 CAPEX 6.1. Property, plant and equipment and 6.2. Intangible assets

2.1.9 Breakdown of Elia Group's KPIs for EU Taxonomy eligibility and alignment in 2023

The last steps taken as part of the Taxonomy analysis was the calculation of the KPIs: Taxonomy-eligible and aligned turnover, CAPEX and OPEX.

A top-down approach was applied when calculating the KPIs, meaning non-eligible and non-aligned turnover. CAPEX and OPEX were excluded from the total figures disclosed in the financial statements.Elia Group’s alignment with DNSH criteria and its compliance with the Minimum Social Safeguards lead to the conclusion that the KPIs are mainly impacted by:

• the non-eligibility of the Group’s consultancy activities and other activities not related with electricity transmission;

• the non-alignment of the eligible transmission of electricity activities is due in particular to existing direct connections to power plants that do not meet the TSC;

• PCB-contaminated assets from our electricity transmission activities in Belgium.

A detailed breakdown of the KPIs is available in the Excel table accessible via this QR code.

2.2. ESRS E1 Climate change

2.2.1 Strategy

E1-1 – Transition plan for climate change mitigation

Elia Group's core mission is to drive the energy transition by supporting the integration of RES into the electricity system in order to foster decarbonisation. Successfully achieving this will be the key to decarbonising industry and will thus benefit society as a whole and our own bottom line. It will also enable us to effectively and sustainably decarbonise our own operations. We therefore have a threefold interest in being successful in our core business.

To underline our commitment to decarbonisation, we have set a carbon neutrality target for 2030 for our own operations (i.e. Scope 1 & 2 emissions, excluding grid losses). This objective takes an avoid-reduce-offset approach. Furthermore, we have committed to an absolute GHG emissions reduction target for all Scope 1 & 2 emissions, including grid losses, of 28% by 2030 (taking 2019 as the benchmark year). The SBTi’s Target validation team has determined that this target is in line with a ‘well-below 2°C’ trajectory. In addition, we aim to be fully carbon-neutral by 2040.

The challenge lies in grid losses from our lines and cables, which represent the biggest share of our carbon footprint, and currently hinder us from having a 1.5°C plan. Grid losses are an inevitable and inherent part of electricity transmission and their GHG emissions impact is dependent on the energy generation mix, the breakdown of which is legally outside our area of responsibility as a TSO67. In the short term, the required grid development described above and volatile renewable energies feed-in will lead to an increase in the volume of grid losses, which is not sufficiently offset by a decrease in the emission factor of the power mix to allow for even more ambitious decarbonisation goals for Elia Group. However, our contribution to societal decarbonisation far outweighs our own corporate carbon footprint. This effect will progressively disappear in the mid to long term. As the electricity generation structure evolves with increasing RES integration in our grids, it will eventually lead to a significant decrease in the electricity emission factor (see 4. 'Reduction of grid losses-related GHG emissions' in E1-3 'Actions and resources in relation to climate change policies').

Our transition plan explained (including drivers)

Our ActNow sustainability programme is a key part of our strategy and fully embeds sustainability into our business activities. We are working towards meeting these targets via our five-year business roadmaps and plans and revise them regularly, for example when EU requirements are updated.

As outlined in section 4.3. 'Our sustainability programme: ActNow' of the Strategic Report, Climate Action - which is Dimension 1 of our ActNow sustainability programme - is both the first and most consequential dimension of the programme. The table below outlines the objectives included in this dimension and the decarbonisation drivers that were identified. Please see 2.2.2. E1-3 'Actions and resources' for more details regarding the associated actions.

67 In Europe, under the Third Energy Package, energy networks are subject to unbundling requirements which oblige Member States to ensure the separation of vertically integrated energy companies, resulting in the separation of the various stages of energy supply (generation, transmission, distribution, and retail). Consequently, Elia Transmission's (Belgium) scope of activities include only transmission of electricity, and not generation, which means it cannot influence the energy mix.

Challenge

Objective

OUR SOCIETAL CHALLENGE

Speed up the decarbonisation of the power sector

Objective 1

Enabling the decarbonisation of the power sector

Focus of action

• Grid development

• Market development and system operations

• Electrification

ACTNOW DIMENSION 1 CLIMATE ACTION

OUR CORPORATE CHALLENGE Decarbonisation of our own activities

Objective 2

Reach carbon neutrality in system operations by 2040

Objective 3

Reach carbon neutrality in our own activities by 2030

Climate change mitigation

• Reduction of grid losses-related GHG emissions

• Evaluate impact of balancing and redispatching

• Strategy for phasing-out SF6

• Sustainable substations

• Low-carbon mobility

Objective 4

Transition to a carbon-neutral value chain for new assets & construction work

Upstream value chain (scope 3) actions

Objective 5

Increase climate resilience

Climate change adaptation

• Climate change scenarios

• Grid and asset planning and dimensioning

• Anticipation and handling of extreme weather disasters

Locked-in GHG emissions

Grid losses: Please refer to the above text where we explain the unavoidable nature of grid losses and the dependency of grid losses-related emissions on the energy mix.

SF668: Due to the long lifetime (55 years) of our equipment, there will still be equipment using SF6 gas by 2030 and 2040, yet an increasingly reduced one. It is worth noting that what generates emissions are leakages. Hence our SF6 phase-out strategy also focuses on leakage management, thereby minimising and/or mitigating our impact.

Substations: Our substations, as elements enabling us to operate the grid, consume electricity. Solar panels will be installed (see below under actions). Therefore, as for grid losses, the reduction in associated emissions will align with the decarbonisation of our local power mixes.

Financial resources

According to the EU Taxonomy reporting methodology, Elia Group’s economic activities had been identified as eligible are aligned at a very high level with the technical screening criteria (TSC). High alignment clearly underlines the Group’s ongoing contribution to the energy transition. We do not foresee major deviations in the future. Please refer to 2.1 'Disclosures pursuant to Article 8 of Regulation 2020/852 (Taxonomy Regulation)', where the EU Taxonomy Regulation alignment of our eligible activities is disclosed.Further investment and funding are integrated in the five-year business plan, but are either impossible to disaggregate from the overall business plan or are not significant enough to be disclosed here.

There were no significant CAPEX amounts invested during the reporting period related to coal, oil and gas-related economic activities.

Embedding the transition plan in our overall strategy and financial planning

Elia Group does not fall under the exclusion for EU Paris-aligned benchmarks69

Since our core business is inherently linked to driving the energy transition, sustainability and climate-related responsibilities lie with our executive bodies: they drive the implementation of our strategy and oversee the Group’s progress. Moreover, specific arrangements have been put in place, including ones which affect our Board of Directors, to ensure that our ActNow sustainability programme - which includes climate change aspects in its Dimension 1 - is fully embedded across the organisation. Please refer to 1.2.1. 'The role of the administrative, management and supervisory bodies' for further information

Our climate transition plan is voted on at annual general meetings (AGMs). Feedback is collected during these meetings, but it is collected more frequently than annually. We have established processes and controls that ensure regular monitoring, measuring, validating and reporting of these KPIs. In addition, our Executive Team took shareholders through several presentations focusing on the Group’s sustainability strategies during the Capital Market Day events.

Our progress in implementing the transition plan is overseen by the GSO and two local sustainability boards at Elia Transmission (Belgium) and 50Hertz Transmission (Germany) and is tracked through KPIs, the most relevant of which we publish for our stakeholders (see the chapter on 'Our ActNow sustainability programme' in the Strategic Report).

ESRS 2 SBM-3 – Material impacts, risks and opportunities and their interaction with strategy and business model

With climate change as a main concern and our societal role in climate change mitigation at the core of our business activities, climate-related risks and opportunities in all their subcategories had already been integrated into every corporate risk and opportunity of our corporate risk register. They are extensively described in the risks and opportunities cards in section 3.1. 'Risk and opportunities management system of the Strategic Report', where the link to any type of climate-related risk (as detailed in the TCFD) is also identified. The main climate-related risks and opportunities for our activities are detailed in the table below.

68 Chemical formula of ‘sulphur hexafluoride’. SF6 is used as an insulation and switching gas in gas-insulated high-voltage switchgear. It has excellent electrical properties, is non-toxic and is chemically stable. However, the global warming potential of SF6 is 23,500 times higher than CO2

69 In accordance with the exclusion criteria stated in Articles 12.1 (d) to (g) 53 and 12.2 of Commission Delegated Regulation (EU) 2020/1818 (Climate Benchmark Standards Regulation).

Nature of risk/opportunity • SF6 and potential PFAS ban

• Carbon taxing

• Reporting

Physical damage to assets and infrastructure Investment programme in grid infrastructure projects

• Extreme weather events

• More frequent or severe heatwaves

• New offshore and onshore infrastructure

• Reinforcement of onshore infrastructure

•

Returns on investment in low-emission technology

Climate resilience is embedded in our strategy and business models as our societal challenge. Elia Group is both shaping and driving the energy transition, playing a leading role in the integration of RES into energy systems, responding to the demand for electrification and working with players from across the sector to identify and address additional means of decarbonising society.

As transmission system operators (TSOs), Elia Transmission (Belgium) and 50Hertz Transmission (Germany) are both responsible for aligning their activities with the ambitions of the Belgian and German governments, respectively (known as the Nationally Determined Contributions). The main grid development and reinforcement needs are identified and described in the Belgian Federal Development Plan and the German Grid Development Plan that both TSOs are legally required to publish at regular intervals (their frequency is dictated by the regulatory law applicable in the respective electricity grid - see section 5. 'Our business model' of the Strategic Report for further information). At the same time, both TSOs have initiated closer exchanges with RES developers and industry to better anticipate their grid needs that often materialise within fewer years than the target dates set out in the Belgian Federal Development Plan and the German Grid Development Plan. In order to develop a grid which is capable of meeting future challenges, we analysed multiple scenarios to better understand the impact on the grid and to better foresee the investments

needed. The scenarios encompass those developed by ENTSO-E & ENTSO-G, the European association of electricity (and gas) transmission system operators, in the context of the TYNDP (Ten-Year Network Development Plan), which are supported by future climate projections, considering two possible scenarios for 2050: RCP 4.5 and RCP 8.5.

Our ability to respond and adapt to climate-related transition risks is described as our corporate challenge in our ActNow sustainability programme and focuses on our own operations. A well-below 2°C emissions reduction target has been validated by the SBTi. The associated decarbonisation drivers are the reduction of grid losses-related emissions, SF6 phase-out, the sustainable substations programme and low-carbon mobility (see further details in E1-3 'Actions and resources').

Regarding the resilience of our assets to climate-related physical risks, Elia Group has taken an in-depth long-term look at climate scenarios (RCP 2.6, RCP 4.5 and RCP 8.5) with support from the Climate Service Center Germany GERICS, an independent scientific organisational entity of the Helmholtz‐Zentrum Hereon, to challenge existing assumptions about the need to adapt its infrastructure in order to protect it from physical climate risks. The RCP 8.5 scenario provides insight on the most stringent heatwave conditions, while other scenarios are useful for sensitivity analysis. RCP 2.6 is the most stringent scenario in terms of policies to limit climate change (for transition climate-related risks).

The physical climate-related risks to which the Group is subject fall into two categories: chronic and acute. Based on the best climate scenario information available to us, our vulnerability assessment of the Group’s activities was furthered in 2023, in line with the technical screening criteria of the EU Taxonomy Delegated Act. This assessment highlighted the possible harmful effect of heatwaves, cold snaps/winter incidents, storms, flooding, droughts and wildfires. All these phenomena are acute physical risks, which could lead to less favourable operating conditions for the Group’s assets or even damage them. Such circumstances may trigger business continuity disruption and may require the activation of contingency plans. Given the critical nature of the Group’s infrastructure and the fact that its assets are spread over a wide territory (in particular its overhead line infrastructure), the Group’s assets are deemed to be facing a heightened vulnerability to physical climate risks, as is the case for other system operators and utilities.

2.2.2 Impact, Risk and Opportunity Management

E1-2 – Policies on climate change mitigation and adaptation

In our Purchasing Conditions, we explain our expectations from our suppliers regarding efficient energy use and energy use reduction.

In our General Safety, Health and Environment Rules for Contractors Performing Assignments, we require them to make rational use of energy. These elements are also included in our Supplier Code of Conduct. All these documents are signed off by our Head of Purchasing and are available on our website. These rules form an integral part of every contract that Elia Group concludes with contractors, i.e. our upstream value chain. Regarding our own operations, our asset management policy on substations includes energy consumption reduction aspects related to our emissions reduction transition plan. No third-party standard or initiative is used in the making of those policies.

E1-3 – Actions and resources in relation to climate change policies

Please refer to section E1-4 'Targets related to climate change mitigation and adaptation to read how these actions translate into targets.

All the actions described below are climate change mitigation actions.

The decarbonisation of the electricity sector and the emission factor of the power mix (downstream value chain) occur through actions such as:

1. Grid development and RES integration: please refer to the above description of Elia Group's corporate challenge.

2. Market development and system operations

We are constantly working with other market players, political decision-makers and regulators on further developing electricity market design to facilitate the integration of variable RES into the grid and unlock consumer flexibility. The adoption of electric vehicles (EVs) and heat pumps is accelerating and opening the door to new ways for consumers to interact with the electricity system. However, the large-scale participation of demand-side flexibility is slow. One key reason for this is that the current market design includes multiple barriers which prevent the active participation of small flexibility assets. Our efforts address these barriers and will facilitate the efficient integration of more renewable energy into the system. This, in turn, will allow consumers to reap the benefits of their investments in flexible assets (such as heat pumps, EVs, solar PV and electrical boilers).

By upgrading our system operations technologies and processes, we are paving the way for further strong increases in intermittent renewable energies in the system.

In order to manage the grid of the future, which integrates more renewables and decentralised units, Elia Group is developing a Supervisory Control and Data Acquisition system - internally called Modular Control Center System (MCCS) - to deal with the growing amount of data and managing the increasing need for system and grid monitoring. This cutting-edge technology, as a platform, is our answer to managing increased complexity and enables flexibility, adaptability and scalability over time. Modularisation is key for fast developments and differentiated solutions. Automated processes and algorithms will support the operators of the future in decision making. In the longer term, we aim to evolve towards an autopilot equipped with all required capabilities so that operators can focus on supervising but are able to (re)take control if needed. The MCCS vision, architecture and product solutions are meant to be shared and co-developed with peers (e.g. other international TSOs) as part of an MCCS NextGen community.

3. Electrification and sector coupling

A core element of European decarbonisation involves the electrification of industry and society at large. Leveraging our enabler role in the European power sector, we are collaborating with industrial players such as Linde, ArcelorMittal, and Total (who are active players in our grid regions) to assess electrification potentials and to identify the best possible ways to meet their growing electricity needs. We are also proactively developing and promoting suitable locations for e.g. new data centres, industrial sites and hydrogen production facilities in order to speed up their deployment and ensure the system is ready to cope with those loads.

The scope addressed by the following actions is our own operations:

4. Reduction of grid losses-related GHG emissions

Grid losses from lines and cables are an inevitable and inherent part of electricity transmission. They depend on factors such as the distance electricity has to be transmitted, its current and its voltage. Grid losses are a source of GHG emissions related to grid operation that depend on the CO2 intensity of the national energy mix. As higher amounts of renewable energy are integrated into the system, the amount of CO2 associated with these losses will decrease over time. However, at the same time, grid losses will increase as electrification is accelerating and the related GHG emissions will consequently also increase. Indirect GHG emissions (Scope 2) are most material for electricity transmission activities, but setting reduction pathways conflicts with our societal role of decarbonising society by electrification (increasing grid losses) and strongly depends on national energy mix policies. Our focus is therefore on integrating ever larger amounts of RES into the system.

5. Actions for phasing out SF6

We have designed and approved a new asset policy that favours alternatives to SF6,. In the short term, we have set ourselves the target of seeing to it that 50% of all new facilities will use SF6-free solutions by 2030. In the long term, we will stop using it completely in new installations in accordance with the recently adopted EU F-gas regulation. At the same time, we will continue to focus on keeping SF6 leakages as low as possible. We were able to successfully do this in 2023, when the rate was only 0.11%, well below our objective of 0.25%.

6. Sustainable substations

With the goal of making our substations more sustainable and energy-efficient, we have developed new building standards for our substations, including those related to heating and cooling installations and smart temperature control. In addition, we are also renovating our existing substation buildings to further increase their efficiency. In Belgium, we have taken the decision to install approximately 45,000 m2 of solar panels across our premises by 2030, which will have a peak load of 7 MW of solar energy. This energy will then be used to meet some of our own consumption needs. A similar initiative is being rolled out across a number of 50Hertz Transmission (Germany)’s administrative buildings and substations, in addition to an existing PV system on the roof of the corporate headquarters in Berlin.

Another action in Belgium is the installation of remote heating control and monitoring systems in around 600 existing substation buildings by 2030, representing a total heated area of approximately 130,000 m².

7. Low-carbon mobility

We are electrifying our fleet (both company cars and our technical vans). In 2025, 75% of travel between home and work for our Belgian entities will be low-carbon. A mobility budget was introduced in 2022 across our entities in Belgium and a bike leasing programme was rolled out across our German entities.

The scope addressed by the following actions is the upstream side of our value chain (impact on our scope 3 footprint):

8. Creating a fit-for-our-business CO2 accounting platform for our suppliers

Emissions related to new assets and construction work are categorised as Scope 3 emissions 'category 1 - Purchased Goods' and 'Services and category 2 - Capital Goods'. They are related to upstream value chain emissions categories that are more challenging to accurately calculate since the relevant information has to be gathered and sent to us by our suppliers. We developed a CO2 accounting platform to increase our data maturity that went live in late 2023. Green procurement is carried out in close collaboration with our suppliers. In the future, we will closely track the improvements that our suppliers apply to their designs, production methods and project execution methods. Precise data will allow us to concentrate on those actions which have the biggest potential impact and will enable us to set scope 3-related targets.

9. Setting up an Internal Carbon Price (ICP)

Please refer to E1-8. 'Internal carbon pricing' for more information.

10. Green works (in Belgium)

We engaged with several of the suppliers who execute infrastructure works under the lead of Elia Transmission (Belgium). The objective is, alongside the accounting platform, to quantify emissions related to the different types of standard works and identify impactful drivers in order to establish reduction measures. Several projects covering the main types of infrastructure works (lines, cables, substations) for building grid assets were selected as pilot projects and data (civil works materials, waste, on-site fuel and electricity consumption, upstream and downstream transportation and commuting) were collected in order to gain an initial overview of our infrastructure works' carbon footprint, replacing the current spendbased approach. The main drivers in the footprint of each type work were identified and potential reduction emissions practices were listed in order to lead to the launch of a series of proof-of-concept projects to validate their relevance. This information will also be relevant to us in setting Scope 3-related targets. The collection of data regarding the capture of GHG emissions from our offshore projects is ongoing.

2.2.3 Metrics and targets

E1-4 – Targets related to climate change mitigation and adaptation

'Elia Group' = Elia Transmission Belgium SA/NV, Elia Engineering SA/NV, Elia Asset SA/NV, 50Hertz Transmission GmbH, 50Hertz Offshore GmbH (no employees), Eurogrid GmbH

SF6 leakage rate = amount of SF6 leaked during the year/the average amount of SF6 gas stored in the compartments. The SF6 leakage is calculated based on the weight registration of SF6 bottles and containers when transactions (e.g. refills) with SF6 gas are done..

For a description of how the targets were set and which stakeholders were involved in their validation, see section E1-4 - 'Targets related to climate change mitigation and adaptation'.

E1-5 – Energy consumption and mix

'Elia Transmission (Belgium)' = Elia Transmission Belgium SA/NV, Elia Engineering SA/NV and Elia Asset SA/NV.

'50Hertz Transmission (Germany)' = 50Hertz Transmission GmbH, 50Hertz Offshore GmbH (no employees), Eurogrid GmbH.

'Elia Group' = Elia Transmission Belgium SA/NV, Elia Engineering SA/NV, Elia Asset SA/NV, 50Hertz Transmission GmbH, 50Hertz Offshore GmbH (no employees), Eurogrid GmbH.

Comments:

'Elia Transmission (Belgium)' = Elia Transmission Belgium SA/NV, Elia Engineering SA/NV and Elia Asset SA/NV.

'50Hertz Transmission (Germany)' = 50Hertz Transmission GmbH, 50Hertz Offshore GmbH (no employees), Eurogrid GmbH.

For Elia Transmission (Belgium): The electricity consumption is – to a minor extent – based on physical values and on estimated consumption. The estimated electricity consumption is the consumption from high-voltage substations not equipped with meters. For 2023, the estimation was adjusted to fit to an increased scope (number of batteries, buildings area and number of fieldboxes) compared to 2022.

The gasoline and diesel consumption were converted to MWh using conversion factors from the IEA Statistics Manual.

'Elia Transmission (Belgium)' = Elia Transmission Belgium SA/NV, Elia Engineering SA/NV and Elia Asset SA/NV.

'50Hertz Transmission (Germany)' = 50Hertz Transmission GmbH, 50Hertz Offshore GmbH (no employees), Eurogrid GmbH.

'Elia Group' = Elia Transmission Belgium SA/NV, Elia Engineering SA/NV, Elia Asset SA/NV, 50Hertz Transmission GmbH, 50Hertz Offshore GmbH (no employees), Eurogrid GmbH.

'Elia Group' = Elia Transmission Belgium SA/NV, Elia Engineering SA/NV, Elia Asset SA/NV, 50Hertz Transmission GmbH, 50Hertz Offshore GmbH (no employees), Eurogrid GmbH.

The activities of Elia Transmission Belgium SA/NV, Elia Asset SA/NV, 50Hertz Transmission GmbH and 50Hertz Offshore GmbH are identified as activities in high climate impact sectors.

The activities of Elia Engineering SA/NV, Elia Re SA, Eurogrid GmbH and the ‘Non-regulated activities’ belonging to the financial segment are considered not to belong to high climate impact sectors.

E1-6 – Gross Scopes 1, 2, 3 and Total GHG emissions

E1-6. AR 48

'Elia Group' = Elia Transmission Belgium SA/NV, Elia Engineering SA/NV, Elia Asset SA/NV, 50Hertz Transmission GmbH, 50Hertz Offshore GmbH (no employees), Eurogrid GmbH,

Definitions:

SF6: Chemical formula of ‘sulphur hexafluoride’. SF6 is used as an insulation and switching gas in gas-insulated high-voltage switchgear. It has excellent electrical properties, is nontoxic and is chemically stable. However, the global warming potential of SF6 is 23,500 times higher than CO2.

SF6 leakage is calculated based on the weight registration of SF6 bottles and containers when transactions (e.g. refills) with SF6 gas are done.

Comments:

The following calculation standards and emission factors were used to determine the GHG emissions:

For SF6: Greenhouse Gas Protocol – Corporate Accounting and Reporting Standard /IPCC 5th ARS

For electricity:

The location-based scope 2 emissions for all years are calculated using the emission factors based on Belgium's and Germany's annual energy mix published on the Portal "eCO₂grid" (https://eco2grid.50hertz.com/)

The market-based scope 2 emissions for 2019 and 2022 are calculated using the AIB European Residual Mixes emission factors for Belgium and Germany. The 2023 value is not published yet.

For Elia Transmission (Belgium) gasoline, diesel, natural gas, air conditioning leakages: Bilan GES Ademe (as of 29 March 2019)

For 50Hertz Transmission (Germany):

For gasoline, diesel: the GHG emissions are provided by the fleet service provider

For natural gas: German Federal Office for Economic Affairs and Export Control (BAFA)

'Elia Group' = Elia Transmission Belgium SA/NV, Elia Engineering SA/NV, Elia Asset SA/NV, 50Hertz Transmission GmbH, 50Hertz Offshore GmbH (no employees), Eurogrid GmbH.

Definitions:

The scope 3 values are calculated with two methods: the spend-based methodology using external, category-specific emission factors (no supplier data) and physical values using information coming from our suppliers.

Comments:

Scope 3 GHG emissions are calculated using the Greenhouse Gas Protocol Corporate Value Chain (Scope 3) Standard.

'Elia Transmission (Belgium)' = Elia Transmission Belgium SA/NV, Elia Engineering SA/NV and Elia Asset SA/NV.

Definitions:

SF6: Chemical formula of ‘sulphur hexafluoride’. SF6 is used as an insulation and switching gas in gas-insulated high-voltage switchgear. It has excellent electrical properties, is nontoxic and is chemically stable. However, the global warming potential of SF6 is 23,500 times higher than CO2

SF6 leakage is calculated based on the weight registration of SF6 bottles and containers when transactions (e.g. refills) with SF6 gas are done.

Comments:

The emissions related to backup systems are included as of 2022.

Only regional grid losses are taken into account. Federal grid losses are excluded from the CO2 emissions calculation in accordance with Art. 104 of the Code of Conduct (Gedragscode) stipulated by CREG.

The electricity consumption-related emissions are – to a minor extent – based on physical values and on estimated electricity consumption. The estimated electricity consumptionrelated emissions are related to high-voltage substations not equipped with meters. For 2023, the estimation was adjusted to fit to an increased scope (number of batteries, buildings area and number of fieldboxes) compared to 2022. The following calculation standards and emission factors were used to determine the GHG emissions:

For SF6: Greenhouse Gas Protocol – Corporate Accounting and Reporting Standard /IPCC 5th ARS

For gasoline, diesel, natural gas, air conditioning leakages: Bilan GES Ademe (as of 29 March 2019)

For electricity:

The location-based scope 2 emissions for all years are calculated using the emission factors based on Belgium's annual energy mix published on the Portal "eCO₂grid" (https:// eco2grid.50hertz.com/)

The market-based scope 2 emissions for 2019 and 2022 are calculated using the AIB European Residual Mixes emission factors for Belgium. The 2023 value is not published yet.

Restatements:

Due to an alignment in the data collection of the technical fleet gasoline and diesel consumption, the 2022-related emissions have been recalculated

Due to the use of a new source of information (see above) for the location-based electricity emission factor, location-based scope 2 emissions have been restated for 2019 and 2022.

'Elia Transmission (Belgium)' = Elia Transmission Belgium SA/NV, Elia Engineering SA/NV and Elia Asset SA/NV.

Definitions:

The scope 3 values are calculated with two methods: the spend-based methodology using external, category-specific emission factors (no supplier data) and physical values using information coming from our suppliers.

Comments:

Scope 3 GHG emissions are calculated using the Greenhouse Gas Protocol Corporate Value Chain (Scope 3) Standard.

Restatements:

Due to the implementation of our internal scope 3 CO2 platform, the values have been recalculated leading to a restatement of the 2022 values.

'50Hertz Transmission (Germany)' = 50Hertz Transmission GmbH, 50Hertz Offshore GmbH (no employees), Eurogrid GmbH.

Definitions:

SF6: Chemical formula of ‘sulphur hexafluoride’. SF6 is used as an insulation and switching gas in gas-insulated high-voltage switchgear. It has excellent electrical properties, is nontoxic and is chemically stable. However, the global warming potential of SF6 is 23,500 times higher than CO2.

SF6 leakage is calculated based on the weight registration of SF6 bottles and containers when transactions (e.g. refills) with SF6 gas are done.

Comments:

The following calculation standards and emission factors were used to determine the GHG emissions:

For SF6: Greenhouse Gas Protocol – Corporate Accounting and Reporting Standard /IPCC 5th ARS

For gasoline, diesel: the GHG emissions are provided by the fleet service provider

For natural gas: German Federal Office for Economic Affairs and Export Control (BAFA)

For electricity:

The location-based scope 2 emissions for all years are calculated using the emission factors based on Germany's annual energy mix published on the Portal "eCO₂grid" (https:// eco2grid.50hertz.com/ )

The market-based scope 2 emissions for 2019 and 2022 are calculated using the AIB European Residual Mixes emission factors for Germany. The 2023 value is not published yet.

Restatements:

Due to the use of a new source of information (see above) for the location-based electricity emission factor, location-based scope 2 emissions have been restated for 2019 and 2022.

Minor adjustments were also made regarding the 2022 natural gas consumption-related emissions.

'50Hertz Transmission (Germany)' = 50Hertz Transmission GmbH, 50Hertz Offshore GmbH (no employees), Eurogrid GmbH.

Definitions:

The scope 3 values are calculated with two methods: the spend-based methodology using external, category-specific emission factors (no supplier data) and physical values using information coming from our suppliers.

Comments:

Scope 3 GHG emissions are calculated using the Greenhouse Gas Protocol Corporate Value Chain (Scope 3) Standard.

E1-6. AR 48

Non-disclosed scope 3 categories

[Optional sub-category: Cloud computing and data centre services]

Fuel and energy-related activities

Upstream leased assets

Waste generated in operations

Processing of sold products

Use of sold products

End-of-life treatment of sold products

Downstream leased assets

Franchises

Upstream transportation and distribution

Downstream transportation and distribution

Employee  commuting

Financial investments

E1-6. AR 53

Motivation

Not applicable

This is not a significant scope 3 GHG emissions category for our activities.

No upstream leased assets could be identified.

This is not a significant scope 3 GHG emissions category for our activities.

Our business does not include the sale of products. Electricity transported is used directly with no further processing.

Our business does not include the sale of products.

Our business does not include the sale of products.

There are no downstream leased assets within our financial control boundary for which we could identify emissions.

There are no franchises within our financial control boundary for which we could identify emissions.

There are no significant upstream transportation and distribution activities, emissions related to the transport of consumed electricity are reported in Scope 2.

No downstream transportation and distribution activities could be identified. We do not sell any physical product that is not distributed through the energy networks.

This is not a significant scope 3 GHG emissions category for our activities.

Investment in the sense of the provision of capital or financing is not included in our business.

'Elia Transmission (Belgium)' = Elia Transmission Belgium SA/NV, Elia Engineering SA/NV and Elia Asset SA/NV.

'50Hertz Transmission (Germany)' = 50Hertz Transmission GmbH, 50Hertz Offshore GmbH (no employees), Eurogrid GmbH.

'Elia Group' = Elia Transmission Belgium SA/NV, Elia Engineering SA/NV, Elia Asset SA/NV, 50Hertz Transmission GmbH, 50Hertz Offshore GmbH (no employees), Eurogrid GmbH, Elia Group SA/NV, Elia Grid International GmbH, Elia Grid International SA/NV, Eurogrid International SA/NV and WindGrid SA/NV.

'Elia Transmission (Belgium)' = Elia Transmission Belgium SA/NV, Elia Engineering SA/NV and Elia Asset SA/NV.

'50Hertz Transmission (Germany)' = 50Hertz Transmission GmbH, 50Hertz Offshore GmbH (no employees), Eurogrid GmbH.

'Elia Group' = Elia Transmission Belgium SA/NV, Elia Engineering SA/NV, Elia Asset SA/NV, 50Hertz Transmission GmbH, 50Hertz Offshore GmbH (no employees), Eurogrid GmbH, Elia Group SA/NV, Elia Grid International GmbH, Elia Grid International SA/NV, Eurogrid International SA/NV and WindGrid SA/NV.

E1-7 – GHG removals and GHG mitigation projects financed through carbon credits

We do not have GHG removal and storage resulting from projects developed in own operations or contributed to in upstream and downstream value chain.

We purchase project-based carbon credits (verified to Gold Standard) to offset GHG emissions related to SF6 leakages and business flights from the previous year.

As of 2021, we buy credits from the voluntary market to offset the previous year's GHG emissions associated with the above-mentioned categories. The carbon credits are used to financially support a climate change mitigation project, i.e. Solar Systems Supply of Senegalese households.

E1-8 – Internal carbon pricing

We use several internal carbon prices to drive important internal business decisions:

• Investment decisions: cost-benefit analyses for grid planning that show the variation in total CO2 emissions from the power system due to the implementation of a certain project.

• Supply chain decisions: in tenders in order to impact the Total Cost of Ownership (TCO) and thus the ranking of suppliers.

We use shadow pricing aligned with the price of allowances under the EU Emissions Trading Scheme, and the social cost of carbon. Depending on the decision, we use a differentiated pricing approach. Scope 1, 2 and 3 are covered.

We have opted to use a 'flat' pricing model for internal carbon pricing that uses a constant (after actualisation of future costs) price. However, we expect the price to increase significantly over the coming years, both through market pressure (scarcity of emission rights etc.) and through increased awareness of the true cost of carbon emissions for society.

No internal carbon pricing scheme is used in our financial statements.

E1-9 – Anticipated financial effects from material physical and transition risks and potential climaterelated opportunities

This disclosure requirement is currently in preparation as per ESRS guidelines.

'Elia Group' = Elia Transmission Belgium SA/NV, Elia Engineering SA/NV, Elia Asset SA/NV, 50Hertz Transmission GmbH, 50Hertz Offshore GmbH (no employees), Eurogrid GmbH.

We are currently rethinking our GHG emissions offset approach and therefore cannot currently disclose any future carbon credits planned to be cancelled outside the undertaking’s value chain.

2.3. Pollution

This standard and its disclosure requirements are still being assessed from the perspective of the double materiality exercise. Nevertheless, existing information related to pollution was integrated to ensure the coherency compared to previous annual reports and the transparency over our activities.

2.3.1 Policies related to pollution prevention

An overview of policies can be consulted at 1.5. 'Policies adopted to manage material sustainability matters'. In terms of prevention, Elia Group is committed to pursuing effective groundwater and soil conservation measures. The company’s business activities do not involve the regular release of process-linked effluents. We must focus on preventing water and soil pollution through accidental leaks of hazardous substances used in our equipment.

Accidental leakage remediation policy: We have developed processes to immediately cope with the impacts of leakages in the event of accidental hazardous substance leaks and employees are trained to detect early signs of these types of events. Substation building policy: The main potential source of soil, ground and surface water pollution is the large volume of mineral oil in our transformers. The standard solution for combatting this consists of equipping our transformers with a liquid-tight concrete tank, which, in the event of an oil spill, can contain all leaks. The tanks are fitted with a hydrocarbon separator and an additional coalescence filter with an automatic shut-off valve to ensure that rainwater that falls on the facilities can be drained without causing pollution.

Another water management aspect relates to rainwater that ends up on our highvoltage facilities (transformers) as well as on impermeable (roofs, asphalt roads) and permeable surfaces (gravel roads). When building new substations and when expanding or renovating existing substations, we ensure that rainwater that ends up on the installations (transformers) is always drained without any (oil) contamination, we increase the permeability of surfaces70 and we explore reuse and infiltration solutions (some of which can have a positive impact on biodiversity).

In our Purchasing Conditions, our suppliers are required to comply with all the applicable laws and regulations related among others to soil pollution. In our General Safety, Health and Environment Rules for Contractors Performing Assignments, we require them to take all necessary preventive measures to avoid contaminating the soil, groundwater and surface water.

2.3.2 Actions related to pollution prevention

A significant part of Belgian soil is polluted as a direct result of nearby or in situ (prior use) industrial activities or the backfilling of areas with polluted soil. Elia Transmission (Belgium) has mapped the soil condition of its own land in order to plan out remediation activities. These are being conducted according to the local environmental regulations.

70 This is carried out by constructing roadways with reinforced gravel pits (asphalt on concrete is no longer used). Drainage gutters are avoided for existing paving and natural run-off and infiltration are provided next to the road.

2.4. Water and marine resources

This standard and its disclosure requirements are still being assessed from the perspective of the double materiality exercise. Nevertheless, existing information related to water and marine resources was integrated to ensure the coherency compared to previous annual reports and the transparency over our activities.

2.4.1 Policies related to water and marine resources

In terms of prevention, Elia Group is committed to pursuing effective groundwater and soil conservation measures (see the previous section 2.3.1. 'Policies related to pollution prevention'). The company’s business activities do not involve significant amounts of water consumption or the regular release of process-linked effluents.

Regarding marine resources, the impacts of our offshore projects are assessed during their permitting phase in an environmental impact assessment executed by external environmental experts.

2.4.2 Actions and resources related to water and marine resources

Please refer to the actions described in the previous section regarding water management to prevent pollution from accidental leakages.

With regard to our offshore projects, permits are granted provided an extensive list of conditions are met relating to the work phase and the exploitation of the offshore installation, including a series of measures relating to the marine environment, e.g. monitoring the evolution of sand piles and the minimum burial depth for cables in order to mitigate the impact on the marine environment. Some of these mitigation measures aim in particular to reduce the impacts of such projects on marine life and are therefore described in the next section entitled 2.5. 'Biodiversity and Ecosystems'.

2.5. Biodiversity and ecosystems

This standard and its disclosure requirements are still being assessed from the perspective of the double materiality exercise. Nevertheless, existing information related to biodiversity and ecosystems was integrated to ensure the coherency compared to previous annual reports and the transparency over our activities.

We strive to limit the impact of our projects on the areas we work in, and either refrain from causing avoidable disturbances to nature and landscapes, or to ensure such disturbances are reduced to a minimum using the ‘mitigation hierarchy’, which aims to prevent or avoid negative impacts on nature. It also provides advice about protecting biodiversity throughout project lifecycles, from early planning through to decommissioning and repowering. The application of this mitigation hierarchy means we can avoid, minimise, restore and – where necessary –offset negative impacts on biodiversity.

We have set ourselves a series of objectives in terms of environmental protection and fostering biodiversity in our own operations. Please see the next section for more information. Elia Transmission (Belgium) has sites located in or near biodiversity-sensitive areas (see 'Targets and metrics related to biodiversity and ecosystems'). We take appropriate measures during the construction phase to prevent and mitigate any negative impact.

2.5.1 Policies related to biodiversity and ecosystems

The impacts of our infrastructure projects (both onshore and offshore) are assessed during their permitting phase in an environmental impact assessment executed by external environmental experts, in line with our legal requirements to minimise the potential disturbances we could cause to nature. A Strategic Environmental Assessment (SEA) also has to accompany the Belgian Federal Development Plan when it is published.

We have several policies regarding biodiversity and ecosystem protection. In our Purchasing Conditions, our suppliers are required to comply with all the applicable laws and regulations relating, among other things, to impact on biodiversity. In our General Safety, Health and Environment Rules for Contractors Performing Assignments for Elia Transmission (Belgium) or 50Hertz Transmission (Germany), we require them to take all the necessary preventive measures related to respect for nature. We also have specific policies relating to the proper handling of invasive alien species and a policy to clarify how and where bird beacons should be placed.

2.5.2 Actions and resources related to biodiversity and ecosystems

Bird protection: With the help of leading European and local environmental organisations, Elia Transmission (Belgium) and 50Hertz Transmission (Germany) have identified the sections of its grid that pose the greatest danger to birds. These are gradually being fitted with bird markers, which reduce the probability of bird collisions by making them more visible to birds. At Group level, we want to have 100% of our overhead lines identified as critical for birds equipped with bird markers by 2030. Nesting boxes are also being installed along the bottom or the top of our pylons, depending on the species we are aiming to protect.

