Sustainability Report of Transelectrica 2020

Statement of responsible persons

The information provided in the Transelectrica’s Sustainability Report of 2020, elaborated in accordance with the Global Reporting Initiative standard, while observing the provisions of European Directive 2014/95/UE transposed in the Romanian legislation by Order 1938 of 17 August 2016 of the Ministry of Public Finance provides fair accurate image consistent with true facts of the non-financial aspects, part of ongoing business, which impacts the Company’s development and sustainability.

Directorate Chairman Catalin NITU

Member Member Member Member Ovidiu Corneliu Bogdan Andreea Mihaela Marius Viorel ANGHEL MARCU MIU STANCIU

Contents

Foreword Message from the Directorate 4

Chapter 1 Company presentation 5 Company identification in national and European context 5 Licences and certifications 8 Mission, vision, values 9 Investment strategy and development plan 9 Main activities 10 Group structure (subsidiaries) 11 Risk management 12 Relevant indicators 15 Transparency, relations with stakeholders and material topics 18 Ethics in business 20 Corporative governance 21 National and international affiliations 23 Rewards and distinctions the Company was awarded 24

Chapter 2 Our people – Human resources development and diversity 26 Human resource strategy 26 Promotion of parity, removal of gender discrimination and promoting 27 women in managerial positions Structure of employees 28 Performance analysis on the job and remuneration policy 29 Training programmes 29 Internships 30 Employee information, consultation and trade union relations 30

Chapter 3 Responsibility to employees 31 Training programme and processes providing labour health & safety 31 Prevention measures 32 Organising the joint SSM committees (management-employees) 33 relevant activities in 2020

Chapter 4 Responsibility towards environment 34 Environmental management system 34 Risks, opportunities and environmental costs 35 Management of environmental factors 37 Activities and measures in order to prevent and/or limit environmental 41 impact Waste classification by type and disposal method 42 Cases when admissible limits of environmental regulations were 42 exceeded and remedial means

Chapter 5 Future measures to diminish locally detected issues 44

Chapter 6 Corporative social responsibility 46 Corporative social responsibility policy 46 Examining the community needs 46 Involvement in the society 46 Projects with Transelectrica’s involvement 47

Chapter 7 Energy efficiency 49 Current activities in energy efficiency 50 Utilisation of electricity from renewable sources 51 New technologies 52 European projects which Transelectrica is a partner of 53

Chapter 8 Research and innovation 56 Present and future challenges for transmission & system operators 56 (TSO) Objectives of the research and innovation strategy 58 Asset management challenges for transmission & system operators 60 (TSO) (TSO) Benefits in the application of smart grid concepts and standards 61

Chapter 9 About this report 62 GRI Index 63 Glossary 66

Message from the Directorate (102-14)

Our performance with respect to sustainability

Dear shareholders, investors and upgrade and refurbishment of our partners, installations, thus providing employee with Transelectrica publishes for the motivation to respect the environment and fourth consecutive year its Sustainability observe applicable legislation. Report, elaborated by GRI standards, this Our daily activities and investment being an opportunity to reiterate our projects aim at contributing to developing commitment for policies centred on a sustainable performant Romanian sustainability and lastingness. society. The Company performs in In the last two years we acquired top accordance with corporative sustainable positions in the ranks of Romanian management and our objectives rely on a companies in terms of sustainability. We sound responsibility component. We want would like to keep Transelectrica along the to develop and promote responsible same coordinates, which will certainly attitude towards environment and contribute to developing the community. surrounding communities as well. In the context of a year that brought Our activity focuses on public about many changes of the business interest priorities; we pay great attention to environment, the non-financial existent lines of sustainability and performance of Transelectrica was sustainable development. Transelectrica is sustained by sound corporative a strategic Company and holds important governance principles. Also Company place in Europe besides the most efforts were high therefore in 2020 Transmission System Operators of this Moody’s confirmed for the third region. We deem it a duty of the business consecutive year the rating Ba1 with environment, comprising both private and positive outlook. state-owned companies, to make sure We want safe prospects for future their activities go sustainable-ward. generations. This is why in 2021 we will Transelectrica promotes an launch the Energy efficiency improvement environmental policy by which we comply programme and invest in infrastructure with assumed engagements. We propose development which should provide using resources in as reasonable a renewable integration and higher use in manner as possible, to properly manage the Romanian energy sector. waste resulting from the maintenance,

Directorate of Transelectrica

Chairman Member Member Member Member Catalin Ovidiu Corneliu Bogdan Andreea Mihaela Marius Viorel NITU ANGHEL MARCU MIU STANCIU

Company Presentation

2018

Moody's grants 2015 Ba1 rating, with 2018 2000 Certification improved Transelectrica Establishment 2006 of outlook from joins the of Listed on ownership stable to shareholders Transelectrica BVB unbunding positive of TSCNET

2004 2009 2017 2018 UCTE ENTSO-E Fitch grants Transelectrica member member BBB rating becomes of stable founding company member of (above the ARIR sovereign rating)

Company identification in European and national context (102-1) In the value chain of electricity countries and transposed as such in the activities Transelectrica holds the central national legislation. position of transmission system operator wih the mission to provide public electricity Strategic Company in energy, transmission services while maintaining Transelectrica has passed from the operational security of the national national size to a pan-European power system under non-discriminatory approach of its activities access conditions for all users. Strategic Company in national and Europe-wide the energy sector regional context, Transelectrica performs undergoes deep changes. also the functions of: balancing market Emphasis is laid on the transition operator, metering operator and the from a prevailingly national development operator that allocates interconnection model of the energy sector to an capacities. integrated development coordinated at The business model correspons to European level, which shall provide unitary the standard profile of a Transmission and continental development but can enable System Operator (TSO), a model designed tailoring national specificities and following all over Europe in the European energy the legitimate interest of European states. legislation; it is applied in all community