Ecological corridor management: We implement this policy under our overhead lines that run through forests. Whilst ensuring that our grid can be safely operated, we either minimise our interventions in these areas so that natural habitats can once again flourish under our lines or implement management measures that benefit biodiversity. Since 2012, Elia Transmission (Belgium) has been a front-runner in this area. Indeed, we developed a seven-year LIFE project (EU-funded and together with French TSO, RTE). In 2018, we decided to continue this project for another five years – under the name Life2 – without receiving any subsidies by adding more green corridors around its lines. The other objective of this project was to further monitor the improvement in biodiversity. The results are highly encouraging, with 98% of evaluated sites showing conclusive outcomes. By 2030, our aim is for Elia Transmission (Belgium) and 50Hertz Transmission (Germany) to manage 90% of all of our forest corridors in a way that supports biodiversity. Further information about these projects can be found at: http://www.life-elia.eu/

Substations: We foster green areas around our existing infrastructure to encourage biodiversity and reduce the negative impacts of our assets on the ecosystem. By the end of 2022, we banned the use of all herbicides on all of our sites in Belgium and Germany. In 2023 we also published an internal invasive alien species policy in order to have a unified way of preventing the spread of such species and practices to remove them permanently from our sites.

Offshore: (see also 2.4.2. 'Actions and resources related to water and marine resources') With regard to our offshore projects, mitigation measures are principally implemented during the construction phase of our projects. These aim to reduce the impacts of such projects on marine life (for example, measures aimed at limiting the impact of any noise created and acoustic deterrents to prevent marine life from coming close to our assets during their construction

The future artificial Princess Elisabeth Island in the North Sea is designed with the additional objective of implementing measures to enhance the marine environment. Elia Transmission (Belgium) worked with a range of experts to shape this nature-inclusive design (NID). The NID was developed in partnership with experts in nature conservation and the marine environment. From the design and construction phase onwards, every effort will be made to strengthen the marine ecosystem. The company wants to minimise the disruptive effects on the marine environment while seizing the momentum to add ecological and environmental value to the project. The NID partnership also aims to enhance scientific knowledge in this area. An overview of the envisioned biodiversity measures is available on our website

2.5.3 Targets and metrics related to biodiversity and ecosystems

We currently have two biodiversity-related targets that are aligned with the implementation of the actions explained above.

Both of these targets are related to our own operations and their geographical scope is our respective grid areas.

'Elia Group' = Elia Transmission Belgium SA/NV, Elia Engineering SA/NV, Elia Asset SA/NV, 50Hertz Transmission GmbH, 50Hertz Offshore GmbH (no employees), Eurogrid GmbH,

'Elia Transmission (Belgium)' = Elia Transmission Belgium SA/NV, Elia Engineering SA/NV and Elia Asset SA/NV.

'50Hertz Transmission (Germany)' = 50Hertz Transmission GmbH, 50Hertz Offshore GmbH (no employees), Eurogrid GmbH.

The total length of Elia Transmission (Belgium) located in Natura 2000 areas (on land and sea) is 665 km.

'50Hertz Transmission (Germany)' = 50Hertz Transmission GmbH, 50Hertz Offshore GmbH (no employees), Eurogrid GmbH.

2.6. Resource use and circular economy

This standard and its disclosure requirements are still being assessed from the perspective of the double materiality exercise. Nevertheless, existing information related to resource use and circular economy was integrated to ensure the coherency compared to previous annual reports and the transparency over our activities.

Please refer to following section to read more about our waste management within the Taxonomy regulation framework: Disclosures pursuant to Article 8 of Regulation 2020/852 (Taxonomy Regulation), 2.1.6. DNSH

2.6.1 Policies related to resource use and circular economy

We apply circular business practices to the management of our HV and linear equipment. We have asset management policies that prioritise avoidance/minimisation of waste over waste treatment (reuse, repair, refurbish). For more information on these asset management practices, see below in Actions.

Regarding waste from our own operations and the upstream value chain, we comply with all national and federal laws and regulations. On our construction sites (value chain upstream), contractors must apply the waste hierarchy and comply with the applicable environmental legislation to remove and sort the waste generated on site and have it collected by a registered waste collector. Waste management companies provide information about the way our waste is disposed of (and necessary certificates). Depending on the operating zone, we are also required to report periodically the yearly quantities of specific waste types we produce to the authorities.

Regarding the waste produced by Elia Transmission (Belgium) and 50Hertz Transmission (Germany) on their own sites (own operations), waste is removed by authorised waste management companies, which collect, transport and recycle hazardous and nonhazardous waste.

2.6.2 Actions and resources related to resource use and circular economy

Circular business practices in asset management: We have developed methods to optimise the replacement management of our linear (lines, cables) and high-voltage equipment. We monitor our equipment using health indicators in order to keep a close eye on the condition of the equipment and adjust its service life accordingly.

We also analyse the level of risk associated with the equipment by assigning a grid impact score to every piece of equipment, enabling us to keep less critical equipment on the grid for longer, while maintaining the right level of attention for the most critical equipment. Even more importantly, equipment failure rates are closely monitored for equipment in service so that the most appropriate actions can be taken at the right time. This approach enables us to optimise maintenance and replacement management decisions.

When the equipment reaches the end of its life, we also analyse whether it is possible to postpone this end-of-life by carrying out a retrofit71

We are deploying new approaches based on digital technology to maximise the efficiency of our projects and improve our risk management models in order to achieve closer-to-realtime monitoring.

When we dismantle substations and lines, that equipment which is still functional is set aside and stored in a pool of equipment in order to replace any failing or obsolete equipment on another site.

Another future development of the CO2 accounting platform mentioned in E1-3 'Actions and resources in relation to climate change policies' will be to expand its use to collect waste volumes generated by our suppliers.

71 Retrofitting involves replacing old or end-of-life components with newer ones, generally using more recent technology, while retaining the same function.

2.6.3 Resource outflows

'Elia Transmission (Belgium)' = Elia Transmission Belgium SA/NV, Elia Engineering SA/NV and Elia Asset SA/NV.

Transmission (Germany)

'50Hertz Transmission (Germany)' = 50Hertz Transmission GmbH, 50Hertz Offshore GmbH (no employees), Eurogrid GmbH.

Definitions:

Hazardous and non-hazardous waste are identified based on their EURAL/CED (European waste classification), which is a legally required mention on the waste collection documents.

Comments:

All recovery and disposal operations happen offsite.

For Elia Transmission (Belgium), the data provided in the table covers the waste collected in the administrative and technical centres. Waste from construction sites is not included.

3. Social information

3.1. ESRS S1 Own Workforce

The success of Elia Group’s operations depends significantly on the work and commitment of its workforce. When transitioning towards an ESRS-compliant Sustainability Report, the Group decided to prioritise reporting related to its impact on its workforce and the related risks and opportunities. Although some disclosure requirements were phased in, section S1 Own Workforce was deliberately given special attention in order to reach maturity early in the overall reporting process.

3.1.1 Strategy

ESRS 2 SBM-2 – Interests and views of stakeholders

Elia Group's mission can only be achieved thanks to its staff. It is part of our corporate responsibility to develop our own workforce, promote their health and safety, involve them in decision-making and guarantee equal opportunities for all. As part of the Groupwide ActNow sustainability programme, we have set ourselves specific targets in the areas of 'diversity, equal opportunities and inclusion' and 'occupational health and safety' and measures derived from these (see sections 1.4.1 'Double materiality process and 1.4.2 'Material Topic Cards'). Maintaining and further developing our value-based, open and inclusive corporate culture and creating a good work-life balance are among Elia Group's top objectives and form the strategic basis for all personnel-related decisions.

The indicators below (from the GRI standards) display relevant strategic trends for talent management.

'Elia Transmission (Belgium)' = Elia Transmission Belgium SA/NV, Elia Engineering SA/NV and Elia Asset SA/NV.

Transmission (Germany)

'Elia Group' = Elia Transmission Belgium SA/NV, Elia Engineering SA/NV, Elia Asset SA/NV, 50Hertz Transmission GmbH, 50Hertz Offshore GmbH (no employees), Eurogrid GmbH, Elia Group SA/NV, Elia Grid International GmbH, Elia Grid International SA/NV, Eurogrid International SA/NV and WindGrid SA/NV.

'50Hertz Transmission (Germany)' = 50Hertz Transmission GmbH, 50Hertz Offshore GmbH (no employees), Eurogrid GmbH.

'Non-regulated segment' = Elia Group SA/NV, Elia Grid International GmbH, Elia Grid International SA/NV, Eurogrid International SA/NV and WindGrid SA/NV.

The methodology includes workers who have joined any entity in the reporting scope without distinguishing if they were coming from outside the Group or transitioning from

another entity within the Group. The inaccuracy induced is considered negligible and immaterial. The methodology takes into account the guidance provided by ESRS standards.

Total rate formula: (number of workers hired/((number of employees beginning of year + number of employees end of year)/2) * 100))

Gender rate formula: (new hires (male or female)/total new hires)

Where number of employees beginning of the year = contractual headcount on 1 January of the reporting year

Where number of employees end of the year = contractual headcount on 31 December of the reporting year

Contractual headcount refers to the overall count of individuals holding active contracts within an organisation on a specified date, encompassing all employees, including those on sick leave and directors but does not encompass suspended contracts to avoid double counting.

The Group's targets for diversity, equity and inclusion for new hires can be found in section S1-5 'Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and opportunities'.

'Elia Transmission (Belgium)' = Elia Transmission Belgium SA/NV, Elia Engineering SA/NV and Elia Asset SA/NV.

'50Hertz Transmission (Germany)' = 50Hertz Transmission GmbH, 50Hertz Offshore GmbH (no employees), Eurogrid GmbH.

'Non-regulated segment' = Elia Group SA/NV, Elia Grid International GmbH, Elia Grid International SA/NV, Eurogrid International SA/NV and WindGrid SA/NV.

'Elia Group' = Elia Transmission Belgium SA/NV, Elia Engineering SA/NV, Elia Asset SA/NV, 50Hertz Transmission GmbH, 50Hertz Offshore GmbH (no employees), Eurogrid GmbH, Elia Group SA/NV, Elia Grid International GmbH, Elia Grid International SA/NV, Eurogrid International SA/NV and WindGrid SA/NV.

The methodology for calculating this datapoint assumes that workers will retire at the age of 67. Actual career paths may differ depending on various factors, but the inaccuracy induced in the retirement trend pictured in the table is considered negligible and immaterial. The projection is made for own employees at year-end of the reporting period.

Formula: (number of workers entitled to retirement/contractual headcount)

Where the contractual headcount is the figure as at 31 December of the reporting year. Contractual headcount refers to the overall count of individuals holding active contracts within an organisation on a specified date, encompassing all employees, including those on sick leave and directors, but does not encompass suspended contracts to avoid double counting.

ESRS 2 SBM-3 – Material impacts, risks and opportunities and their interaction with strategy and business model

This disclosure requirement is currently under preparation as per ESRS guidelines.

3.1.2 Impact, Risks and Opportunity Management

S1-1 Policies related to own workforce

For an overview of Elia Group’s policies for its own workforce see section 1.5. 'Policies adopted to manage material sustainability matters'.

In accordance with the impact, risks and opportunities of our economic activities, the following matters are addressed by policies, procedures or certified management systems:

• respect for human and labour rights, including child labour;

• health and safety of our employees and of our contractors;

• diversity, equity and inclusion;

• ethical behaviour and compliance;

Human and labour rights

To emphasise the importance of human rights and make sure they form part of our corporate culture, we have codified our commitments in Elia Group’s Code of Ethics, which we expect all employees to follow.

Our commitment to human rights comprises an acknowledgement of and support for internationally recognised instruments, such as the Universal Declaration of Human Rights and the two Covenants that implement it, as well as the International Labour Organization’s Declaration (ILO: C87, C98 and C135) on Fundamental Rights and Principles at Work. Our human rights policy document was drawn up following guidance published by the UN Global Compact, to which we are a signatory. Our commitment to labour rights is reflected in our Code of Ethics, which is based on the ILO's core labour standards and the ten principles set out in the UN Global Compact.

Health and Safety

Elia Group’s subsidiaries have adopted a Health and Safety policy. They undertake regular safety analyses and promote a culture of safety across the entire organisation. Elia Group has high safety standards in place which all its employees, subcontractors and everyone who comes into contact with its infrastructure are required to follow. The Health and Safety at Work Guideline is binding on all employees. Elia Transmission (Belgium) holds a Safety Culture Ladder certification, while 50Hertz Transmission (Germany) has been awarded ISO45001 certification.

Diversity, equity and inclusion

In accordance with Convention 111 of the International Labour Organization (ILO), we are committed to promoting diversity and strongly condemn any discriminatory act at work. This commitment is enshrined in our Diversity, Equity and Inclusion Charter. Accordingly, all employees are equal regardless of their racial and ethnic origin, colour, sex, sexual orientation, gender identity, disability, age, religion, political opinion, national origin or social origin, or any other characteristic. The company has established procedures which aim to eliminate any form of discrimination, including harassment, and to promote equal opportunities. Furthermore, these topics are managed via a dedicated part of our ActNow sustainability programme.

Engagement methods with own workforce

Elia Group sees open and truthful communication with its stakeholders as an integral part of its business success. Accordingly, Elia Group regularly engages with all its stakeholders, including people in its own workforce (see the table in the section 'Interests and views of stakeholders').

Elia Group offers its employees the opportunity to express their concerns about alleged breaches of the Group’s Code of Ethics (including human rights matters) without fear of reprisal and/or unfair treatment through an established whistleblowing policy. An external Ethics Alert system is available for reporting possible breaches of integrity that is compliant with the EU Whistleblowing Directive. Internal employees as well as external stakeholders can anonymously raise their concerns via this platform. Violations of these codes can also be reported to management, HR or the Compliance Officer. Their concerns will be handled in an objective and confidential manner, in line with the whistleblowing procedure.

In accordance with the objectives of our ActNow sustainability programme (dimension: Governance, Ethics and Compliance), management has appointed a member of staff to act as a confidential point of contact for anti-discrimination issues, anti-corruption measures and human rights violations. This person can be contacted anonymously.

S1-2 Processes for engaging with own workers and workers’ representatives about impacts

Engagement with own workforce on impacts occurs both directly and through workers’ representatives, which for Elia Group are organised in the form of workers’ councils. Further information on the interaction between Elia Group and its employees can be found in section 1.3.2. 'Interests and views of stakeholders'.

Elia Group is committed to freedom of association, collective bargaining and the protection of workers’ representatives. Emphasis is placed on trust and ongoing cooperation with all trade unions.

Elia Transmission (Belgium) and 50Hertz Transmission (Germany) each have a General Works Council at national level that is responsible for the interests of employees. In addition, two members of the General Works Council for 50Hertz Transmission (Germany) are represented on the German Supervisory Board, which therefore has an equal number of employee representatives. Seven representatives from each of the national works councils are members of the Elia Group European Works Council. In Germany, the CHRO Sylvia Borcherding is responsible for the implementation of employee matters. In Belgium, the Group’s Chief Alignment Officer – Peter Michiels - is responsible. In the Elia Group European Works Council, cross-border discussions are held and measures are derived. Both persons are qualified to perform this role given their well-placed position in the organisation for giving advice about own workforce matters and are recognised as the highest management position with expert knowledge.

Elia Group ensures that employment-related decisions are taken in an impartial and nondiscriminatory manner through monthly meetings and preliminary consultations with union representatives that occur at both local and Group level.

Current topics are discussed and driven forward in regular meetings of the works councils in Belgium and Germany as well as in working groups. The national programmes are presented and discussed with the workforce at an annual general works meeting in Belgium and Germany. Other smaller works council meetings are also held during the year to ensure employee participation. Interviews and surveys are conducted and information is disseminated via the intranet to ensure that the workforce is consulted and involved beyond these meetings. With this approach, 50Hertz Transmission (Germany) fulfils its obligations under Section 80 (2) of the German Works Constitution Act and engages in trust-based cooperation with the works council.

Beyond collective bargaining agreements and company agreements, Elia Group is also committed to internationally established guidelines, such as the core labour standards of the International Labour Organization (ILO: C87, C98 and C135) and the labour rights set out in the UN Global Compact. Elia Group is committed to promoting diversity out of conviction and in accordance with ILO Convention 111. Each employee pledges to comply with these standards and principles when entering the company by signing the individual working contract.Different networks exist throughout the organisation (Women Forum Initiative, 50:50 Frauennetzwerk, Führungsfrauen), whose members meet regularly to dialogue about management and leadership topics. These ensure that women’s voices are heard and that engagement processes are adapted (for example, for 50Hertz Transmission (Germany), job recruitment descriptions include references to diversity when looking for profiles to fill vacancies, in order to promote equal opportunities). For diversity targets, see section S1-5 'Targets related to managing material negative impacts, advancing positive impacts and managing material risks and opportunities'.

S1-3 Processes to remediate negative impacts and channels for own workers to raise concerns

Elia Group sees open and truthful communication with its stakeholders as an integral part of its business success. Early and open communication with all stakeholders - both from across society and those affected by our projects - enhances the realisation of our infrastructure projects in Belgium and Germany.

Elia Group offers its employees the opportunity to express their concerns about alleged breaches of the Group’s Code of Ethics without fear of reprisal and/or unfair treatment. There is an external system EthicsAlert for reporting possible breaches of integrity that is compliant with the EU Whistleblowing Directive. Employees and external stakeholders can anonymously raise their concerns via this platform. Violations of these codes can also be reported to management, HR or the independent representatives for equity and inclusion, as well as to the employee and trainee representatives and the Compliance Officer. Their concerns are handled in an objective and confidential manner, in line with the whistleblowing procedure.

(See also the section on 'Risk management and internal controls')

S1-4 Taking action on material impacts on own workforce and approaches to mitigating material risks and pursuing material opportunities related to own workforce, and effectiveness of those actions

The following actions addressing own workforce were taken in order to reach the objectives defined in section S1-5 'Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and opportunities': Diversity, equity and inclusion

1. Inclusive leadership across the organisation and engagement of all staff.

• Elia Group has published a Diversity, Equity and Inclusion (DEI) Charter outlining the management team’s commitment to further embedding DEI across the organisation.

2. Awareness about DEI issues is raised amongst staff through ambassadors, training sessions, events and internal communication.

This year, we particularly focused on addressing micro-aggressions at Elia Transmission (Belgium) and promoting the inclusion of people with disabilities at 50Hertz Transmission (Germany). Inclusive recruitment and selection practices in hiring processes are practised.

• Increase the proportion of women in the workforce (both in directors’ positions and in senior management positions)

3. Equal opportunities for all staff

• Women in Leadership initiative

• Open and inclusive company culture and healthy work-life balance measures

4. Recognition of societal DEI role

• 50Hertz Transmission (Germany) works with Annedore-Leber-Berufsbildungswerk to support young people with disabilities as they start their careers.

• The 50Hertz Transmission (Germany) Disability Officer is closely involved in the entire application process

• Elia Group is a member of the Equality Platform for the energy sector, established by the European Commission. This Platform unites different actors from across the sector who want to create an environment in which everyone has equal chances to succeed. It involves working with other partners and sharing best practice.

Health and Safety

1. The Go for Zero programme

• Since 2015, all safety-related improvement initiatives and projects have been integrated in the Go for Zero programme. In 2023, the structure of the programme was updated and now revolves around three pillars: continuous improvement, skills and behaviour. The aim is to develop our working methods, skills and culture in a coherent way, with safety at the core.

• Workers are trained to adopt the right behaviour and be responsible for their safety and that of others. They are encouraged to give each other feedback to promote and embed safety in their actions. Safety awareness events are organised for Elia Transmission (Belgium) workers throughout the year.

• Elia Transmission (Belgium) has a strong Safety Management Programme ensuring the consistency and impact of safety projects carried out by the various departments. The Safety Culture Ladder is part of the Programme and sets out an evaluation method for measuring and assessing companies' health and safety awareness, with a view to reducing the number of risk situations.

2. Health and Safety information

• All Health and Safety indicators are closely monitored internally and via dedicated dashboards.

• Health and Safety information is regularly shared with workers via Safety Flashes and Safety Shares

• All workers can easily report any dangerous situation they encounter via a dedicated application

3. Well-being

• Elia Transmission (Belgium) has a Committee for Prevention and Protection at Work. This committee serves as a consultative body for employers and employees and makes an active contribution to improving well-being in the workplace. Workers can also make use of internal and external prevention services.

• Elia Group establishes a Global Prevention Plan every five years.

• Health and Safety initiatives at Elia Group also cover the mental health of workers and aim to promote resilience. Elia Transmission (Belgium) has a Right to Disconnect charter that was drawn up in close collaboration with the social partners and is now formally part of the internal working regulations of Elia Transmission (Belgium).

3.1.3 Metrics and targets

S1-5 Targets related to managing material negative impacts, advancing positive impacts and managing material risks and opportunities

(consolidated figures of Elia Group SA/NV, Elia Transmission

(consolidated figures of Elia Group

(consolidated figures

(consolidated figures of Elia Group SA/NV, Elia

SA/NV, Elia Asset SA/NV, Elia Engineering SA/NV)

*target used for the purpose of the revolving Credit Facility

Rolling average of the last 3 years for Total Recordable Injury Rate (TRIR) of employees, non-employees and contractors

S1-6 Characteristics of employees

*Gender as specified by employees themselves.

'Elia Transmission (Belgium)' = Elia Transmission Belgium SA/NV, Elia Engineering SA/NV and Elia Asset SA/NV.

'50Hertz Transmission (Germany)' = 50Hertz Transmission GmbH, 50Hertz Offshore GmbH (no employees), Eurogrid GmbH.

'Non-regulated segment' = Elia Group SA/NV, Elia Grid International GmbH, Elia Grid International SA/NV, Eurogrid International SA/NV and WindGrid SA/NV.

'Elia Group' = Elia Transmission Belgium SA/NV, Elia Engineering SA/NV, Elia Asset SA/NV, 50Hertz Transmission GmbH, 50Hertz Offshore GmbH (no employees), Eurogrid GmbH, Elia Group SA/NV, Elia Grid International GmbH, Elia Grid International SA/NV, Eurogrid International SA/NV and WindGrid SA/NV.

The methodology considers that employee headcount = total contractual headcount on 31 December of the reporting year. Contractual headcount refers to the overall count of individuals holding active contracts within an organisation on a specified date, encompassing all employees, including those on sick leave and directors, but does not encompass suspended contracts to avoid double counting. Note that the headcount methodology has been adjusted for 2023, but does not apply to historical data (2022 and 2021).

The different internal HR systems of Elia Group handle the gender-related data of employees differently. For entities managed by the Belgian HR system, only male and female genders can be assigned to employees, as the law does not require us to provide other options. This implies that the data related to 'Other' and 'Not disclosed' will be marked as non-available for those entities. For entities managed by the German HR system, a third option is available under the 'Diverse' label, but no employee has identified with it so far. The data related to 'Other' and 'Not disclosed' will thus be zero for all measures of those entities.

'Elia Transmission (Belgium)' = Elia Transmission Belgium SA/NV, Elia Engineering SA/NV and Elia Asset SA/NV.

'50Hertz Transmission (Germany)' = 50Hertz Transmission GmbH, 50Hertz Offshore GmbH (no employees), Eurogrid GmbH.

'Non-regulated segment' = Elia Group SA/NV, Elia Grid International GmbH, Elia Grid International SA/NV, Eurogrid International SA/NV and WindGrid SA/NV.

'Elia Group' = Elia Transmission Belgium SA/NV, Elia Engineering SA/NV, Elia Asset SA/NV, 50Hertz Transmission GmbH, 50Hertz Offshore GmbH (no employees), Eurogrid GmbH, Elia Group SA/NV, Elia Grid International GmbH, Elia Grid International SA/NV, Eurogrid International SA/NV and WindGrid SA/NV.

The methodology considers that employee headcount = total contractual headcount on 31 December of the reporting year. Contractual headcount refers to the overall count of individuals holding active contracts within an organisation on a specified date, encompassing all employees, including those on sick leave and directors, but does not encompass suspended contracts to avoid double counting. Note that the headcount methodology has been adjusted for 2023, but does not apply to historical data (2022 and 2021).

Breakdown of type of employees per gender

'Elia Group' = Elia Transmission Belgium SA/NV, Elia Engineering SA/NV, Elia Asset SA/NV, 50Hertz Transmission GmbH, 50Hertz Offshore GmbH (no employees), Eurogrid GmbH, Elia Group SA/NV, Elia Grid International GmbH, Elia Grid International SA/NV, Eurogrid International SA/NV and WindGrid SA/NV.

'Elia Transmission (Belgium)' = Elia Transmission Belgium SA/NV, Elia Engineering SA/NV and Elia Asset SA/NV. 50Hertz

'50Hertz Transmission (Germany)' = 50Hertz Transmission GmbH, 50Hertz Offshore GmbH (no employees), Eurogrid GmbH.

'Non-regulated segment' = Elia Group SA/NV, Elia Grid International GmbH, Elia Grid International SA/NV, Eurogrid International SA/NV and WindGrid SA/NV.

The methodology considers that employee headcount = total contractual headcount on 31 December of the reporting year. Contractual headcount refers to the overall count of individuals holding active contracts within an organisation on a specified date, encompassing all employees, including those on sick leave and directors, but does not encompass suspended contracts to avoid double counting.

The different internal HR systems of Elia Group handle the gender-related data of employees differently. For entities managed by the Belgian HR system, only male and female genders can be assigned to employees, as the law does not require us to provide other options. This implies that the data related to 'Other' and 'Not disclosed' will be marked as non-available for those entities. For entities managed by the German HR system, a third option is available under the 'Diverse' label, but no employee has identified with it so far. The data related to 'Other' and 'Not disclosed' will thus be zero for all measures of those entities.

No non-guaranteed employees are working for the Elia Group entities in the scope of the reporting. All related data are thus marked as zero for that category. Turnover rate

The methodology includes workers who have left any entity in the reporting scope without distinguishing if they were exiting the Group or transitioning to another entity within the Group. For intercompany ins and outs, each legal entity must categorise them as either inflows or outflows. The inaccuracy induced is considered negligible and immaterial. The methodology takes into account the guidance set out in ESRS standards.

Formula: Turnover rate (%) = (annual number of leavers) / ((number of employees beginning of year + number of employees end of year)/2) * 100

Where the annual number of leavers relate to all employees (defined as contractual headcount from 1 January to 31 December) leaving the company due to voluntary and involuntary reasons - resignation, end of temporary contract, dismissal, retirement or deathfor 1 January to 31 December of the reporting year. Employees are counted as leavers on the first calendar day after the last day of their employment contract.

Where number of employees beginning of the year = contractual headcount on 1 January of the reporting year

'Elia Group' = Elia Transmission Belgium SA/NV, Elia Engineering SA/NV, Elia Asset SA/NV, 50Hertz Transmission GmbH, 50Hertz Offshore GmbH (no employees), Eurogrid GmbH, Elia Group SA/NV, Elia Grid International GmbH, Elia Grid International SA/NV, Eurogrid

Where number of employees end of the year = contractual headcount on 31 December of the reporting year Breakdown

'Elia Group' = Elia Transmission Belgium SA/NV, Elia Engineering SA/NV, Elia Asset SA/NV, 50Hertz Transmission GmbH, 50Hertz Offshore GmbH (no employees), Eurogrid GmbH, Elia Group SA/NV, Elia Grid International GmbH, Elia Grid International SA/NV, Eurogrid International SA/NV and WindGrid SA/NV.

'Elia Transmission (Belgium)' = Elia Transmission Belgium SA/NV, Elia Engineering SA/NV and Elia Asset SA/NV.

Employee headcount by contract type, broken down by region

'50Hertz Transmission (Germany)' = 50Hertz Transmission GmbH, 50Hertz Offshore GmbH (no employees), Eurogrid GmbH.

'Elia Group' = Elia Transmission Belgium SA/NV, Elia Engineering SA/NV, Elia Asset SA/NV, 50Hertz Transmission GmbH, 50Hertz Offshore GmbH (no employees), Eurogrid GmbH, Elia

'Non-regulated segment' = Elia Group SA/NV, Elia Grid International GmbH, Elia Grid International SA/NV, Eurogrid International SA/NV and WindGrid SA/NV.

The methodology considers that employee headcount = total contractual headcount on 31 December of the reporting year. Contractual headcount refers to the overall count of individuals holding active contracts within an organisation on a specified date, encompassing all employees, including those on sick leave and directors, but does not encompass suspended contracts to avoid double counting.

'Non-regulated segment' = Elia Group SA/NV, Elia Grid International GmbH, Elia Grid International SA/NV, Eurogrid International SA/NV and WindGrid SA/NV.

The methodology considers that employee headcount = total contractual headcount on 31 December of the reporting year. Contractual headcount refers to the overall count of individuals holding active contracts within an organisation on a specified date, encompassing all employees, including those on sick leave and directors, but does not encompass suspended contracts to avoid double counting. Note that the headcount methodology has been adjusted for 2023, but does not apply to historical data (2022 and 2021).

S1-7 Characteristics of non-employee workers in the own workforce

This disclosure requirement is currently under preparation as per ESRS guidelines.

S1-8 Collective bargaining coverage and social dialogue

100% of Elia Transmission (Belgium) and 50Hertz Transmission (Germany) employees are covered by collective bargaining agreements.

The company has a strong policy on freedom of association and the right to collective bargaining.

S1-9 Diversity metrics

'Elia Group' = Elia Transmission Belgium SA/NV, Elia Engineering SA/NV,Elia Asset SA/NV, 50Hertz Transmission GmbH, 50Hertz Offshore GmbH (no employees), Eurogrid GmbH, Elia Group SA/NV, Elia Grid International GmbH, Elia Grid International SA/NV, Eurogrid International SA/NV and WindGrid SA/NV.

'Elia Transmission (Belgium)' = Elia Transmission Belgium SA/NV, Elia Engineering SA/NV and Elia Asset SA/NV.

'Non-regulated segment' = Elia Group SA/NV, Elia Grid International GmbH, Elia Grid International SA/NV, Eurogrid International SA/NV and WindGrid SA/NV.

The methodology considers that employee headcount = total contractual headcount on 31 December of the reporting year. Contractual headcount refers to the overall count of individuals holding active contracts within an organisation on a specified date, encompassing all employees, including those on sick leave and directors, but does not encompass suspended contracts to avoid double counting. Note that the headcount methodology has been adjusted for 2023, 2022 and 2021.

At Elia Group, the top management layer, acting one level below the administrative and supervisory bodies of the entities, comprises the Directors designated by the Board. The management layer active two levels below the administrative and supervisory bodies comprises the Senior Managers. Michael Roeder von Diersburg is reported in this category as he holds a Senior Manager position at 50Hertz Transmission (Germany). He is also an invited Member of the Executive Committee of 50Hertz Transmission (Germany).

For the consolidation at Elia Group, numbers and percentages for directors were manually adjusted to avoid double counting due to dual contracts at the Group and local level.

The different internal HR systems of Elia Group handle the gender-related data of employees differently. For entities managed by the Belgian HR system, only male and female genders can be assigned to employees, as the law does not require us to provide other options. This implies that the data related to 'Other' and 'Not disclosed' will be marked as non-available for those entities. For entities managed by the German HR system, a third option is available under the 'Diverse' label, but no employee has identified with it so far. The data related to 'Other' and 'Not disclosed' will thus be zero for all measures of those entities.

'50Hertz Transmission (Germany)' = 50Hertz Transmission GmbH, 50Hertz Offshore GmbH (no employees), Eurogrid GmbH.

'Elia Transmission (Belgium)' = Elia Transmission Belgium SA/NV, Elia Engineering SA/NV and Elia Asset SA/NV.

'50Hertz Transmission (Germany)' = 50Hertz Transmission GmbH, 50Hertz Offshore GmbH (no employees), Eurogrid GmbH.

'Non-regulated segment' = Elia Group SA/NV, Elia Grid International GmbH, Elia Grid International SA/NV, Eurogrid International SA/NV and WindGrid SA/NV.

'Elia Group' = Elia Transmission Belgium SA/NV, Elia Engineering SA/NV, Elia Asset SA/NV, 50Hertz Transmission GmbH, 50Hertz Offshore GmbH (no employees), Eurogrid GmbH, Elia Group SA/NV, Elia Grid International GmbH, Elia Grid International SA/NV, Eurogrid International SA/NV and WindGrid SA/NV.

The methodology considers that employee headcount = total contractual headcount on 31 December of the reporting year. Contractual headcount refers to the overall count of individuals holding active contracts within an organisation on a specified date, encompassing all employees, including those on sick leave and directors, but does not encompass suspended contracts to avoid double counting. Note that the headcount methodology has been adjusted for 2023, but does not apply to historical data (2022 and 2021).

Age distribution amongst employees

S1-10 Adequate wages

This disclosure requirement is currently in preparation as per ESRS guidelines.

S1-11 Social protection

Under both German and Belgian law, employers are required to provide their employees with social protection against loss of income due to specific events, including :

a. Sickness

b. Unemployment

c. Employment injury and acquired disability

d. Parental leave

e. Retirement

Accordingly, all Elia Group employees are protected against loss of income stemming from these events. These policies are developed and enforced in compliance with the applicable laws of the countries included in this reporting.

For these matters, 50Hertz Transmission (Germany) and all entities under German law comply more specifically with the Social Code (Sozialgesetzbuch) which outlines the framework for social protection in Germany.

Similarly, Elia Transmission (Belgium) and all entities under Belgian law comply with the Social Security Code (Code de la sécurité sociale), which outlines the framework for social protection in Belgium.

In addition to local laws and EU legal frameworks, Elia Group takes part in and applies industry-specific collective bargaining agreements which may also relate to these topics.

S1-12 Persons with disabilities

This disclosure requirement is currently in preparation as per ESRS guidelines.

S1-13 Training and skills development metrics

This disclosure is in preparation with ESRS guidelines and the information below is presented as per the GRI standard.

'Elia Transmission (Belgium)' = Elia Transmission Belgium SA/NV, Elia Engineering SA/NV and Elia Asset SA/NV.

'50Hertz Transmission (Germany)' = 50Hertz Transmission GmbH, 50Hertz Offshore GmbH (no employees), Eurogrid GmbH.

'Non-regulated segment' = Elia Group SA/NV, Elia Grid International GmbH, Elia Grid International SA/NV, Eurogrid International SA/NV and WindGrid SA/NV.

'Elia Group' = Elia Transmission Belgium SA/NV, Elia Engineering SA/NV, Elia Asset SA/NV, 50Hertz Transmission GmbH, 50Hertz Offshore GmbH (no employees), Eurogrid GmbH, Elia Group SA/NV, Elia Grid International GmbH, Elia Grid International SA/NV, Eurogrid International SA/NV and WindGrid SA/NV.

S1-14 Health and safety metrics

workers

covered by the undertaking’s health and

management system based on legal requirements and/or recognised standards

1. The percentage of own workers who are covered by the undertaking’s health and safety management system based on legal requirements and/or recognised standards or guidelines

2.

3.

'Elia Transmission (Belgium)' = Elia Transmission Belgium SA/NV, Elia Engineering SA/NV, Elia Asset SA/NV and Elia Group SA/NV

'50Hertz Transmission (Germany)' = 50Hertz Transmission GmbH, 50Hertz Offshore GmbH (no employees), Eurogrid GmbH.

Data for the 'Non-regulated segment' (Elia Group SA/NV) is consolidated into the Elia Transmission (Belgium) segment.

'Elia Group' = Elia Transmission Belgium SA/NV, Elia Engineering SA/NV, Elia Asset SA/NV, 50Hertz Transmission GmbH, 50Hertz Offshore GmbH (no employees), Eurogrid GmbH, Elia Group SA/NV.

The figures of 50Hertz Transmission (Germany) include Eurogrid GmbH starting with the current reporting exercise.

In Germany, no distinction is made in the system between work-related illness and nonwork-related illnesses for confidentiality reasons (as per legal requirements). All information related to those datapoints has thus been taken out and marked as 'non-applicable' in the table. The German systems also do not collect information on non-employees. All information related to those datapoints has thus been taken out and marked as 'nonapplicable' in the table.

All workers are covered by our health and safety management system.

TRIR = number of recordable injuries*1.000.000/number of hours worked.

Recordable injury = any work-related injury or illness that requires more than first-aid treatment and/or restriction of work motion. For contractors, the worked hours are estimated starting from actual invoices and based on an allocation key for labor cost in function of material groups and a monthly indexed hourly rate (for FY2023: 62,21 EUR/hour)

'Elia Transmission (Belgium)' = Elia Transmission Belgium SA/NV, Elia Engineering SA/NV, Elia Asset SA/NV and Elia Group SA/NV.

'50Hertz Transmission (Germany)' = 50Hertz Transmission GmbH, 50Hertz Offshore GmbH (no employees), Eurogrid GmbH.

Data for the 'Non-regulated segment' (Elia Group SA/NV) is consolidated into the Elia Transmission (Belgium) segment.

'Elia Group' = Elia Transmission Belgium SA/NV, Elia Engineering SA/NV, Elia Asset SA/NV, 50Hertz Transmission GmbH, 50Hertz Offshore GmbH (no employees), Eurogrid GmbH, Elia Group SA/NV.

The figures of 50Hertz Transmission (Germany) include Eurogrid GmbH starting with the current reporting exercise.

In Germany, no distinction is made in the system between work-related illness and non-

work-related illnesses for confidentiality reasons (as per legal requirements). All information related to those datapoints has thus been taken out and marked as 'non-applicable' in the table. The German systems also do not collect information on non-employees. All information related to those datapoints has thus been taken out and marked as 'nonapplicable' in the table.

TRIR = number of recordable injuries*1.000.000/number of hours worked.

Recordable injury = any work-related injury or illness that requires more than first-aid treatment and/or restriction of work motion. For contractors, the worked hours are estimated starting from actual invoices and based on an allocation key for labor cost in function of material groups and a monthly indexed hourly rate (for FY2023: 62,21 EUR/hour)

Additional information on targets related to the health and safety of our contractors can be found in the section on 'Targets related to managing material negative impacts, advancing positive impacts and managing material risks and opportunities'.

'Elia Transmission (Belgium)' = Elia Transmission Belgium SA/NV, Elia Engineering SA/NV, Elia Asset SA/NV and Elia Group SA/NV.

S1-15 Work-life balance metrics

All employees of Elia Group are entitled to family-related leave through related internal policies and as per applicable legislations.