As integrant part of the interconnected European system Transelectrica, member Transelectrica is responsible not only for of TSCNET and JAO since the safe operation of the Romanian power 2018 system and supply of national consumers but next to the other Transmission System In August 2018 Transelectrica Operators has extended its competence became member in the Regional de and responsiblity area all over Europe (36 Security Coordination Centre TSCNET countries, 532 million consumers). Services GmbH by joining its shareholders and of the European Joint Allocation Office Transelectrica, member JAO SA as well in December 2018. of the European family TSCNET was established to serve of Transmission System the Transmission System Operators in the Operators eastern-central-western European region in view of the coordinated implementation The Romanian power system has of European network codes, while JAO been integrated in the European electricity coordinates the bids for long-term capacity transmission system long before allocation, being designated Operator of Romania’s integration in the European the Single Allocation Platform (SAP). Union. Since October 2004 Transelectrica Transelectrica, partner of has become partner of electricity European institutions in transmission companies all over Europe, the elaboration of the as member of UCTE, ETSO associations, new legislative package the latter of which became ENTSO-E in for energy 2009. ENTSO-E promotes important Europe’s energy and environmental energy policy issues with a view to policies, instrumented by successive promote the completion and operation of legislative packages approved in all the internal electricity market and cross- Europe are centred on increasing safe border trades, as well as to provide best electricity supply; incresing energy management, coordinated operation and efficiency; decarbonising the electricity sound technical development for the generation mix by integrating renewable European electricity transmission network.

6 resources and implementing efficient authority responsible to facilitate and storage solutions. coordinate the licensing procedure for A part of the European family by its projects of common interest, communitary ENTSO-E membership Transelectrica is a technical assistance, e.g. Connecting worthy partner in the elaboration and Europe Facility). negotiation of legislative packages applicable to energy. Transelectrica, worthy European network codes are partner in European documents regulating many operational projects issues of the synchronously interconnected power systems and the In parallel with the negotiations for harmonisation and integration of national adopting the regulatory framework of electricity markets, thus facilitating the energy there are project developed by implementation of the single European Transmission System Operators aiming at one. implementing the single European Through its technical and operational electricity market; applying European expertise of Transmission System network codes or investigating specific Operator Transelectrica has been active challenges of the new legislative pack: partner both in the elaboration of codes in Clean Energy Package. ENTSO-E structures and in the negotiation Integrating the Romanian electricity stages in the European Commission and, market into the European one is a major through the specific ministry, in the objective in constituting the internal European Parliament. European market (IEM), priority target for Europe; this requires coherent measures Transelectrica, strategic partner and conjugated efforts of all entities in the elaboration of the involved: specific Ministries, Regulatory Development Plan for the authorities, Transmission System European electricity Operators, and Energy Exchanges. transmission network Having operated since 2014 in the 4M MC coupled market (Romania, Electricity transmission networks Hungary, Slovakia and Czech Republic), play an essential role in reaching Transelectrica has become partner in the European desiderata, especially as projects developed in the eastern-central- regards safe supply of consumers, western European region (CORE), while constituting the internal electricity market being active in south-eastern Europe and integrating renewable sources. (SEE), thus extending its implication and Within ENTSO-E there is integrated competence Europe-wide. coordinated planning of pan-European While performing in the market- transmission infrastructures (TYNDP: 10 coupling project and coordinated allocation years’ European masterplan of the of cross-border transmission capacities transmission network, comprising also Transelectrica is also active in projects assessed adequacy of pan-European that develop and operationalise platforms power systems), main corridors and providing trans-European transaction of priority projects are found (list of PCI) balancing electricity. which Regulation (EU) 347/2013 provides Such platforms will contribute to stimulative mechanisms for their optimising Europe-wide the balancing of expeditious implementation (competent power systems, generating economic and

7 social welfare and contributing to higher supply safety of European consumers.

Licences and certifications Concession and Licence

Transelectrica has got concession was granted for 25 years, being valid until over the goods belonging in the state 22.12.2025. To keep it valid the licence public domain, namely the national holder observes the specific conditions electricity transmission network (RET), and the general licence terms. being a public utility Company. Specific conditions are established in The concession over RET and the the last update of ANRE Decision lands it is located on was granted for 49 865/22.12.2000, namely ANRE Decision years under concession contract 571/08.04.2020, its content being also 1/29.06.2004, concluded between the available on the internet page of Ministry of Economy and Trade as Transelectrica conceder authority and Transelectrica, in (https://www.transelectrica.ro/web/tel/licent capacity of concessionnaire. e-si-autorizatii). The Company performs as The general terms associated to the Romania’s transmission system operator licence are approved by ANRE Order according to Licence 161/2000 to provide 104/22.10.2014, in accordance with the electricity transmission services, system provisions of article 8 para (2) and article services and balancing market 10 para (2) let. c), d) and f) of the administration, granted under Decision Electricity and natural gas law 123/2012 865 of 22.12.2000 of the president of the with later amendments and additions. This National Regulatory Authority in the is integrant part of the licence and Energy doman, with later amendments contains data about the licence holder’s and additions. rights and obligations, on control and The Licence holder is the single sanctions, licence suspension or provider of public electricity transmission withdrawal, licence amendment, and services for all RET users and system communication means, rates and services for all SEN users. The licence contributions.

Certification

In accordance with the provisions of complied with legal requirements of article 31 the Electricity and natural gas certification as transmission system law 123/2012 with later amendments and operator of the National Power System, additions, ANRE certifies the transmission according to the ownership unbundling system operator (OTS) of the National model, while ANRE’s Regulatory Power System according to a certification Committee approved the certification of procedure which ends by the Authority’s the National Power Grid company issuing a final TSO certification decision. Transelectrica SA, issuing ANRE Order In accordance with the final Notice 164/07.12.2015 in this respect. 7053 / 12.10.2015 of the European The certification requirements which Commision, in accordance with article 3 have to be met by the transmission system para (1) of Regulation (EC) 714/2009 and operator are provided in article 34 of Law article 10 of Directive 2009/72/EC, ANRE 123/2012 and ANRE Order 104/2014 has ascertained Transelectrica has

8 approving the general licence terms, Chapter III, Sectionea 11, articles 46-49.