50Hertz Transmission (Germany) and all entities under German law comply with the requirements of the EU Working Time Directive and German employment legislation. They mandate paid leave for various family-related reasons, including maternity leave, paternity leave, parental leave, care leave and short-term work leave.

Elia Transmission (Belgium) and all entities under Belgian law comply with the EU Working Time Directive and Belgian employment legislation, which establishes a comprehensive framework for employment and working conditions, including provisions for family-related leave. Eligible employees are entitled to paid leave for maternity leave, paternity leave, pregnancy and parental leave, adoption leave, care leave and temporary employment benefits.

In addition to local law and EU legal frameworks, Elia Group takes part in and applies industry-specific collective bargaining agreements which also may relate to these topics.

'Elia Transmission (Belgium)' = Elia Transmission Belgium SA/NV, Elia Engineering SA/NV and Elia Asset SA/NV.

'50Hertz Transmission (Germany)' = 50Hertz Transmission GmbH, 50Hertz Offshore GmbH (no employees), Eurogrid GmbH.

'Non-regulated segment' = Elia Group SA/NV, Elia Grid International GmbH, Elia Grid International SA/NV, Eurogrid International SA/NV and WindGrid SA/NV.

'Elia Group' = Elia Transmission Belgium SA/NV, Elia Engineering SA/NV, Elia Asset SA/NV, 50Hertz Transmission GmbH, 50Hertz Offshore GmbH (no employees), Eurogrid GmbH, Elia Group SA/NV, Elia Grid International GmbH, Elia Grid International SA/NV, Eurogrid International SA/NV and WindGrid SA/NV.

Rate formula: (Entitled employees that took family-related leave/total contractual headcount)

The methodology considers 'Entitled employees who took family-related leave' as the headcount of workers who activated their right to parental leave during the reporting period, even if the leave is not completed on 31 December or if one takes leave twice in one year.

Contractual headcount refers to the overall count of individuals holding active contracts within an organisation on a specified date, encompassing all employees, including those on sick leave and directors, but does not encompass suspended contracts to avoid double counting.

The different internal HR systems of Elia Group handle the gender-related data of employees differently. For entities managed by the Belgian HR system, only male and female genders can be assigned to employees, as the law does not require us to provide other options. This implies that the data related to 'Other' and 'Not disclosed' will be marked as non-available for those entities. For entities managed by the German HR system, a third option is available under the 'Diverse' label, but no employee has identify with it so far. The data related to 'Other' and 'Not disclosed' will thus be zero for all measures of those entities.

S1-16 Compensation metrics

2023

'Elia Transmission (Belgium)' = Elia Transmission Belgium SA/NV, Elia Engineering SA/NV and Elia Asset SA/NV.

'50Hertz Transmission (Germany)' = 50Hertz Transmission GmbH, 50Hertz Offshore GmbH (no employees), Eurogrid GmbH.

'Non-regulated segment' = Elia Group SA/NV, Elia Grid International GmbH, Elia Grid International SA/NV, Eurogrid International SA/NV and WindGrid SA/NV.

'Elia Group' = Elia Transmission Belgium SA/NV, Elia Engineering SA/NV, Elia Asset SA/NV, 50Hertz Transmission GmbH, 50Hertz Offshore GmbH (no employees), Eurogrid GmbH, Elia Group SA/NV, Elia Grid International GmbH, Elia Grid International SA/NV, Eurogrid International SA/NV and WindGrid SA/NV.

The gender pay gap is reported for all employees as of the director level. The methodology takes into account the guidance set out in ESRS standards:

Formula: Gender pay gap = ((Average gross hourly pay level of male employees – average gross hourly pay level of female employees)/ Average gross hourly pay level of male employees)*100

S1-17 Incidents, complaints, and severe human rights impacts

This disclosure requirement is currently in preparation as per ESRS guidelines.

3.2. Workers in the value chain

This standard and its disclosure requirements are still being assessed from the perspective of the double materiality exercise. Nevertheless, existing information related to workers in the value chain was integrated to ensure the coherency compared to previous annual reports and the transparency over our activities.

We can distinguish two types of value chain workers for our company:

• (Sub)contractors working on our sites either for infrastructure projects or for maintenance activities

• Workers working for entities in our upstream value chain

3.2.1 Policies related to value chain workers

The health and safety policies enforced for our employees also apply to the contractors working on our sites.

Elia Group’s direct operations take place in Belgium and Germany where strict national and European laws regarding human rights are enforced. Furthermore, the Elia Group requires its suppliers to behave lawfully and ethically in order to protect human and labour rights. This is set out in the Supplier Code of Conduct (SCoC), which is attached to all tender and contract documents and with which suppliers are required to comply.

3.2.2 Processes for engaging with value chain workers about impacts

Safety for Contractors programme: Elia Group also provides training materials, training and tests for subcontractors. We want to invest in good safety behaviour and support our suppliers in encouraging this in their staff, too. We want to grow together by taking joint measures to prevent accidents and ensure all of our onshore and offshore sites are safe places for people to work.

Strategic suppliers are surveyed by an external service provider (EcoVadis) on sustainability aspects, including human rights due diligence, and the result is expressed in an overall score: the ESG rating. In new framework agreements, suppliers will be required to undergo an annual EcoVadis rating during the term of the contract, which will be reviewed by the purchasing department.

The long-term goal is to include all strategic suppliers in an uniform ESG rating such as Ecovadis.

3.2.3 Processes to remediate negative impacts and channels for value chain workers to raise concerns

We conduct regular site inspections. As part of these inspections, human rights due diligence is carried out in addition to reviews of risks related to accidents and employee health. Sanctions are imposed in instances where violations are found to have occurred.

Measures aimed at avoiding such risks are also implemented, primarily through discussions with the partners involved.

3.2.4 Taking action on material impacts on value chain workers and approaches to

managing material risks and pursuing material opportunities related to value chain workers, and effectiveness of those

actions

As mentioned above, our health and safety management system also covers our contractors working on our sites.

3.2.5 Targets related to managing material negative impacts, advancing positive impacts and managing material risks and opportunities

A series of metrics related to the health and safety of our contractors are monitored. They are disclosed alongside the KPIs related to our own workforce in section S1-5 'Targets related to managing negative impacts, advancing positive impacts and managing material risks and opportunities'.

At Elia Transmission (Belgium), the adherence to the supplier code of conduct is above 80%.

3.3. Affected communities

This standard and its disclosure requirements are still being assessed from the perspective of the double materiality exercise.

Nevertheless, existing information related to affected communities was integrated to ensure the coherency compared to previous annual reports and the transparency over our activities. For the transmission of electricity activities of Elia Group, the understanding of 'affected communities' is similar to the one used in the ESRS: people and groups living and working in areas (local communities) that have been or may be affected by our own operations or through the upstream and downstream value chain.

3.3.1 Policies related to affected communities

The involvement of affected communities plays an important role in sustainable grid expansion.

Involving stakeholders as early as possible in our infrastructure projects helps to improve their understanding of society’s need for a grid and optimises its approval and development.

Internal, project-related guidelines regulate timelines and the dissemination of information regarding project planning, approval processes, public participation and stakeholder management.

3.3.2 Processes for engaging with affected communities about impacts

Our approach is to contact and inform all parties of upcoming projects from the outset to ensure their voices are heard and community concerns can be addressed. To achieve this objective, the relevant departments in Belgium and Germany have developed a communication and public acceptance methodology; this ensures that stakeholder engagement and communication is embedded into the grid development process.

As a new project is being explored, discussions with relevant stakeholders are held during the very early stages of project planning. During the design phase of our projects, we mainly work with civil society, local municipalities and representatives from academia. Public consultations are also held regarding grid development plans. As projects become more concrete, discussions and information exchange are organised for local citizens and communities. In addition to holding legally required preliminary public information meetings, we also organise information sessions for local residents. We have adapted how

we inform citizens and local authorities of our plans: we now employ digital communication channels more frequently than we used to. This includes hosting webinars and one-toone consultations. It is crucial for us to make sure interested stakeholders are able to find the information they need. Our website includes a specific section dedicated to providing information about our current and future infrastructure projects.

3.3.3 Processes to remediate negative impacts and channels for affected communities to raise concerns

Elia Transmission (Belgium) keeps in constant touch with its customers and partners through its Users Group, which comprises grid user representatives.

Elia Transmission's (Belgium) two contact centres receive and handle requests for information from various sources, including local residents, contractors, engineering firms, public authorities, utilities and project developers.

Anyone wishing to submit a report can do so via the external ethical notification system EthicsAlert, a secure web application managed by an independent third party specialising in these matters. The system is safe, easy to use, confidential and, if so desired, anonymous.

3.3.4 Taking action on

material impacts on affected communities and approaches to managing material risks and pursuing material opportunities related to affected communities, and effectiveness of those actions

Elia Transmission (Belgium) has developed a compensation policy. Measures and compensation are available to those in the vicinity of our works i.e. local residents, businesses and farms.

An additional approach was developed to compensate local communities for any disruptions caused during work on high-impact projects. This involves making a financial contribution to community funds, the aim being to support local communities affected by infrastructure work.

In 2017, Elia Transmission (Belgium) established a partnership with Be Planet to develop and support citizen-led ecological transition projects in municipalities where infrastructure projects are underway. The organisation, which has been recognised as an organisation that works in the interest of the general public, manages the funding, ensures it is used in line with its objectives and oversees the careful selection of the citizen projects which will receive the funding. Through this partnership, we are setting up a system whereby citizen projects are funded in order to compensate municipalities for the impacts associated with the construction of overhead lines.

3.3.5 Targets related to

managing material negative impacts, advancing positive impacts and managing material risks and opportunities

In-kind donations (especially IT equipment) are regularly made to community partners (especially NGOs and local authorities). There are no related metrics.

4. Governance information

4.1. Business conduct

This standard and its disclosure requirements are still being assessed from the perspective of the double materiality exercise.

Nevertheless, existing information related to business conduct was integrated to ensure the coherency compared to previous annual reports and the transparency over our activities.

4.1.1 Business conduct policies and corporate culture

The environment in which Elia Group operates is facing numerous changes and challenges and it is becoming increasingly important to be able to deal with uncertainty and insecurity. We have an ambitious strategy that defines the framework for our actions in the interests of society.

Furthermore, to be able to steer the strategy we rely on a solid governance structure (see II. 'Governance & risk report') . In the same time, 'Governance' is one of the dimensions of our ActNow sustainability programme, whose steering structure can be consulted in 1.2. 'Governance'.

In particular, to address in the best possible way the forecast increase in CAPEX needs for infrastructure development (see 1.4.1. 'Double materiality process'), in 2023 the governance and business conduct practices took centre stage.

In case there are breaches that violate Elia Group's Code of Ethics, these can be brought to the attention of internal and external parties via the Ethics Alert channel

In terms of corporate culture, six behavioural anchors form the basis for collaboration and the shared vision within Elia Group:

• Impact,

• Simplification,

• Co-Creating the future,

• Feedback,

• One Voice,

• One Company.

We aim to harness these behavioural anchors to actively shape change. This is what the 'Make A Difference' internal communication programme stands for: to promote change leading towards a common culture within Elia Group. We are integrating the six Make A Difference behavioural anchors into our daily work so that we can realise our ambitious strategy at Group and country level.

4.1.2 Management of relationships with suppliers

Due to their legal status as electricity TSOs, Elia Transmission (Belgium) and 50Hertz Transmission (Germany) are subject to a wide range of legal and regulatory rules in their respective countries. This stipulate three basic principles:

• non-discriminatory behaviour;

• confidential treatment of information;

• transparency towards all electricity market participants with regard to non-confidential market information.

Elia Group's subsidiaries have company charters, guidelines and other documents that outline the behaviour we expect our employees to demonstrate and embody. These documents set out Elia Group’s understanding of correct ethical conduct and make it clear that the company complies with the law and does not tolerate corruption. These principles are translated into organisational measures that must be adhered to. A policy defining and addressing bribery and corruption was published as part of our Code of Ethics.

Elia Group's strategic suppliers are committed to a Supplier Code of Conduct (SCOC). This is an integral part of Elia Group supplier contracts.

Other purchasing initiatives are also implemented at Group level. For example, strategic suppliers are surveyed by an external service provider (EcoVadis) on sustainability matters, including environmental and social issues as well as human rights due diligence. The result is expressed in an overall score: the ESG rating. In the future, new framework agreements will require strategic suppliers to undergo an annual EcoVadis assessment during the term of the contract, which will be reviewed by the purchasing department. Weak points highlighted by the rating will form the basis for action plans, which are requested by Purchasing if necessary.

In addition, Purchasing raises awareness of sustainable behaviour in regular discussions and thus conveys an understanding of compliance with ethical principles and guidelines for sustainable development.

4.1.3 Prevention and detection of corruption and bribery

An external system, EthicsAlert, is available for reporting alleged breaches of integrity. This system is compliant with the EU Whistleblowing Directive.

Employees as well as external stakeholders can anonymously raise their concerns through this platform using a link which can be found on our website. Violations of these codes can also be reported to management, HR, the Compliance Officer and the Internal Audit team.

Their concerns will be handled in an objective and confidential manner, in line with the whistleblowing procedure (more about this in II. 'Governance & Risk Report' and in the 2.1.7 'Requirements of the Minimum social safeguards'.

During the reporting period, there were no violations of corruption and bribery regulations by Elia Group, Elia Transmission (Belgium), 50Hertz Transmission (Germany) or their employees. Furthermore, no contracts with suppliers were terminated or not renewed in connection with corruption or bribery issues.

4.1.4 Political influence and lobbying activities

Elia Transmission (Belgium) and 50Hertz Transmission (Germany) are responsible for contributing to political debate in their respective countries and to the development of legislation.

We carry out our advisory role in a transparent manner. As legal monopolies with public responsibilities, our TSOs communicate their viewpoints with the best interests of society in mind. Elia Group is a trusted advisor when it comes to topics such as the implementation of the energy transition, ensuring a secure supply of electricity as renewable energy levels increase, and the expansion of the grid.

The growing number of EU energy policies impacting the Group's activities and the societies in which it operates have prompted the top management to create a European Affairs Team, which monitors all relevant legislation and regulations and takes part in European public and political debates via public position statements and publications.

Both Elia Transmission SA/NV and 50Hertz Transmission GmbH are listed in the EU Transparency Register and are committed to its Code of Conduct. The correspondent webpages are:

• Elia Transmission Belgium SA/NV

• 50Hertz Transmission GmbH

In 2023, neither Elia Transmission Belgium SA/NV nor 50Hertz Transmission GmbH made any direct donations to politicians or political parties.

Elia Group is committed to renewable energy, climate and environmental protection, human rights and the integration of European electricity markets. It furthers its work in these areas via active memberships in various associations and initiatives.

World Energy Council

CIGRE - Conseil International des Grands Réseaux Electriques

Go15 - Reliable and Sustainable Power Grids

UNGC - United Nations Global Compact

Centre on Regulation in Europe

Roundtable of Europe’s Energy Future

Charge-up Europe

ENTSO-E - European Network of Transmission System Operators for Electricity

Coordination of Electrical System Operators

RGI - Renewables Grid Initiative

Energy Web Foundation

The Shift

Synergrid - Fédération des gestionnaires de réseaux électricité et gaz en Belgique

Osiris

Conseil des Gestionnaires des Réseaux de Bruxelles

Vlaamse Raad van Netwerkbeheerders

Powalco

BECI - Brussels Enterprises Commerce and Industry

FEB - Fédération des Entreprises de Belgique

UWE - Union Wallonne des Entreprises

VOKA - Vlaams Netwerk van Ondernemingen

AGORIA

Communauté Portuaire Bruxelloise

COGEN Vlaanderen

AVEU Arbeitgeberverband Energie- und Versorgungswirtschaftlicher Unternehmen e.V. [employers’ association of energy and utility companies] x x x

BDEW – Federal Association of the Energy and Water Industry x x

VDE-Elektrotechnischer Verein e.V.[electrotechnical association] x x

Diversity Charter x x

5. Appendixes

5.1. Limited Assurance Report

5.2. Acronyms

Below is a list of the acronyms used throughout the Sustainability report.

Acronym Full form expression

AA Appropriate Assessment

AGM Annual General Meeting

AIT Average Interruption Time

AR Application Requirement

BBEMG Belgian BioElectroMagnetics Group

BoD Board of Directors

CAPEX Capital Expenditure

CEO Chief Executive Officer

CR Pass Community Relations Passport

CREG Commission for Electricity and Gas Regulation

CSDDD Corporate Sustainability Due Diligence Directive

CSRD Corporate Sustainability Reporting Directive

DEI Diversity, Equality and Inclusion

DNSH Do No Significant Harm

DR Disclosure Requirement

DSO Distribution System Operator

EGMB Elia Group Management Board

EIA Environmental Impact Assessments

EMFs Electric and Magnetic Fields

ENTSO-E European Network of Transmission System Operators for Electricity

ENTSO-G European Network of Transmission System Operators for Gas

EPRI Electric Power Research Institute

ESG Environmental, Social and Governance

ESMA European Securities and Markets Authorities

ESRS European Sustainability Reporting Standards

EU European Union

EV Electric Vehicle

ExCo Local Executive Management Committees

GERICS Climate Service Center Germany

GES Gaz à Effet de Serre

GHG Greenhouse Gas

GRI Global Reporting Initiative

GSO Group Sustainability Office

H&S Health and Safety

HR Human Resources

HSE Health, Safety & Environment

HV High-Voltage

HVDC High-Voltage Direct Current

ICP Internal Carbon Price

IFC International Finance Corporation

IFRS International Financial Reporting Standards

ILO International Labour Organization

IPCC Intergovernmental Panel on Climate Change

ISO International Organization for Standardization

KfW Bank Kreditanstalt für Wiederaufbau

KPI Key Performance Indicator

LIFE L’Instrument Financier pour l’Environnement

MCCS Modular Control Center System

NACE Nomenclature of Economic Activities

NGO Non-governmental organisation

NID Nature Inclusive Design

OECD Organisation for Economic Co-operation and Development

OPEX Operational Expenses

PCB Polychlorinated Biphenyls

PFAS Per-and Polyfluoroalkyl Substances

PPE Property, Plant and Equipment

RCP Representative Concentration Pathway

RES Renewable Energy System

SBTI Science Based Targets Initiative

SCoC Supplier Code of Conduct

SEPPs Standardised Emergency Preparedness Plans

TCFD Task Force on Climate-related Financial Disclosures

TCO Total Cost of Ownership

TRIR Total Recordable Injury Rate

TSC Technical Screening Criteria

TSO Transmission System Operator

TYNDP Ten-Year Network Development Plan

UNGC United Nations Global Compact

IV. Financial Report

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated statement of profit or loss

The accompanying notes (1-9) form an integral part of these consolidated financial statements.

Rounding – In general, all figures are rounded. Variances are calculated from the source data before rounding, implying that some variances may not add up.

Consolidated statement of profit or loss and comprehensive income

The accompanying notes (1-9) form an integral part of these consolidated financial statements.

Rounding – In general, all figures are rounded. Variances are calculated from the source data before rounding, implying that some variances may not add up.

Consolidated statement of financial position

The accompanying notes (1-9) form an integral part of these consolidated financial statements.

Rounding – In general, all figures are rounded. Variances are calculated from the source data before rounding, implying that some variances may not add up.

Consolidated statement of changes in equity

The accompanying notes (1-9) form an integral part of these consolidated financial statements.

Rounding – In general, all figures are rounded. Variances are calculated from the source data before rounding, implying that some variances may not add up.

Consolidated statement of cash flows

The accompanying notes (1-9) form an integral part of these consolidated financial statements.

Rounding – In general, all figures are rounded. Variances are calculated from the source data before rounding, implying that some variances may not add up.

NOTES ACCOMPANYING THE CONSOLIDATED FINANCIAL STATEMENTS

1. Reporting entity

The registered office of Elia Group SA/NV (hereafter referred to as the “Company” or “Elia”) is established in Belgium and located at 20 Boulevard de l’Empereur, 1000 Brussels. Elia Group SA/NV is a public limited company, which is a listed company on Euronext Brussels, under the symbol ELI, whose reference shareholder is municipal holding company Publi-T SC.

The consolidated financial statements for the financial year 2023 include those of Elia Group SA/NV and its subsidiaries (collectively referred to as ‘the Group' or 'Elia Group') and the group's interests in joint ventures and associates.

Elia Group comprises two electricity transmission system operators (TSOs): Elia Transmission Belgium SA/NV ("ETB") in Belgium and 50Hertz Transmission GmbH ("50HertZ"), in which Elia Group holds an 80% stake through Eurogrid International SA/NV (fully owned) and Eurogrid GmbH (80%). 50Hertz Transmission GmbH is one of Germany’s four transmission system operators; it operates in the north and east of the country. We refer to the Group structure in Note 7 for further details.

The Group also has a 50% stake in Nemo Link Ltd, which constructed an electrical interconnector between the UK and Belgium: the Nemo Link interconnector. Nemo Link Ltd is a joint venture between Elia Transmission Belgium SA/NV and National Grid Ventures (in the UK). It began its commercial operations on 30 January 2019, with a transfer capacity of 1000 MW.

With around 3,473 employees and a transmission system that comprises some 19,460.5 km of high-voltage connections and serves 30 million end consumers, Elia Group is one of Europe’s top five TSOs. It efficiently, reliably and securely transports electricity from generators to distribution system operators and major industrial consumers, while also importing and exporting electricity from and to neighbouring countries. The Group is a driving force behind the development of the European electricity market and the integration of energy generated from renewable sources. In addition to its transmission activities in Belgium and Germany, the Group offers businesses a range of consultancy and engineering services.

Through ETB and 50Hertz, Elia Group’s mission is to realise the climate ambitions of the European Green Deal. Over the next few years, large-scale investments in renewable energy production and the offshore grid are due to be undertaken and any delay in unlocking flexibility or realising grid infrastructure will result in additional capacity needs. Investing in accelerated digitalisation and investments in the timely build-out of grid infrastructure

are therefore very important. This confirms the strategic and economic value of the Group's assets, which will continue to be modernised and developed, as demonstrated by the various projects that got underway in 2023. We refer to note 6.1 where further information is provided on the investment plan.

2. Basis of preparation

2.1. Statement of compliance

These consolidated financial statements were prepared in accordance with the International Financial Reporting Standards (IFRS), which have been adopted by the European Union. In doing so, the Group applied all new and revised standards and interpretations published by the International Accounting Standards Board (IASB), including those which came into effect for the financial year starting on 1 January 2023, which are applicable to the Group’s activities.

NEW AND AMENDED STANDARDS AND INTERPRETATIONS

The standards, amendments and interpretations listed below came into effect in 2023, with little or limited impact on the Group:

• IFRS 17 Insurance Contracts (including the June 2020 and December 2021 amendments to IFRS 17)

• Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of Accounting Policies;

• Amendments to IAS 8 Accounting policies, Changes in Accounting Estimates and Errors: Definition of Accounting Estimates;

• Amendments to IAS 12 Income Taxes: Deferred Tax related to Assets and Liabilities arising from a Single Transaction;

• Amendments to IAS 12 Income taxes: International Tax Reform – Pillar Two Model Rules (effective immediately but not yet endorsed in the EU – disclosures are required for annual periods beginning on or after 1 January 2023).

The standards, amendments and interpretations listed below did not take effect in 2023. The changes to the standards, amendments and interpretations listed below are not expected to have a material impact on these annual accounts and are therefore not outlined in any great detail:

• Amendments to IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or Non-current and Non-current Liabilities with Covenants (applicable for annual periods beginning on or after 1 January 2024, but not yet endorsed in the EU);

• Amendments to IFRS 16 Leases: Lease Liability in a Sale and Leaseback (applicable for annual periods beginning on or after 1 January 2024, but not yet endorsed in the EU);

• Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures: Supplier Finance Arrangements (applicable for annual periods beginning on or after 1 January 2024, but not yet endorsed in the EU).

• Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability (applicable for annual periods beginning on or after 1 January 2025, but not yet endorsed in the EU)

2.2. Functional and presentation currency

These consolidated financial statements are presented in millions of euro, rounded to the nearest hundred thousand, unless stated otherwise.

2.3. Basis of measurement

In general, these consolidated financial statements were prepared on a historical cost basis. However, reporting related to the following categories deviate from this general rule:

• Equity accounted investees: the equity method was applied to determine the value of a shareholding over which the group has a significant influence;

• Other shareholdings: entities in which the group has a shareholding but over which it does not have a significant influence were valued at fair value through other comprehensive income (OCI);

• Current and non-current receivables were valued at the lowest of the carrying amount and the recoverable amount;

• Employee benefits were valued at the present value of the defined benefit obligations, minus the fair value of the plan assets (see also Note 6.14);

• Derivative financial instruments were measured at fair value through OCI or profit and loss (P&L), depending on whether the derivative can be designated as a hedging instrument (see also Note 8.1);

• Decommissioning provisions were valued at present value.

2.4. Going concern

The directors reassessed the going concern assumption of the Company and, at the time of approving the financial statements, held a reasonable expectation that the Group had adequate resources to continue in operational existence for the foreseeable future. The directors will therefore continue to adopt the going concern basis of accounting in the preparation of the financial statements.

In the current context of inflation and volatile market conditions, the Group paid particular attention to adequately reflecting the current and expected impact of the situation on the financial position, performance and cash flows of the company, applying the IFRS accounting principles in a consistent manner. In general, since Elia Group is acting in accordance with the regulatory frameworks in Belgium and Germany, the profitability and the financial position of the Group have not been affected.

2.5. Use of estimates and judgements

The preparation of these consolidated financial statements in accordance with IFRS requires management to make judgements, estimates and assumptions that could affect the reported amounts of assets and liabilities and revenue and expenses. The estimates and underlying assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances: the results of these estimates and assumptions form the basis for making judgements regarding the carrying amounts of assets and liabilities. Actual results could therefore differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised either: in the period during which the estimate is revised if the revision only affects this period; or in the period during which the estimate is revised and throughout future periods if the revision affects both current and future periods.

The following points include information about significant areas of estimation uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amounts recognised in the consolidated financial statements:

• The total allowed remuneration for the Group’s role as TSO in the Belgian and German segments is mainly determined by calculation methods set by the Belgian federal regulator (the Commission for Electricity and Gas Regulation or CREG) and the German federal regulator (the Federal Network Agency or BNetzA) respectively. The recognition of deferral regulatory accounts is also based on the different regulatory schemes. For certain calculations, a level of professional judgement needs to be applied. More disclosures are provided in Notes 6.20, 9.1.4 and 9.2.3.

• Entities in which the Group holds less than 20% of the voting rights but has significant influence are accounted for under the equity method. Following the guidance in IAS 28, the Group assesses whether it has significant influence over its associates and therefore needs to account for them under the equity method (rather than applying IFRS 9) and reassesses this in each reporting period (see also Note 6.5).

• Deferred tax assets are recognised for the carry-forward of unused tax losses and unused tax credits in so far as it is probable that future taxable profit will be available against which the unused tax losses and unused tax credits can be utilised. In making a judgement on this, management takes into account elements such as long-term business strategy and tax planning opportunities (see Note 6.7).

• Credit risk related to customers: management closely reviews the outstanding trade receivables, including by considering ageing, payment history and credit risk coverage (see Note 8.1).

• Employee benefits including reimbursement rights – see Note 6.14:

‐ The Group has defined benefit plans and defined contribution plans which are disclosed in Note 6.14. The calculation of the liabilities or assets related to these plans is based on actuarial and statistical assumptions. For example, this is the case for the present value of future pension liabilities. The present value is, among other factors, impacted by changes in discount rates, and financial assumptions such as future increases in salary. In addition, demographic assumptions, such as average assumed retirement age, also affect the present value of future pension liabilities.

‐ In determining the appropriate discount rate, management considers the interest rates of corporate bonds in currencies consistent with currencies of the post-employment benefit obligation, i.e. euro, with at least an AA rating or above, as set by at least one leading rating agency and extrapolated along the yield curve to correspond with the expected term of the defined benefit obligation. Higher and lower yielding bonds are excluded in developing the appropriate yield curve.

‐ Each plan's projected cash flow is matched to the spot rates of the yield curve to calculate an associated present value. A single equivalent discount rate is then determined that produces that same present value. The resulting discount rate therefore reflects both the current interest rate environment and the plan's distinct liability characteristics.

• Provisions for environmental remediation costs: at each year-end, an estimate is made regarding future expenses with respect to soil remediation, based on the expert advice. The extent of remediation costs is dependent on a limited number of uncertainties, including newly identified cases of soil contamination (see Note 6.15).

• Other provisions are based on the value of the claims filed or on the estimated amount of the risk exposure. The expected timing of the related cash outflow depends on the progress and duration of the associated process/procedures (see Note 6.15).

• In determining the appropriate discount rate to discount the future dismantling obligation, management considers the interest rates of corporate bonds in euro with at least an AA rating or above as set by at least one leading rating agency and extrapolated along the yield curve to correspond with the expected term of the dismantling obligation. A sensitivity analysis is performed to measure the impact of a differing discount rate.

• Goodwill impairment testing: the Group performs impairment tests on goodwill and on cash-generating units (CGUs) at the reporting date, and whenever there are indications that the carrying amount might be higher than the recoverable amount. This analysis is based on assumptions such as estimated investment plans, remuneration defined in the regulatory frameworks, market evolution, market share, margin evolution and discount rates (see Note 6.3).

• Fair value measurement of financial instruments: when the fair values of financial assets and financial liabilities recorded in the statement of financial position cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques. The inputs for these valuation techniques are taken from observable markets where possible. Where this is not feasible, a certain level of professional judgement is required in establishing fair values. Changes in the fair value of the derivative hedging instrument designated as a cash flow hedge are recognised directly in OCI to the extent that the hedge is effective. If the hedge is ineffective, changes in fair value are recognised in profit or loss (see Note 6.18).

• The useful life of the fixed assets is defined to reflect the real depreciation of each asset. The depreciation of property, plant and equipment is mainly calculated based on the useful lives determined by the regulatory frameworks in Belgium and Germany, which are considered to be the best possible approximation of expected economic lives in the light of current events. (see Note 3.3.1 and 6.1)

• The Group makes use of practical expedients when applying IFRS 16 (Leasing):

‐ The Group applies a single discount rate per type of contracts, summarised per their duration. Those leases are assumed to have similar characteristics. The discount rate used is the Group's best estimate of the weighted average incremental borrowing rate. Each lease contract is classified in a duration bucket (<5 years, between 5 and 10 years, etc.) for which an interest rate is derived equal to the interest rate of a traded bond with the same rating as Elia Group SA/NV in the same sector with a similar duration. The interest rate is fixed over the lifetime of the lease contract.

‐ The Group assesses the non-cancellable period of each of the contracts falling within the scope of IFRS 16. This includes the period covered by an option to extend the lease, if the lessee is reasonably certain that they will exercise that option. Certainly, where it relates to office rent contracts, the Group makes its best estimate of the non-cancellable period based on all information at its disposal (see Note 6.19).

The Group is attentive to the effects that current challenges like geopolitical risks, macro economic events and climate change may have on these financial statements and gives an overview of the potential impacts in the table below:

Type of risk /change General description

Increasing interest ratesfinancing Interest rates globally rose in 2023 due to increased market risk and central banks’ actions to slow down inflation.

Increasing interest ratesdiscounting

According to IFRS, Elia Group use discounting to account for the time value of money in measuring non-current assets and liabilities: When interest rates increase, the present value of those assets and liabilities will decrease.

Impact for the group

As the Group has substantial financing needs, it is faced with an increased cost of debt and borrowing costs and higher refinancing costs. However, these factors have no direct impact on profitability, as long as they are taken into account in the remuneration mechanism.

This may mainly affect Elia Group in the following areas of financial reporting:

- impairment calculations: even if the new tariff methodology in both countries has been amended to better protect the group against a rise of interest rates;

- dismantling provisions:

- retirement obligations

High and volatile commodity prices

High volatility in commodity prices driven in particular by the war in Ukraine.

The main impacts for the Group :

- fair value of the derivatives contracted by the group for the purpose of reducing the risk of fluctuations in the expected amount of grid losses (impact in OCI) and increased margin calls;

- impact on revenue and costs directly linked to energy prices, with a limited net impact on profitability due to the regulatory mechanism. This can make more complex the calculation of some incentives.

- level of trade receivables (and payables), including levies (pass through), without the Group noting any increase in credit risk on its external debtors since the crisis

Reference to the notes

Note 5.3 - Net Finance costs

Note 6.3 - Goodwill; Note 6.14 - Employee Benefits; Note 6.15Provisions

Note 5.6, 6.6 and 6.16 - Derivatives; Note 4.2/4.3 , 5.1 and 5.2 and 6.20 - Revenue and costs; Note 6.9 - Trade receivables

Inflation

Geopolitical tensions

There is a general business risk that inflation increases direct costs while lowering consumer demand. High inflation can also trigger some significant changes in key input to assess the carrying amount of assets and liabilities

The year 2023 was marked by heightened geopolitical tensions with the war in Ukraine and Middle East.

The Group is not exposed to a significant risk of onerous contract due to the regulatory nature of its main activities.

Inflation was carefully considered in the calculation of : - Retirement obligations (and corresponding reimbursement rights) - Goodwill - Credit risk; and has not adversely impacted the group in 2023

Given the nature and location of its operations and the fact that Elia Group does not currently have activities in Russia nor in Ukraine or with Russian companies, Elia Group has not observed a direct impact of the Ukrainian conflict on its business. However, there was a strong push at the European level to become less dependent from Russian gas and fossil fuels with a willingness among the authorities in Belgium and Germany to accelerate the energy transition. This led to an increase of the Group’s investment program over the mid-term. The Group sees no impact from tensions in the middle east on its business performance.

Note 6.3 - Goodwill; Note 6.9 - Trade receivables; Note 6.14Employee Benefits

Climate change

Through Elia and 50Hertz, Elia Group’s mission is to realise the climate ambitions of the European Green Deal. For the group as a whole, energy transition represents a challenge, but also opportunities.

Additional information are also provided in Note 8.1 - Financial risk management

Climate goals merely confirms the strategic and economic value of the current asset base without significant impact on the useful life of the existing assets. Asset base will continue to be modernised and developed, as demonstrated by the various projects that got underway in 2023.

Note 6.1 - PPE

2.6. Declaration by responsible persons

These consolidated financial statements were authorized for publication by the Board of Directors on 29 March 2024.

The undersigned declare that to the best of their knowledge :

• the financial statements, which have been prepared in accordance with applicable accounting policies for financial statements, give a true and fair view of the assets, the financial position and results of Elia and of its subsidiaries included in the consolidation;

• the annual report gives a true and fair view of the evolution and the results of the Group and of the situation of Elia and of its subsidiaries included in the consolidation, as well as a description of the most significant risk and uncertainties they are facing.

3. Material accounting policies

3.1. Basis of consolidation

SUBSIDIARIES

A subsidiary is an entity that is controlled by Elia Group. The Group controls an entity when it is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date this control commences until the date that it ceases. The accounting policies of subsidiaries are changed when necessary, in order to align them with the policies adopted by the Group. Losses applicable to the non-controlling interests in a subsidiary are allocated to the noncontrolling interests even if this results in a deficit balance of the non-controlling interests. Changes to the Group's interest in a non-wholly-owned subsidiary that do not result in a loss of control are accounted for as equity transactions.

ASSOCIATES

Brussels, 29 March 2024

Catherine Vandenborre Bernard Gustin Chief Executive Officer ad-interim President of the Board of Directors

Associates are those companies over which Elia Group exerts significant influence, but not control, in terms of their financial and operating policies. Investments in associates are accounted for in the consolidated financial statements in accordance with the equity method. They are initially recognised in the consolidated statement of financial position at cost, with all transaction costs incurred with the acquisition included, and are adjusted thereafter to reflect the Group’s share of the profit or loss and other comprehensive income of the associate. This accounting under the equity method is done from the date that significant influence commences until the date that it ceases. When the Group's share of the losses exceeds its interest in an associate, its carrying amount is reduced to nil and further losses are not recognised except to the extent that the Group has incurred legal or constructive obligations or has made payments on behalf of an associate.

INTERESTS IN JOINT VENTURES

A joint venture is an arrangement under which Elia Group has joint control and has rights to the net assets of the arrangement, as opposed to joint operations, under which the Group has rights to its assets and obligations for its liabilities. Interests in joint ventures are accounted for using the equity method. They are initially recognised at cost price, with all transaction costs incurred with the acquisition included. Subsequent to initial recognition, the consolidated financial statements include the Group's share of the total recognised profits and losses of joint ventures on the basis of the equity method, from the date that joint control commences until the date that it ceases. When the Group's share of the losses exceeds its interest in joint ventures, its carrying amount is reduced to nil and further losses are not recognised except to the extent that the Group has incurred legal or constructive obligations or has made payments on behalf of a joint venture.

NON-CONTROLLING INTERESTS

Non-controlling interests are measured in line with their proportional share of the acquiree's identifiable net assets on the acquisition date.

ELIMINATION OF INTRA-GROUP TRANSACTIONS

Intra-group balances and any unrealised gains or losses or income and expenses arising from intra-group transactions are eliminated when preparing the consolidated financial statements.

Unrealised gains from transactions with associates are eliminated to the extent of the Group's interest in the entity. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

3.2. Foreign currency translation

FOREIGN CURRENCY TRANSACTIONS AND BALANCES

Transactions in foreign currencies are converted into the functional currency of the Company at the foreign exchange rate on the date of the transaction. Monetary assets and liabilities denominated in foreign currencies on the reporting date are converted at the foreign exchange rate on that date. Foreign exchange differences arising on conversion are recognised in profit or loss.

Non-monetary assets and liabilities denominated in foreign currencies that are valued in terms of historical cost are converted at the exchange rate on the date of the transaction.

FOREIGN OPERATIONS

A foreign operation is an entity that is a subsidiary, an associate, an interest in a joint venture or a branch of the reporting entity whose activities are based or conducted in a country or currency other than those of the reporting entity.

The financial statements of all group entities that have a functional currency which differ from the Group's presentation currency are translated into the presentation currency as follows:

• assets and liabilities are translated at the exchange rate at the reporting date;

• income and expenses are translated at the average exchange rate of the year.

Exchange differences arising from the translation of the net investment in foreign subsidiaries, interests in joint ventures and associates at closing exchange rates are included in shareholder's equity under OCI. Upon the (partial) disposal of foreign subsidiaries, joint ventures and associates, (partial) cumulative translation adjustments are recognised in the profit or loss as part of the gain or loss on the sale.

3.3. Statement of financial position

3.3.1 Property, plant and equipment

The Group has opted for the historical cost model.

Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful life of each component of an item of property, plant and equipment. The useful lives are determined by the regulatory frameworks in Belgium and Germany, which are considered to be the best possible approximation of expected economic lives in the light of current events.

The Group recognises in the carrying amount of an item of property, plant and equipment the subsequent costs of replacing part of such an item when that cost is incurred, but only when it is probable that the future economic benefits embodied in the item will flow to the Group and the cost of the item can be measured reliably. All other costs, such as repair and maintenance costs, are recognised in profit or loss as and when they are incurred.

Right of use assets

These different types of assets are divided into four main classes: (i) Land and buildings, (ii) Machinery and equipment, (iii) Furniture and vehicles, (iv) Leasing, (v) Other tangible assets and (vi) Assets under construction.

Borrowing costs that are directly attributable to the construction of the qualifying asset are capitalised as part of the cost of that asset.

In accordance with IAS 16, when Elia Group has a present, legal or constructive obligation to dismantle the item or restore the site, the initial cost of the item of property, plant and equipment includes an initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located. A corresponding provision for this obligation is recorded for the amount of the asset component (the dismantling asset) and depreciated over the asset's entire useful life (see also 3.3.13 Provisions).

An asset is no longer recognised when it is subject to disposal or when no future economic benefits are expected from its use or disposal. Gains or losses arising from the derecognition of the asset (determined as the difference between the net disposal proceeds and the carrying amount of the asset) are included in profit or loss, under other income or other expenses, during the year in which the asset was derecognised.

3.3.2 Intangible assets

COMPUTER SOFTWARE

Software licences acquired by the Group are stated at cost less accumulated amortization and impairment.

Expenditure on research activities undertaken with the purpose of developing software within the Group is recognised in profit or loss as it is incurred. Expenditure related to the development phase of software developed within the Group is capitalised if:

• the costs of development can be measured reliably;

• the software is technically and commercially feasible and future economic benefits are probable;

• the Group plans – and has sufficient resources – to complete development;

• the Group plans to use the software.

The capitalised expenditure includes the cost of material, direct labour costs and overhead costs that are directly attributable to preparing the software for its use. Other costs are recognised in profit or loss as they are incurred.

LICENCES, PATENTS AND SIMILAR RIGHTS

Expenditure on acquired licences, patents, trademarks and similar rights are capitalised and amortised on a straight-line basis over the contractual period, if any, or the estimated useful life.

AMORTISATION

Amortisation is recognised in profit or loss on a straight-line basis over the estimated useful life of intangible assets, unless the useful life is indefinite. Goodwill are tested systematically for impairment on each end of the reporting period. Software is amortised from the date it becomes available for use. The estimated useful lives are as follows:

3.3.3 Goodwill

Goodwill is stated at cost, less accumulated impairment losses. Goodwill is allocated to cashgenerating units and is not amortised but is tested annually for impairment (see Section 3.3.7 'Impairment of non-financial assets'). In the case of associates, the carrying amount of goodwill is included in the carrying amount of the investment in the associates.

3.3.4 Trade and other receivables

LEVIES

In its role as TSOs, Elia Transmission Belgium SA/NV and 50Hertz Transmission GmbH are subject to various public service obligations imposed by their respective governments and/ or by regulation mechanisms. These identify public service obligations in various areas (such as promoting the use of renewable energy, social support, fees for the use of the public domain, offshore liabilities) that should be fulfilled by TSOs. The costs incurred by TSOs as they undertake these obligations are fully covered by the tariff ‘levies’ approved by the regulators in Belgium and Germany. The amounts outstanding (deficit) are reported as a trade and other receivables.

Throughout this process, as the TSOs are agents, the Group opted for a net presentation both at profit or loss and at balance sheet level. These transactions are fully “passed through”.

See also Note 9.1.4.

TRADE AND OTHER RECEIVABLES

Trade receivables and other receivables are measured at amortised cost minus the appropriate allowance for amounts regarded as unrecoverable.

IMPAIRMENT

For trade receivables and contract assets, the impairment model is based on the expected credit loss model (ECLs). Under IFRS 9 standard, the Group applies a group-wide methodology when calculating the Expected Credit Losses (ECLs). An individual approach is used for customers and other counterparties, for which the change in credit risk is monitored on an individual basis.

See Note 8.1 ‘Credit risk’, for a detailed description of the model.

Amortisation methods, remaining useful lives and residual values of intangible assets are reassessed annually and are prospectively adjusted as the occasion arises.

3.3.5 Inventories

Inventories (spare parts) are stated at the lower of cost and net realisable value. Net realisable value is the estimated selling price minus the estimated costs of completion and selling expenses. The cost of inventories is based on the weighted-average-cost-price method. The cost includes the expenditure incurred in acquiring the inventories and the direct costs of bringing them to their location and making them operational.

Write-downs of inventories to net realisable value are recognised in the period in which the write-offs occurred.

3.3.6 Cash and cash equivalents

Cash and cash equivalents comprise cash balances, bank balances, commercial paper and deposits that can be withdrawn on demand. Overdrafts that are repayable on demand form an integral part of the Group's cash management and are included as a component of cash and cash equivalents for the purpose of the statement of cash flows.

3.3.7 Impairment of non-financial assets

The carrying amount of the Group's assets, excluding inventories and deferred taxes, is reviewed at the end of the reporting period for each asset to determine whether there is any indication of impairment. If any such indication exists, the recoverable amount of the asset is estimated.

The recoverable amount of goodwill is estimated at the end of each reporting period.

An impairment loss is recognised whenever the carrying amount of such an asset or its cash-generating unit exceeds its recoverable amount. Impairment losses are recognised in profit or loss. Recognised impairment losses relating to cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to cash-generating units and then to reduce the carrying amount of the other assets in the units on a pro-rata basis.

After recognition of impairment losses, the depreciation costs for the asset will be prospectively adjusted.

CALCULATION OF THE RECOVERABLE AMOUNT

The recoverable amount of intangible assets and property, plant and equipment is determined as the higher of their fair value less costs of disposal and their value in use. In assessing value in use, the expected future cash flows are discounted to their present value using a pre-tax discount rate that reflects both the current market assessment of the time value of money and the risks specific to the asset.

The Group's assets do not generate cash flows that are independent from other assets. The recoverable amount is therefore determined for the cash-generating unit (i.e. the entire high-voltage grid) to which the asset belongs. This is also the level at which the Group administers its goodwill and gathers the economic benefits of acquired goodwill.

REVERSALS OF IMPAIRMENT

An impairment loss with respect to goodwill is not reversed. Impairment loss on other assets is reversed if there have been changes in the estimates used to determine the recoverable amount.

An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

3.3.8 Financial assets

INITIAL RECOGNITION AND MEASUREMENT

The classification of financial assets at initial recognition depends on their contractual cash flow characteristics and the Group’s business model for managing them. The Group initially measures a financial asset at its fair value (for financial assets measured at FVTOCI transaction costs are added).

SUBSEQUENT MEASUREMENT

For purposes of subsequent measurement, financial assets are classified in three categories:

• Financial assets at amortised cost (debt instruments)

• Financial assets measured at fair value through OCI (equity instruments)

• Financial assets measured at fair value through profit and loss

Financial assets at amortised cost

Financial assets at amortised cost are managed with a view to holding them to maturity and collecting contractual cash flows. The financial assets give rise to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Financial assets at amortised cost are subsequently measured using the Effective Interest Rate (EIR) method and are subject to impairment. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired.

Financial assets measured at fair value through OCI (equity instruments FVOCI)

Upon initial recognition, the Group irrevocably classifies its equity investments as equity instruments measured at fair value through OCI when the Group does not have significant influence and the assets are not held for trading. This classification is determined on an instrument-by-instrument basis.

Gains and losses on these financial assets are never recycled to profit or loss. Dividends are recognised as other income in the statement of profit or loss when the right of payment has been established, except when the Group benefits from such proceeds as a recovery of part of the cost of the financial asset, in which case any such gains are recorded in OCI. Equity instruments measured at fair value through OCI are not subject to impairment assessment.

The Group has elected to irrevocably classify non-listed equity investments over which the Group does not have significant influence in this category.

Financial assets measured at fair value through profit and loss (FVTPL)

All financial assets not classified as measured at amortised cost or FVOCI as described above are measured at FVTPL. At Elia, this mainly concerns equity instruments (SICAVs) at fair value trough income.

IMPAIRMENT OF FINANCIAL ASSETS

The Group recognises an allowance for expected credit losses (ECLs) for its debt instruments. See Note 8.1 ‘Credit risk’, for a detailed description of the approach.

3.3.9 Derivative financial instruments and hedge accounting

DERIVATIVE FINANCIAL INSTRUMENTS

The Group sometimes uses derivative financial instruments to hedge its exposure to foreign exchange, interest rate and commodity prices risks arising from operating, financing and investment activities. In accordance with its treasury policy, the Group neither holds nor issues derivative financial instruments for trading purposes. However, derivatives that do not qualify for hedge accounting are accounted for as instruments held for trading purposes.

Derivative financial instruments are initially recognised at fair value. Any gain or loss resulting from changes in the fair value is immediately booked in the statement of profit or loss. Where derivative financial instruments qualify for hedge accounting, the reflection of any resulting gain or loss depends on the nature of the item being hedged.

The fair value of interest rate swaps is the estimated amount that the Group would receive or pay to terminate the swap at the end of the reporting period, taking into account the current interest rates and the current creditworthiness of the swap counterparties and the Group. The fair value of forward exchange contracts is their quoted market price at the end of the reporting period, i.e. the present value of the quoted forward price.

DERIVATIVES USED AS HEDGING INSTRUMENTS

Cash flow hedges

Changes in the fair value of the derivative hedging instrument designated as a cash-flow hedge are recognised directly in OCI to the extent that the hedge is effective. If the hedge is ineffective, changes in fair value are recognised in profit or loss.

The Group uses forward currency contracts as hedges of its exposure to foreign currency risk in forecast transactions and firm commitments, as well as forward commodity contracts for its exposure to volatility in the commodity prices. The Group designates only the spot element of forward contracts as a hedged risk. The forward element is considered the cost of hedging and is recognised in OCI and accumulated in a separate component of the statement of financial position under hedging reserves.

If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold, terminated or exercised, hedge accounting is prospectively discontinued. The cumulative gain or loss previously recognised in OCI remains there until the forecast transaction occurs. When the hedged item is a non-financial asset, the amount recognised in OCI is transferred, where justified, to the carrying amount of the asset. In other cases, the amount recognised in OCI is transferred to profit or loss in the same period that the hedged item affects profit or loss.

When a derivative or hedge relationship is terminated, cumulative gains or losses still remain in OCI, provided that the hedged transaction is still expected to occur. If the hedged transaction is no longer expected to take place, the cumulative unrealised gain or loss is removed from OCI and is immediately recognised in profit or loss.

The Group recognises derivatives to hedge the price for the future procurement of the physical requirement for grid losses that is expected in subsequent periods and is covered in each case by short-term procurement transactions on the spot market. These derivatives are measured at fair value in OCI with no effect on profit or loss as part of cash flow hedge accounting; they serve as price hedging of the physical demand for electrical energy to cover grid losses (underlying transaction). Due to the availability and liquidity of futures trading, the hedging period for intended price hedging covers a period of up to two years from the balance sheet date. In this context, the Group pursues a conservative hedging strategy oriented towards the regulatory framework and the ability to roll over the electricity procurement costs incurred, which enables timely and predictable price hedging.

The critical term match method measures effectiveness. If the valuation-relevant parameters of the hedged item and hedging instrument match, it is assumed that an effective hedging relationship exists and that changes in value from both items offset each other. The Group strives for full price hedging of the expected volume of grid loss energy (hedge ratio 1:1).

Hedging of monetary assets and liabilities

Hedge accounting is not applied to derivative instruments that economically hedge monetary assets and liabilities denominated in foreign currencies. Changes in the fair value of such derivatives are recognised in profit or loss as foreign currency gains and losses.

3.3.10 Equity

SHARE CAPITAL - TRANSACTION COSTS

Transaction costs related to the issuing of capital are deducted from the capital received.

DIVIDENDS

Dividends are recognised as a liability in the period in which they are declared (see note 6.12.1).

HYBRID SECURITIES

Hybrid securities are deeply subordinated securities. With the exception of ordinary shares, hybrid securities rank as the most junior instruments in the capital structure of the Group in an insolvency hierarchy. Hybrid securities are perpetual instruments and do not default on non-payment of coupons (unless such payment was mandatory following a resolution or payment of a dividend to ordinary shareholders).

The holders of hybrid securities have limited influence on the outcome of a bankruptcy proceeding or restructuring outside bankruptcy. Consequently, the holders cannot oblige the Group to pay distributions or redeem the securities in part or in full. Payment of distributions on and redemption of the securities is at our sole discretion. In light of their characteristics, hybrid securities are classified as an equity instrument under IFRS. The associated issue costs are recognised directly in retained earnings.

TREASURY SHARES

When shares recognised as equity are repurchased, the amount of the consideration paid, which includes directly attributable costs, is recognised as a change in equity. Repurchased shares are classified as treasury shares and are deducted from equity. The amount of treasury shares held is disclosed in the treasury share reserve. When treasury shares are subsequently sold or reissued, the amount received is recognised as an increase in equity and the resulting surplus or deficit on the transaction is presented within retained earnings. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of treasury shares.

3.3.11 Financial liabilities

Financial liabilities consist of interest-bearing loans and borrowings in the Group. They are initially recognised at fair value, less related transaction costs. Subsequent to initial recognition, interest-bearing loans and borrowings are stated at amortised cost price with any difference between amount at initial recognition and redemption value being recognised in profit or loss over the period of the loans on an effective interest basis.

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.

3.3.12 Employee benefits

DEFINED-CONTRIBUTION PLANS

In Belgium, contribution based promises, called defined-contribution pension plans under Belgian pension legislation, are classified as defined-benefit plans for accounting purposes due to the legal minimum return to be guaranteed by the employer.

Before 1 January 2016, the legal minimum return was 3.75% on employee contributions, 3.25% on employer contributions and 0% for inactive plan participants.

From 1 January 2016 onwards, the legal minimum return is a variable rate between 1.75% and 3.75%. The interest rate is automatically adapted on 1 January each year based on the average return OLO 10 years over 24 months, with 1.75% as a minimum. As of 1 January 2016, the legal minimum return is 1.75% on employee and employer contributions and 0% for inactive plan participants.

As the plans are funded via a pension fund, the vertical approach is applied, meaning that 1.75% is applied on all the reserves (even before 2016).

The employer needs to finance the deficits related to the “Law on Supplementary Pensions (LSP) guarantee at any time for the employee contract and at the moment the vested reserves are transferred in case of departure, retirement or liquidation of the pension for the employer contract.

For each plan, the fair value of assets equals the sum of the accrued individual reserves (if any) and the value of the collective fund(s) (if any).

The Defined-Benefit Obligation (DBO) was determined following the Projected Unit Credit (PUC) method. The plan formula (backloaded or not) determines whether the premiums are projected.

In Germany, the defined-contribution plan comprises a fixed pension to be paid to an employee upon retirement, which is usually based on one or more factors such as the employee’s age, years of service and salary.

In both countries, the calculation is performed by an accredited actuary.

DEFINED-BENEFIT PLANS

For defined-benefit plans, which exist in both Belgium and Germany, the pension expenses for each plan are assessed separately on an annual basis by accredited actuaries using the PUC method. The estimated future benefit that employees have earned in return for their service in the current and previous periods is discounted to determine its present value, and the fair value of any plan assets is deducted. The discount rate is the interest rate, at the end of the reporting period, on high quality bonds that have maturity dates approximately equivalent to the terms of the Group's obligations and that are denominated in the currency in which the benefits are expected to be paid.

When the benefits of a plan are improved, the portion of the increased benefit relating to past service by employees is recognised as an expense in profit or loss at the earlier of the following dates:

• when the plan amendment or curtailment occurs; or

• when the entity recognises related restructuring costs under IAS 37 or termination benefits.

Where the calculation results in a benefit to the Group, the recognised asset is limited to the present value of any future refunds from the plan or reductions in future contributions to the plan.

Remeasurements – comprising actuarial gains and losses, the effect of the asset ceiling (excluding amounts included in net interest on the net defined-benefit liability) and the return on plan assets (excluding amounts included in net interest on the net definedbenefit liability) – are recognised immediately in the statement of financial position with a corresponding debit or credit to retained earnings through OCI in the period in which they occur. Remeasurements are not reclassified to profit or loss in subsequent periods.

REIMBURSEMENT RIGHTS (BELGIUM)

Reimbursement rights are recognised as a separate asset when, and only when, it is virtually certain that another party will reimburse some or all of the expenditure required to settle the corresponding benefit obligation. Reimbursement rights are presented as non-current assets under other financial assets and are measured at fair value. These rights are handled the same way as the corresponding defined-benefit obligation. When the changes in the period result from changes in financial assumptions or from experience adjustments or changes in demographic assumptions, then the asset is adjusted through OCI. The components of the defined-benefit cost are recognised net of amounts relating to changes in the carrying amount of the rights to reimbursement.

OTHER LONG-TERM EMPLOYEE BENEFITS

The Group's net obligation regarding long-term service benefits other than pension plans is assessed on an annual basis by accredited actuaries. The net obligation is calculated using the PUC method and is the amount of future benefit that employees have earned in return for their service in the current and previous periods. The obligation is discounted to its present value, and the fair value of any related assets is deducted. The discount rate is the yield, at the end of the reporting period, on high quality bonds that have maturity dates approximately equivalent to the terms of the Group's obligations and that are denominated in the currency in which the benefits are expected to be paid.

SHORT-TERM EMPLOYEE BENEFITS

Short-term employee benefits are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognised for the amount expected to be paid out under a short-term cash bonus or profit-sharing plans if the Group has a legal or constructive obligation to pay this amount as a result of the employee’s past service and the obligation can be reliably estimated.

3.3.13 Provisions

A provision is recognised in the balance sheet when the Group has a current legal or constructive obligation as a result of a past event and it is likely that an outflow of economic benefits – of which a reliable estimate can be made – will be required to settle the obligation.

If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects the current market assessment of the time value of money and, where appropriate, of the risks specific to the liability.

The Group’s main long-term provisions are provisions for dismantling obligations. The present value of the obligation at the time of commissioning represents the initial amount of the provision for dismantling with, as the counterpart, an asset for the same amount, which is included in the carrying amount of the related property, plant and equipment and is depreciated over the asset's entire useful life.

Factors having a significant influence on the amount of provisions include:

• cost estimates

• the timing of expenditure ; and

• the discount rate applied to cash flows.

These factors are based on information and estimates deemed by the Group to be the most appropriate as of today.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

3.3.14 Trade and other payables

Trade and other payables are stated at amortised cost.

LEVIES

In its role as a TSO, Elia Transmission Belgium SA/NV and 50Hertz Transmission GmbH are subject to various public service obligations imposed by the Government and/or by regulation mechanisms. These identify public service obligations in various fields (such as promoting the use of renewable energy, social support, fees for the use of the public domain, offshore liability) for fulfilment by TSOs. The costs incurred by TSOs in accordance with these obligations are fully covered by the tariff ‘levies’ approved by the regulator. The amounts outstanding (surplus) are reported as a trade and other payable.

In this process, as the TSOs are agents, the Group opted for a net presentation both at profit or loss and at balance sheet level. These transactions are fully “passed through”.

See also Note 9.1.4.

3.3.15 Other non-current liabilities GOVERNMENT GRANTS

Government grants are recognised when it is reasonably certain that the Group will receive such grants and that all underlying conditions will be met. Grants related to an asset are presented under other liabilities and will be recognised in the statement of profit or loss on a systematic basis over the expected useful life of the asset in question. Grants related to expense items are recognised in the statement of profit or loss in the same period as the expenses for which the grant was received. Government grants are presented as other operating income in the statement of profit or loss.

CONTRACT LIABILITIES- LAST MILE CONNECTION

The consideration of the last mile connection is paid upfront, whilst the revenues are recognised over the lifetime of the underlying asset. The amounts to be released in future are reflected in this section. See also Note 3.4.1.

3.3.16 Leases

Upon the inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Group uses the definition of a lease included in IFRS 16.

THE GROUP AS A LESSEE

The Group recognises a right-of-use asset and a lease liability on the lease commencement date. Assets and liabilities arising from a lease are initially measured on a present value basis and discounted using the Group's best estimate for the weighted average incremental borrowing rate, in case the rate implicit in the lease cannot be readily determined. The Group applies a single discount rate per group of similar contracts, summarised per their duration. Lease payments included in the measurement of the lease liability comprise fixed payments, including in-substance fixed payments. Variable lease payments are expensed as incurred. As a practical expedient, no distinction is made between lease and non-lease components. Components that do not transfer any goods or services (initial direct costs, prepayments) are excluded from the lease price.

Right of use assets are subsequently reduced by accumulated depreciation, impairment losses and any adjustments resulting from the remeasurement of the lease liability. These assets are depreciated using the straight-line method from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Group by the end of the lease term or the cost of the right-of-use asset reflects the fact that the Group will exercise a purchase option. In that case the right-of-use asset will be depreciated over the useful life of the underlying asset, which is determined on the same basis as that of property and equipment.

The lease liability is subsequently increased by the interest cost on the lease liability and reduced by lease payments made. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, a change in the estimate of the amount expected to be payable under a residual value guarantee, or a change in the reassessment of whether a purchase or extension option is reasonably certain to be exercised or a termination option not to be exercised.

The Group presents right-of-use assets within ‘property, plant and equipment’ and lease liabilities within ‘loans and borrowings’ (current and non-current) in the statement of financial position.

The Group has elected not to recognise right-of-use assets and lease liabilities for leases of low-value assets and short-term leases, including IT equipment. The Group recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

3.3.17 Regulatory deferral accounts

The Group operates in a regulated environment in which tariffs are meant to realise total revenue/income consisting of:

• a reasonable return on invested capital;

• all reasonable costs which are incurred by the Group.

Since the tariffs are based on estimates, there is always a difference between the tariffs that are actually charged and the tariffs that should have been charged (tariff setting agreed with regulator) to cover all reasonable costs of the system operator including a reasonable profit margin for its shareholders.

If the applied tariffs result in a surplus or a deficit at the end of the year, this means that the tariffs charged to end consumers should have been lower or higher respectively (and vice versa). This surplus or deficit is therefore reported in the regulatory deferral account.

The release of the regulatory deferral account will impact future tariffs: incurred regulatory liabilities will decrease future tariffs, whilst incurred regulatory assets will increase future tariffs.

In the absence of an IFRS standard which specifically applies to the treatment of these regulatory deferral accounts, Elia management referred to the requirements of IFRS 14 and the Conceptual Framework for Financial Reporting alongside the latest changes in the IASB project on Rate-regulated Activities to develop the following accounting policy:

• a liability is recognised in the statement of financial position and presented as part of “accruals and deferred income” with respect to the Elia group’s obligation to deduct an amount from the tariffs to be charged to customers in future periods because the total allowed compensation for goods or services already supplied is lower than the amount already charged to customers, or excess revenues has been generated due to higher volumes than initially estimated (regulatory liability);

• an asset is recognised in the statement of financial position with respect to the Elia group’s right to add an amount to the tariffs to be charged to customers in future periods because the total allowed compensation for the goods or services already supplied exceeds the amount already charged to customers or shortage in revenues has occurred due to lower volumes than initially estimated (regulatory asset); and

• the net movement in the regulatory deferral accounts for the period is presented separately in the statement of profit or loss within the line item “net regulatory income (expense)”.

The amount in the regulatory deferral accounts is reported on an annual basis and assessed by the regulator.

The sum of revenue from contracts with customers (as defined in IFRS 15), other income and the net income (expense) from the settlement mechanism is also presented as a subtotal headed “Revenue, other income and net income (expense) from settlement mechanism”, as in substance it represents the revenue that is economically earned during the period taking into account the regulated environment in which the Elia group operates. The effect of discounting is reflected in the financial result. See Note 9.

3.4. Items in the statement of profit or loss

3.4.1 Income REVENUES

The Group’s main revenues are realised by TSOs which operate in accordance with regulatory frameworks and which have de facto/legal monopolies in their respective control zones. The frameworks which apply in the Group’s main countries of activity are detailed in Note 9 ‘Regulatory framework and tariffs’.

With regard to the regulated business, each service is based on a standard contract with the customer, mostly with a predefined regulated tariff (unit price multiplied by the volume (injection or offtake) or the reserved capacity (depending on the type of service)), so pricing is not variable. The allocation of the transaction price over the different performance obligations is therefore straightforward (one-to-one relationship). Most of these contracts are concluded for an indefinite period and have general payment terms of 15-30 days.

Considering the business of the Elia group, there are no relevant right-of-return and warranty obligations.

For all services provided by the Group, Elia is the sole and primary party responsible for executing the service and is thus the principal.

However, in its role as a TSO, Elia Transmission Belgium SA/NV and 50Hertz Transmission GmbH are subject to public service obligations imposed by the government/regulation mechanisms. These obligations mainly relate to financial support for the development of renewable energy. TSOs act as agents for these activities, and since the expense/income streams are fully covered by tariffs, they have no impact on the statement of profit and loss.

See section ‘Levies’ of Note 3.3.14 for more information on the accounting treatment.

The Group’s main performance obligations/contract types, their pricing and the revenue recognition method for 2023 can be summarised as follows:

Revenue by category for Elia Transmission Belgium

Revenue stream Nature, customer and timing of satisfaction of performance obligations

Grid revenues

Grid connection Technical studies conducted at the request of grid users, connected directly to the grid with a view to having a new connection built or an existing connection altered. The revenue is recognised at the point in time when the study is delivered.

Last-mile connection is a component of the grid connection contract. At the request of a future grid user, Elia constructs/adjusts a dedicated/ physical connection, known as a last-mile connection, to connect the customer’s facility to Elia’s grid. Although control of the asset is not transferred as such to the grid user, the grid user obtains direct access to the high-voltage grid. The access right transferred by Elia is valuable to the grid user, hence why the grid user compensates Elia in cash. Since the grid user simultaneously enters into a grid connection contract, the two activities (access right and grid connection services) are not distinct and constitute a single performance obligation and interdependence between the contracts.

As the total amount of revenue recognised for this single performance obligation, which includes grid connection services, is recognised over the life of the assets, the contract has no specific end date. This component of the grid connection/grid user contract is presented separately (not part of the grid connection/revenues from the revenue cap) because the tariff-setting method is very specific from a regulatory perspective.

The fees charged to grid users/distribution system operators (DSOs) cover the maintenance and operating costs relating to the dedicated connection facilities. The revenue is recognised over time, as this service is performed continuously throughout the contractual term.

Contract – Price setting

Contract and tariff approved by regulator. Fixed amount per type of study.

Standard contract approved by regulator, but the price is set on the basis of the budget for implementing the connection.

Management and development of grid infrastructure

Management of the electricity system

Market integration

This component of the access contract signed with access holders/DSOs covers the development and management of the grid with a view to meeting capacity needs and satisfying demand for electricity transmission. The revenue is recognised over time, as providing sufficient capacity and a resilient grid is a service performed continuously throughout the contractual term.

This component of the access contract signed with access holders/DSOs covers the management and operation of the electricity system and the offtake of additional reactive energy relating to Elia’s grid (different from the connection assets). The revenue is recognised over time, as these services are performed continuously throughout the contractual term.

This component is part of the access contract signed with access holders/DSOs, and covers (i) services to facilitate the energy market; (ii) services to develop and enhance the integration of an effective and efficient electricity market; (iii) the management of interconnectors and coordination with neighbouring countries and the European authorities; and (iv) the publication of data, as required by transparency obligations. The revenue is recognised over time, as these services are performed continuously throughout the contractual term.

Contract and tariff approved by regulator. Tariff is set per asset type (e.g. bay, km of cable).

Contract and tariff approved by regulator. EUR per kW/KVA for yearly/monthly peak and power available at access point.

Contract and tariff approved by regulator. EUR per kW/ kVArh at access point.

Contract and tariff approved by regulator. EUR per kW at access point.

Compensation for imbalances

International revenues

As defined in the BRP contract, the BRP (Balance Responsible Party) has a commitment to ensure a perfect balance between offtake and injection on the grid. In the event of an imbalance caused by a BRP, Elia has to activate the ancillary services, which are then invoiced to the BRP. The revenue is recognised at the point in time when an imbalance occurs.

Grid use along borders is organised through half-yearly, quarterly, monthly, weekly, weekend, daily and intra-day auctions. Elia and the regulators decide which auctions are conducted along each border. Auctions are organised through an auction office, which acts as an agent. The auction office collects the revenues paid by the European energy traders, which are ultimately shared between neighbouring TSOs based on the volumes imported/exported on the border. The revenue is recognised at the point in time when an import/export activity occurs.

Contract and tariff/mechanism approved by regulator. Based on market prices, EUR per kW imbalance at access point.

Framework agreement with parties and auction office. Price is set based on price difference in cross-border market prices.

Revenue by category for 50Hertz Transmission

Revenue stream Nature and timing of satisfaction of performance obligations

Contract – Price setting Grid revenues

Revenues from incentive regulation

The ‘grid use fee’ is charged to grid users/DSOs connected to the grid for the offtake on the onshore grid. This contract is signed with grid users.

The revenue is recognised over time, as this service is a performed continuously throughout the contractual term.

Last-mile connection ("client contribution") is a component of the ‘grid use fee’ contract. At the request of a future grid user, 50Hertz constructs a dedicated/physical connection, known as a last-mile connection, to create an interface point to the grid. Although control of the asset is not transferred as such to the grid user, the grid user obtains direct access to the high-voltage grid. The access right transferred by 50Hertz is valuable to the grid user, hence why the grid user compensates Elia in cash.

Since the grid user simultaneously enters into a grid connection contract, the two activities (access right and grid connection services) are not distinct and constitute a single performance obligation and interdependence between the contracts.

As the total amount of revenue recognised for this single performance obligation, which includes grid connection services, is recognised over the life of the assets, the contract has no specific end date.

This component of the grid connection/grid user contract is presented separately (not part of the grid connection/revenues from the revenue cap) because the tariff-setting method is very specific from a regulatory perspective.

Standard contract and grid tariffs defined by regulator.

Standard contract approved by regulator, but the price is set on the basis of the budget for implementing the connection.

Revenues from offshore regulation

This component comprises tariffs charged to grid users/DSOs to cover grid connection costs for offshore wind farms.

The revenue is recognised over time, as this service is performed continuously throughout the contractual term

Energy revenues This revenue stream consists of different components

Congestion management and redispatch fees are paid by market participants for use of the capacity made available by 50Hertz on specific lines (including use of cross-border assets). This allocation mechanism is governed by transparent, market-oriented procedures.

The revenue is recognised at the point in time when it is generated

Compensation for imbalances

Market participants (BRPs) have a commitment to ensure a perfect balance between offtake and injection on the grid. In the event of an imbalance, 50Hertz invoices the market participant to compensate for the costs incurred.

The revenue is recognised at the point in time when an imbalance occurs.

Horizontal reimbursement of lignite back-up costs

In its role as a TSO, 50Hertz charges fees to other TSOs for services related to the reserve power required by the legal framework.

The revenue is recognised over time, as this service is performed continuously throughout the contractual term.

Contract and tariffs predefined in regulatory mechanism.

Standard contracts approved by regulator and tariff mechanism defined in regulatory schemes.

Standard contracts approved by regulator and tariff mechanism defined in regulatory schemes.

Other revenues

Revenue stream Nature and timing of satisfaction of performance obligations

Other revenues

Third-party services

Elia Grid International provides consultancy services to third parties around the world.

The revenue is recognised over the completion of the contract.

Third-party services are presented in other revenues.

Commission fee Re.alto provides a platform through which energy actors (e.g. traders, prosumers) can exchange energy data. re.alto receives a commission on transactions undertaken via the platform.

The revenue is recognised at the point in time when the transaction occurs.

The commission fee is presented in other revenues.

Others This mainly covers other services than those described above.

The revenue is recognised at the point in time when the service is complete.

Consequently, all revenue components contain revenue from contracts with customers, i.e. parties that have contracts in place with the Group to obtain services resulting from the Group’s ordinary activities in exchange for a consideration.

OTHER INCOME

Other income is recognised when the related service is performed and no further performance obligations arise.

NET REGULATORY INCOME (EXPENSE) FROM SETTLEMENT MECHANISM

Since the tariffs are based on estimates, there is always a difference between the tariffs that are actually charged and the tariffs that should have been charged (tariff setting is agreed with the regulator) to cover all the system operator’s reasonable costs, including a reasonable profit margin for the shareholders.

If the applied tariffs result in a surplus or deficit at the end of the year, this means that the tariffs charged to consumers/the general public could have been lower or higher. This surplus or deficit is therefore reported in the settlement mechanism deferral account.

Contract – Price setting

Contract negotiated between EGI and customer. The contract price is set when the contract is concluded with the customer.

The payment term is generally 30 days from the invoice date.

The commission fee is a fixed percentage on each transaction.

The release of this deferral account will impact future tariffs: where regulatory liabilities are incurred, future tariffs will be lower, and where regulatory assets are incurred, future tariffs will be higher. The net movement in the regulatory deferral accounts for the period is presented separately in the statement of profit or loss in the line 'Net income (expense) from settlement mechanism'. See also Note 3.3.17.

3.4.2 Expenses OTHER EXPENSES

Property taxes are directly recognised in full as soon as ownership is certain (generally on 1 January of the year in question). However, these costs, which are considered to be noncontrollable costs under the regulatory framework, are recorded as revenue through the settlement mechanism for the same amount, resulting in zero impact in terms of profit or loss.

FINANCE INCOME AND EXPENSES

Finance expenses comprise interest payable on borrowings (calculated using the effective interest rate method), interest on lease liabilities, foreign-exchange losses, gains on currency hedging instruments that offset currency losses, results on interest-rate hedging instruments, losses on hedging instruments that are not part of a hedge accounting relationship, losses on financial assets classified as being for trading purposes and impairment losses on financial assets as well as any losses from hedge ineffectiveness.

Finance income includes interest receivables on bank deposits, which are recognised in profit or loss using the effective interest rate method as they accrue.

Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognised in profit or loss using the effective interest method.

INCOME TAXES

Income taxes comprise current and deferred tax. Income tax expense is recognised in profit or loss, except where it relates to items recognised directly in equity. Taxes on hybrid coupons are recognised in the statement of profit and loss as these are a tax on profits whereas the hybrid coupon itself is recognised directly in equity.

Current tax is the expected tax payable on taxable income for the year, using tax rates enacted or substantively enacted at the end of the reporting period, and any adjustments to tax payable in relation to previous years.

Deferred tax is recognised, using the balance sheet method, on temporary differences arising between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences: the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit; and differences relating to investments in subsidiaries and joint ventures where these will

probably not be reversed in the foreseeable future. In addition, deferred tax is not recognised for taxable temporary differences arising from initial recognition of goodwill. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they are reversed, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets and the deferred items relate to income taxes levied by the same tax authority on the same taxable entity or on different tax entities, but they are intended to settle current tax liabilities and assets on a net basis, or their tax assets and liabilities will be realised simultaneously.

A deferred tax asset is recognised only to the extent that it is likely that future taxable profits will be available against which the asset can be utilised. Deferred tax assets are reduced to the extent that it is no longer likely that the related tax benefit will be realised.

Additional income taxes that arise from the distribution of dividends are recognised at the same time as the liability to pay the related dividend.

3.5. Statement of comprehensive income and statement of changes equity

The statement of comprehensive income presents an overview of all revenues and expenses recognised in the consolidated statement of profit or loss and in the consolidated statement of changes in equity. The Group has elected to present comprehensive income using the two-statement approach, i.e. the statement of profit or loss immediately followed by the statement of other comprehensive income. As a result of this approach, the content of the statement of changes in equity is restricted to owner-related changes.

4. Segment reporting

There were no changes made to the basis of preparation and therefore no restatements of figures from previous years were required.

4.1. Basis for segment reporting

The Group has opted for segment reporting, in conformity with the different regulatory frameworks that currently exist within the Group. This reporting approach closely reflects the Group’s operational activities and is also in line with the Group’s internal reporting to the Chief Operating Decision Maker (CODM), enabling the CODM to better evaluate and assess the Group’s performance and activities in a transparent way.

Pursuant to IFRS 8, the Group has identified the following operating segments based on the aforementioned criteria:

• Elia Transmission (Belgium), which comprises the activities based undertaken in line with the Belgian regulatory framework: the regulated activities of Elia Transmission Belgium SA/NV, Elia Asset SA/NV, Elia Engineering SA/NV, Elia Re SA, HGRT SAS and Coreso SA/NV, whose activities are directly linked to the role of the Belgian transmission system operator and are subject to the regulatory framework applicable in Belgium – see Section 9.1.3.

• 50Hertz Transmission (Germany), which comprises the activities undertaken in line with the German regulatory framework: Eurogrid GmbH, 50Hertz Transmission GmbH, 50Hertz Offshore GmbH and 50Hertz Connectors, whose activities are directly linked to the role of the transmission system operator in Germany – see Section 9.2.3.

• Non-regulated activities and Nemo Link, comprising:

• Elia Group NV/SA, mainly consisting of the holding activities in the Elia Transmission (Belgium) and 50Hertz Transmission (Germany) segment;

Eurogrid International NV/SA;

‐ Nemo Link Ltd., which connects the UK and Belgium using high-voltage electricity cables, enabling power to be exchanged between the two countries and for which a specific regulatory framework has been set up – see Section 9.3 for more details;

‐ the non-regulated activities of the Elia Transmission (Belgium) segment. ’Non-regulated activities’ refers to activities which are not directly related to the role of a TSO – see Section 9.1;

‐ EGI (Elia Grid International NV/SA, Elia Grid International GmbH, Elia Grid International Pte. Ltd Singapore (closed in 2022), Elia Grid International LLC Saudi Arabia and Elia Grid International Inc Canada (a new subsidiary incorporated in 2022), which are companies that supply specialists in consulting, services, engineering and procurement, creating value by delivering solutions based on international best practice while fully complying with regulated business environments;

‐ Re.Alto-Energy BV/SRL and Re.Alto-Energy GmbH, a start-up founded in August 2019 which is the first European digital marketplace for energy data and services;

‐ WindGrid (WindGrid NV/SA, WindGrid USA Holding LLC and WindGrid USA LLC ), founded in 2022, which was established to manage expected increase in investments in renewable energy production and the offshore grid expansion.

The CODM has been identified by the Group as the Boards of Directors, CEOs and Management Committees of each segment. The CODM periodically reviews the performance of the Group's segments using various indicators such as revenue, EBITDA and operating profit.