Mission, vision, values (102-16)

Mission Providing under sustainable conditions the public electricity transmission and siytem services for all users of the electricity transmission grid, under non-discriminatory terms in order to maintain the safe operation of the national power system. Keeping a key role on Romania's electricity market and on that from the south-eastern European region, supporting the operation and integration of electricity markets. Providing sustainable operation, maintenance, upgrade and development of the electricity transmission grid in view of maintaining the safe operation of the national power system, under energy efficiency and qualitative conditions.

Vision Taking into account that Transelectrica is found at the cross-road of eastern-central-western European (CORE) and south-eastern (SEE) regions the Company intends becoming an inter- regional integration factor, thus contributing also to increased security and sustainability at pan-European level. In terms of corporative management Transelectrica plans being an integrat part of the society as well, relying on sound principles, promoting responsible people in its team and sustaining value development in all its structures .

Values The values used in all activities are as follows: sustainability, integrity, professionalism, respect, and social responsibility. Opinion diversity is appreciated in the entire Company regardless of hierarchies and we deem that exchanges of opinion can be a development engine.

Investment strategy and development plan

Transelectrica plans the The RET development plan is public development of the Electricity document providing the main aspects of Transmission Grid (RET) taking into the current state of affairs and forecasted account the current stage and forecasted RET development in the following ten development of consumption, the years, which is provided to all generation fleet and electricity exchanges; stakeholders. every 2 years it elaborates a Development The RET development plan takes Plan for the following 10 successiv years, into account the requirements and submitted for approval of ANRE and of the priorities of the National Energy Policy. network owner. In 2020 the RET They constitute determining references to Development Plan was elaborated for identify priority guidelines and to forecast 2020-2029, including all updated data for the development trends of the power this interval. sector considered for planning.

Being an integrant part of the complement to the European ones. Thus European power system Transelectrica Transelectrica develops projects of major elaborates the RET Development Plan in significance for the European network in correlation with Europe’s Ten-Year the electricity network it operates, which Network Development Plan (TYNDP). are included in the list of projects of The Company’s development common interest (PCI). strategies have been aligned in

Main activities (102-2, 102-4, 102-5, 102-6)

Key transmission system operator on the Romania and regional electricity market Transelectrica has got attributions to manage and operate Romania’s electricity transmission system and to secure electricity exchanges between Romania and the countries it is interconnected with in central and eastern Europe, in its capacity of ENTSO-E member. In accordance with licence terms Transelectrica carries out the following regulated activities: Beginning with 2006  Providing electricity transmission Transelectrica has been listed on services as well as electricity the Bucharest Stock Exchange. metering on the specific wholesale electricity market, in capacity of Once being listed on the Bucharest metering operator; Stock Exchange Transelectrica has laid  Providing system services by the basis for a sustainable relationship means of the dispatch with Company shareholders. The management layers, using specific Company-issued shares are transacted on systems and installations; the regulated market managed by the  Organising and managing the Bucharest Stock Exchange, in Premium balancing market in capacity of its category, under TEL symbol. administrator;

 Structure of Company shareholders on 31-12-2020* SHAREHOLDER SHARES QUOTA (%) Romanian State 43,020,309 58.689 Pavel Holding 4,753,567 6.484 Privately Managed Pension Fund NN/NN Pensii SAFPAP SA 4,007,688 5.467

Other legal person shareholders 16,305,068 22.244

Other natural person shareholders 5,216,510 7.116 TOTAL 73,303,142 100 *Shareholder Register and history of holdings can be found with the Central Depositary SA

In the context of its implementation The diversity of shareholders and of good practice and corporative the inclusion in the main indexes governance rules, Transelectrica is published by BVB point out the committed to active communication with transparency exigent requirements, shareholders and investors, using in this relevance of information and its fast respect dedicated communication dissemination, as well as maintaining an channels and interfaces. The Company is uninterrupted dialogue with the investor aware of the responsibility it has in public. capacity of publicly transacted company.

Group structure (subsidiaries) (102-45)

On the date of this report Transelectrica comprises five subsidiaries, Romanian legal persons organised as joint stock companies, three of which it is single shareholder: Company FORMENERG SA (Formenerg), the Company providing Telecommunications and Information Technology to Electricity Transmission Networks TELETRANS SA (Teletrans) and Company ICEMENERG-SERVICE SA

(this is under bankruptcy procedure). In case of the Electricity and Natural Gas Market Operator OPCOM SA (OPCOM), after the share capital increase made on 13.02.2018 by AGA of OPCOM with the value of one land which previously 97.84% of the subsidiary’s registered ownership certificate was obtained for, the capital. Company is majority shareholder with

Risk management (102-11, 102-30)

The strategic requirements with management system represents a respect to safe uninterrupted operation fundamental prerequisite for sound determine the Company to approach risk internal managerial control. management in proactive manner with a Risk management within the view to detect and treat potential losses Company complies with the applicable before generating events could occur, legal and regulatory requirements to have while preparing beforehand specific risk control capacities adequate to the technical, operational and financial Company’s risk profile in order to identify, solutions for possible losses, as the risk

11 evaluate, manage, monitor, communicate, Thus in organisational terms risks are consult on and report risks: kept under control at acceptable level and - While complying with the applicable with reasonable costs diminished or even legal requirements to develop transferred by means of activities such as: managerial control systems – Order - Organisation, design, planning, 600/2018 of SGG approving the Code structuring activities, communication, of internal managerial control for public including measures for business entities continuity after occurrence of a risk; - While complying with the listing procedures have been also elaborated requirements on the Bucharest Stock with principles which should be Exchange – including the provisions of observed by all employees while labour the Corporative Governance Code of security and safety measures were the Bucharest Stock Exchange, and enhanced in order to reduce risks; - While complying with other - Insurance contracts aiming at risk regulatory requirements, of the rating transfer; bank letters of indemnity, agency, of the auditors’; financial securities requested from The set of risk management solutions Transelectrica’s counterparts; financial used by Transelectrica aims at supporting solutions which include offers of shares, the organisation to reach its objectives and bond issuance and other instruments contribute to improve planning by means provided on the capital, insurance and of the risk mitigation measures comprising, other financial markets; under optimised structure, the organisational and financial solutions.