The information presented to the CODM follows the Group's IFRS accounting policies, so no reconciling items have to be disclosed.

4.2. Elia Transmission (Belgium)

The table below shows the 2023 consolidated results for Elia Transmission (Belgium)

Results Elia Transmission (in € million) − period ended 31 December

The tariff methodology approved by the CREG on 7 November 2019 came into force in 2020. The methodology is applicable for a four-year period (2020 – 2023). See Note 9.1 for more information about the new regulatory framework.

FINANCIAL

Elia Transmission's revenue was down by 11.4% compared with 2022, decreasing from €1,561.3 million to €1,383.9 million. Revenue was impacted by a higher regulated net profit, higher depreciations linked to the growing asset base, more than offset by lower net financial cost due to interest income from cash deposits and a strong drop in costs for ancillary services. The lower ancillary services were driven by lower balancing activation and reservation costs, resulting from the drop in gas and electricity prices as prior year was marked by the start of the war in Ukraine.

The table below provides more details about revenue component changes:

Revenues from grid connection, the management of the electrical system and market integration remained stable compared to 2022.

The revenues from the management and development of grid infrastructure decreased from €475.3 million to €461.3 million (-€14.0 million). This is driven by reduced revenues due to lower consumption peaks (both yearly and monthly), particularly on the Distribution System Operator (DSO) side. Additionally, income related to power put at disposal saw a decrease compared to the previous year. This reduction is mainly attributed to optimization efforts and a decrease in power reserved by certain DSOs, implemented since September 2022.

Services rendered in the area of energy management and the individual balancing of balancing groups are paid under revenues from compensation for imbalances. These revenues saw a notable decline from €365.0 million to €255.1 million (-30.1%). Primarily, this decrease can be attributed to the tariff reduction for maintaining and restoring the residual balance of individual access responsible parties, amounting to €106.2 million. The drop in market conditions, specifically lower gas and electricity prices compared to last year, resulted in reduced balancing activation costs and, consequently, a lower imbalance price.

International revenue decreased to €294.3 million (-17.9%). The decrease is primarily attributed to a lower income from daily auctions for flow-based congestion, amounting to a reduction of €142.6 million. This is driven by decreased price spreads at Belgian borders compared to the previous year, particularly at the French border. Monthly auction revenues have also declined, down by €79.9 million, reflecting a less tense energy market compared to the previous year. However, these reductions are partially offset by an increase in yearly auction revenues, rising by €162.6 million. Notably, the yearly auctions for 2023 occurred in November 2022 during a peak crisis period, with nuclear unavailability in France still a concern, resulting in higher prices.

The last mile connection remained flat compared with previous year, while other revenues increased, mainly due to works delivered to third parties.

The settlement mechanism increased from -€6.7 million in 2022 to €50.4 million in 2023 and encompassed both deviations in the current year from the budget approved by the regulator (-€106.8 million) and the settlement of net surpluses from the previous tariff period (€156.7 million).The operating surplus (-€106.8 million), with respect to budgeted costs and revenue authorised by the regulator, will be returned to consumers in a future tariff period. The surplus was primarily the result of higher costs for ancillary services (+€122.1 million), higher influenceable costs (+€89.6 million), adjustment of the controllable budget (+€45.1 million) and a higher net profit (+€32.4 million). This was more than offset by an increase in tariff sales (-€137.4 million), which was mainly driven by imbalance compensations, and higher international and other sales (-€272.8 million).

EBITDA rose to €510.2 million (+7.1%) due to a higher regulated net profit, higher depreciations linked to the growing asset base, partially offset by lower net finance costs, all passed through into revenue. The EBIT increase was more pronounced (+10.9%), driven by higher dismantling provision for the Modular Offshore Grid covered by the tariffs, while already capitalised under IFRS in previous years. Also the depreciations for intangible assets expensed during the previous regulatory period and thus not covered by the tariffs decreased. The contribution of equity-accounted investments slightly increased to €2.8 million, linked to the contribution from HGRT.

Net finance cost decreased (-12.3%) compared with the previous year. This was mainly driven by the activation of borrowing costs due to the growth of the asset base (+€3.1 million), but the increasing interest rate environment also led to higher interest income on cash deposits. This was partly offset by higher interest costs linked to ETB’s bond issuance. Beginning 2023, ETB tapped the debt capital market with its inaugural €500 million Green Bond for funding

its eligible green projects. ETB proactively anticipated the rising interest rate environment by concluding interest rate swaps and8 this fully to the benefit of consumers. Consequently, the average cost of debt only marginally increased to 2.0% (+10 bps) at the end of 2023, and all outstanding debt has a fixed coupon.

Net profit rose by 15.3% to 180.9 million, mainly due to the following:

• A higher fair remuneration (+€7.7 million) due to asset growth and higher equity.

• Increase in incentives (+€12.9 million), reflecting a strong operational performance, primarily linked to a higher efficiency gain on controllable costs despite the growth of our activities and a better performance on the incentive for interconnection capacity driven by lower congestion costs. The net contribution from incentives was slightly negatively impacted by an increase of the average tax rate.

• Activation of the Green Bond issuance costs under IFRS while fully covered by the tariffs (+€2.1 million).

• Higher capitalised borrowing costs due to a higher level of assets under construction and the slight uptick in average costs of debt (+€3.2 million).

• A one-off tariff compensation recognized in 2022 for the financial costs linked to the capital increase (-€3.5 million).

• Other (+€1.5 million): this was driven by lower share-based payment expenses linked to the capital increase in favour of members of staff (+€1.6 million), higher dismantling provisions for the Modular Offshore Grid covered by the tariffs while capitalized under IFRS (+€3.4 million) and lower depreciation of software and hardware (+€0.7 million) as some of the assets acquired during the previous regulatory period and covered by the regulatory methodology are written off. This is partially offset by slightly more damage to electrical installations compared with the previous year (-€2.1 million) and deferred tax effects (-€2.5 million).

Total assets increased by €429.2 million to €8,277.8 million due to the realisation of the investment programme.

Net financial debt increased to €3,479.1 million (+19.3%), as ETB’s CAPEX programme was partially financed by cash flows from operating activities, which were negatively impacted by lower cash inflows from levies, and the issuance of a €500 million Green bond. The sustainability-linked RCF (€650 million) and the commercial paper (€300 million) were fully undrawn at the end of 2023. Elia Transmission Belgium is rated BBB+ with a stable outlook by Standard & Poors.

4.3. 50Hertz Transmission (Germany)

The table below shows the 2023 consolidated results for 50Hertz Transmission (Germany) system operator activities in Germany.

Results 50Hertz Transmission (Germany)

Total revenues are detailed in the table below.

50Hertz Transmission’s total revenue and other income slightly decreased compared with 2022 (0.6%).

Revenues from incentive regulation consist of grid tariffs before the settlement mechanism; they are primarily driven by the regulatory remuneration for onshore activities (revenue cap).

Revenues from incentive regulation increased by €695.3 million. The main driver was the revenue cap increase (+€824.1 million), as it assumed energy prices at the level of 2022, and includes significantly higher cost allowance for pass-through energy costs for redispatch (+€664.4 million) and grid losses (+€71.5 million). Furthermore, it also results from the voluntary commitment to utilise electricity in electrical heat generating units instead of limiting the renewable energy production in the scope of temporary measures to reduce overloads on the transmission grid (+€67.1 million), as well as a higher cap for non-influenceable Opex (+€14.3 million), e.g. personnel, subsidies etc. The volume effects offset the higher revenue cap partially. Last year the infeed of renewable energy into the distribution grid was much higher than expected, leading to lower volumes in the transmission grid. This effect increased even further compared to last year (-€128.8 million).

Revenues from offshore surcharge include all revenues derived from the offshore grid surcharge. This includes regulatory remuneration for the connection of offshore wind farms, the reimbursement of offshore liability payments and offshore costs charged to 50Hertz by third parties, e.g. other TSOs.

The offshore surcharge revenues increased compared with the previous year (+€105.8 million) as the pass-through costs charged to 50Hertz by third parties increased (+€117.2 million). While the offshore remuneration for capital costs increased due to the execution of the investments (Ostwind 2, Ostwind 3 and Gennaker), the remuneration of the offshore Opex decreased more strongly as 50Hertz benefitted in 2022 from the final settlement of the offshore lump sum for 2018 (-€11.4 million).

Energy revenues include all revenues related to system operations and are mostly corresponding costs charged on to third parties, such as redispatch measures, costs for reserve power plants or control power costs. Revenues generated from auctioning off interconnector capacity are also included in this section.

Energy revenues strongly decreased compared to the previous year (-€478.9 million), due to the sharp drop in energy prices since last year. The main driver is the strong decrease of control power costs charged to balancing groups (-€217.7 million). The revenues from the compensation of involuntary exchanges at the grid’s borders decreased as well (-€81.1 million), as did the revenues from reserve power plants (-€73.0 million). Furthermore, revenues from the auctioning of interconnector capacities dropped due to the price developments (-€58.7 million), as did the charges to other TSOs for redispatch measures decreased significantly (-€47.0 million).

Other income rose (+€49.3 million), as a result of higher own work capitalised following the increase in staffing to execute and manage the investment programme (+€40.6 million) as well as higher revenues from service level agreements (+€17.0 million).

The net regulatory income (expense) from settlement mechanism neutralises regulatory time lags. It consists of two components: firstly, the neutralisation of differences between cost allowances in the tariffs and the actual costs incurred for the current year (-€288.3 million); secondly, the balancing of said differences from prior years (+€138.1 million).

EBITDA increased to €710.9 million (+16.3%). The growing onshore and offshore asset base benefitted the investment remuneration (+€75.0 million). Base year revenues increased due to a higher remuneration (inflation adjustment) of the capital costs and the Opex compared to last year (+€9.5 million). The operational costs remained well under control (+€4.6 million), driven by lower maintenance costs and partially offset by important expenditures in digitalisation and IT in order to manage the increasing complexity of operating the system. Furthermore, the EBITDA benefitted from a higher energy bonus (+€11.1 million), especially for grid losses. 50Hertz continued to expand its talent pool in order to keep up with the increasingly larger and more complex investment programme, leading to additional staff costs (-€34.1 million). This was offset by higher own work capitalised and revenues from service level agreements (+€48.6 million). Finally, last year’s EBITDA was marked by significant one-off regulatory settlements as the offshore lump sum for 2018 was settled (-€14.8 million). Also, the EBIT increased (+20.6%) despite the higher depreciations (-€34.7 million) following the execution of the investment programme. Furthermore, operating provisions remained flat.

The net financial result decreased to -€59.8 million (-€87.1 million), mainly related to the valuation of the long-term provision for congestion income from interconnectors included in the regulatory accounts (-€74.2 million). Last year was marked by a strong drop in the valuation of this liability due to the spike of forward interest rates, while the sudden drop in interest rates in December 2023 caused an increase of the provision. Furthermore, the funding costs increased due to Eurogrid’s bond and green loan issuances in an environment of increasing interest rates over the first three quarters of 2023 (-€9.7 million). This is partially offset by higher capitalised borrowing costs due to the ongoing investment programme (+€7.1 million).

Net profit decreased to €218.5 million (-7.5%) as a result of:

• Higher investment remuneration (+€52.5 million) following the growth of the asset base.

• Decreased Opex and other costs (+€10.5 million) mainly driven by higher base year revenues and lower operating cost more than offsetting the lower regulatory settlements.

• Higher energy bonus (+€4.6 million), mainly due to the bonus for grid losses.

These effects were partially compensated by:

• Lower financial results (-€60.9 million), driven primarily by last year’s revaluation of longterm provisions and the higher interest costs.

• Higher depreciations (-€24.3 million) due to the commissioning of projects.

Total assets declined by -€1,551.5 million compared with 2022 mainly due to decreasing cash and cash equivalents linked to the decreasing energy prices and therefore a strong drop of the EEG cash balance, partially compensated by the good progress on the investment programme and therefore increasing assets under construction. The free cash flow totalled -€3,403.7 million and was heavily affected by the realisation of investment programme (€1,685.9 million) and the net cash outflow for EEG and similar mechanisms (KWK72 and SPB73) (-€2,578.6 million) driven by the decreased energy prices. 50Hertz acts as a trustee for these mechanisms.

The net financial debt, excl. EEG and similar mechanisms increased by €854.6 million compared to end of 2022, up to €5,045.9 million. The execution of the investment programme was partially financed from operating cash flow, while Eurogrid also accessed the debt market on several occasions. Including EEG and similar mechanisms, the net financial debt increased by €3,438.0 million due to the drop of the cash balance for EEG and similar mechanisms. As of December 2023, the cash position for these schemes decreased and amounted to €352.6 million.

72 KWK (Kraft-Wärme-Kopplung): Combined Heat & Power

73 SPB (Strompreisbremse): Cap on energy prices

In 2023, Eurogrid continued to tap the debt market to finance its investment plan. It secured and drew on a €600 million Green Loan with a term of ten years and refinanced under KfW’s “Climate Protection Programme for Companies”. The funds are used to co-finance the offshore grid connection for the Gennaker wind farm project. Additionally, Eurogrid issued a new bond of €650 million with a tenor of 7 years and at a fixed rate of 3,722% on which it tapped an additional €150 million in November (re-offer yield at 4.534%), in order to refinance a €750 million bond with a maturity in 2023. Finally, a syndicated bank loan of €120 million with a tenor of 10 years was secured in November to partially finance the Uckermark line and Berlin cable tunnel, while Eurogrid also agreed on a new private placement of €50 million. Following these transactions, the average cost of debt increased to 2.01% (+21 bps) at the end of 2023.

4.4. Non-regulated activities and Nemo Link

The table below shows the 2023 consolidated results for the ‘Non-regulated activities and Nemo Link’ segment.

Results Non-regulated activities and Nemo Link (in € million) − period ended 31 December

Results from operating activities

of profit of equity accounted investees (net of income tax)

Adjusted net profit

Consolidated statement of financial position (in € million)

Non-regulated revenue increased by 54.4% to €69.0 million compared to 2022. Elia Grid International (‘EGI’) achieved a strong increase in revenues (+€8.3 million) by effectively utilizing its well-established consulting expertise in the energy industry to support countries in their pursuit of energy transition objectives. Furthermore, the intersegment transactions increased mainly between Elia Group SA, Elia Transmission Belgium and 50Hertz. The effect of these intersegment transactions is disclosed in ‘Note 4.5. Segment reconciliation’.

Equity-accounted investments contributed €27.3 million to the Group’s result, which is almost entirely attributable to Nemo Link. Despite the Nemo Link’s strong performance in 2023, it contributed €9.8 million less to the overall result compared to prior year. This decline can be fully attributed to the fact that Nemo Link reached the cumulative cap for the 5-year assessment, while prior year result still partially benefitted from lower performance for the years 2019-2021.

In 2023, the European and British electricity markets settled following the tumultuous state in 2022. The year saw significant power flow towards Belgium due to a more favorable gas supply situation in Great Britain, but this difference faded as EU gas storages hit record highs and reliance on Russian gas decreased. This improved supply scenario led to a significant drop in gas prices compared to 2022, reducing price spreads and flows towards Belgium. Carbon emission prices, which significantly impact power prices, also showed a downward trend in the UK relative to the EU, further reducing price differences between these markets. Consequently, the average hourly market spread came down from €41.3/MWh in 2022 to a more normal level of €13.7/MWh in 2023.

The operational availability of the interconnector remained high at 96.1% in 2023, despite more extensive maintenance due to the first 5 years of operations.

Adjusted EBIT dropped to €17.3 million (-€6.3 million). This decrease was primarily due to the lower contribution from Nemo Link (-€9.8 million), higher cost at WindGrid especially in relation to the establishment of WindGrid US (-€3.4 million) and partially offset by the lower costs at the holding (+€1.7 million). Furthermore, the adjusted EBIT was negatively impacted by higher costs for re.alto (-€0.4 million). Following the increase in revenues, the contribution from EGI increased (+€4.8 million), while the other non-regulated cost decreased (+€0.8 million). Considering the one-off costs linked to the acquisition of a minority stake in energyRe Giga (€11.9 million), EBIT totals €5.4 million.

Net finance cost dropped to €5.0 million, mainly consisting of interest expenses related to the senior bond (€5.2 million), expenses related to the Nemo Link private placement (€2.6 million) and other financial costs related to Elia Group SA, primarily driven by funding cost linked to equity injection in Eurogrid GmbH. These costs were partially balanced out by interest income from mainly from cash deposits (€4.3 million) benefitting from the higher interest rate environment and the Group’s improved liquidity position following last year’s capital increase. In the course of 2023, the Group successfully refinanced its €700 million

hybrid security, by the use of liquidity and the issuance of a new €500 million hybrid with a capped tender on the outstanding hybrid security. All the cost linked to this transaction, are directly recognised in equity under IFRS.

Adjusted net profit decreased by -20.4% to €12.1 million, mainly as a result of:

• Lower contribution from Nemo Link (-€9.6 million).

• Higher costs driven by the expansion of international offshore activities of WindGrid (-€3.2 million).

• Lower loss for the holding (+€5.3 million) driven mainly by higher interest income on cash deposits and lower business development cost as cost linked to energyRe Giga are presented as an adjusted item.

• Higher contribution from EGI (+€4.0 million).

• Other items (+€0.4 million) primarily driven by lower other non-regulated cost (+€0.2 million), financial income at Eurogrid International (+€0.7 million), partially offset by higher costs for re.alto (-€0.4 million).

Total assets decreased by 5.2% amounting to €1,844.9 million (-€101.6 million) as the refinancing of the hybrid security was partially financed from existing liquidity following last year’s capital increase, while the dividend paid to shareholders (-€140.4 million) was covered by the dividend proceeds from subsidiaries. Additionally, the Group increased its participation in Eurogrid GmbH, by drawing €100 million from its Revolving Credit Facilities. This also led to a rise in net financial debt of €209.4 million to €469.6 million.

Finally, as part of the investment in energyRe Giga, Elia Group SA has secured a bridge facility of €400 million, fully undrawn at year end. It also has unused Revolving Credit Facilities amounting to €55 million, while the commercial paper worth €35 million remains fully undrawn.

4.5. Reconciliation of information on reportable segments to IFRS amounts

Consolidated results (in € million)

There are no significant intersegment transactions.

The Group has no concentration of customers in either of the operating segments.

4.6. Adjusted items – reconciliation table

(in € million) − Period ended 31 December 2023 Elia Transmission 50Hertz Transmission Non-regulated activities and Nemo Link

Adjusted items

In 2023, the Group reports the transaction costs related to the acquisition of a minority share in EnergyRe Giga US as "adjusted items". More information about the transaction are provided in Note 8.4 - Subsequent events.

There were no adjusted items incurred in 2022.

5. Items in the consolidated statement of profit or loss and other comprehensive income

There were no changes made to the basis of preparation and therefore no restatements of figures from previous years were required.

5.1. Revenue, net income (expense) from settlement mechanism and other income

5.2. Operating expenses

COST OF MATERIALS, SERVICES AND OTHER GOODS

We refer to the segment reports for a detailed analysis of the Group’s recognised revenues at segment level. The Elia Transmission (Belgium) segment reported revenues and other income of €1,383.9 million (Note 4.2), the 50Hertz Transmission (Germany) segment reported revenues and other income of €2,578.2 million (Note 4.3) and the ‘Non-regulated activities and Nemo Link’ segment reported revenues and other income of €69.0 million (Note 4.4). The total reported revenues and other income amount to €3,953.5 million.

No further geographical information is provided as revenues are generated in the countries where the grid infrastructure is located, which largely corresponds to the segments mentioned above.

The Group’s own production relates to time spent on investment projects by group employees.

The Group recognised €4.8 million of revenue in the reporting period that was included in the contract liability balance at the beginning of the period (€147.2 million). Additional information is provided in Note 6.16. The Group did not recognise any substantial revenues in the reporting period with respect to performance obligations in previous periods.

The Group’s costs for ‘Raw materials, consumables and goods for resale’ decreased to €17.2 million for the financial year 2023. In 2023, the costs are attributable to the Belgian segment for €4.4 million (€5.0 million in 2022), the German segment for €12.8 million (€64.2 million in 2022) and EGI for €0.1 million (€0.5 million in 2022). In the German segment, the decrease is mainly explained by the fact that, in the previous year, third-party services were mainly reported under raw materials. From 2023, these (EUR 66.1 m; prior year: EUR 73.2 m) are reported under Services and other goods.

Purchase of ancillary services’ includes the costs for services which enable the Group to balance generation with demand, maintain constant voltage levels and manage congestion across its grids. The cost incurred in 2023 by Elia Transmission (Belgium) decreased to €375.1 million (up from €566.8 million in 2022) mainly because of lower prices to cover electricity losses and decreased activations to balance the grid against a background of the high energy prices. 50Hertz Transmission (Germany) incurred decreased costs of €1,298.6 million in 2023 compared to €1,575.6 million in 2022 also due to lower electricity prices.

Services and other goods’ relates to maintenance of the grid, services provided by third parties, insurance and consultancy fees, and others. The cost of these increased by €192.3 million (+46.6%) to €604.6 million. The increase is mainly explained by the increased level of activities (in the regulatory business but also in EGI activities) in an inflationary environment.

PERSONNEL EXPENSES

Personnel expenses increased by €42,4 million in 2023 as a consequence of the indexation and the continued growth in headcount, especially in the non-regulated segment. For Elia Transmission (Belgium) the personnel expenses amounted to €188.4 in 2023 compared to €183.5 million in 2022. 50Hertz Transmission (Germany) accounted for €201.8 million of the Group’s personnel expenses for 2023 (previous year: €168.1 million) and the non-regulated activities and Nemo Link accounted for €24.2 million (previous year: €20.5 million). All three segments have experienced a growth in the number of full-time equivalents to support the acceleration of the energy transition and the development opportunities linked to the expansion of its international offshore activities.

A new capital increase in favour of the members of the personnel of Elia Group NV/SA and its Belgian subsidiaries was completed in April 2023. The capital increase resulted in the creation of 5,984 additional shares without nominal value. The Group's employees were granted a 16.66% reduction on the quoted share price, which resulted in a €0.1 million reduction overall.

See Note 6.14 ‘Employee benefits’ for more information about pension costs and employee benefits’.

DEPRECIATION, AMORTISATION, IMPAIRMENT AND CHANGES

The total ‘depreciation, amortisation, impairment and changes in provisions’ increased from €512.4 million in 2022 to €552.9 million in 2023, mainly because of an increase in depreciation of property, plant and equipment due to increasing fixed assets.

A detailed description and movement schedule is provided in other sections for 'Intangible assets' (see Note 6.2), 'Property, plant and equipment' (see Note 6.1) and 'Provisions' (see Note 6.15).

OTHER EXPENSES

In 2023, the share of Elia Transmission (Belgium) in the Group’s other expenses was €25.3 million (€26.6 million in 2022), 50Hertz Transmission (Germany)’s total share amounted to €15.6 million (€17.0 million in 2022) and the share of the non-regulated activities and Nemo Link segment accounted for €6.7 million (€0.9 million in 2022).

Taxes other than income tax mainly consist of property taxes. The increase is mainly due to property taxes paid by the Group in Germany (and to a large extent rebilled to partners).

Losses on disposal for property, plant and equipment totalled €11.5 million for Elia Transmission (Belgium), compared with €12.8 million in the previous year. 50Hertz Transmission (Germany) recorded €7.7 million of losses on disposal for property, plant and equipment in 2023, from €5.0 million in 2022.

The amount of impairment on trade receivables is explained in Note 8.1 ‘Financial risk and derivative management’.

5.3. Net finance costs

Finance income decreased from €75.4 million in 2022 to €61.6 million in 2023. The global variation results from opposite effects within this line item:

• Increase in interest income following higher cash balances over the year (especially in Germany) in a higher interest rate environment, combined with a dynamic investment policy in 2023 (+€53.3 million)

• Decrease in other financial income due to a negative impact of the reevaluation of provision for congestion income from interconnectors to be returned to grid customers in Germany: the positive impact of €69.2 million in 2022 turns out to be negative, with a charge of €4.2 million in 2023

The interest expenses on Eurobonds and other bank borrowings increased by €50.4 million compared to the previous year. See Note 6.13 for more details regarding the loans outstanding and the interest paid in 2023.

The interest cost on leasing is stable compared to previous year.

Other financial costs increased from €5.1 million in 2022 to €20.1 million in 2023 (+€15.0 million).

• In 2022, a net income on German regulatory issues (credit amount of €69.2 million) was reported in finance income in connection with the provisions for congestion management. As explained here above, in 2023, a net charge is reported for €4.2 million.

• The interests on provisions and employee benefits have increased by respectively €3.2 million and €3.0 million, the remaining variation being mainly explained by bank fees and commissions and fees on debts (+€4.3 million).

Please see Note 6.13 for more details about outstanding loans and the interest.

5.4. Income taxes

RECOGNISED IN PROFIT OR LOSS

The consolidated income statement includes the following taxes:

Total income tax expenses 2023 are higher than in 2022. The increase is mainly explained by the higher profit generated in Belgium .

Deferred income taxes are discussed further in Note 6.7.

RECONCILIATION OF THE EFFECTIVE TAX RATE

The tax on the Group's profit (loss) before tax differs from the theoretical amount that would arise using the Belgian statutory tax rate applicable to profits (losses) of the consolidated companies:

• If the top-up tax had applied in 2023, then, under the applicable Transitional Safe Harbour rules, no minimum top-up tax would be due for any of these jurisdictions.

• Based on the Group’s income tax forecasts, and based on currently available information, a similar conclusion can be reached for the foreseeable future (2024 through 2026)”.

The Group is continuing to assess the impact of the Pillar Two income taxes legislation on its future financial performance.

5.5. Earnings per share (EPS)

BASIC EPS

Basic earnings per share are calculated by dividing the net profit attributable to the Company’s shareholders (after adjustment for the distribution on hybrid securities) (€324.5 million) by the weighted average number of ordinary shares outstanding during the year.

* The income tax rate in Germany amounts to 29.93% in 2023 and 29.93% in 2022, for Belgium the income tax rate is 25% for 2022 and 2023

The effective tax rate 2023 of the Group is 28.00%, compared to 26.54% in 2022. This increase is mainly explained by the higher contribution of the Belgian segment to the profit before tax at an higher effective tax rate compared to prior year (from 17.98% to 20.85% due to lower contribution of the equity accounted investees and lower tax credits in 2023) .

The Group has applied the temporary exception issued by the IASB in May 2023 from the accounting requirements for deferred taxes in IAS 12. Accordingly, the Group neither recognises nor discloses information about deferred tax assets and liabilities related to Pillar Two income taxes.

On 14 December 2023, the government of Belgium, where the parent company is incorporated, enacted the Pillar Two income taxes legislation effective from 1 January 2024. Under the legislation, the parent company will be required to pay, in Belgium, top-up tax on profits of its subsidiaries that are taxed at an effective tax rate of less than 15 per cent. .

Based on analyses performed, the Group does however expect not to be subject to the topup tax in relation to its operations in any of these jurisdictions.

• As the newly enacted legislations are only effective as from 1 January 2024, there is no current tax impact for the year ended 31 December 2023.

DILUTED EPS

Diluted earnings per share are determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, which comprise share options and convertible bonds.

Diluted earnings per share are equal to basic earnings per share, since there are no share options or convertible bonds.

5.6. Other comprehensive income

Total comprehensive income includes both the result of the period recognised in the statement of profit or loss and other comprehensive income recognised in equity. ‘Other comprehensive income’ includes all changes in equity other than owner-related changes, which are reported in the statement of changes in equity.

The total other comprehensive income for 2023 amounts to €272.2 million negative impact, representing a significant decrease compared with the previous year (€65.6 million negative impact). The most important drivers of this are described below.

Cash flow hedges

Since 2021, 50Hertz applies hedge accounting for the purpose of reducing the risk of fluctuations in the expected amount of grid losses. Due to the drop in energy prices over the year, the fair value of these contracts decreased from +€129.6 million in 2022 to -€224.8 million end of 2023, or a decrease of €354.5 million (pre-tax). This impact has been amplified by the negative fair value variation of the derivates contracted in Belgium in connection with the pre-hedging of probable forecast debt transactions (bonds issuance). The fair value of these derivatives decreased from €65.3 million in 2022 to €40.2 million (pre-tax) end of 2023. We refer to notes 6.18 and 8.1 for further details.

The related tax on these elements amounts to +€112.7 million.

Financial assets measured at fair value through other comprehensive income

There was no significant remeasurement in 2023. The measurement at fair value of the participation of EEX (see note 6.6) , in which 50Hertz Transmission holds a 5.4% stake resulted in a gain of €32,7 million as of 31 December 2022.

Remeasurements of post-employment benefit obligations

The other comprehensive income on post-employment obligations had a negative impact amounting to €6.5 million. This impact is mainly explained by the decrease in the discount rate and the experience adjustments resulting from the higher salary increase, partly offset by the positive return of the plan assets. See Note 6.14 for more details.

The related tax on these elements amounts to +€1.8 million

6. Items in the consolidated statement of financial position

6.1. Property, plant and equipment

Large-scale (onshore and offshore) infrastructure projects in both Belgium and Germany are under construction. These projects are focusing on strengthening both the Belgian and German grids, developing the necessary offshore infrastructures to allow the integration of increasing amounts of renewable energy into the grid and the digitalisation of the infrastructure. The acceleration of the energy transition and the current inflationary environment are driving the investments of the Group.

In Belgium, Elia Transmission made investments totalling €682.8 million in property, plant and equipment. The primary focus remained on fortifying and expanding the 380 kV grid, laying the groundwork for offshore grid expansion and the seamless integration of renewable energy. An amount of circa €158.5 million was allocated to offshore developments, €321.7 million to regional grid reinforcements, and client connections, while approximately €145.2 million supported 203 replacement projects across the Belgian grid. In February 2023, Elia awarded the engineering, procurement, construction and installation contract for the Princess Elisabeth Island but he island’s foundation work will only begin in early 2024 and will last for two and a half years.

In Germany, 50Hertz Transmission invested €1,650.9 million in property, plant and equipment. In total, €1,102.2 million were invested in onshore projects, while offshore investments amounted to €494.3 million. Significant onshore investments include the DC line SuedOstLink (€289.7 million), crucial for connecting growing offshore production in northern Germany to southern consumption centers. Additionally, a major focus of the year was on reinforcing the existing grid, with the 380 kV overhead line between Röhrsdorf and Remptendorf as a major project, costing €137.3 million. Other important reinforcement projects involve the southern Uckermark region (€118.0 million) and the northern Uckermark region (€25.5 million) overhead lines, and the 380 kV overhead line section between Pulgar and Vieselbach (€54.6 million). Other noteworthy onshore projects to strengthen the grid include the restructuring of the Lauchstädt substation with STATCOM and MSCDN (€44.7 million), as well as the restructuring and reinforcement of the Wolmirstedt to Güstrow (€44.4 million) overhead line.

During 2023, €33.8 million of borrowing costs were capitalised on assets under construction. An amount of €8.7 million based on an average interest rate of 2.01% originated from the Elia Transmission Belgium segment (€6.1 million at 1.91% in 2022). An amount of €25.1 million based on an average interest rate of 1.7% was accounted for in the 50Hertz Transmission segment (€18.1 million at 1.4% in 2022).

For the Group as a whole, energy transition represents a challenge, but also opportunities. Climate goals merely confirms the strategic and economic value of the current asset base without significant impact on the useful life of the existing assets. Asset base will continue to be modernised and developed, as demonstrated by the various projects that got underway in 2023.

There were no mortgages, pledges or similar securities on PP&E relating to loans.

Outstanding capital expenditure commitments are described in Note 8.2. The analysis of lease liabilities is presented in note 6.19.

6.2. Intangible assets

(in € million)

CARRYING AMOUNT

Development costs of software Licences/ concessions

Software comprises both IT applications developed by the Group for operating the grid and software for the Group's normal business operations.

The Group invested a total amount of €143 million, of which €64.7 million in Elia Transmission Belgium, €77.2 million in 50Hertz Transmission and €1.1 million in the nonregulated activities and Nemo Link segment.

During 2023, €1.1 million in borrowing costs were capitalised on software in development (compared with €0.6 million in 20220) in the Elia Transmission Belgium segment, based on an average interest rate of 2.01% (1.91% in 2022). No borrowing costs on software in development were capitalised in the 50Hertz Transmission segment.

The Group does not hold individual intangible assets that are material to its financial statements, except capacity entitlements in the Kontek cable (Denmark) that amount to €13.6 million (with a remaining useful life of 10 years (until 2033) and the ERP (€32.8 million with a remaining useful life of 4 years - until 2027).

The Group has not identified SAAS contracts at present. This type of arrangement may be made in the future.

6.3. Goodwill

There were no changes in goodwill during the years 2022-2023. The carrying amount is the following:

(in € million)

The goodwill relates to the following business combinations and is allocated to the cash generating unit (CGU) Elia Transmission for the acquisition of Elia Asset and Elia Engineering and to the CGU 50Hertz Transmission for the acquisition of the 20% stake in Eurogrid International:

IMPAIRMENT TEST FOR CASH-GENERATING UNITS CONTAINING GOODWILL

According to IFRS rules, goodwill should be tested for impairment on at least an annual basis or upon the occurrence of a triggering event. Goodwill is allocated to the CGUs Elia Transmission and 50Hertz Transmission for impairment testing. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually.

The recoverable amount of CGUs is determined by reference to a value in use that is calculated based on different methods (Discounted Cash Flow and Discounted Dividend Model) using cash flow projections drawn up on the basis of the 2023 updated forecast and the 2024-2028 business plan, as approved by the Management Committee and the Board of Directors, and on extrapolated cash flows beyond that time frame.

The forecasts and projections included in the reference scenario were determined on the basis of the estimated investment plans, remuneration defined in the regulatory frameworks, market evolution, market share and margin evolution. As the Group’s asset base consists of assets with long useful lives, the business plan’s projection period was set to encompass the coming two regulatory periods.

The discount rates used correspond to the weighted average cost of capital, which is adjusted in order to reflect the business, market, country and currency risk relating to each goodwill CGU reviewed. The discount rates used are consistent with available external information sources.

The growth rates associated with the terminal values do not exceed the inflation rate or the long-term average growth rate for the market to which the CGU is dedicated.

More details are provided below by CGU.

ACQUISITION OF ELIA ASSET AND ELIA ENGINEERING

The acquisition of Elia Asset (in 2002) and Elia Engineering (in 2004) by the Company resulted in a positive consolidation difference of respectively €1,700.1 million and €7.7 million which could not be allocated to specific assets. This difference has consequently been recognised as goodwill assigned to the regulated activity in Belgium. Since 2004, annual impairment tests have been conducted and have not resulted in the recognition of any impairment losses.

The impairment test was conducted by an independent expert. This impairment test is based on the value in use and uses two main valuation methods to estimate the recoverable amount: 1) a discounted cash flows method (DCF); and 2) a dividend discount model (DDM), both of which are further detached in valuation variants depending on the terminal value calculation.

Future cash flows and future dividends are based on a business plan for the period 20232033. As the Group’s asset base consists of assets with long useful lives, the business plan’s projection period was set to encompass the coming two regulatory periods. Note that the regulatory framework within which Elia operates is characterised by an allowed revenues

basis structured around: 1) a fair remuneration of the regulated asset base; and 2) incentives to guarantee the continuity of supply and improve efficiency. Considering that the regulator will allow a fair remuneration of the regulated asset base consistent with market expectations, the estimated regulated asset base for the last forecast year can be considered an indication of the terminal value. This approach does not take into account potential cash flows generated by meeting or beating future efficiency targets.

The valuation methods are subject to different assumptions, the most important of which are outlined below.

1. Discounting of future cash flows (DCF-models):

• Discount rate:

‐ Cost of Equity of 8.7%;

• Risk-free-rate: 3.1%

• Beta 0.90

• Equity market risk premium 5.5%

• Small firm premium 1.0%

• Country risk premium 0.9%

‐ Pre-tax Cost of Debt of 4.3%;

‐ Operational risk premium of -1.1%

‐ Corporate tax rate of 25%;

‐ Target gearing (D/(D+E)): 60%;

‐ Post-tax WACC: 5.4%.

• Terminal value based on two variants:

‐ Terminal value based on a 1.15x RAB multiple in 2033.

NB: as such, the RAB itself does not take into account the contribution that the incentive remuneration makes to the value creation process.

‐ Terminal value based on a perpetual growth rate of 3.0%. This long term growth rate is higher than long term expected inflation to capture the returns generated from the significant investments in the business plan.

2. Discounting of future dividends (DDM-models):

• Discount rate:

‐ Cost of Equity of 8.7%

• Terminal value based on two variants:

‐ Terminal value based on 1.15x RAB multiple in 2033.

NB: as such, the RAB itself does not take into account the contribution of the incentive remuneration to the value creation process.

‐ Terminal value based on a perpetual growth rate of 3.0%. This approach assumes that the residual value consists of profit after tax less investments and considers net borrowings (in relation to the investments). However, profit and thus dividend payments in FY33 most likely does not yet reflect the (positive) impact of the investments planned in FY26-FY33.

Conclusion:

• The independent analysis, which was based on a (€3,901 million) midpoint of the different valuation approaches and variants used did not result in the identification of an impairment of goodwill in the financial year 2023. Moreover, market multiples (based on current enterprise values and current/forecasted EBITDA) were applied for plausibility.

• As the median and the average of the different methods presented above were relatively far apart (€3.394 million and €5.425 million respectively), mainly due to differences in assumptions for the terminal value, the expert’s mid-point is based on 75% of the median and 25% of the average, bearing in mind, among other factors, that the median alone might not appropriately reflect the impact of incentive remuneration on the terminal value (see above for more details).

• Compared to 2022, the context has slightly changed, giving greater visibility to the Group on how the rates of return are calculated, taking into account the changing market parameters. Indeed, the discussions on the new tariffs methodology have led to a new mechanism designed to protect ROE against a rise of interest rates. An additional remuneration is foreseen in the methodology in connection with the OLO level. The fact that the regulated return on equity is now directly linked to the evolution of the risk-free rate triggers the use of a negative operational risk premium and an unchanged WACC level compared to 2022 despite an increase in the risk-free rate. This negative premium results from the difference between the average of ROE and the cost of equity, taking into account the beta derived from the peer group (0,66 = market view) and this COE. Considering this evolution and the regulated nature of the businesses grouped with the CGU, a reasonable change in any of the valuation inputs would not result in impairment losses.

ACQUISITION OF EUROGRID INTERNATIONAL

• In April 2018, the acquisition of an extra 20% stake in Eurogrid International by the Group resulted in a goodwill of €703.4 million, This consolidation difference has been allocated to the CGU 50Hertz Transmission, since it comprises all income and expenses generated thereof.

• The impairment test was conducted by an independent expert. This impairment test is based on two main valuation methods: 1) a discounted cash flows (DCF) method; and 2) a dividend discount model (DDM). Both of these are further detached in valuation variants depending on the terminal value calculation. Future cash flows and future dividends are based on a business plan for the period 2023-2033 (two regulatory periods). As the Group’s asset base consists of assets with long useful lives, the business plan’s projection period was set to encompass the next two regulatory periods.

The valuation methods are subject to different assumptions, most importantly:

1. Discounting of future cash flows (DCF-models):

• Discount rate:

‐ Cost of Equity: 8.0%;

• Risk-free-rate: 3.1%

• Beta 0.90

• Equity market risk premium 5.5%

• Country risk premium 0.0%

• Small firm premium 1.0%

• Operational risk premium: -1.0%

‐ Pre-tax Cost of Debt: 4.3%;

‐ Corporate tax rate: 30%;

‐ Target gearing (D/(D+E)): 60%;

‐ WACC: 5.0%.

• Terminal value based on two variants:

‐ Terminal value based on a 1.15x RAB multiple in 2033;

‐ Terminal value based on a perpetual growth rate of 2.0%.

2. Discounting of future dividends (DDM-models):

• Discount rate:

‐ Cost of Equity: 8.0%

• Terminal value based on two variants:

‐ Terminal value based on 1.15x RAB multiple in 2033;

‐ Terminal value based on a perpetual growth rate of 2.0%.

Conclusion:

• Neither the independent analysis, which was based on a (€4,448 million) midpoint of the different valuation approaches and variants used, nor the sensitivity analysis resulted in the identification of an impairment of goodwill in the financial year 2023. Moreover, market multiples (based on current enterprise values and current/forecasted EBITDA) were applied for plausibility.

• The median and the average of the different methods presented above were relatively close (€3,271 million and €3,269 million respectively), as the assumptions for the terminal value were similar. Neither the independent analysis based on a median of the different valuation approaches and variants used, nor the sensitivity analysis resulted in the identification of an impairment of goodwill in the financial year 2023.

• Compared to 2022, the context has slightly changed, giving greater visibility to the Group on how the rates of return are calculated, taking into account the changing market parameters. Indeed, the discussions on the new tariffs methodology have led to a new mechanism designed to protect return in equity (ROE) against a rise of interest rates. ROE will be linked to the German risk-free rate for all new assets. The fact that the regulated return on equity is now directly linked to the evolution of the risk-free rate triggers the use of a negative operational risk premium and a quite stable WACC level compared to 2022 despite an increase in the risk-free rate. This negative premium results from the difference between the average of ROE and the cost of equity, taking into account the beta derived from the peer group (0,66 = market view) and this COE. Considering this evolution and the regulated nature of the businesses grouped with the CGU, a reasonable change in any of the valuation inputs would not result in impairment losses.

6.4. Non current trade and other receivables

The non current trade and other receivables are mainly composed by the long term part of the granted investment subsidy (€55.0 million versus €95.0 million end of 2022). up to a subsidy of €99,7 millions out of a total budgeted investment of circa €600.0 millions.

This subsidy has been granted for the creation of an offshore island (The Princess Elisabeth Island) and within the framework of the Recovery and Resilience Facility (EU instrument to support project of Member States and help the EU emerge stronger and more resilient from the current crisis). This island will serve as a multifunctional energy hub/an extension of the electricity grid in the North Sea. It will connect wind farms from the sea to the mainland and create new connections with neighbouring countries.

At December 31, 2023, an amount of €55.0 million remains receivable beyond 2024 and is therefore presented as long-term receivable while €40.0 million have been transferred in short term.

Cash is collected as predefined milestones are reached. The recoverability of this amount is contractually guaranteed. No credit risk has been considered on this long-term receivable.

6.5. Equity-accounted investees

The movements in the equity-accounted investees are summarised as follows:

6.5.1 Joint ventures NEMO LINK LTD

On 27 February 2015, Elia System Operator and National Grid signed a joint venture agreement to build the Nemo Link Interconnector between Belgium and the UK. This project consists of subsea and underground cables connected to converter stations and an electricity substations in each country, allowing electricity to flow in either direction between the two countries, so giving the UK and Belgium improved reliability and access to electricity and sustainable generation. Each shareholder holds a 50% stake in Nemo Link Ltd, a UK company. The interconnection was commissioned in late January 2019.

To finance the project both shareholders have provided funding to Nemo Link Ltd since 2016 via equity contributions and loans (divided on a 50/50 basis). In June 2019, the loans were incorporated in the share capital (loan swap to equity).

In 2023, Nemo Link Ltd paid out dividends totalling €40.0 million (€64.0 million in 2022) to its shareholders.

The joint ventures had no contingent liabilities or significant capital commitments as at 31 December 2023 and 2022.

The following table summarises the financial information of the joint venture, based on its IFRS financial statements and reconciliation with the carrying amount for the Group's interest in the consolidated financial statements.

Details are given in the subchapters below.

6.5.2 Associates

As of 31 December 2023, the Group has 2 associates, both being equity-accounted investees.

• The Group has a 22.2% stake in Coreso SA/NV. Coreso SA/NV is a company that provides coordination services aimed at facilitating the secure operation of the high-voltage grid in several European countries.

• The Group holds a 17.0% stake in HGRT SAS. HGRT SAS is a French company with a 49.0% stake in Epex Spot, the exchange for power spot trading in Germany, France, Austria, Switzerland, Luxembourg and (through its 100% associate APX) the UK, Netherlands and Belgium. As one of the founding partners of HGRT, the Group has a 'golden share', giving it a minimum number of representatives on HGRT’s Board of Directors. This constitutes a significant influence and therefore HGRT is accounted for using the equity method. In 2023, the Group received a dividend of €2.2 million from HGRT (€2.2 million in 2022).

None of these companies are listed on any public exchange.

Just like in 2022 there are no scope changes to be reported in 2023.

The associates had no contingent liabilities or significant capital commitments as at 31 December 2023 and 2022.

The following table illustrates the summarised financial information of the Group's investment in these companies, based on their respective financial statements prepared in accordance with IFRS.

6.6. Other financial assets

The total other financial assets decreased by €208.7 million compared with the previous year.

Immediately claimable deposits are measured at fair value. The risk profile of these investments is discussed in Note 8.1. The value as at 31 December 2023 is stable compared to 2022.

Reimbursement rights are linked to the obligations regarding (i) the retired employees falling under specific benefit schemes (Scheme B - unfunded plan); and for (ii) health plan and reduced energy pricing plans for retired staff members. See Note 6.14: ‘Employee benefits’. The reimbursement rights are recoverable through the regulated tariffs. The following principle applies: all incurred pension costs for 'Scheme B' retired employees and the costs linked to healthcare and reduced energy pricing plans for retired Elia staff members are defined by the regulator (CREG) as non-controllable expenses that are recoverable through the regulatory tariffs. The decrease in the carrying value of this asset is disclosed in Note 6.14: ‘Employee benefits’ and mainly explained by the change in discount rate. Considering the nature (regulatory asset) of these financial assets, they are not considered to be at risk of impairment.

Other shareholdings: the Group holds 5.4% (at 100%) of the shares in European Energy Exchange (EEX), Leipzig, Germany, for a total value of €42.7 million as of the reporting date. These shares are disclosed under Other shareholdings in addition to an 8.0% (at 100%) shareholding in JAO Joint Allocation Office SA, a 6.7% (at 100%) shareholding in TSCNET Services GmbH (Munich, Germany), 6.6% (at 100%) shareholding in decarbon1ze GmbH (acquired in 2023) and a 10.4% (at 100%) shareholding in the Stiftung Kurt-SanderlingAkademie des Konzerthausorchesters foundation (Berlin, Germany). Other investments are measured at fair value. At each reporting date, a re-measurement is performed to reevaluate these investments. Any deviation from the previous period is recorded under other comprehensive income. There was no significant remeasurement in 2023.

Derivatives: derivatives show a decrease of €212.5 million:

• Since 2021, 50Hertz applies hedge accounting for the purpose of reducing the risk of fluctuations in the expected amount of grid losses. Due to the drop in energy prices over the year, the fair value of these contracts has turned negative. Long and short term commodities contracts show a negative fair value. This evolution explains an overall decrease of €154.4 million.

• This decrease is amplified by the lower fair value of the derivatives contracted in Belgium in connection with the pre-hedging of probable forecast debt transactions (ETB bond issuance). The fair value of these derivatives amounted to €7,2 million compared to €65.3 million end of 2022. See Note 8.1 for more info on these derivatives.

We refer to notes 6.18 and 8.1 for further details about derivatives.

6.7. Deferred tax assets and

RECOGNISED

The changes in deferred tax assets and liabilities can be presented as follows:

2022

The deferred tax liability on right-of-use assets from IFRS 16 leases is shown under ‘Property, plant and equipment’, whilst the deferred tax asset on finance lease liability is shown under ’Interest-bearing loans and other non-current financial liabilities’.

UNRECOGNISED DEFERRED TAX ASSETS OR LIABILITIES

As at 31 December 2023, the group had unrecognised deferred tax assets for a total of €41.7 million. This amount can be summarised follows:

6.9. Current trade and other receivables, deferred charges and accrued revenues

(in

These unused tax losses carried forward, Dividend Received Deduction carried forward and non-deductible interests carried forward (Corporate Interest Restriction rule) have no expiry date. An assessment is conducted each year to determine the probability that these fiscal deductions could be used in the future to lower the tax base.

6.8. Inventories

The warehouse primarily stores replacement and spare parts for maintenance and repair work carried out along the Group's high-voltage substations, overhead lines and underground cables.

The value of inventories increased compared to December 31, 2022. This is an overall change linked to the increase in business and grid investments in a inflationary context.

Write-downs are recorded following the non-utilisation of stock items based on their underlying rotation. These were slightly higher than in 2022 (€0,4 million as an expense during the period).

The total current trade and other receivables, deferred charges and accrued revenues decreased by €143.9 million compared with the previous year. This is mainly explained by a decrease in trade receivables and levies in a context of falling prices.

Contract assets are mainly related to EGI's consulting business and transmission work for third parties. The position increased from €0.9 million in the previous year to €7.2 million at year-end.

Trade receivables are non-interest-bearing and generally have payment terms of 15 to 30 days. The decrease is driven by both Belgian and German segments due to a significant decrease in energy prices.

The decrease in the levies is mainly attributable to Germany where the offshore receivable reported in 2022 (€68.9 million) turned negative. The outstanding balance mainly relates to Belgium (€6.8 million).

‘Other receivables’ mainly relate to the margin calls (advances received or paid as part of collateralization agreements set up by the Group to manage counterparty risk on commodity transactions) of the German segments (€289.5 million).

The Group's exposure to credit and currency risks, and impairment losses related to trade receivables are shown in Note 8.1.

At 31 December, the ageing analysis of trade receivables is as follows:

6.11. Cash and cash equivalents

(in €

See Note 8.1 for a detailed analysis of the credit risk incurred in connection with these trade receivables.

Considering the nature (as regulatory assets) and/or the risk profile of the counterparties (Belgian/German state) of the most significant other receivables, there is a low impairment risk and thus it is not needed to record a loss allowance.

6.10. Current tax assets and liabilities

Cash and cash equivalents decreased by €2,783.1 million. This decrease was mainly due to the lower EEG, KWK and StromNEV (levies) surplus of €352,6 million (-€2,583.4 million) in Germany and the realisation of the investment program in Belgium and Germany which relied partially on funding from operating cash flow as well as on liquidity stemmed from last year’s capital increase.

Short-term deposits are invested for periods varying from a few days or weeks to several months (generally not exceeding three months), depending on immediate cash requirements, and earn interest in accordance with the interest rates for short-term deposits. Bank account balances earn or pay interest in line with the variable rates of interest on the basis of daily bank deposit interest rates. The Group's interest rate risk and the sensitivity analysis for financial assets and liabilities are discussed in Note 8.1.

The cash and cash equivalents disclosed above and in the statement of cash flows include restricted cash for a total of €255.7 million held by 50Hertz Transmission GmbH and €2.4 million held by Elia Re.

6.12. Shareholders

6.12.1 Equity attributable to the owners of the Company

The Group shows a net tax asset position of €59.1 million. This position increased compared with the previous year following a higher level of advances on corporate. More subsidiaries are in a tax asset position compared to end of 2022. The €64.4 million income tax receivables recorded on 31 December 2023 mainly relates to advances on corporate tax to be recovered in the financial year 2024. Income tax liabilities decreased to €5.3 million and are also payable within one year.

The second tranche of the capital increase for Elia employees decided by the extraordinary shareholders' meeting held on 21 June 2022 (capital increase in two steps/periods: one in 2022 for a maximum of €5.0 million and the other in 2023 for a maximum of €1.0 million) was completed in April 2023. The capital increase resulted in the creation of 5,984 additional shares without nominal value for a total amount of €0.2 million capital increase and a €0.5 million share premium increase.

In 2022, the movements were related to two transactions

• On 24 June 2022, Elia Group SA/NV successfully completed a public offering of new shares to existing shareholders and any holders of an extra-legal preferential right. Through this offering, the capital of Elia Group SA/NV has increased by an amount of €118.2 million along with an increase in share premium of €471.9 million for which 4.739.865 new shares have been issued at a subscription price of €124.5 per share. €6.9 million of costs were incurred in relation to the capital increase.

• The extraordinary shareholders' meeting held on 21 June 2022 decided to execute a capital increase in two steps/periods (one in 2022 for a maximum of €5.0 million and the other in 2023 for a maximum of €1.0 million), for a total maximum amount of €6.0 million for its Belgian employees. The first tranche of this capital increase for employees took place in December 2022. The transaction resulted in the creation of 47,920 new shares for a total amount of €5.0 million, consisting of a €1.2 million capital increase and a €3.8 million increase in share premium.

RESERVES

In line with Belgian legislation, 5% of the Company's statutory net profit must be transferred to the legal reserve each year until the legal reserve represents 10% of the capital. As at 31 December 2023, the Group's legal reserve amounts to €180.3 million and represents 9.8% of the capital.

The Board of Directors can propose the pay-out of a dividend to shareholders totalling up to a maximum of the available reserves plus the profit carried forward from the Company’s previous financial years, including the profit for the financial year ending on 31 December 2023. Shareholders must approve the dividend payment at the Annual General Meeting of Shareholders.

HEDGING RESERVE

The hedging reserve comprises the effective portion of the cumulative net change in fair value of cash flow hedging instruments. The Group has commodity derivatives (in Germany to hedge grid losses) and financial derivatives (in Belgium to hedge probable expected transactions).

(6.40)

BE - CFH - FX Forward rate 2024 (1.10) (1.10)

GE - CFH - Grid losses (179.90) 103.80 (283.60)

Total (143.40) 165.90 (309.30)

In 2023, the hedging reserve decreased from a positive/credit amount of €119.2 million to a negative/debit amount of -€98.6 million. This variation is mainly explained by the negative variation in commodity derivatives in Germany, where the downturn in energy prices had a negative impact on contracts concluded to hedge grid losses.

As the costs for grid losses are almost fully passed through to the tariffs, the fair value of the future contracts has no relevance for the current or future profitability of the company.

The cash flow hedging (CFH) reserve for financial derivatives in Belgium also fell year-onyear.

We refer to notes 6.18 and 8.1 for further details about derivatives.

TREASURY SHARES

The reserve for the Company’s treasury shares comprises the cost of the Company’s shares held by the Group. On 31 December 2023, the Group held 22.079 of the Company’s shares.

In 2023, the consideration for the acquired or transferred shares amounted to respectively €49.6 million (€62.2 million in 2022) and €48,7 million (€61.3 million in 2023).

SHARE-BASED PAYMENTS

At 31 May 2021, Eurogrid International SA/NV has granted 1,640 stock options to the employees of RealTo BV/SRL and RealTo GmbH at a strike price of €100 per stock option at exercise date 31 March 2024. Subsequently, 940 additional stock options have been granted to new employees at the same terms and conditions. In total, 2,560 stock options were granted out of a total of 4.000 options to be offered in the plan. As per 31 December 2023, 940 options are still living. The share-based payments cost amounted to €0.1 million in 2023 (€0.2 million). As the stock option plan concerns shares in RealTo BV/SRL and its parent company, the share-based payments are not presented separately in the statement of equity.

DIVIDEND

After the reporting date, the Board of Directors will put forward the dividend proposal outlined below.

6.13 Interest-bearing loans, borrowings and lease liabilities

It was proposed and approved, at the Shareholders’ Meeting convened to approve the Elia Group SA/NV financial statements for the year ended 31 December 2022, to pay a dividend of €1.91 per share, representing a total payout of €140.4 million.

The Board of Directors meeting on 29 March 2024 proposed a gross dividend of €1.99 per share with regard to 2023. This dividend is subject to approval by shareholders at the Annual General Meeting on 21 May 2024 and is not included as a liability in the Group’s consolidated financial statements.

The total dividend, calculated based on the number of shares outstanding on 29 March 2024 corresponds to a total of €146.3 million.

6.12.2 Hybrid securities

On 9 March 2023, Elia Group SA/NV (“Elia Group”) successfully placed €500 million hybrid securities to be admitted to trading on the Luxembourg Stock Exchange's Euro MTF market. This transaction was part of a liability management exercise including the refinancing of the existing hybrid bond of € 700 million issued in 2028 to finance the additional 20% stake in 50Hertz Transmission (Germany) through Eurogrid International SA/NV.

This new hybrid securities will carry a fixed coupon of 5.85% until the 15 June 2028, with a reset every five years thereafter and will be callable from 15 March 2028.

As at 31 December 2023, the unpaid cumulative dividend related to the new hybrid bond amounts to €15.9 million. A coupon of €16.4 million was paid to the holders of hybrid securities in 2023.

The hybrid securities are structured as perpetual instruments, have junior ranking to all senior debt and are recorded as equity in the Group’s accounts pursuant to IFRS.

The tables below show the changes in the group's liabilities arising from financing activities, including changes arising from both cash flows and non-cash changes. (in

In 2022, the Group has secured liquidity for the further grid expansion necessary for the energy transition with the issuance of a second Green Bond in the amount of €750.0 million at a rate of 3.279% and a term of nine years. Repayments of borrowing from 2022 mainly relate to the closing of the commercial paper program (-€60.0 million) and the capital repayment of the amortising loans (€22.0 million).

In 2023, the Group successfully issued in Belgium a first green bond of €500 million with a fixed rate of 3.625%, dedicated to funding eligible green projects. Moreover, in March the Group syndicated a Green Loan of €600 million from seven banks with a ten-year term, which was fully drawn at year-end. In April, the Group made a re-entry into the market, issuing a 7-year bond of €650 million at an interest rate of 3.722%. In October, the Group tapped on the bond issued in April, issuing an extra €150 million under this series at the prevailing market price with a re-offer yield of 4.534%. Finally, the Group concluded a private placement of €50 million and syndicated another €120 million bank loan.

Furthermore, Elia Group has secured two bilateral Revolving Credit Facilities, amounting to a total of €120 million, of which €100 million was drawn at the end of 2023.

In 2023, the Group redeemed the €750.0 bond maturing in 2023. There have been no breaches of the financial covenants of any interest-bearing loans and borrowing in the current period.

Information on the terms and conditions of outstanding interest-bearing loans and borrowings is outlined below:

As per 31 December 2023:

As per 31 December 2022:

- 31 December 2022

6.14. Employee benefits

The Group has various legal and constructive defined benefit obligations linked to its Belgian and German operations.

The total net liability for employee-benefit obligations is as follows:

Of the €89.9 million in employee benefits provisions recognised at the end of the financial year 2023, €87.1 million is presented in the long term and €3.2 million in the short term which is part of the provision discussed in note 6.15.

Belgium

DEFINED-CONTRIBUTION PLAN

Employees remunerated based on a salary scale and recruited after 1 June 2002, as well as management staff recruited after 1 May 1999 are covered by two defined-contribution pension plans (Powerbel and Enerbel):

• The Enerbel plan is a plan for salaried employees hired after 1 June 2002, to which the employee and the employer contribute based on predefined formula.

• The Powerbel plan is a plan for managers hired after 1 May 1999. The contributions of the employee and employer are based on a fixed percentage of the employee’s salary.

The law regarding occupational pension plans, published at the end of 2015, made various changes to the guaranteed return on defined-contribution plans. For payments made after 1 January 2016, the law requires employers to guarantee an average annual return of at least 1.75% (up to 3.75% depending on who contributes) over the course of each employee’s career.

For insured plans the minimum guaranteed return until 31 December 2015 still needs to be equivalent to at least 3.25% for the employer’s contribution and 3.75% for the employee's contribution, with any shortfall being covered by the employer.

As a result of the above changes and as mentioned in the accounting policies, all definedcontribution pension plans under Belgian pension legislation are classified as definedbenefit plans for accounting purposes, due to the legal minimum return to be guaranteed by the employer, which represents a plan amendment. They are accounted for using the Projected Unit Credit method (PUC-method). For each plan, the fair value of assets equals the sum of the accrued individual reserves (if any) and the value of the collective fund(s) (if any), hence no application of IAS 19 § 115. In addition, with the exception of Enerbel, the defined-contributions (DC) plans are not backloaded, as such these plans are valued without projection of future contributions. The Enerbel DC plan is backloaded and this plan is valued with projection of future contributions.

Elia Transmission Belgium has transferred certain acquired reserves guaranteed by the insurers to 'Cash balance – best of' plans since 2016. The main objective of these plans is to guarantee for every subscriber a minimum guaranteed return of 3.25% on the acquired reserves until retirement age.

Both employee' and employer' contributions are paid on a monthly basis for the base plans. The employee' contribution is deducted from their salary and paid to the insurer by the employer. The amount of future cash flows depends on wage growth.

DEFINED-BENEFIT PLANS

For a closed population, collective agreements in the electricity and gas industries provide ‘pension supplements’ based on the annual salary and an employee’s career within a company (partially revertible to the inheritor in case of early death of the employee).The benefits granted are linked to Elia’s operating result. There is no external pension fund or group insurance for these liabilities, which means that no reserves are constituted with third parties. The obligations are classified as a defined-benefit.

The collective agreement determines that active staff hired between 1 January 1993 and 31 December 2001 and all managerial/executive staff hired prior to 1 May 1999 will be granted the same guarantees via a defined-benefit pension scheme (Elgabel and Pensiobel – closed plans). Obligations under these defined-benefit pension plans are funded by a number of pension funds for the electricity and gas industries and by insurance companies.

As mentioned above, Elia Transmission Belgium has transferred certain acquired reserves guaranteed by the insurers to 'Cash balance – best of' plans since 2016. As this guarantee is an employer obligation, these plans represent defined-benefit plans.

Both employees' and employers' contributions are paid on a monthly basis for the base plans. The employee's contribution is deducted from the salary and paid to the insurer by the employer.

OTHER PERSONNEL OBLIGATIONS

Elia Transmission (Belgium) has also granted staff certain early-retirement schemes and other post-employment benefits such as reimbursement of medical expenses and a contribution to their energy bills, as well as other long-term benefits (seniority payments). Not all of these benefits are funded and, in accordance with IAS 19, these post-employment benefits are classified as defined-benefit plans.

Germany

DEFINED CONTRIBUTION PLANS

In the case of externally financed defined contribution plans, 50Hertz Transmission (Germany)’s obligation is limited to paying the agreed contributions. For those defined contribution plans recognised in the form of direct guarantees, there are pledged congruent employer’s liability insurance policies in place.

• Pension obligations for executives (agreement with staff representatives from 2003 onwards): individual contractual pension obligations based on an agreement with representatives;

• Pension obligations for executives (agreement with staff representatives from 19 August 2008 onwards): individual contractual pension obligations relating to a company pension plan with the Vattenfall Europe Group;

• Collective bargaining agreement on the company pension scheme: obligations based on the collective bargaining agreement made in relation to 50Hertz Transmission’s company pension scheme, concluded on 28 November 2007;

• Direct insurance: direct insurance policies for all former employees who worked at Vereinigte Energiewerke AG (VEAG) from 1993 to 31 December 2004, with the exception of managers;

• Individual commitments: individual commitments which are financed exclusively by external pension funds (welfare fund and pension fund).

DEFINED-BENEFIT PLANS

Defined-benefit plans entitle employees to submit direct pension claims to 50Hertz Transmission. Provisions for these are recognised in the statement of financial position. If plan assets are created for the sole purpose of fulfilling pension obligations, the amount is offset against the present value of the obligation. The following defined-benefit plans exist in Germany:

• Group works agreement regarding the company pension scheme

In accordance with the Group works agreement regarding the company pension scheme, employees are granted a company pension plan on the basis of a defined-contribution plan (effective 1 January 2007). This agreement applies to all employees within the meaning of Sec. 5 (1) of the German Work Constitution Act (BetrVG) and came into effect at the

Company on 1 January 2007. Participation in the scheme is voluntary. The scheme grants pension benefits to employees once they reach the statutory retirement age, once they take early retirement from statutory pension insurance, and in the event of occupational disability for death. Current pension benefits are increased by 1% p.a., so the scheme is classified as a defined-benefit plan.

• TVV Energie

This pension plan relates to direct guarantees resulting from a collective bargaining agreement concluded on 16 October 1992. It was closed to new hires on 1 January 1993. This contribution plan applies to employees who worked at Vereinigte Energiewerke AG until 30 November 2001 and whose vested benefits were allocated to Vattenfall Europe Transmission GmbH (now 50Hertz Transmission GmbH). The scheme covers pension obligations, based on years of service and remuneration level and grants retirement and disability pensions, but no pension for surviving dependants. It is not possible to index current post-employment benefits falling due for the first time after 1 January 1993.

OTHER PERSONNEL OBLIGATIONS

50Hertz Transmission also has following obligations, which are listed under ‘Other personnel obligations’:

• Obligations for long-service benefits;

• Obligations from German phased retirement schemes;

• Obligations for working lifetime accounts.

Not all of these benefits are funded and, in accordance with IAS 19, these post-employment benefits are classified as defined-benefit plans.

Employee benefit obligations at group level

The Group’s net liability for employee benefit obligations is as follows:

(in € million)

The net employee benefit liability increased in total by €12.8 million, of which €8.3 million on German level and €4.5 million on Belgian level.

The net impact is mainly explained by the decrease in discount rate compared with 2022, the change from experience adjustments following higher salary increase than expected, offset to a large extent by returns on plan assets.

Actuarial gains(/losses) on defined obligations arising from: 1)

Remeasurements of net defined benefit (liability)/ asset recognised in other comprehensive income

Considering the actuarial gains or losses recognised in other comprehensive income for the reimbursement rights (+€5.9 million for 2023 - see hereafter), the net impact of the remeasurement of post-employments benefit obligations amounts to -€6.1 million.

When determining the appropriate discount rate, the Group considers the interest rates of corporate bonds in currencies consistent with the currencies of the post-employment benefit obligation with at least an 'AA' rating or above, as set by an internationally acknowledged rating agency, and extrapolated as needed along the yield curve to correspond with the expected term of the defined benefit obligation.

A stress test is performed annually. This test verifies that the minimum funding requirements are covered to deal with 'shocks' with probabilities of occurrence of 0.5%.

The members (mostly) contribute to the financing of the retirement benefits by paying a personal contribution.

The annual balance of the defined benefit lump sum is financed by the employer through a recurrent allowance, which is expressed as a percentage of the total payroll of the participants. This percentage is defined by the aggregate cost method and is reviewed annually. This method of financing involves smoothing future costs over the remaining period of the plan. The costs are estimated on a projected basis (taking into account salary growth and inflation). The assumptions related to salary increase, inflation, employee turnover and age term are defined on the basis of historical data from the Company. The mortality tables used are those corresponding to the observed experience within the financing vehicle and take into consideration expected changes in mortality. The Group calculates the net interest on the net defined benefit liability (asset) using the same highquality bond discount rate (see above) used to measure the defined benefit obligation (net interest approach). These assumptions are challenged on a regular basis.

Exceptional events (such as modifications made to the plan, changes in assumptions and overly short coverage terms) can lead to outstanding payments from the sponsor.

The defined benefit plans expose the Company to actuarial risks such as investment risk, interest-rate risk, longevity risk and salary risk.

INVESTMENT RISK

The present value of the defined benefit plan liability is calculated using a discount rate which is determined based on high-quality corporate bonds. The difference between the actual return on assets and the interest income on plan assets is included in the remeasurements component (OCI). Currently the plan has a relatively balanced range of investments, as shown below:

Due to the long-term nature of the plan liabilities, it is considered appropriate that a reasonable portion of the plan assets be invested in equity securities to leverage the return generated by the fund. In Germany, all plan assets are invested in insurance agreements.

INTEREST RISK

A decrease in the bond interest rate will increase the plan liability. However, this will be partially offset by an increase in the return on the plan’s assets, of which approximately 95% is now invested in pension funds with an expected return of 3.12%.

LONGEVITY RISK

The present value of the defined benefit plan liability is calculated based on the best estimate of the life expectancy of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan's liability. The prospective mortality tables from the IA/BE are used in Belgium and the 2018 Heubeck tables are used in Germany.

SALARY RISK

The present value of the defined benefit plan liability is calculated based on the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan’s liability.

ACTUARIAL ASSUMPTIONS

of a pensioner retiring at age 65 at closing date:*

*Mortality tables used: IABE in Belgium, 2018 Heubeck in Germany

In Germany, the liability of the defined contribution plans is completely covered by the plan assets. Therefore, no weighted average duration is necessary and thus not calculated.

The actual return on plan assets in percentage terms for 2023 was positive, ranged between 2.6% and 10.1% (compared with a range of -2.6% to -18.0% in 2022).

Below is an overview of the expected cash outflows for the DB plans: Future

cash outflows < 12 months 1-5 years 6 - 10 years

Pensions (6.0) (21.8) (28.1)

Other (3.0) (10.8) (12.5)

Total (in € million) (9.0) (32.6) (40.6)

There is some degree of uncertainty linked to the above expected cash outflows which can be explained by the following factors:

• differences between assumptions and actual data can occur, e.g. retirement age and future salary increase;

• the expected cash outflows shown above are based on a closed population and therefore do not incorporate future new hires;

• future premiums are calculated based on the last known aggregate cost rate, which is reviewed on an annual basis and varies depending on the return on plan assets, the actual salary increase as opposed to the assumptions, and unexpected changes in the population.

SENSITIVITY ANALYSIS

Effect on defined benefit obligation Belgium Germany (in € million) Increase (+) / Decrease (-)

/ Decrease (-) Impact on the net defined-benefit obligation of an increase in:

Discount rate (0.5% movement) 7.5 6.2

Average salary increase - excl. inflation (0.5% movement) (6.8) 3.5

Inflation (0.25% movement) (3.3) (0.2)

Increase of healthcare care benefits (1.0% movement) (0.3) n.r.

Life expectancy of pensions (1 year) 1.4 (1.0)

REIMBURSEMENT RIGHTS (BELGIUM)

As described in Note 6.6, a non-current asset (within other financial assets) is recognised as reimbursement rights linked to the defined benefit obligation for the population benefitting from the interest scheme and medical plan liabilities and tariff benefits for retired Elia employees. Each change in these liabilities equally affects the corresponding reimbursement rights under non-current other financial assets.

The change in reimbursement rights is presented below:

Movement in the present value of the reimbursement rights

The sum of ‘Pensions’ (€13.3 million) and ‘Other’ (€23.5 million) reimbursement rights amounted to €36.8 million in 2023 (2022: €33.7 million), which reconciles with the reimbursement rights listed in Note 6.6.

6.15. Provisions

The Group has recognised provisions for the following:

Environment: The environmental provision provides for existing exposure with respect to land decontamination. The €9.0 million provision mainly relates to the Belgian segment, with only a €1.7 million provision relating to the German segment. There were no significant movements in the environmental provisions in 2023.

More specifically for the Belgian segment, Elia has conducted soil surveys on over 200 sites in Flanders in accordance with contractual agreements and Flemish legislation. Significant soil contamination was found on a number of sites, with this being mainly attributable to historical pollution arising from earlier or nearby industrial activities (gas plants, incinerators, chemicals, etc.). In the Brussels-Capital and Walloon Regions, Elia also carried out analyses and studies to detect contamination at a number of substations and a number of plots occupied by pylons for overhead power lines. Based on the analyses and studies it conducted, Elia has made provisions for possible future soil remediation costs in line with the relevant legislation.

Environmental provisions are recognised and measured based on an expert appraisal bearing in mind BATNEEC (Best Available Techniques Not Entailing Excessive Costs) as well as on the circumstances known at the end of the reporting period. The timing of the settlement is unclear but for the premises where utilisations occur, the underlying provision is classified as a short-term provision.

Elia Re: An amount of €1.7 million is included at year-end for Elia Re, a captive reinsurance company. €0.1 million of this is linked to claims for overhead lines, whilst €1.6 million is linked to electrical installations. The expected timing of the related cash outflow depends on the progress and duration of the respective procedures.

Dismantling provisions: As part of the Group’s CAPEX programme, the Group is exposed to decommissioning obligations; most of which are related to offshore projects. These provisions take into account the effect of discounting and the expected cost of dismantling and removing the equipment from sites or from the sea. The carrying amount of the provision as at 31 December 2023 is €156.3 million. The provision increased due a lower discount rate and the reassessment of the costs (inflation and additional projects), especially in Germany where the obligation went from €114.2 million to €130.7 million. The Group has applied a case-by-case approach to estimate the cash outflow needed to settle the liability.

Elia Group uses corporate bond rates (minimum AA rating) and sets them out to match the lifetime of the provisions in order to discount the dismantling provisions. In case the discount rate is below 0%, the rate is floored at 0%. The discount rates used in 2023 ranged between 3.12% to 3.97%, depending on the lifetime of the asset to dismantle. Should the discount rate increase by 1%, the dismantling provisions would decrease by €22.6 million.

Employee benefits: See Note 6.14 for more details of these short-term employee benefits.

‘Other' consists of various provisions for litigation to cover likely payment where legal proceedings have been instituted against the Group by a third party or where the Group is involved in legal proceedings. These estimates are based on the value of claims filed or on the estimated level of risk exposure. The expected timing of the related cash outflow depends on the progress and duration of the associated proceedings.

No assets have been recognised in connection with the recovery of certain provisions.

6.16. Other current and non-current liabilities

Of the total investment grants, €133.3 million relates to 50Hertz Transmission (Germany) and €76,2 million to Elia Transmission (Belgium). The investment grants are spread over several assets. The most significant projects are:

• In Belgium: the Princess Elisabeth energy island which will serve as an extension of the electricity grid in the North Sea. This grant has been signed in December 2022 for a total amount of €99,7 million (pre-taxes), out of which €73,1 million are reported in the Other non-current liability (post taxes);

• In Germany: SuedOstLink and Kriegers Flak Combined Grid Solution.

All were subsidised by the European Union or the Belgian State. The grants are released in profit and loss based on the useful lives of the assets to which they relate. The terms and conditions of the grants were monitored and met as per 31 December 2023.

Contract liabilities remained stable. They mainly relate to upfront payment for last mile connection. At the end of 2023, a liability of €127.5 million was recognised within Elia Transmission (Belgium) and a liability of €32.0 million within 50Hertz Transmission (Germany) with that respect. The income is released over the lifetime of the asset where the last mile connection relates to. As already disclosed in Note 5.1, the Group has recognised €4.8 million of revenue in the reporting period, €3.3 million of which was included in the contract liability balance at the beginning of the period (€147.2 million).

The derivatives are related to the long term future contracts entered into by 50Hertz for the purpose of reducing the risk of fluctuations in the expected amount of grid losses. As per 31 December 2023, these contracts have a negative fair value due to the drop in energy prices in 2023 (€8.5 million reported as non-current liabilities and €217.4 million in current liabilities).

6.17. Trade and other payables

The trade debts increased by €29.0 million in a context of increased activity levels and high volatility in energy prices.

The amount for levies can be split into levies related to 50Hertz Transmission (€457.6 million) and levies related to Elia Transmission (€104.5 million).

The levies for Elia Transmission decreased compared with the previous year (€-61.6 million).

The levies include federal levies, which totalled €72.3 million on 31 December 2023 (€150.0 million in 2022) and levies for renewable energies in Flanders (€24.0 million) which have increased due to more positive cogeneration certifications auctioned than foreseen. Levies for the Walloon government decreased to €5.1 million (€13.8 million in 2022). The remaining balance mainly consists of strategic reserves (€1.9 million).

The levies for 50Hertz Transmission significantly decreased by €2,502.2 million compared to previous year due to the significant decrease of the EEG balance following a change in the regulatory mechanism. In the past, the costs not covered by the marketing revenues were compensated by levying a uniform nationwide EEG surcharge on the electricity distributors. With the reduction of the EEG surcharge to zero on 1 July 2022, compensation will be made through correspondingly high federal subsidies to the EEG account of the TSOs.

The other payables mainly related to project related accruals of the German segment (€80.5 million as of 31 December 2023 compared to €44.6 million last year) and other regulatory liabilities.

6.18. Financial instruments - fair values

The following table shows the carrying amounts and fair values of financial assets and liabilities, including their levels in the fair value hierarchy.

The above tables do not include fair value information for financial assets and liabilities not measured at fair value, such as cash and cash equivalents, trade and other receivables, and trade and other payables, as their carrying amount is a reasonable approximation of fair value. We consider that the carrying amount approximates the fair value considering the financial and short-term nature.

FAIR VALUE HIERARCHY

Fair value is the amount for which an asset could be exchanged or a liability settled in an arm's-length transaction. IFRS 7 requires, for financial instruments that are measured in the statement of financial position at fair value and for financial instruments measured at amortised cost for which the fair value has been disclosed, the disclosure of fair value measurements by level in the following fair value measurement hierarchy:

• Level 1: The fair value of a financial instrument that is traded in an active market is measured based on quoted (unadjusted) prices for identical assets or liabilities. A market is considered active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm’s-length basis.

• Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. These maximise the use of observable market data where these are available and rely as little as possible on entity-specific estimates. If all significant inputs required to assess the fair value of an instrument are observable, either directly (i.e. as prices) or indirectly (i.e. derived from prices), the instrument is included in level 2.

• Level 3: If one or more of the significant inputs used in applying the valuation technique is not based on observable market data, the financial instrument is included in level 3. The fair value amount included under ‘Other financial assets’ has been determined by referring to either: (i) recent transaction prices, known by the Group; for similar financial assets or (ii) valuation reports issued by third parties.

The fair value of financial assets and liabilities, other than those presented in the above table, approximates to their carrying amounts largely due to the short-term maturities of these instruments.