Transelectrica’s risk management policy and objectives

Transelectrica’s policy consists in Risk management facilitates efficient providing directly and by means of its effective accomplishment of branches or under service contracts with Transelectrica’s objectives. Knowing the special suppliers the continuous operation threats – the strategic, operational and and operational management of the financial risks and hazards which the National Power System (SEN), in Company is exposed to enable their accordance with the quality, security and treatment according to hierarchy, efficiency norms provided in RET’s depending on the likelihood of their Technical Code, providing priority and occurrence, their impact over objectives paying particular attention to the safety and the costs of measures meant to and health of its employees, as well as to reduce the occurrence likelihood or to limit protecting and safeguarding property and the undesired effects. the environment. To this effect the Company The continuity of strategic functions management established the following for Romania’s SEN - of system operator strategic objectives with respect to risk and electricity conveyor - should be management: maintained, even under the worst circumstances.

Understanding the risks the Company is Maintaining a safe working environment for exposed to, their causes and impact over employees the general and specific objectives

OBJECTIVES

Operation of equipment and installations Implementing optimum risk control under safe conditions without any danger to third parties and no environmental effects measures

The established specific objectives include: • Improving the Company’s risk profile by managing the overall risk detection, analysis, estimation, treatment, communication, monitoring and review with a view to maintain risk exposure to acceptable level; • Eliminating or reducing to minimum the conditions and practice that can lead to incompliance with general objectives, to interrupted or limited Company activities; • Reducing the total risk cost within Transelectrica in order to contribute to providing the financial resources necessary for operational expenses, liability payment and investments;

Organisational framework of risk management (102-33)

In accordance with applicable the possible risk consequences and legislation: SGG Order 600/2018 nominate responsible people to apply such approving the Internal managerial control plans and also elaborate risk supervision of public entities, in Transelectrica were and monitoring forms, every time they constituted the Risk Management Team, deem necessary. Company-wide (EMRC), the Monitoring The internal mode of operation with commission to implement the Internal - respect to risk management provides an Managerial Control System and the important instrument, which facilitates risk Technical Secretariat of the Monitoring management in methodical efficient Commission for the implementation of the manner in order to carry out the objectives Internal - Managerial Control System (CM of the Company. To this effect each year SCIM) with attributions and the documentation is elaborated in terms responsibilities. of risk management which might impact Throughout Transelectrica risks that the activities of Transelectrica, containing might have substantial impact over the also and describing the manner in which accomplishment and completion of control measures are established, Company objectives are managed in implemented and monitored with a view to accordance with internal procedures, so limit possible threats and consequences in that each organisational entity is obliged to case risks do occur. systematically analyse, at least once a Risks associated to objectives year, the risks associated to its activities and/or activities are detected and (including the significant risks at Company assessed in each organisational entity of level, to the extent in which there is any), the Company, in accordance with the to elaborate proper plans towards limiting component elements of the Risk Register.

Keeping risks under control

Measures that have been applied to strategy as required by the circumstances keep risks under control in 2020 in the that enabled risk occurrence. main diminished their occurrence The risk management strategy was likelihood and risk impact in comparison established by applying the following steps with the level of inherent risks. which are meant to support internal Risks that have occurred were entities in their endeavours: treated in accordance with the applied

Risk outsourcing by insurance, activity Risk monitoring spin-of, other contracts with third parties*

Risk treatment to Risk acceptance remove /diminish it at acceptable level by measures

* Each organisational entity (unit, division, department, and territorial transmission unit) has done it by identifying the best risk treatment operations in accordance with their risk management responsibilities, so as to record as low risk exposure values as possible in the given internal and external context.

In the main strategies consisted of: - Elaborating or updating databases; 1. Risk treatment to remove / diminish it at Whenever risks have occurred acceptable level by means of measures, control / check-up measures have been and intensified in similar circumstances, in 2. Risk monitoring; order to prevent such risk occurrence or Mention should be made of the the likelihood of new ones being possible. following internal control instruments: Control measures of organisational - Measures under procurement / entities (unit, division, department, maintenance / investment / territorial transmission unit) have been fully professional personnel training implemented or under implementation. programmes; Consequently in 2020 risk - Elaborating or reviewing procedures; management activities were performed in - Changing the processual and accordance with internal procedures and structural organisation; legal provisions in the entire Company, - Performance indicator attached to fully observing in due time legal the objective; requirements and internal regulations. - Redistribution of personnel;

Relevant indicators Key figures

* The amount associated to the 10 years’ development plan represents the total investments planned in the 2020-2029 edition of the RET Development Plan

Rating

In 2020 Moody’s confirmed Ba1 operator of the electricity rating with positive outlook granted in transmission network; 2019, showing very strong stable and  Sound financial profile with low predictable financial values, a path indebtedness; characterised by consistent  Continuous improvement of the implementation of regulatory norms. regulatory framework; Maintaining the rating has been justified  Governmental support in case of by: financial difficulty;

 The low business profile coming Estimations are such trend should from the strategic significance and further continue in the years to come, natural monopoly of Transelectrica, given the stability shown by the Company. as fully regulated owner and

Relevant non-financial indicators (203-1, 202-1)