The fair value of other financial assets decreased by €211.7 million compared to previous year. The decrease mainly results from the fair value of the future contracts entered into by 50Hertz for the purpose of reducing the risk of fluctuations in the expected amount of grid losses (no positive fair value as at 31 December 2023 compared to €154.4 million last year). This decrease is amplified by the negative variation accounted for in Belgium in connection with the pre-hedging of probable forecast debt transactions (bonds issuance). The fair value of these derivatives amounted to €7,2 million compared to €65.3 million end of 2022.

The fair value of the Sicav and the Group’s stake in EEX is stable following no significant remeasurement of the fair value of EEX. This participation in EEX is classified as "Fair value to FVOCI" and falls under level 3 in the fair value hierarchy. The fair value has been determined by reference to an evaluation method using discounted cash flows and therefore nonobservable market data. The Group uses third party qualified valuers to perform the valuation.

The fair value of sicavs falls into level 1, i.e. valuation is based on the listed market price on an active market for identical instruments.

The fair value of the bank loans and bond issues increased by €983.0 million, due to the higher nominal value (new bonds as explained in Note 6.13) and higher pricing.

The fair values of the derivative is reported in level 1 based on market-to-market values:

in € million - Group share 2023 2022 Variation

BE - CFH - Green Bond 2023

BE - CFH - Green Bond 2024

65.30 (65.30)

7.20 7.20

• The derivatives from the price hedge for grid loss procurement, which is measured at fair value in OCI without affecting profit or loss, falls under level 1 of the measurement hierarchy. Its value is determined on the basis of the reporting date valuation of the existing futures contracts, which are fully contracted via the EEX electricity exchange and quoted there. Credit and default risks are avoided with this form of price hedging via exchange transactions. At December 31, 2023, the Group reported derivative financial instruments in a net negative amount of -€224.8 million.The futures contracts were concluded during the fiscal year at prices between EUR 108 and EUR 174 per MWh. As a result of the volatile price development on the electricity market, derivatives with a negative market value of EUR -224.8m (prior year: €-24.7 million and positive market value of € 154.4 million) as a result of the price drop shortly before the end of 2022 were recognised in the consolidated statement of financial position under financial assets and other (non)-current liabilities .At the balance sheet date, the Group had already pricehedged a volume of 3.2 TWh for its expected physical requirements for grid loss energy in subsequent years.

• The Group also uses cash flow hedging (CFH) derivative contracts to hedge future financial transactions. The fair value of these contracts amounts to €6.1 million in 2023 and relates to a forecasted debt issuance in Belgium and the USD exposure on the forthcoming US acquisition Giga (see also note 8.4).

The fair value of the bonds (including the private placement 2014 for €135.9 million)) is €8.021.6 million (prior year: €7,188.6 million). Fair value was determined by reference to published price quotations in an active market (classified as level 1 in the fair value hierarchy).

In level 2, the Group now reports the fair value of the private placement 2023 (€50.3 million) and the registered bond (€43.6 million).

*: In 2023, following the issuance of the new private placement, the Group reassessed the classification of the private placements (2020 and 2023) and reached to the conclusion that the private placement issued in 2020 had been misclassified in the past as level 3 because this bond is listed on the regulated market in Luxembourg (like the other bonds). As such the market price is directly observable, therefore the classification was changed from level 3 to level 1. The private placement newly issued in 2023 and the registered bond 2014 are not publicly listed. The fair market value (of respectively €50.3 million and €43.6 million) was derived from observable prices for comparable bonds, as such classification as level 2 is appropriate. Figures 2022 have been restated accordingly with the reclassification of the private placement 2020 in level 1 (€133.2 million reported as level 3 in published figures 2022) and the registered bond 2014 in level 2 (€39.7 million reported as level 3 in published figures 2022).

The fair value of other bank loans approximates to their carrying amounts largely due to the short-term maturities of these instruments.

6.19. Leasing

THE GROUP AS A LESSEE

The group mainly leases buildings, cars and optical fibres. It also has some rights to use (portions) of land and overhead lines. The valuation period used is based on the contractual term. Where a fixed term has not been set and an ongoing extension is subject to the contract, the relevant department has set an assumed termination date. In the event that the lease contract contains a lease extension option, the group assesses whether it is reasonably certain of exercising the option and makes its best estimate of the termination date.

Information about leases for which the group is a lessee is presented below.

Right-of-use assets

Right-of-use assets are presented separately within ‘Property, plant and equipment’ and can be broken down in the table below, with the discounted lease liability for comparison. The split between current and non-current lease liabilities also provided.

The right-of-use assets are briefly described below:

• The use of land and overhead lines constitutes a right for the Group to use a well identified piece of land to build on someone’s property. Only the contracts under which the Group has the full right to control the use of the identified asset are in scope.

• The Group leases buildings and offices in which corporate functions are performed.

• The Group has car leasing contracts which are used by employees for business and private activities.

• The Group leases optical fibres to transmit data. Only cables that are clearly identified are in scope.

• Other lease contracts: printer lease contracts and strategic reserves contracts. Strategic reserves are contracts where the Group has the right to control the use of a power plant to maintain a balance on the grid.

The Group only has lease contracts with fixed lease payments and assesses whether it is reasonable to extend a lease contract. If so, the lease contract is valued as if the extension were exercised.

Lease liabilities

Information concerning the maturity of the contractual undiscounted cash flows is provided below:

Amounts recognised in profit and loss

The following amounts were recognised in profit and loss for the financial year:

The discount rate used to discount the lease liabilities is the Group’s best estimate of the weighted average incremental borrowing rate. The Group made use of the practical expedients, i.e. a single discount rate per group of contracts, summarised per their duration.

The Group has assessed the extension options concluded in the lease contracts and considers it reasonably likely that these extension options will be executed. The Group has therefore considered the lease contract as if the extension option is exercised in the lease liability.

The Group has no lease contracts with variable payments nor residual value guarantees. The Group did not commit to any lease that has not yet commenced. The Group has no contracts which include contingent rental payments nor include any escalation clauses or restrictions that are significant regarding the use of the asset in question.

In 2021, an optical fibre lease contract coming to maturity was prolonged and a purchase option for a value of €22.0 million was added. The purchase option came to maturity at the end of February 2022 and the Group exercised the option.

A total of €17.7 million in lease expenses was recognised in the statement of profit or loss in 2023. There were no variable lease payments included in the measurement of lease liabilities.

The total cash outflow for leases amounted to €16.3 million in 2023 (€13.3 million in 2022). This amount is included in the “Repayment of borrowings” of the cash flow statement.

THE GROUP AS A LESSOR

The Group leases out optical fibres, land and buildings, which are presented as part of ‘Property, plant and equipment’. Leasing is only an ancillary business. Rental income is presented under ‘Other income’.

Contracts that do not relate to separately identifiable assets or under which the customer cannot directly the use of the asset or does not substantially obtain all the economic benefits associated with the use of the asset do not constitute a lease. The new lease definition led to the exclusion of some telecommunication equipment

The Group has classified these leases as operating leases as they do not substantially transfer all the risks and rewards incidental to the ownership of the assets.

The following table sets out a maturity analysis of lease payments, showing the undiscounted lease payments to be received after the reporting date and considering the best estimate of the contractual term:

The group recognised €15.2 million in rental income in 2023 (2022: €15.2 million).

6.20. Accruals and deferred income

The movements in deferral account from settlement mechanism are as follows:

In the Elia Transmission segment, the deferral account from the settlement mechanism (€310.6 million) decreased compared with year end 2022 (€360.6 million). The decrease in the deferral account from the settlement mechanism encompasses the settlement of net surpluses from the prior tariff period (-€156.7 million), the review of the regulator on previous year’s settlement mechanism (+€1.2 million) and the operating surplus generated in the current year over the budget approved by the regulator (+€106.8 million). Any operating surplus/deficit, in relation to the budget of the costs and revenues authorised by the regulator, needs to be returned to/refunded by the consumers and therefore does not form part of the revenues.

In 2023, there was an operational surplus (€ 106.8 million), reported as an additional regulatory obligation. This operating excess is primarily a result of higher tariff sales (€137.4 million) and non-controllable revenue (€272.8 million) and is partly offset by increased non controllable and influenceable costs.

In the 50Hertz Transmission segment, the deferral accounts from the settlement mechanism (€284.8 million) is the nominal amount of €361.3 million (€209.3 million as of 31 December 2022) less an interest effect of €76.5 million (€78.0 million in 2022). The net liability increased compared to year end 2022 (€131.3 million).

The release of the deferral account is determined in the tariff setting process. The amounts on the deferral account are recognised on a yearly basis and the release depends on the source of the deferral, some are released in T+1, whilst others are released in T+2 and some are released after a longer period of time.

The future release of the deferral account from the settlement mechanism to the future tariffs is set out in the table below (situation on 31 December 2023):

(in € million) Belgian

To

*Belgium: from 2020 to 2023 ; Germany: from 2019 to 2023

The other regulatory transfer relates to a revenue from incentive regulation which is subject to uncertainty in the particular context of a significant increase of energy prices and for which the calculation method should be further assessed with the Belgian regulator.

7. Group structure

OVERVIEW OF GROUP STRUCTURE

Belgian segment

German segment

Non-regulated segment and Nemo Link

*National Grid owns 50% of Nemo Link

**KFW holds 20% of Eurogrid GmbH

***WindGrid USA LLC holds 35.1% of energyRe Giga (closing February 2024)

SUBSIDIARIES

Elia Group SA/NV has direct and indirect control of the subsidiaries listed below.

Following the issue of a convertible bond (pre-seed investment) in 2021, Decarbon1ze GmbH was initially recognized as a financial asset within the 50Hertz Transmission GmbH. As part of the conversion of the convertible bond into shares in 2023, additional shares were acquired in April 2023; since then, Decarbon1ze GmbH has been recognized as an investment (6.59 shares) within 50Hertz Transmission GmbH.

In December 2023, the Group, through its subsidiary WindGrid, entered a firm agreement to acquire a 35.1% stake in energyRe Giga, a clean energy company in the U.S..

All the entities keep their accounts in euros and have the same reporting date as Elia Group SA/NV.

8. Other notes

8.1. Financial risk and derivative management

PRINCIPLES OF FINANCIAL RISK MANAGEMENT

The Group aims to identify each risk and sets out strategies to control their economic impact on the Group's results.

The Risk Management Department defines the risk management strategy, monitors risk analyses and reports to management and the Audit Committee. The financial risk policy is implemented by determining appropriate policies and setting up effective control and reporting procedures. Selected derivative hedging instruments are used depending on the assessment of the risk involved. Derivatives are used exclusively as hedging instruments. The regulatory framework in which the Group operates significantly restricts their effects on profit or loss (see the section 'Regulatory framework and tariffs'). The major impact of increased interest rates, credit risk, etc. can be settled in the tariffs, in accordance with the applicable legislation.

MARKET RISK

The market risk takes into account negative effects on the financial position and cash flows of the Group arising as a result of price changes on the market which cannot be otherwise avoided. The activities of the Group extend to the electricity market – in particular through selling the electricity generated from renewable energy as well as the procurement of energy to cover grid energy losses – as well as to the market for short-term deposits. In Germany, the Group counteracts the procurement price risk for grid loss energy by hedging prices at an early stage using futures contracts on the EEX electricity exchange.

As the financial costs and the costs for grid losses are passed through to the tariffs, the Group is not really exposed to a change in market conditions. There is no sensitivity analysis to provide on that respect.

FOREIGN CURRENCY RISK

The Group is not exposed to any significant currency risk, either from transactions or from exchanging foreign currencies into euro, since it has no material foreign investments or activities and less than 1% of its costs are expressed in currencies other than euros.

As reported in the note 8.4, the Group entered into an agreement to acquire a minority stake in a US company, energyRe Giga Projects USA Holdings.This could increase the Group exposure to foreign currency risks in the future. In connection with this transaction, the Group has entered into forward contracts to lock in the exchange rate to the date the acquisition will be completed. The goal was to fully hedge the first tranche of €250,0 million. These contracts are accounted for as Cash Flow Hedge (CFH) with their market-to-market value (negative as at 31 December 2023 ; -€1.1 million) recognised in other comprehensive income.

INTEREST RATE RISK

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group's exposure to the risk of changes in market interest rates relates primarily to its long-term debt obligations with floating interest rates. As at 31 December 2023, one interest-rate swap was outstanding in connection with pre-hedging of a forecasted bond issue (nominal amount of €125,0 million out of €800,0 million issued in January 2024). The interest rate swaps which were outstanding on 31 December 2022 have been unwound in January 2023, when ETB’s first green bond was issued.

See Note 6.13 for a summary of the outstanding loans and their respective interest rates.

RISKS FROM ENERGY PROCUREMENT

The Group counters the procurement price risk for grid loss energy by hedging prices at an early stage using futures contracts on the EEX power exchange. To cover the required grid loss volumes, the Group enters into daily day ahead transactions on the spot market (EPEX Spot). Due to the availability and liquidity of futures trading, the hedging period for the intended price hedging covers a period of up to two years from the balance sheet date. Credit and default risks are avoided with this form of price hedging via exchange transactions.

Spot market procurement is a highly probable transaction, because the actual occurrence of grid losses is physically determined and must necessarily be compensated for by the grid operator through the purchase of energy. The Group pursues a conservative recovery strategy aligned with the regulatory framework and regulatory recognition of the electricity procurement costs incurred, which enables timely and predictable price hedging. The Group aims at fully hedging the price of the expected volume of grid loss energy.

Price hedging of future required spot market procurement of grid loss energy volumes using futures provides a highly effective hedging method. The price development of the settlement price of EEX fully reflects the price change of the spot price on the EPEX spot market, so that a 100% effectiveness of the hedging relationship can be assumed in this respect. As the volume of electricity required for the grid losses that will arise in the future is not known at the time the hedging transactions are entered into, the Group determines the highly probable volume required (expected value) and derives the procurement strategy for price hedging from this; this expected value forms the basis for the hedging transactions under hedge accounting.

The forecast of the future volume of electricity required to cover grid losses is naturally subject to uncertainties relating to external factors, in particular wind feed-in, the electricity generation mix and the respective grid situation (influenced by generation, consumption and interventions such as redispatch measures). The expected value for grid loss procurement determined with the aid of a model is based on historical experience values, taking into account as best as possible any future changes in the relevant factors and foreseeable events on the basis of available information at the time of procurement planning. Changes in the forecast quantity are monitored on an ongoing basis and lead to an adjustment of the procurement strategy as far as possible.

At the balance sheet date, the Group had already price-hedged a volume of 3.2 TWh for its expected physical requirements for grid loss energy in subsequent years. The futures contracts were concluded during the fiscal year at prices between EUR 108 and EUR 174 per MWh. As a result of the volatile price development on the electricity market, derivatives with a negative market value of €-224.8 million (prior year: €-24.7 million and positive market value of €154.3 million) as a result of the price drop shortly before the end of 2022 were recognised in the consolidated statement of financial position under financial assets and derivative liabilities. In the financial year, a negative result of €89.3 million was realised from hedging with futures contracts (prior year: positive result of €390.1 million), which is included in the cost of materials.

CREDIT RISK

Credit risk encompasses all forms of counterparty exposure, i.e. where counterparties may default on their obligations to the Group in relation to lending, hedging, settlement and other financial activities. The Group is exposed to credit risk from its operating activities and treasury activities. With regards to its operating activities, the Group has a credit policy in place, which takes into account customer’s risk profiles. The exposure to credit risk is monitored on an ongoing basis, resulting in a request to issue bank guaranties from the counterparty for some major contracts.

At the end of the reporting period there were no significant concentrations of credit risks. The maximum credit risk is the carrying amount for each financial asset, including derivative financial instruments.

The movement in the allowance for expected credit losses in relation to trade receivables during the year was as outlined in the table below:

Almost all bad debtors are related to outstanding receivables linked to the regulatory levies in Germany. If a debtor goes bankrupt, 50Hertz Transmission is compensated by the levy system for the loss incurred.

The Group believes that the unimpaired amounts overdue by more than 30 days are still collectible, based on historical payment behaviour and extensive analysis of customer credit risk, including customers' underlying credit ratings, when available. The credit quality of trade and other receivables is assessed based on a credit policy.

IFRS 9 requires the Group to impair financial assets based on a forward-looking expected credit loss (ECL) approach.

As of 2022, the Group applies an individualised approach for trade receivables, for which the Group has set rules for defining the stage of the concerned asset for Expected Credit Loss (ECL) calculations.

• stage 1 covers financial assets that have not deteriorated significantly since initial recognition. The ECL for stage 1 is calculated on a 12-month basis,

• stage 2 covers financial assets for which the credit risk has significantly increased. The ECL for stage 2 is calculated on a lifetime basis. The decision to move an asset from stage 1 to stage 2 is based on certain criteria such as:

• a significant downgrade in the creditworthiness of a counterparty and/or its parent company and/or its guarantor (if any),

• significant adverse changes in the regulatory environment,

• changes in political or country-related risks, and

• any other aspect the Group may consider relevant.

Regarding financial assets that are more than 30 days past due, the move to stage 2 is not systematically applied as long as the Group has reasonable and supporting information that demonstrates that, even if payments become more than 30 days past due, this does not represent a significant increase in the credit risk since initial recognition.

• stage 3 covers assets for which default has already been observed, such as:

• when there is evidence of failure in credit support from a parent company to its subsidiary (in this case the subsidiary is the Group’s counterparty at risk),

• when a Group entity has initiated legal proceedings against the counterparty for nonpayment.

Regarding financial assets that are more than 90 days past due, the presumption can be rebutted if the Group has reasonable and supportable information that demonstrates that even if payments become more than 90 days past due, this does not indicate counterparty default.

The ECL formula applicable in stages 1 and 2 is ECL = EAD x PD x LGD, where:

• for 12-month ECL, Exposure At Default (EAD) equals the carrying amount of the financial asset, to which the relevant Probability of Default (PD) and the Loss Given Default (LGD) are applied;

• for lifetime ECL, the calculation method consists in identifying changes in exposure for each year, especially the expected timing and amount of the contractual repayments, and then applying to each repayment the relevant PD and the LGD, and discounting the figures obtained. ECL is then the sum of the discounted figures; and

• probability of default is the likelihood of default over a particular time horizon (in stage 1, this time horizon is 12 months after the reporting period; in stage 2 this time horizon is the entire lifetime of the financial asset). This information is based on external data from a well-known rating agency. The PD depends on the time horizon and of the rating of the counterparty.

The Group uses external ratings if they are available; or an internal rating for major counterparties with no external rating.

Subsequently, a loss given default is calculated as the percentage of the amount of trade receivables that is not covered by a bank guarantee. The total outstanding amount of trade receivables covered by a bank guarantee totals €36.4 million. The loss given default is multiplied by the probability of default and the outstanding trade receivables.

This approach is deemed more relevant than the portfolio approach to provide a better assessment of the risk, especially in the current context of volatile market conditions. The impact of this new approach is not significant. Furthermore, any losses would be recoverable through the tariffs.

The model is applied to the trade receivables, all other financial assets being not assessed at risk of impairment considering their nature (regulatory assets, amounts recoverable through future tariffs in compliance with the regulatory frameworks), risk profile (reliable counterparty being for the levies the Belgian/German state) or measurement method (at fair value). More details are provided in the different notes.

LIQUIDITY RISK

Liquidity risk is the risk that the Group may be unable to meet its financial obligations. The Group limits this risk by constantly monitoring cash flows and ensuring that there are always sufficient credit-line facilities available.

The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank loans, confirmed and unconfirmed credit facilities, commercial paper programmes, etc. For medium- to long-term funding, the Group uses bonds. The maturity profile of the debt portfolio is spread over several years. The Group Treasury frequently assesses its funding resources taking into account its own credit rating and general market conditions.

Bond issuances realised over the last years , various loan contracted with investors and different banks prove that the Group has access to different sources of funding.

Details of the used and unused back-up credit facilities are set out below:

The Group has had several lines available to guarantee the financing of its activities and to cushion possible variations in levies (even if we can observe a surplus for the last 2 years) or derivatives. Indeed, the high volume of futures contracts contracted by 50Hertz Transmission (Germany) also has an impact on the Group's liquidity management. The daily cash settlement of futures contracts with the exchange can have short-term effects on liquidity, which largely follow the general price trend on the electricity market.

HEDGING ACTIVITIES AND DERIVATIVES

The Group is exposed to certain risks relating to its ongoing business operations. The primary risk managed using derivative instruments is interest rate risk.

All financial derivatives entered into by the Group relate to an underlying transaction or forecast exposure, depending on the expected impact on the statement of profit or loss, and if the IFRS 9 criteria are met, the Group decides on a case-by-case basis whether hedge accounting will be applied.

Derivatives not designated as hedging instruments

The Group had no derivatives which were not designated as hedging instruments.

Derivatives designated as hedging instruments

In 2018, the Group hedged the interest rate risk linked to the acquisition of a 20% stake in 50Hertz Transmission (Germany) for which a bridge loan was initially put in place. To cover the potential exposure to interest rate risk, the Group entered into a pre-hedge interest rate swap agreement in June 2018 to lock in market interest rates at the moment of the issuance of the €300 million senior bond. The Group applied hedge accounting as the derivative transaction met the requirements under IFRS 9. Upon the settlement of the transaction in September 2018, the portion of the gain or loss on the derivative was recognised within hedging reserves and had an impact of €5.7million.

These hedging reserves are recycled into profit and loss over the lifetime of the underlying hedged instrument, i.e. the senior bond with 10-year maturity. In 2023, an amount of €0.6 million was recycled into profit and loss.

The Group recognises derivatives to hedge the price for the future procurement of the physical requirement for grid losses that is expected in subsequent periods and is covered in each case by short-term procurement transactions on the spot market. These derivatives are measured at fair value in OCI with no effect on profit or loss as part of cash flow hedge accounting; they serve as price hedging of the physical demand for electrical energy to cover grid losses (underlying transaction). Due to the availability and liquidity of futures trading, the hedging period for intended price hedging covers a period of up to two years from the balance sheet date. In this context, the Group pursues a conservative hedging strategy oriented towards the regulatory framework and the ability to roll over the electricity procurement costs incurred, which enables timely and predictable price hedging.

The critical term match method measures effectiveness. If the valuation-relevant parameters of the hedged item and hedging instrument match, it is assumed that an effective hedging relationship exists and that changes in value from both items offset each other. The Group strives for full price hedging of the expected volume of grid loss energy (hedge ratio 1:1).

In 2022, the Group entered into Interest Rate Swaps contracts as pre-hedge for probable forecast debt transactions. The purpose of those instruments was to fix the rate at which the Group will borrow in the context of future bond issues planned in 2023. Upon the settlement of the transaction in 2023, the gain resulting from the hedge was recognized within hedging reserves for a total of €36.5 million. An amount of €3.4 million was recycled into profit and loss. As per 31 December 2023, €7.2 million interest rate swap (IRS) remain outstanding in connection with a bond issue forecasted in 2024.

End of 2023, as reported in the note 8.4, the Group entered into an agreement to acquire a minority stake in a US company, energyRe Giga Projects USA Holdings. In connection with this transaction, the Group has entered into forward contracts (EUR-USD 250.0 million) to lock in the exchange rate to the date the acquisition will be completed. The fair value of these contracts was negative at the end of 2023 (-€1.1 million recognised in other comprehensive income).

CAPITAL RISK MANAGEMENT

The purpose of the Group's capital-structure management is to ensure that the debt and equity ratios related to its regulated activities are as closely aligned as possible with the recommended level set by the relevant regulatory frameworks.

The Company's dividend guidelines involve optimising dividend payments while bearing in mind that self-financing capacity is needed to carry out its legal mission as transmission system operator, finance future CAPEX projects and, more generally, implement the Group’s strategy.

The Company offers its employees the opportunity to subscribe to capital increases that are exclusively reserved for them.

SUSTAINABILITY

Sustainability lies at the heart of Elia’s strategy through its ActNow programme, which sets out the long-term sustainability objectives of the Group. These are guided by the UN Sustainable Development Goals (SDGs) and have been translated into KPIs which are reported to the market and grouped under the following five dimensions: Climate Action; Environment and Circular Economy; Health and Safety; Diversity, Equity and Inclusion; and Governance, Ethics and Compliance.

Furthermore, as a driver of the energy transition, Elia Group is committed to ensuring that its activities are strongly aligned with the EU Taxonomy, a classification system for sustainable economic activities. Elia Group therefore published in 2021 a white paper which outlines the company’s eligibility and alignment with the EU Taxonomy. The paper includes the methodology used for the assessment, highlights the Group’s implementation of sustainable tools and practices, and reinforces its commitment to operating its businesses in a sustainable way.

In 2023, Elia Group was one of the first Belgian companies to be selected to be part of BEL®ESG, the new stock market index linked to sustainability and launched by Euronext.

Elia was named as one of the best employers in Belgium for the sixth time in a row. Its overall score improved again, rising from 86% to 88%. Elia made most of its progress in the areas of ‘diversity and inclusion’ (+13.53%) and ‘sustainability’ (+11.67%).

The Group continued to explore the use of innovative devices throughout 2023, including remote inspection technology to increase the efficiency, safety and sustainability of our asset monitoring activities

We refer to our Strategic Report and our Sustainability Report for further information.

8.2. Commitments and contingencies

CAPITAL EXPENDITURE COMMITMENT

As at 31 December 2023, the Group had a commitment of €11,509.0 million (€3,883.9 million in 2022) relating to purchase contracts for the installation of property, plant and equipment for further grid extensions.

OTHER CONTINGENCIES AND COMMITMENTS

Commitments

As at 31 December 2023, the Group had a commitment of €280.8 million (€347.9 million in 2022) relating to purchase contracts for general expenses, maintenance and repair costs.

Contingent liabilities

As stated in Note 6.15, the group defends litigation matters relating to business interruptions, contractual claims or disputes with third parties. Generally, in line with good business practice, the group does not recognise any pending proceeding which has not matured and/ or where the probability of existing or future exposure is unlikely, where financial impact is not estimable and for which no contingent liabilities are able to be quantified.

Nevertheless, at the end of 2023, it may be relevant to note that, in connection with an open procedure, the group received a judgement that could result in it having to pay compensation amounting to around €14,0 million. The Group decided to file on appeal against the court’s decision. The group and its lawyers are confident that their arguments will be heard. The probability of an impact in profit or loss is considered remote and no provision has been recognised in connection with this litigation.

Other

Having received approval from the Walloon government and from the CREG, on 22 June 2015 Elia entered into an agreement with Solar Chest for the sale of Walloon green certificates with a total value of €275 million. Solar Chest's mission is to buy, hold and sell Walloon green certificates for periods of five, six and seven years. In accordance with legislation, Solar Chest conducted several auctions.

In September 2017, Elia sold 2.8 million green certificates to the Walloon Region (i.e. the Walloon Agency for Air and Climate, or AwAC) leading to a net cash inflow of €181.2 million. This was a result of the Decree of 29 June 2017 amending the Decree of 12 April 2011 relating to the organisation of the regional electricity market and the Decree of 5 March 2008 relating to the creation of the Walloon Agency for Air and Climate. The green certificates transferred by Elia can be gradually resold by the AwAC from 2022 onwards, taking into account the market conditions that exist for green certificates at that time. The legislation also envisages the green certificates being held by the AwAC for a period of up to nine years, after which Elia is required to buy back any unsold certificates. These repurchase

commitments will have no impact on Elia's financial performance, as the cost and expense for the repurchase will be fully recovered through the tariffs for levies. The legislation was supplemented in 2021 by new provisions that allow the Government to decide, after consultation with the LTSO, on the gradual resale to Elia of certain quantities of green certificates held by AwAC.

In November 2018, Elia sold another €0.7 million in green certificates to the Walloon Region (i.e. the AwAC) which resulted in a net cash inflow of €43.3 million. As with the transaction in September 2017, Elia might be required to buy back some of the certificates sold from 2023 onwards. Any repurchase will be covered through the tariffs for levies. There were no transactions for sale of green certificates to the AwAC in 2019, 2020, 2021, 2022 or 2023. Considering (i) the state of the Walloon green certificate market and (ii) the amounts actually available following the application of the surcharge in 2022 and 2023, the Walloon Government has decided to ask Elia to buy back certificates held by AwAC for an amount of €45.5 million in December 2022; and of €65.0 million in December 2023 .

In Germany, offshore expenses between 50Hertz and TenneT TSO arising from the horizontal settlement no longer exist (prior year: €0.3 million).

8.3. Related parties

CONTROLLING ENTITIES

The core shareholder of Elia Group is Publi-T and this remained unchanged from 2022. Other than the yearly dividend payment, no transactions occurred with the core shareholder in 2023.

The shareholder structure of the Group can be found in Note 7.

TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL

Key management personnel include Elia's Board of Directors and Elia’s Management Committee, both of which have a significant influence across the entire Elia Group.

The members of Elia’s Board of Directors are not employees of the Group. The remuneration for their mandate is detailed in the Corporate Governance Statement, which forms part of this Annual Report (see the remuneration report).

The other members of key management personnel are hired as employees. The components of their remuneration are detailed below (i.e. excluding the directors who are not employees).

The names of the key management personnel are included in the Corporate Governance report.

Key management personnel did not receive stock options, special loans or other advances from the Group throughout the year.

TRANSACTIONS WITH JOINT VENTURES AND

Transactions between the Company and subsidiaries that are related parties were eliminated during consolidation and therefore are not recognised in this note.

Transactions with joint ventures and associates (as defined in Note 7.) were not eliminated, so details of these transactions are shown below:

In 2022 and 2023, entities of the Elia Group had transactions with Nemo Link Ltd. and Coreso SA/NV. The sale of goods relates to corporate services (SLAs) rendered by Elia to Nemo Link Ltd and Coreso SA/NV. Nemo Link Ltd. also rents a building (Herdersbrug) from Elia Asset SA/NV (see also Note 6.18). Purchases of goods mostly relates to services rendered by Coreso SA/NV to the group.

TRANSACTIONS WITH SHAREHOLDERS

There were no transactions with shareholders in 2023, except for the dividend payment.

TRANSACTIONS WITH RELATED PARTIES

Elia's Management Committee also assessed whether transactions occurred with entities in which they or members of the Board of Directors exercise a significant influence (e.g. positions as CEO, CFO, vice-chair of the Management Committee, etc.).

There were some significant transactions in 2023 in which the key management personnel of the Group has a significant influence. All these transactions took place in the normal course of Elia’s business activities. The total value of expenses amounted to €1.0 million. There were no realised sales during 2023. As at 31 December 2023, there were no outstanding trade-receivable positions nor outstanding trade-debt positions with related parties.

8.4. Subsequent events

No significant events that would result in the financial statements being adjusted occurred after the closing of the financial statements as of 31 December 2023.

However, two major non-adjusting subsequent events can be reported:

• In January 2024, the Group has successfully placed a €800 million green bond via Elia Transmission Belgium under its €6 billion Euro Medium Term Notes (“EMTN”) programme and a combined €1.5 billion green bond via Eurogrid Gmbh. This confirms investors' appetite to support the Group's projects at the heart of the energy transition.

• On 4 December 2023, Elia Group SA/NV entered into an agreement to acquire a 35.1% minority % stake in a energyRe Giga Projects USA Holdings, newly formed subsidiary of energyRe LLC. energyRe is a diversified renewable energy generation and transmission company founded in 2020 and headquartered in New York with expertise in solar, wind, distributive generation, and transmission.

Giga has been formed through the contribution by energyRe of core assets, consisting of energyRe’s onshore transmission, offshore transmission, offshore wind projects and onshore renewable generation projects to be connected to the Clean Path New York transmission line.

The closing of the transaction took place on 1 February 2024. It is expected that Elia Group will deploy US$400 million over three years into energyRe Giga. US$250 million out of the US$400 million have been drawn as part of the closing and Elia Group’s equity stake will increase as the amount is deployed over time, reaching 35.1% once the US$400 million is fully deployed. Proceeds will be fully committed to fund project development in US electricity transmission and renewable energy generation.

The investment will be treated via equity method. Elia will not control Giga but will have a significant influence. This judgment will be supporter quantitatively (minority stake)

and qualitatively (via the governance provisions). The investment will be classified as an associate. A preliminary allocation of the purchase price will be finalized in 2024. This could give rise to goodwill, which will be embedded in the value of the equity method.

8.5. Miscellaneous

THE IMPACT OF THE WAR IN UKRAINE

Given the nature and location of its operations and the fact that Elia Group does not currently have activities in Russia nor in Ukraine or with Russian companies, Elia Group does not observe a direct impact of the Ukrainian conflict on its business. However, there is a strong push at the European level to become less dependent from Russian gas and fossil fuels. Accordingly, the Group observes a willingness among the authorities in Belgium and Germany to accelerate the energy transition and the related investment plans.

8.6. Services provided by the Auditors

The General Meeting of Shareholders appointed as joint auditors BDO Bedrijfsrevisoren BV (represented by Mr. Michaël Delbeke) and EY Bedrijfsrevisoren BV (represented by Mr. Paul Eelen) for the audit of the consolidated financial statements of Elia Group SA/NV and Elia Transmission Belgium SA/NV and the audit of the statutory financial statements of Elia Group SA/NV, Elia Transmission Belgium SA/NV, Elia Asset SA/NV, Elia Engineering SA/NV, Elia Grid International SA/NV, Eurogrid International SA/NV, WindGrid SA/NV and Re.Alto BV/ SRL. BDO Bedrijfsrevisoren BV and EY Bedrijfsrevisoren BV are also the statutory auditors of Coreso SA/NV.

50Hertz Transmission (Germany) appointed BDO AG Wirtschaftsprüfungsgesellschaft for the audit of the consolidated financial statements of Eurogrid GmbH and the statutory financial statements of Eurogrid GmbH, 50Hertz Transmission GmbH, 50Hertz Offshore GmbH and Elia Grid International GmbH.

The following table sets out the fees of the joint auditors and their associates in connection with services delivered with respect to the financial year 2023:

9. Regulatory framework and tariffs

9.1. Regulatory framewark in Belgium

9.1.1 Federal legislation

The Electricity Act, which forms the general basis, lays down the core principles of the regulatory framework governing Elia’s activities as a transmission system operator in Belgium.

This Act was heavily amended on 8 January 2012 by the transposition at federal level of the third package of European directives. These changes ensure that the Electricity Act:

• sets out the unbundling of transmission operations from generation, distribution and supply activities;

• sets out in greater detail the rules for operating and accessing the transmission system;

• redefines the transmission system operator's legal mission, mainly by expanding it to the offshore areas over which Belgium has jurisdiction; and

• strengthens the role of the regulatory authority, particularly with regards to the determination of the transmission tariffs.

A number of royal decrees provide more details relating to the regulatory framework that applies to the transmission system operator, particularly the Royal Decree on the Federal Grid Code. Similarly, the decisions passed by the CREG supplement these provisions to form the regulatory framework within which Elia operates at federal level.

9.1.2 Regional legislation

Belgium's three regions are primarily responsible for the local transmission of electricity through grids with a voltage of 70 kV or less across their respective territories. Whilst the regional regulators are in charge of all non-tariff aspects of local transmission-system regulation, the setting and monitoring of tariffs falls under federal jurisdiction.

The Flemish Region, the Brussels-Capital Region and the Walloon Region have also transposed into their legislative frameworks the provisions of the third European package that applies to them. The regional decrees have been supplemented by various other rules and regulations relating to matters such as public service obligations, renewable energy and authorisation procedures for suppliers.

9.1.3 Regulatory agencies

As required by EU law, the Belgian electricity market is monitored and controlled by independent regulators.

FEDERAL REGULATOR

CREG is the federal regulator, and its powers with regard to Elia include:

• approving the standardised terms in the three main contracts used by the company at federal level: the connection contract, the access contract and the ARP contract;

• approving the capacity allocation system at the borders between Belgium and neighbouring countries;

• approving the appointment of the independent members of the Board of Directors;

• determining the tariff methodology to be observed by the system operator when calculating the various tariffs which apply to grid users;

• certifying that the system operator actually owns the infrastructure it operates and that it meets the regulatory requirements for independence from generators and suppliers.

REGIONAL REGULATORS

The operation of electricity networks with voltages of 70 kV or less falls under the jurisdiction of the regional regulators. Each of these may require any operator (including Elia if it operates such networks) to abide by any specific provision of the regional electricity rules on pain of administrative fines or other sanctions. However, the regional regulators do not have the power to set tariffs for electricity transmission systems, as tariff setting falls under the exclusive remit of the CREG for these networks.

9.1.4 Tariff setting

A new tariff methodology came into force in early 2020. This methodology is again applicable for a period of four years (2020-2023).

TARIFF REGULATIONS

On 28 June 2018, the CREG issued a decision which set the tariff methodology for the electricity transmission system (including the offshore system) and the electricity networks which have transmission functions during the regulatory period 2020-2023 (Decision (Z)1109/10). This methodology is the general framework in accordance with which transmission tariffs are set for these four years.

Elia has prepared its tariff proposal for the regulatory period commencing on 1 January 2020 based on the methodology described below. This proposal was approved by the CREG on 7 November 2019 (Decision (B)658E/62).

TARIFF REGULATIONS APPLYING IN BELGIUM

As the operator of networks which have transmission functions (covering the transmission system and the local and regional transmission networks in Belgium), Elia generates most of its income from the regulated tariffs charged for use of these networks (tariff income), which are approved in advance by the CREG. Since 1 January 2008, the prevailing tariff regulation mechanisms have provided for approved tariffs that were set for four-year periods, barring specific circumstances.

The tariff mechanism is based on amounts recognised in accordance with Belgian accounting regulations (BE GAAP). The tariffs are based on budgeted costs minus a number of sources of non-tariff income. These costs are then divided based on an estimate of the volumes of electricity taken off the grid and, in the case of some costs, based on estimated volumes of electricity injected into the grid, in accordance with the terms of the tariff methodology drawn up by the CREG.

The costs taken into account include the forecast value of the authorised remuneration of the invested capital, an estimate of the amounts allocated to Elia in the form of performance incentives and the predicted values of various cost categories. These costs are subdivided into three groups: controllable costs, for which Elia is offered a financial incentive to improve its efficiency levels; non-controllable costs, over which Elia has no influence and for which deviations from the budget are completely allocated to the calculation of future tariffs; and influenceable costs, to which a hybrid rule applies (see the information provided below with regard to controllable and non-controllable costs and income and influenceable costs).

FAIR REMUNERATION

Fair remuneration is the return on capital invested in the grid based on the Capital Asset Pricing Model (CAPM). It is based on the average annual value of the regulated asset base (RAB), which is calculated annually, taking into account new investments, divestments, depreciations and changes in working capital.

Since 1 January 2020, the formula has changed compared to the previous tariff methodology with regard to the level of leverage and the OLO interest rate for risk free investment: (i) the regulatory leverage has been increased from 33%. to 40%., and (ii) the OLO has been set at 2.4%. for the period 2020-2023, instead of taking the average of the year, each year. In the event of a major change in the Belgian macro-economic situation and/or in its market circumstances, the CREG and Elia can agree on a modification of the fixed OLO rate.

The formula for the calculation of fair remuneration is as follows:

A: [S (if less than or equal to 40%) x average RAB x [(1 + α) x [(OLO (n) + (β x risk premium)]]]

plus

B: [(S (if above 40%) – 40%) x average RAB x (OLO (n) + 70 base points)]

Where:

• OLO (n) has been fixed at 2.4% and is no longer the average rate of Belgian ten-year linear bonds for the year in question (subject to modification agreed between CREG and the Issuer as set out above);

• RAB (n) = RAB (n-1) + investments (n) - depreciation (n) - divestments (n)decommissioning (n) +/- change in working capital need;

• S = the consolidated average capital and reserves/average RAB, in accordance with Belgian GAAP;

• Alpha (α) = the illiquidity premium set at 10%;

• Beta (β) = calculated over a historical three-year period, taking into account available information on the Issuer's share price in this period, compared with the Bel20 index over the same period. The value of the beta cannot be lower than 0.53;

• Risk premium remains at 3.5%;

• In respect of A: The rate of remuneration (in %) as set by the CREG for year n is equal to the sum of the risk-free rate, i.e. the average rate of Belgian ten-year linear bonds for the year in question (OLO (n)) and a premium for market risk for shares, weighted using the applicable beta factor. Tariff regulation sets the risk premium at 3.5%. The CREG encourages the Elia to keep its actual capital and reserves as close as possible to 40%., this ratio being used to calculate a reference value of capital and reserves;

• In respect of B: If the Elia's actual capital and reserves are higher than the reference capital and reserves, the surplus amount is balanced out with a reduced rate of remuneration calculated using the following formula: [(OLO (n) + 70 base points)];

• Assets related to the MOG are linked to the RABMOG, for which a premium remuneration is applicable in addition to the above. This is based on the following formula: [S (less than or equal to 40%) x average RABMOG x 1.4%].

Non-controllable costs and revenues

The category of costs and revenues that are outside Elia's direct control are not subject to incentive mechanisms offered by the CREG, and are an integral part of the costs and revenues used to determine the tariffs. The tariffs are set based on forecast values for these costs and revenues, and the difference from the actual values is allocated ex post to the tariff calculation for the subsequent period.

The most important non-controllable costs consist of the following items: depreciation of tangible fixed assets, ancillary services (except for the reservation costs of ancillary services excluding black start, which qualify as influence-able costs), costs related to line relocation imposed by a public authority, and taxes, partially compensated by revenues from non-tariff activities (e.g. cross border congestion revenues). In this new tariff period, certain exceptional costs specific to offshore assets (e.g. the MOG) have been added to the list of non-

controllable costs. This also includes financial charges/revenues for which the principle of financial embedded debt has been confirmed. As a consequence, all actual and reasonable finance costs related to debt financing are included in the tariffs.

Controllable costs and revenues

The costs and revenues over which Elia has direct control are subject to an incentive regulation mechanism, meaning that they are subject to a sharing rule of productivity and efficiency improvement which may occur during the regulatory period. The sharing factor is 50%. Therefore, Elia is encouraged to control a defined category of its costs and revenue. Any savings with respect to the allowed (adjusted) budget positively impacts the net profit of the Elia by 50% of the amount (before tax) and, accordingly, any overspending negatively affects its profit. There have been no changes compared with the previous tariff methodology, except for certain non-recurrent but controllable costs specific to offshore assets (e.g. the MOG) that can be added to the cost allowance for a given regulatory period.

Influenceable costs

The reservation costs for ancillary services, except for black start, and costs of energy to compensate for grid losses are qualified as influenceable costs, meaning that efficiency gains create a positive incentive, insofar as they are not caused by a certain list of external factors. 20% of the difference in expenses between Y-1 and Y constitutes a profit (pre-tax) for the Elia, with a cap of +€6 million. For each of the two categories of influenceable costs (power reserves and grid losses), the incentive cannot be less than €0.

Other incentives

The tariff predefined by the regulator includes, besides the fair remuneration, all the incentives listed below. If Elia does not perform in line with the targets for these incentives, as set by the regulator, the amount of the incentive allocated to Elia will decrease. The impact is reflected in the deferred revenues which will generate future tariff decreases, see the description of the settlement mechanism below (all amounts are pre-tax).

• Market integration: This incentive consists of three elements under the previous regulatory framework: (i) increase of import capacity, (ii) increase in market welfare due to market coupling and (iii) financial participations. Only the incentive on financial participations remains. The incentive on market welfare is no longer offered, whereas the one on import capacity has been replaced by an incentive with a similar objective (increase of crossborder commercial exchange capacity) but with a fairly different measurement method. Additionally, a new incentive has been created concerning the timely commissioning of investment projects contributing to market integration. These incentives can contribute positively to the Elia’s profit (from €0 to €16 million for cross-border capacity, from €0 to €7 million for timely commissioning). The profit (dividends and capital gains) resulting from financial participations in other companies which the CREG has accepted as being part of the RAB, is allocated as follows: 40% is allocated to future tariff reductions and 60% is allocated to Elia’s profit).

• Investment programme: This incentive is broadened and is defined as follows: (i) if the average interruption time (AIT) reaches a target predefined by the CREG, Elia’s net profit (pre-tax) could be impacted positively with a maximum of €4.8 million, (ii) should the availability of the MOG align with the level set by the CREG, the incentive can contribute to the Elia’s profit from €0 to €2.53 million and (iii) Elia could benefit from €0 to €2 million if the predefined portfolio of maintained and redeployed investments is realised in time and on budget.

• Innovation and grants: The content and the remuneration of this incentive has changed and covers (i) the realisation of innovative projects which could contribute to the Elia’s remuneration for €0 to €3.7 million (pre-tax) and (ii) the subsidies granted for innovative projects which could impact the Elia’s profit with a maximum of €0 to €1 million.

• Quality of customer related services: This incentive is broadened and is related to three incentives: (i) the level of client satisfaction related to the establishment of new grid connections which can generate a profit for Elia of €0 to €1.35 million, (ii) the level of client satisfaction for the full client base which would contribute between €0 and €2.53 million to Elia’s profit and (iii) the quality of the data that Elia publishes on a regular basis, which can generate remuneration for Elia of €0 to €5 million.

• Enhancement of balance system: This incentive is similar to the discretionary incentive under the previous regulatory framework, through which Elia is rewarded for implementing certain projects related to system balancing as defined by the CREG. This incentive can generate remuneration between €0 and €2.5 million (pre-tax).

Regulatory framework for the Modular Offshore Grid

The CREG has amended the 2016-2019 tariff methodology to create specific rules applicable to investment in the MOG. A formal consultation took place in the first weeks of 2018 between the CREG and the issuer, and the CREG took a decision on 6 December 2018 about the new parameters to be introduced in the tariff methodology. The main features of said parameters were (i) a specific risk premium to be applied to this investment (resulting in an additional net return of 1.4%); (ii) a special depreciation rate applicable to MOG assets; (iii) certain costs specific to the MOG to bear another qualification compared with the costs for onshore activities; (iv) the cost level defined based on the characteristics of the MOG assets; and (v) dedicated incentives linked to the availability of the offshore assets. For the tariff period 2020-2023, the regulatory framework for the MOG has been included in the tariff methodology, based on the features described above, except for the risk premium, which has been applied since 1 January 2020 on a target equity/debt ratio of 40/60.

Regulatory deferral account: deviations from budgeted values

Over the course of a year, the actual volumes of electricity transmitted may differ from the volumes which are forecasted. If the transmitted volumes are higher (or lower) than those forecast, the deviation is booked to an accrual account during the year in which it occurs. These deviations from budgeted values (a regulatory debt or a regulatory receivable) are accumulated and will be taken into account when the tariffs are set for the subsequent tariff period. Regardless of deviations between the forecast parameters for tariff-setting (fair remuneration, non-controllable elements, controllable elements, influenceable costs, incentive components, cost and revenue allocation between regulated and non-regulated activities) and the actual incurred costs or revenues related to these parameters, the CREG takes the final decision each year as to whether the incurred costs/revenue can reasonably be borne by the tariffs. This decision may result in the rejection of incurred elements. In the event that any incurred elements are rejected, the relevant amount will not be taken into account when the tariffs are set for the next period. Although Elia can ask for a judicial review of any such decision, if this judicial review were to be unsuccessful, a rejection may well have an overall negative impact on Elia’s financials.

Cost and revenue allocation between regulated and non-regulated activities

The tariff methodology for 2020-2023 features a mechanism enabling Elia to develop activities outside the Belgian regulated perimeter and whose costs are not covered by grid tariffs in Belgium. This methodology establishes a mechanism to ensure that Elia's financial participation in other companies not considered part of the RAB by the CREG (e.g. stakes in regulated or non-regulated activities outside Belgium) has a neutral impact on Belgian grid users.

Public service obligations

In its role as a TSO, Elia is subject to various public service obligations imposed by the government and/or by regulation mechanisms. Public authorities/regulation mechanisms identify public service obligations in various fields (such as the promotion of renewable energy, green certificates, strategic reserves, social support, fees for the use of the public domain, offshore liability) for fulfilment by TSOs. The costs incurred by the TSO with respect to these obligations are fully covered by the tariff ‘levies’ as approved by the regulator. The amounts outstanding are reported as levies (see Note 6.9 for other receivables and Note 6.17 for other payables).

9.2. Regulatory framework in Germany

9.2.1 Relevant legislation

The German legal framework is laid down in various pieces of legislation. The key law is the German Energy Act (Energiewirtschaftsgesetz, EnWG), which defines the overall legal framework for the gas and electricity supply industry in Germany. The EnWG is complemented by a number of additional laws, ordinances and regulatory decisions, which provide detailed rules regarding the current system of incentive regulation, accounting methods and grid access arrangements, including:

• the Ordinance on Electricity Network Tariffs (Verordnung über die Entgelte für den Zugang zu Elektrizitätsversorgungsnetzen (Stromnetzentgeltverordnung, StromNEV)), which establishes, among other things, the principles and methods for the grid-tariff calculations and other obligations applying to system operators;

• the Ordinance on Electricity Network Access (Verordnung über den Zugang zu Elektrizitätsversorgungsnetzen (Stromnetzzugangsverordnung, StromNZV), which, among other things, sets out further details about how to grant access to the transmission systems (and other types of networks) by way of establishing the balancing groups, the scheduling of electricity deliveries, control energy and other general obligations, e.g. congestion management (Engpassmanagement), publication obligations, metering, minimum requirements for various types of contracts and the duty of certain system operators to manage the balancing amount system for renewable energy;

• the Ordinance on Incentive Regulation (Verordnung über die Anreizregulierung der Energieversorgungsnetze (Anreizregulierungsverordnung, ARegV)), which sets out the basic rules for incentive regulation for TSOs and other system operators (as outlined in more detail below). It also describes in general terms how to benchmark efficiency, which costs are included in the efficiency benchmarking, how to determine inefficiency and how this translates into yearly targets for efficiency growth.

9.2.2 Regulatory agencies in Germany

The regulatory agencies for the energy sector in Germany are the Bundesnetzagentur (BNetzA, or Federal Network Agency) in Bonn for grids to which over 100,000 grid users are directly or indirectly connected; and the specific regulatory authorities in the various federal states for grids to which fewer than 100,000 grid users are directly or indirectly connected. The regulatory agencies are, among other things, in charge of ensuring non-discriminatory third-party access to grids and monitoring the grid-use tariffs levied by the TSOs. 50Hertz Transmission and 50Hertz Offshore are subject to the authority of the Federal Network Agency.

9.2.3 Tariff setting in Germany

The current regulation mechanism is established in Germany by the ARegV. The grid tariffs in Germany are determined in accordance with the ARegV on the basis of the revenue cap of the four transmission system operators. The revenue cap is based on the costs of a base year, and is fixed for the entire regulatory period. However certain cost positions defined by ARegV are adjusted on a yearly basis. Each regulatory period lasts five years, with the third regulatory period starting on 1st January 2019 and ending on 31st December 2023 and the fourth starting on 1st January 2024 and ending 31st December 2028. Tariffs are public and cannot be the subject of negotiations with customers. Only certain customers (under certain set circumstances laid down in the relevant legislation) are allowed to agree to individual tariffs under Article 19 of the StromNEV (for example, in the case of sole use of a grid asset). The Federal Network Agency has to approve such individual tariffs.

For the purposes of the revenue cap, the costs incurred by a system operator fall into two categories as follows:

• Permanently non-influenceable costs (PNIC): These costs are fully integrated into the 'revenue cap' and are fully recovered through the grid tariffs, albeit some of them with a two-year time lag.

• One cost position amongst the PNIC refers to investment measures, meaning costs resulting from new investments in onshore grid infrastructure (new onshore investments will be refinanced from the fourth regulatory period onward via the requested capital cost adjustment). The investment measures include return on equity, imputed trade tax, cost of debt, depreciation and operational costs (currently at a fixed rate of 0.8% of the capitalised investment costs of the respective onshore investments or 0.2% for assets under construction within projects approved as of 2019). The cost of debt related to investment measures is reflected in the interest rate based on acquired debt for the TSO activity. Since 2012, the costs associated with these investment measures have been based on forecast values. The differences between the forecast values and the actual values are reflected in the settlement mechanism deferral account.

• IN addition, PNIC include costs relating to ancillary services, grid losses and redispatch costs, as well as European initiatives and costs from congestion management. These costs and income are included in the revenue cap based on a procedural regulation mechanism set by the Federal Network Agency in accordance with Article 11(2) of the ARegV. The regulation process for costs relating to ancillary services, congestion management and grid losses gives the system operator an incentive to outperform the planned costs through bonus/malus mechanisms. Moreover, costs resulting from European projects of common interest (PCI) to which Germany is contributing can be included as PNIC, albeit with a two-year time lag.

• Temporarily non-influenceable costs (TNIC) and influenceable costs (IC): These costs include return on equity, depreciation, cost of debt, imputed trade tax and other operational expenses. They are subject to an incentive mechanism set by the Federal Network Agency, which features an efficiency factor (only applicable to IC), a productivity improvement factor and an inflation factor (applicable to both TNIC and IC) over a fiveyear period. In addition, the current incentive mechanism provides for the use of a quality factor, but the criteria and implementation mechanism for this factor for TSOs are yet to be defined by the Federal Network Agency. The various defined factors give the TSOs the medium-term objective of eliminating what are deemed inefficient costs. As regards the cost of debt, the permitted cost of debt related to influenceable costs needs to be shown to be marketable.

The Federal Network Agency has already announced that it will initiate a process to further develop the regulatory framework for 2024. The distribution system operators and gas system operators will be affected first, before the regulatory framework for the transmission system operators is to be discussed towards the end of the year.

As for the return on equity, the relevant laws and regulations set out the provisions relating to the permitted return on equity, which is included in the TNIC/IC for assets belonging to the regulated asset base and the PNIC for assets approved in investment measures. In 2021, the BNetzA determined the return on equity applicable to the fourth and coming regulatory period (2024-2028); the values were significantly down from the third regulatory period, namely to 3.51% (instead of 5.12% in the third period) for investments made before 2006 and 5.07% (instead of 6.91% in the third period) for investments made since 2006. The return on equity is calculated before corporate tax and after imputed trade tax. [RL(VF1] 50Hertz appealed against BNetzA’s decision regarding the revenue cap determination of the return on equity for the fourth regulation period. A decision of the court is pending.

In January 2024, the BNetzA (German regulator) finally decided for an adjustment on the RoE to increase the regulatory Return on Equity (RoE) for onshore investments in the Capital Cost Adjustment (CCA) regime. in response to an unexpected and substantial rise in interest rates. According to this decision, the RoE for new onshore investments starting in 2024 will be determined annually, incorporating a fixed risk premium and an update base interest rate for that specific year. This would mean a preliminary adjustment from 4.13% to 5.78% after tax for the year 2024. As for existing investments up to 2023 and projects that have already been realized, the initial unadjusted rate of 4.13% after tax will be applied throughout the entire regulatory period. The same regulation will also be applied for offshore investments. A final decision for Offshore investments is expected in the following months. Separately from the revenue cap, 50Hertz is compensated for costs incurred in connection with its renewable energy obligations, including EEG and CHP/KWKG obligations, offshore liabilities and its obligations from the electricity price brake. To this end, various surcharges (levies) have been implemented that are subject to specific regulatory mechanisms aimed at a balanced treatment of costs and income.

CHANGES IN TARIFF REGULATIONS

The capital cost adjustment model will be used for TSOs starting from fourth regulatory period. In order to avoid distortion effects in the cost base, a transitional arrangement will come into effect. It includes an extensive grandfathering of existing investment measures during the fourth regulatory period, the elimination and an extensive repayment of the clawback for expired investment measures, as well as a transitional base for replacement investments in the period of incentive regulation (2007 to the end of 2021).

As of 31st December 2023, 50Hertz had received 97 approvals for an investment volume of approximately €15.3 billion for the 118 active applications for approval of investment measures submitted since 2008.

TARIFFS

On October 4, 2023, the BMWK (Federal Ministry for Economic Affairs and Climate Action) announced a federal subsidy of €5.5 billion for the calculation of the grid fees in 2024. The provisional TSO grid fees were published on this basis on October 5, 2023 and average grid fees were thus approximately at the level of 2023 (increase of 2%). However, due to the ruling of the Federal Constitutional Court (2 BvF 1/22) of November 15, 2023, the federal government was no longer able to finance this subsidy on the grid fees. The final grid fees for 2024 were therefore published without a federal subsidy on December 13, 2023. That lead to an increase of the average grid fees by 106% to 6,43 ct/kWh.

9.3. Regulatory framework for the Nemo Link interconnector

The key features of the NemoLink Ltd. regulatory framework can be summarised as follows:

• A specific regulatory framework is applicable to the Nemo Link interconnector since the date of operation. The framework is part of the new tariff methodology issued on 18 December 2014, updated on 5 March 2020 (Cap & Floor final levels), by the CREG. The cap and floor regime is a revenue-based regime with a term of 25 years. The national regulators in the UK and Belgium (OFGEM and the CREG respectively) determined the levels of the cap and floor ex-ante and these remain largely fixed (in real term) for the duration of the regime. Consequently, investors will have certainty about the regulatory framework throughout the lifetime of the interconnector.

• The cap and floor regime is applicable since 30 January 2019. Every five years, the regulators will assess the cumulative interconnector revenues (net of any market-related costs) over the period against the cumulative cap and floor levels to determine whether the cap or floor is triggered. If a revenue rises above the cap, it will be returned to the TSO in the UK (National Electricity Transmission System Operator or ‘NETSO’) and to the TSO in Belgium on a 50/50 basis. The TSOs will then reduce the grid charges for grid users in their respective countries. If revenue falls below the floor, then the interconnector owners will be compensated by the TSOs. The TSOs will, in turn, recover the costs through grid charges. National Grid performs the NETSO role in the UK and the Issuer, the Belgian TSO, in Belgium.

• Each five-year period is considered separately. Cap and floor adjustments in one period will not affect adjustments for future periods, and total revenue earned in one period is not taken into account in future periods.

• The high-level tariff design is as follows:

Regime length 25 years

Cap and floor levels

Assessment period

(assessing whether interconnector revenues are above/below the cap/floor)

Mechanism

Levels are set at the start of the regime and remain fixed in real terms for 25 years from the start of operation. Based on applying mechanistic parameters to cost-efficiency: a cost of debt benchmark was applied to costs to set the floor, and an equity return benchmark was applied to set the cap.

Every five years, with within-period adjustments if needed and justified by the operator. Within-period adjustments will let operators recover revenue during the assessment period if revenue is below the floor (or above the cap), but will still be subject to true-up at the end of the fiveyear assessment period.

If revenue is between the cap and floor at the end of the 5-year period, no adjustment is required. Revenue above the cap is returned to end customers and any shortfall in revenue below the floor requires payment from grid users (via grid charges).

JOINT AUDITORS’ REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS

INFORMATION ABOUT THE PARENT COMPANY

Extracts from the statutory annual accounts of Elia Group SA/NV, drawn up in accordance with Belgian accounting standards, are provided hereafter in abbreviated form.

Pursuant to Belgian company legislation, the full financial statements, the annual report and the joint auditors' report are filed with the National Bank of Belgium.

These documents will also be published on the Elia website www.eliagroup.eu and can be obtained upon request from Elia Group SA/NV, Boulevard de l’Empereur 20, 1000 Brussels, Belgium. The joint auditors issued an unqualified opinion.

Statement of financial position after distribution of profits

Statement of profit or loss

Financial terms or alternative performance measures

The Annual Report contains certain financial performance measures that are not defined by IFRS and are used by management to assess the financial and operational performance of the Group. The main alternative performance measures used by the Group are explained and/or reconciled with our IFRS measures (Consolidated Financial Statements) in this document.

The following APM’s appearing in the Annual Report are explained in this appendix:

‐ Adjusted items

‐ Adjusted EBIT

‐ Adjusted net profit

‐ Capex (Capital Expenditures)

‐ EBIT

‐ EBITDA

‐ Free cash flow

‐ Net finance costs

‐ Net financial debt

‐ Regulatory Asset Base (RAB)

‐ Return on Equity (adj) (%)

ADJUSTED ITEMS

Adjusted items are those items that are considered by management not to relate to items in the ordinary course of activities of the Group. They are presented separately, as they are important for users to understand the consolidated financial statements of the performance of the Group and this compared to the returns defined in the regulatory frameworks applicable to the Group and its subsidiaries. Adjusted items relate to:

• Income and expenses resulting from a single material transaction not linked to current business activities (e.g. change in control in a subsidiary);

• Changes to the measurement of contingent considerations in the context of business combinations;

• Restructuring costs linked to the corporate reorganisation of the Group (i.e. reorganisation project to isolate and ring-fence the regulated activities of Elia in Belgium from the nonregulated activities and regulated activities outside Belgium).

ADJUSTED EBIT

Adjusted EBIT is defined as EBIT excluding the adjusted items.

EBIT (Earnings Before Interest and Taxes) = adjusted result from operating activities, which is used to compare the operational performance of the Group over the years.

The adjusted EBIT is calculated as total revenue less costs of raw materials, consumables and goods for resale, services and other goods, personnel expenses and pensions, depreciations, amortisations and impairments, changes in provisions and other operating expense, plus the share of equity accounted investees – net and plus or minus adjusted items.

ADJUSTED NET PROFIT

Adjusted net profit is defined as net profit excluding the adjusted items.The adjusted net profit is used to compare the performance of the Group over the years.

CAPEX (CAPITAL EXPENDITURE)

CAPEX (Capital Expenditures) = Acquisitions property, plant and equipment and intangible assets minus proceeds from the sale of such items. Capital expenditures, or CAPEX, are investments realised by the Group to acquire, upgrade, and maintain physical assets (such as property, buildings, an industrial plant, technology, or equipment) and intangible assets. CAPEX is an important metric for the Group as it affects its Regulated Asset Base (RAB) that serves as basis for its regulatory remuneration.

EBIT

EBIT (Earnings Before Interest and Taxes) = result from operating activities, which is used for the operational performance of the Group. The EBIT is calculated as total revenue less costs of raw materials, consumables and goods for resale, services and other goods, personnel expenses and pensions, depreciations, amortisations and impairments, changes in provision and other operating expense, plus the share of equity accounted investees.

EBITDA

EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortisations) = results from operating activities plus depreciations, amortisation and impairment plus changes in provisions plus share of profit of equity accounted investees. EBITDA is used as a measure for the operational performance of the Group, thereby extracting the effect of depreciations, amortisation and changes in provisions of the Group. EBITDA excludes the cost of capital investments like property, plant, and equipment.

FREE CASH FLOW

Free cash flow = Cash flows from operating activities minus cash flows from investment activities. Free cash flow provides an indication of the cash flows generated by the Group.

NET FINANCE COSTS

Represents the net financial result (finance costs minus finance income) of the company.

NET FINANCIAL DEBT

Net Financial Debt = Non-current and current interest-bearing loans and borrowings (including lease liability under IFRS 16) minus cash and cash equivalents. Net financial debt is an indicator of the amount of interest-bearing debt of the Group that would remain if readily available cash or cash instruments were used to repay existing debt.

REGULATED ASSET BASE (RAB)

The regulated asset base (RAB) is a regulatory concept and an important driver to determine the return on the invested capital in the TSO through regulatory schemes. The RAB is determined as follows: RABi (initial RAB determined by the regulator at a certain point in time) which evolves with new investments, depreciations, divestments and changes in working capital on a yearly basis using the local GAAP accounting principles applicable in the regulatory schemes. In Belgium, when setting the initial RAB, a certain amount of revaluation value (i.e. goodwill) was taken into account, which evolves from year to year based on divestments and/or depreciations.

RETURN ON EQUITY (ADJ.) (%)

Return on Equity (RoE adj.) = Net profit attributable to ordinary shareholders divided by equity attributable to ordinary shareholders. The return on equity is adjusted to exclude the accounting impact of hybrid securities in IFRS (i.e. exclude the hybrid security from equity and consider the interest costs as part of comprehensive income). The RoE adj. provides an indication of the ability of the Group to generate profits relative to its invested equity.

V. Glossary

Below are two lists, as follows: the first includes the most frequent technical terms, each one accompanied by an explanation of their meaning (please note that these explanations are not the legal definitions of each term). The second list includes Integrated Reporting terms, which aim to support our stakeholders as we progress on our <IR> journey.

General terms

Absenteeism rate: This is calculated as the number of days of absence (due to illness, work accidents, or hospitalisation) divided by the number of available workdays.

Adequacy: This is a measure of whether an electricity system carries enough capacity to meet the demand for electricity under normal conditions. A system is considered 'adequate’ if it has sufficient capacity; this capacity can come from generation sources (such as a wind farm); electricity imports; and (increasingly) flexible assets.

Adjusted net profit: Adjusted net profit is defined as the net profit excluding adjusted items. Adjusted net profit is used to compare the Group’s performance between years.

Alternating current (AC): AC is a type of electrical current which regularly reverses its direction: the direction of the flow of its electrons switches back and forth on a regular basis. A typical household plug is usually an AC plug.

Balancing services: One of the services that system operators have to ensure in order to maintain the balance between supply and demand in real time across the electricity system.

Biodiversity - forested areas managed through ecological aisles Forested areas (in hectares): where projects have been implemented to restore biodiversity under overhead lines divided by total forested areas (hectares) under overhead lines across our control zones.

Biodiversity - high-voltage lines identified as critical for birds equipped with anti-collision devices (bird markers): Number of km of overhead lines equipped with bird markers divided by the number of km of overhead lines identified as posing the greatest risk to birds across our control zones.

CAPEX: Abbreviation of ‘capital expenditure’. This is the amount a company spends on building or upgrading its assets; for Elia Group, this includes our lines, pylons, and substations.

Carbon dioxide equivalent (CO2e): A measure of how much a greenhouse gas contributes to global warming when compared with carbon dioxide.

Carbon footprint: This is a measure of the amount of greenhouse gases produced as a result of an individual’s or organisation’s activities.

Capacity Remuneration Mechanism (CRM): This is one of several measures that can be adopted to ensure a country’s security of electricity supply. Such mechanisms provide payments to electricity generators which guarantee that they will be available for electricity generation if this is needed at some future point in time. These payments are in addition to the earnings that power plants make by selling electricity on the market.

Connected offshore generation capacity: Total installed capacity of all offshore wind farms located in the Elia and 50Hertz control areas which are connected to the onshore grid.

Congestion management volumes (redispatch): Volumes of energy which are activated by Elia, 50Hertz and neighbouring TSOs in order to undertake congestion measures both within our own control zones and across borders.

Cost of congestion management (redispatch): Costs related to the activation of congestion measures within our control zones and our share of cross-border congestion measures.

Double materiality: ‘Materiality’ is a principle that guides organisations as they define what is significant for their

businesses and, therefore, should be disclosed in their reporting. A topic meets the criteria of double materiality if it is significant from a financial perspective, impact perspective, or both.

Direct current (DC): DC is a type of electrical current which flows in one direction only. Household appliances that run on batteries employ DC.

Distribution system operator (DSO): An organisation which is responsible for the transportation of energy (gas or electricity) across fixed infrastructure, generally on a regional level within a country.

E-mobility: Shortened term for electromobility, which is the umbrella term for methods of transportation which are powered by electricity.

Earnings per share, adjusted (EPS): Result attributable to owners of ordinary shares divided by the weighted average number of shares over the period.

EBIT: Abbreviation of 'earnings before interest and taxes', which result from operating activities, which are used for the Group’s operational performance. EBIT is calculated as total revenue less costs of raw materials, consumables and goods for resale, services and other goods, personnel expenses and pensions, depreciations, amortisations and impairments, changes in provision and other operating expenses, plus the share of equity-accounted investees.

EBITDA: Abbreviation of 'earnings before interest, taxes, depreciation and amortisations', which result from operating activities plus depreciations, amortisation and impairment plus changes in provisions plus share of profit of equity-accounted investees. EBITDA is used as a measure of the Group’s operational performance, thereby extracting the effect of depreciations, amortisation and changes in provisions of the Group.

Electrification: This is the process of powering a system or machine via the use of electricity (instead of another energy source, which the electricity replaces).

End consumer: An individual who buys and uses a product or service. In the electricity sector, the term is generally used to refer to household consumers.

Energy mix: This is the breakdown of primary energy sources (such as fossil fuels or renewable energy sources) used to produce secondary energy (such as electricity) for direct use by consumers.

Environmental EU Taxonomy aligned CAPEX: Percentage of Elia Group’s CAPEX which is considered aligned according to the EU Taxonomy terminology and the technical screening criteria for “Transmission and distribution of electricity”.

Environmental, social and corporate governance (ESG) matters: These are the three broad categories used to assess the impact of a company’s practices on the external environment (beyond simply looking at a company’s profitability). Companies are increasingly being expected to include ESG metrics in their external reports.

Flexibility: This is a measure of how much an energy system is able to cope with short-term fluctuations in production and consumption. These fluctuations are associated with the integration of increasing amounts of intermittent renewable energy sources into energy systems. It is expected that flexibility assets will play an increasing role in the stabilisation of the grid as RES amounts rise.

Flexible assets: These are household-level assets - such as electric vehicles and heat pumps - that are due to play an important role in maintaining the balance between the supply of electricity and the demand for electricity. For example, the battery of an electric vehicle could be charged and then be used to store that energy temporarily, reinjecting it back into the grid when needed.

Global Reporting Initiative (GRI) standards: These voluntary standards provide a framework for governments and organisations to use when demonstrating accountability for the impact they have on the environment, economy and people.

Global warming potential (GWP): This is a measure of how much a particular gas contributes to global warming relative to CO2. The larger the GWP of a given gas, the more this gas warms the Earth compared to CO2 over the same time period.

Green bond: This is a type of debt instrument which is used to channel investments into projects that have positive impacts on the environment or on climate-related targets.

Greenhouse gas (GHG): Gases that contribute to the warming of the Earth’s temperature. GHGs which are produced as a result of human activities include carbon dioxide, methane and sulphur hexafluoride (SF6).

Grid reliability (based on interruption time): This refers to the availability of the onshore grid's connection points. It is calculated based on the average interruption time at these points due to internal and external factors.

Grid reliability (based on number of incidents): This is calculated based on the number of incidents that occur across our grid which do not involve automatic reclosing compared to the total length of the grid (380 kV lines and 220 kV lines, without offshore, without auxiliary supply faults).

GW: Abbreviation of ‘gigawatt’, which is a unit of energy that measures the amount of energy transferred each second. 1 GW of electricity is roughly enough to power about 750,000 homes.

GWh: Abbreviation of ‘gigawatt hour’, which is a unit of energy that is equivalent to a steady power of one gigawatt running for one hour.

Hit rate for consultancy services: Calculated as the number of offers contracted divided by the number of offers submitted.

HVDC: Abbreviation of ‘high-voltage direct current’, which is a type of current that allows power transmission across long distances and between AC transmission systems whose frequencies are not matched.

Interconnector: A high-voltage cable that connects the electricity grids of two countries together. Interconnectors enable power exchanges to occur across borders, contributing to each country’s security of supply.

Intermittency: Volatility. Some renewable energy sources are associated with high levels of intermittency, given that they are affected by environmental, daily and seasonal factors.

Net zero: A term indicating balance being achieved between the amount of greenhouse gases emitted into the atmosphere and GHG emissions being removed from the atmosphere.

OPEX: Abbreviation of ‘operating expense’. These are a company’s costs associated with the day-to-day running of its operations, such as grid maintenance, staff salaries, business travel and rent for office space.

Power-to-X (PtX): This term comprises the group of technologies that use electricity to generate heat (PtH), gas (PtG) or synthetic fuels.

Prosumer: An individual who both consumes and produces value. In the energy sector, such individuals both consume electricity and produce it through the use of their own individual power generators (such as a solar panel, for example). Prosumers may also sell any excess electricity that they produce.

Renewable energy ratio: Total electricity production from RES with respect to total electricity consumption across our grid areas.

Renewable energy sources (RES): Energy which is generated from natural processes or sources that are continuously replenished, such as wind energy, solar energy or hydropower. Some of these sources - such as wind and solar energy - are intermittent.

Regulatory Asset Base (RAB): The RAB of Elia Group is an important driver for determining the return on the invested capital in the TSOs through regulatory schemes. It reflects 100% of Elia’s RAB and 80% of 50Hertz’s RAB.

Return on Equity adjusted (RoE adj.): The Return on Equity is the net profit attributable to the owners of ordinary shares divided by the equity attributable to ordinary shares adjusted for the value of the future contracts (hedging reserve).

Revenue from external clients: Consolidated revenue from third party activities in non-regulated business.

Scope 1 emissions: Direct greenhouse gas (GHG) emissions that occur from our controlled or owned sources.

Calculations are GHG Protocol standard based.

Scope 2 emissions - location-based: Indirect greenhouse gas (GHG) emissions associated with the purchase of energy for own use. Calculations are GHG Protocol standard based.

Sector coupling: This refers to the integration of the energy supply sector with end use sectors such as heating, transport and industry; ultimately, sector coupling seeks to decarbonise these sectors of society through the use of green electricity. It includes, for example, the electrification of devices in the areas of heating or transport, so that these electrified devices can operate as flexibility assets; and the production of green hydrogen for industrial use.

SF6: Chemical formula of ‘sulphur hexafluoride’. SF6 is used as an insulation and switching gas in gas-insulated high voltage switchgear. It has excellent electrical properties, is non-toxic, and is chemically stable. However, the global

warming potential of SF6 is 23,500 times higher than CO2

Sustainable Development Goals (SDGs): A collection of 17 global goals that were adopted by all United Nations (UN) member states in 2015.

‘Sustainalytics’ risk index score: A privately-owned risk rating, which captures an issuer’s exposure to material ESG risks and the maturity of the management of those risks.

Total investments: Gross CAPEX of Elia and 50Hertz minus client contributions. CAPEX is an important metric for the Group, since it affects the Regulatory Asset Base that serves as basis for its regulatory remuneration.

Total Recordable Injury Rate (TRIR) of own staff: Number of work accidents with and without lost time X 1,000,000 divided by total number of hours worked over the year.

Transmission system operator (TSO): An organisation which is responsible for the transportation of energy (gas or electricity) across fixed infrastructure, generally on a national level within a country. TSOs link generation sources with infrastructure belonging to Distribution System Operators.

Turnover rate: This refers to the percentage of staff who leave the organisation due to planned and unplanned reasons.

Value chain: Term used to describe the whole range of a company’s activities that contribute to its delivery of a service or creation of a product.

Women in leadership positions: This is equal to the share of director and senior manager roles that are occupied by women.

Integrated reporting terms

Business model: The system of transforming inputs through business activities into outputs and outcomes to fulfil an organisation’s strategic purpose and create value over the short, medium and long term.

Capitals: Resources and relationships that an organisation depends on to create value. The Integrated Reporting Framework includes six categories of capitals: financial; manufactured (which we have termed ‘assets’ throughout this report); intellectual (including organisational knowhow and its brand and reputation); human (which we have termed ‘employees and subcontractors’); social and relationship; and natural (termed ‘environmental’).

Inputs: The six capitals which are transformed through business activities into outputs and outcomes.

Integrated reporting: An approach to corporate reporting that provides a complete picture of how each of a company’s activities creates, preserves or erodes value for its stakeholders in the short, medium and long term.

Materiality: This refers to the influence an issue has on an organisation’s ability to create value. Material topics are identified and ranked based on the importance for our stakeholders. For example, the integration of a high amount of renewable energy sources into the energy system is a material issue for Elia Group.

Outcomes: Internal and external consequences of our business activities on the six capitals, which can be positive or negative.

Outputs: Products and services coming from our business activities, as well as any by-products and waste.

REPORTING PARAMETERS

Registered offices

The registered office of Elia Transmission Belgium and Elia Asset is located at Boulevard de l’Empereur 20 1000 Brussels, Belgium

The registered office of 50Hertz GmbH is established at Heidestraße 2 D-10557 Berlin, Germany

The registered office of Eurogrid International is located at Rue Joseph Stevens, 7 1000 Brussels, Belgium

The registered office of Elia Grid International is located at Rue Joseph Stevens, 7 1000 Brussels, Belgium

The registered office of WindGrid is located at Boulevard de l’Empereur 20 1000 Brussels, Belgium

The registered office of re.alto is located at Boulevard de l’Empereur 20 1000 Brussels, Belgium

Reporting period

This annual report covers the period from 1 January 2023 to 31 December 2023.

Contact

Group Communications and Reputation

Marleen Vanhecke

T + 32 486 49 01 09

Boulevard de l’Empereur 20

1000 Brussels

info@elia.be

WE WOULD LIKE TO THANK EVERYONE WHO CONTRIBUTED TO THIS ANNUAL REPORT.

Headquarters Elia Group

Boulevard de l’Empereur 20,

B-1000 Bruxelles

T +32 2 546 70 11

F +32 2 546 70 10

info@elia.be

Heidestraße 2

10557 Berlin

T +49 30 5150 0

F +49 30 5150 2199

info@50hertz.com

Concept and editorial staff

Risk Management

Communication & Reputation

Strategy

Sustainability

Investor relations

Finance

Graphic design

Graphic design

www.chriscom.be

Editor

Catherine Vandenborre

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