381 million lei 2.368 million lei Total amount of investment contracts Total revenues in 2020 signed in 2020 937.5 GWh / 985.51 GWh 114 million lei One’s Own Technological Consumption Net profit in 2020 2020/2019 (gross electricity) 61.0TWh / 59.4 TWh 185 million lei Electricity consumption / generation in 2020 Total minor & major maintenance in 2020 97.5% Achievement degree of minor and major maintenance planned for 2020

* Preliminary data

Investments in 2020 (203-1)

Main investment objectives commissioned by 31.12.2020

No. Objective

100 MVAR, 400 kV shunt reactors for the 400 kV substations Arad, Bucharest and 1 Bradu

2. Upgrading the 400 (220)/110/20 kV substation Munteni - Stage commissioning

Replacing transformers and autotransformers (AT) in electric substations (stage II, step 3. 2) - Stage commissioning

4. Refurbishing the 220/110/20 kV substation Ungheni - Stage commissioning

5. Refurbishing the 220 kV substation Otelarie Hunedoara

6. Refurbishing the 220/110/ kV substation Iaz – Stage commissioning

Upgrading the 110 kV substations Bacau Sud & Roman Nord of the 400 kV axis 7. Moldova - Stage commissioning - 2nd stage Integrated Security System in electric substations - stage IV - the 400/110/20 kV 8. substation Bucharest-Sud

Research & development centre of live work (LW) technologies and fast intervention into 9. SEN – stage I

Refurbishing the 400/110/20 kV subst. Domnesti - Stage commissioning: the 110 kV 10. GIS

11. Replacing the EMS SCADA AREVA system components

12. Refurbishing the 220/110 kV substation Craiova Nord - Stage commissioning

Difficulties met

Taking into account the Consequently addendums were epidemiologic context generated by concluded to extend 2 ÷ 6 months the COVID-19 (coronavirus) spreading a great execution contracts. number of general contractors under work However, analysing the value of execution contracts transmitted achievments in the studied time (January notifications about slowing down the pace – December 2020) it follows such or even suspending the works. epidemiologic crisis had no negative impact on the 2020 Annual Investment Plan.

Benefits of achieving this wide-scale investment programme

 Higher operational safety of SEN;  Reduced operational and  Facilitating electricity trasmission maintenance expenses;

from excess generation areas to  Higher electricity quality, improved consumption regions; performance indicators;  Obtaining an economic operational  Reduced technological consumption regime of RET; within RET, higher energy efficiency;  Higher interconnection capacity,  Introducing new technologies, both with neighbouring countries applying smart grid concepts; which are ENTSO-E members and  Digitalising the transmission, system with non-EU ones: Moldova, Serbia and operational infrastructure of the and closing the national 400 kV ring; managed electricity markets.

Transparency, relations with stakeholders and material topics - dialogue between the Company and society

We strongly believe that an society, facilitating access to relevant important part of Transelectrica’s progress information. is represented by consolidated relationships between the Company and Communication is the the society, by means of permanent key to build a reliable dialogue and commitment. Transelectrica relation with partners maintains a sound commitment towards

Transelectrica fulfils the obligations it  Information posted on the has assumed towards investors, Company’s website; shareholders and the other stakeholders  Current reports transmitted to BVB; by providing transparent constant dialogue  Periodical meetings with investors with them. and financial analysts; The instruments by which the Company fulfils such obligations:

Identification and selection of stakeholders (102-40, 102-42)

The information provided in this other companies of the energy sector, report with respect to the events and analysts, electricity producers, electricity activities developed in non-financial terms distributors and suppliers, end electricity and the identification and selection of consumers, international companies with stakeholders have been performed in similar activities, public authorities in the consequence of rigorous internal same domains, representatives of processes. academic educational establishments in By means of specific qualitative and the energy domain, experienced quantitative analysis instruments the most journalists in similar domains). At the same important 12 stakeholders have been time the most relevant topical issues for identified depending on the need for stakeholders have been identified by information they can show as against that which the central subjects of this report provided by Transelectrica (involved have been formulated. governmental factors, shareholders, Company employees, the employees of

Approach regarding the involvement of stakeholders (102-21, 102-43)

From its very listing on the opinions and the feedback obtained on Bucharest Stock Exchange Transelectrica their behalf as far as the 2020 report is has prioritised the involvement of concerned has permanently supported the stakeholders into Company activities, improvement of our activities. especially as regards turning specific Transelectrica has established actions transparent. In this respect among its objectives to improve its Transelectrica has oriented its quarterly, communicative relationships with half-yearly and annual presentations stakeholders and to get them permanently towards an ever higher proximity to the involved into Company steps, up to the stakeholders’ needs and to permanently level of strategic actions. acquire efficiency in its communication Last but not least, the stakeholders with them. identified in the previous report have been Their opinions were expressed on consulted throughout 2020 in order to the occasion of periodical meetings with enable us provide future information in Company management. The measures compliance with their expectations. applied afterwards took into account such

Defining the report content and list of material topics (102-31, 102-32, 102-44, 102-46, 102-47)

The content of this Sustainability qualitative and quantitative analysis, but Report of Transelectrica has been information has been also used because it established following a complicated was obtained from stakeholders as

18 feedback. The report has been devised included in the other reports as well as to taking into account the recommendations outline the Company’s perspectives in of the Global Reporting Initiative with sustainability terms. respect to the detailing degree of each Each category of the previously individual topic, but most importantly the mentioned ones is approached in the topical issues we have identified from report and new information is added in stakeholders. every reporting session, with direct Each topic approached aims at reference to the requirements stated by explaining the specific aspects not stakeholders and their important topics.

List of material topics Domain Material topic GRI / own Related indicator chapter Corporative Governance system 102-18 1 governance Assuming the corporative governance principles 102-16 1 Delegation of competence 102-19 1 Ethics in business 102-16, 205-1, 205- 1 2, 205-3, 206-1, 418-1 Strategy, innovation Financial indicators 203-1 1 and financial Technical indicators Own indicator 1 development Risk management Own indicator 1 Energy efficiency 302-1, 302-4 7 Strategic objectives of research and innovation 302-4, 302-5 8

Social Training and qualification 404-2, 2 responsibility to Diversity, promotion of parity, removing gender 401-1, 401-3, 405- 2 employees discrimination and promoting women in 1, 405-2, 406-1 managerial positions Safety and security on the job Own indicator 3 Corporative social responsibility policy Own indicator 5 Dialogue between Company and society Own indicator 1 Community needs 413-1 5 Involvement in society 203-2 5 Employee information, consultation and trade 403-4 2 union relations Environment Environmental management system 308-2 4 Risks, opportunities and environmental costs Own indicator 4 Water, energy and water management Own indicator 4 Prevention and limitation of environmental impact Own indicator 4

Communication, cooperation, representation

Availability for Transparency and cooperation: clarity of information involvement degree, transmission fast response to demands

Capacity to provide Effectiveness of contributions by company actual participation, to representation in transmit ideas and relations with third solutions to achieve parties common goals

Ethics in business (102-17)

Conformity management system (102-25, 103-1, 103-2, 103-3, 205-1, 205-3)

Throughout 2020 measures were with the applicable norms for activities, implemented that were included in the which has led to a year with no disciplinary National Anticorruption Strategy (SNA), trespass from employees and no which means there will be further circumstances of conflicts of interests, in emphasis placed on their application and accordance with SNA specifications. improvement. Mention should be made Taking into account the that no violation was recorded of applied epidemiologic context existent throughout norms according to the SNA, nor any 2020 limits were applied to travels or complaints or notification thereof. meetings, in relation with the National Also the Company has paid Anticorruption Strategy. particular attention to getting acquainted

Code of conduct and ethics (205-2)

The Code of Professional Ethics and both during professional activities and Conduct of Personnel from Transelectrica, outside them. At the same time it provides reviewed in 2017, is the general document a guarantee that Transelectrica holds all including the internal regulatory the information necessary for the provision frameworks for all Company employees of an ethical behaviour, but also proof of and provides information with respect to the seriousness with which the Company the manner in which they are supposed to is treating its partners. The review applied behave in moral and professional terms, was meant to clear up certain aspects of

20 corruption fighting, professional obligations The Code of Professional Ethics and but also to complying with the legal Personnel Conduct is available on the framework and internal regulations. Company’s internet page. The review for the Code of Professional Ethics and Personnel Conduct began in 2020.

Protection of personal data (418-1)

Taking into account the legal mention should be made in 2020, provisions with respect to personal data, Transelectrica has permanently most particularly as regards the endeavoured to comply with applicable application of Regulation (EU) 2016/679 of provisions. the European Parliament and Council of Consequently there have been no 27 April 2016 regarding protection of confirmed complaints with respect to such natural persons in what regards the trespassing of personal data potection or processing of personal data and the free to losing them. circulation of such data, named GDPR,

Anti-competitive or anti-trust behaviour (206-1)

Taking into account the specific circumstances of anti-competitive or anti- activities of Transelectrica but also its trust behaviour. Consequently in 2020 special nature of company holding natural there have been no legal suits in this monopoly position on the electricity respect. transmission market there have been no

Corporative governance (102)

Governance system (102-7, 102-18, 102-19, 102-22, 102-23, 102-24, 102-26, 102-27, 102-28)

Shareholders' General Assembly

Supervisory Board

Ciprian Adrian Goicea Jean-Valentin Mihaela Luiza Mircea Oleg Burlacu Constantin Comanescu Popescu Cristian Staicu (chairman) Dumitru Popescu

Directorate

Catalin Nitu Corneliu Bogdan Ovidiu Anghel Andreea Mihaela Miu Marius Viorel Stanciu (chairman) Marcu

* On 11.03.2021

The Shareholders’ general assembly In accordance with OECD (AGA) is the governance body of principles, an effective corporative Transelectrica, having express and governance system is implemented in limitative competencies. AGA can be order to lead to market transparency and ordinary or extraordinary, its specific efficiency, to be compatible with the lawful attributions being provided in the Articles state and to clearly define the distribution of Association. All shareholders are of responsibilities between competent entitled to participate to AGA and to cast entities in terms of supervision, regulation their vote. and application of legal provisions. A The Company is managed under a corporative governance regime should two-tier system, according to the Company protect and facilitate the exercise of law 31/1990, republished, with later shareholders’ rights and to provide fair amendments and additions, by a treatment of all shareholders, minority and Directorate under monitoring of a foreign ones included. In previous years Supervisory Board. The Supervisory Board substantial changes were made in the has seven members, appointed after a Articles of Association with a view to selection procedure, for a term of at most increase the effectiveness of corporative four years. The Supervisory Board governance Company-wide by resorting to chairman is appointed by its members. the applicable legal framework, and also Supervisory Board members are regarding the separation between appointed by the Shareholders’ General Company management from the control Ordinary Assembly, while observing the over the management so that each provisions applicable to companies company body can carry out its specific admitted for transaction and are selected tasks according to legal terms and avoid in accordance with the provisions of OUG potential confusion with respect to the 109/2011 on the corporative governance attributions of a Supervisory Board and of of public enterprises. Supervisory Board an Administration Board. At the same time members in office on 31.12.2020 have a consideration was provided to the principle provisional mandate of 4 months, which regulation by statutory documents to cannot exceed the completion date of the delegate some competencies and specific selection procedure. coordination of certain domains, while maintaining liability for the directorate.

Assuming the governance principles

Once its shares have been listed on Governance Code of BVB which the the Bucharest Stock Exchange (BVB) the Company elaborates and publishes Company has appropriated the principles together with the Annual report. from the Corporative Governance Code of Also the Company’s Supervisory the BVB. In accordance with the BVB Board comprises the Nomination and requirements, Transelectrica made public remuneration committee, the Audit the Company’s reviewed Corporative committee and the Energy security Governance Regulation to the investors. committee. During the entire mandate term The compliance with the corporative in the Company’s Supervisory Board / governance principles is reflected in the Directorate the appointed persons should conformity statement with the Corporative meet the eligibility criteria and not to be

22 found in the incompatibility circumstances Company is entitled to ask Board established in the applicable law or members for reasonable assurance as applicable statutory provisions. In necessary to comply with such obligations. correlation with this obligation the

Delegation of competence (102 – 19)

In view of providing efficiency to the c) Approval of operations with inventory managerial attribution of the Company and effect up to a certain maximum cap; to achieve the established objectives d) Approving / endorsing of under effective economic conditions documentation preliminary and/or Transelectrica has developed a system of competence delegation. subsequent to the approval of Competence delegation pertains to, operations with inventory effect up to for instance: a certain maximum value, a) Approving certain kinds of documentation necessary according operations; to legal terms or internal regulations; b) Approval / endorsement of Such kind of delegation observes the documentation preliminary and/or Directorate’s limits of competence in terms subsequent to the approval of of operation content and value, certain types of operations, and establishes in express manner the limits of necessary according to legal terms competence and the responsibilities which or internal regulations; the Directorate delegates and complies with the rule regarding Company representation by means of joint signature.

National and international affiliations (102-12, 102-13)

Taking into account the important decisions, to elaborating studies and role of Transelectrica for SEN scientific expertise. management and on the electricity market, Also by means of these national activities with strong national and associations and bodies there is a international dimension, the Company is possibility to facilitate direct contacts, the member in specific national and exchange of information, experience and international organisations and bodies. expertise; stating and acknowledging the In its capacity of collective member Company’s leader position in the electricity in national associations / organisations transmission sector of Romania; Transelectrica intends maintaining close In 2020 Transelectrica got affiliated cooperation relationships with all important to 12 national associations, organisations players of the energy domain and and bodies in the domain, as follows: attending the events organised by such entities.  ACUE-PD - Association of Utility The Company has got Companies in Electricity Generation & representatives in various national Distribution (www.acue.ro); organisations and associations in the Date of Transelectrica affiliation: 2015 domain, which belong to the working committees and groups of such  ALSTR - Live Work Association of organisations, participate to taking Romania (www.smarsb/ro/alstr) Date of Transelectrica affiliation: 2000

 AmCham - Association of the American - RE-SERVE – Renewables in a Chamber of Commerce in Romania Stable Electric Grid (www.amcham.ro); - CROSSBOW - “CROSS BOrder management of variable renewable  ARIR – Association Liaising with energies and storage units Investors at Romania’s Stock Exchange enabling a transnational Wholesale (www.ir-romania.ro) market” Date of Transelectrica affiliation: 2018 Date of Transelectrica affiliation: 2011

 ASRO - Standardisation Association of  ENTSO-E - European Association of Romania (www.asro.ro); Transmission System Operators for Date of Transelectrica affiliation: 2008 Electricity (www.cnr-cme.ro) - It is the cooperation structure of Transmission  CIGRE - International Council of Large System Operators (TSO) of Europe Electricity Networks – It is international both at pan-European and regional technical-scientific organisation with level, with essential role in promoting basic objective to develop knowledge in the internal electricity market and of the domain of high voltage networks cross-border trade, as well as in view of and exchange information between providing optimum management, member countries with respect to: coordinated operation and sound electricity generation and transmission technical development of the European at high voltage, building and operating electricity transmission network. connection and transformer substations European TSOs participation to and their component equipment; ENTSO-E is regulated by the applicable building, insulation and operation of European legislation (Regulation high voltage lines; systems 943/2019). interconnection, operation and Data afilierii Transelectrica: 2000. protection of interconnected systems.  LWA - International Live Work  CNR-CME - Association of the National Association Romanian Committee of the World Energy Council (www.cnr-cme.ro) –  SIER - Society of Power Engineers in non-governmental organisation Romania (www.sier.ro) member of the World Energy Council Date of Transelectrica affiliation: 2000 (CME) since 1924;  IRE – Association of the National  CRE - Romanian Energy Centre Romanian Institute for Study on the (www.crenerg.org) Development and Use of Energy Projects developed by CRE in cooperation Sources (www.ire.ro) with Transelectrica: Date of Transelectrica affiliation: 2019

Rewards and distinctions the Company was awarded

All through 2020 the Company or Event: AR&IR Gala organised by the Transelectrica representatives were Association Liaising with Investors at awarded prizes and distinctions as follows: Romania’s Stock Exchange - ARIR on 19 October 2020

Institutional investors of the whole world responsibility projects, as per the that are active on Romania’s capital “Romania CSR Index 2020” study. market have carefully assessed the The Azores is an independent consultancy companies listed on the Bucharest Stock agency studying the performance and Exchange by means of Institutional transparency level as regards corporative Investor and following their vote sustainability among companies in Transelectrica was designated the best Romania. Company in Investor Relations terms.

Transelectrica obtained in 2020 as well Event: Financial Intelligence Awards the Bronze Level Recognition in the top Gala, organised by Financial Intelligence of the most sustainable companies on on 19 October 2020 the local market made by The Azores. This year’s edition of the Financial Thus Transelectrica is further counted Intelligence Gala provided Transelectrica among the country’s most responsible with the Excellency Prize for the companies in terms of transparency and implementation of investment projects. involvement with which it developed social

Our people – Human resources development and diversity

Human Resource Strategy

Action Vision Objectives lines

implementation and Initiation, development and capitalisation of the Human implementation - project to Resource Senior Expert (HR BP) develop organisational culture role Developing the human resource strategy in line with the Company's strategic objectives and with the critical employee needs Developing a library of professional and behavioural Reorganisation of the Human competence both at managerial Resource Department based on and executive level, where each Company objectives and on competence should be defined those assumed by the Division and developed by 3 levels (junior, standard, senior)

implementing the performance Reducing bureaucracy of the and career management system Human Resource Department

Developing a working environment suitable for professional evolution, based Restoring the balance between Physic and electronic archive of on profile competence, a the volume of personnel employee files in order to personnel motivation strategy, administration versus personnel develop a database enabling the developing the brand of development activities, which transfer of as many HR successful employer, turning rates now about 80% vs 20% in processes as possible to online dynamic the personnel favour of administration administration processes meant to draw new resources and motivating the professional development of existent resources (recruitment, Company integration, Standardisation and online Developing competence for the performance and career transfer of documents specific HR Department so that it can management) for personnel administration develop the proposed projects



Professional training strategy in 2020

The 2020 professional training strictly necessary in the fore-mentioned strategy targeted providing professional epidemiologic context. qualification to employees in order to Consequently objectives were comply with the Company’s operational reviewed targeting the main action lines: and strategic objectives. The 2020 Annual - Providing performance of training / Professional maintenance, training and qualification / improvement courses qualification programme identified the for personnel that requires licensing / professional training needs in correlation relicensing for professional activities with the professional activities and but also urgent training sessions; attributions specific to Company - Tailoring periodical training sessions employees, as well as with the by local measures, which should organisation’s business targets. reduce contagion risk given the The epidemiologic context generated present circumstances; by SARS CoV-2 all along 2020, the - Finding alternative methods to measures applied by competent provide professional training which authorities with a view to limit risk cases prevent or reduce the contamination associated to the infection with the new risk; coronavirus, to protect health and reduce Aiming at the main goal of providing COVID-19 spreading, a cautious attitude professional training and thus enabling an in employees’ protection and safety while accessible attractive competitive relevant maintaining business had significant training system for Transelectrica objective impact on professional training sessions and, studying the trend of professional compared to last years. This is why the course trainers to provide sessions online, professional training strategy had to be in 2020 debates were initiated to tailored to the state of affairs, therefore implement online courses in the Company. training courses were organised as only

Promoting parity, eliminating gender discrimination and promoting women in managerial positions (102-8, 103-1, 103-2, 103-3, 401-3, 405-1, 406-1)

Through our policy we make sure The structure of Transelectrica there is no discrimination in any of the employees depending on age and gender recruitment, hiring and promotion activities is specific for the Company’s domain, for reasons of gender, civil status, sexual noticing some slight ageing for reasons identity, religion, political options, ethnic, pertaining to considerable loosening of race, nationality, genetic features, age etc. vocational education, general ageing of The Company’s internal regulation population or intensive development of comprises, among others, rules with prosperous alternative domains (e.g.: IT). respect to non-discrimination principles In this context in Transelectrica the being observed and to removing all dignity percentage of women hired in executive trespassing forms. Thus in 2020 no positions is over 28%, those occupying top discriminating incidents were recorded management in 2020 covered 35% of the and, thanks to prevention, there was no total, while in middle management over need for corrective action. 23%. At the same time mention should be made in 2020 one of the five managerial

27 positions in the Directorate and two of executive positions and in managerial seven in the Supervisory Board were ones, the revenue ratio is sub-unitary yet. taken by women. Nevertheless the difference between the As regards the remuneration ratio revenues of women and those of men between men and women, taking into continues to diminish within Transelectrica. account that in the energy domain in Moreover the Company numbers 5 general and in electricity transmission in disabled employees, therefore no such particular the percentage of men is still discriminating incident was recorded in higher than that of women, both in 2020.

Structure of employees (401-1, 405-2)

In terms of 47 among employees on 31.12.2020. Still employees’ in 2020, 31 women and 10 men were on 35.64% of top dynamics, in 2020 leave for child rearing, benefiting of the management positions were we hired 103 dedicated articles thereof both in the taken by persons, while 109 Labour Code and in the Colective Labour women in 2020 left the Company, so Contract. the medium age was

Structure by gender categories (distinct for executive, leading and management positions) Type of position Total Age Gender number of Up to 30-50 Over 50 M F employees 30 Top management 101 0 51 50 65 36 personnel (4.99%) (0%) (50.49%) (49.51%) (64.36%) (35.64%) Leadership (except 306 4 153 149 233 73 top management) (15.14%) (1.13%) (50.00%) (48.69%) (76.14%) (23.86%) Executive 1614 111 812 691 1268 346 personnel (79.86%) (6.87%) (50.31%) (42.81%) (78.56%) (21.43%) Total personnel 2021 115 1016 890 1566 455 (5.68%) (50.27%) (44.04%) (77.49%) (22.51%)

Performance analysis on the job and the remuneration policy (102-35, 102-36) The remuneration system applied  “Equal pay for equal work” principle, nowadays in Transelectrica was implemented when positions were implemented on 01 January 2017, when graded using a unit instrument; the basic salary was added 4 permanent  Granting the basic salary especially indexations, namely the work seniority according to professional criteria – bonus, the uninterrupted performance in depending on the role a position the Company, fidelity bonus and the holds within the organisation, the confidentiality clause. complexity degree of the profession / The criteria and principles used in trade exercised, responsibility, as the establishment of the current salary well as depending on the system are as follows: qualifications required for a position.

They were determined after an  Providing internal equity by removing objective job assessment process; discrimination based on work  Providing internal equity by removing seniority or years within the discrimination based on work Company; seniority or years within the  Providing salary increases, bonuses Company; or promotions based on performance  Payment in accordance with the criteria, after an annual assessment importance of the job and the of performance carried out according attention paid to performance create to criteria that have been established premises both for retention and for and communicated at the beginning drawing qualified personnel; of the assessment cycle; The remuneration system has been Facilities granted to employees refer organised by 9 classes of positions, which especially to applying the fore-mentioned are structured depending on activities principles and are included in a collective performed and the kind of contribution labour contract negotiated between the made within the Company. executive management and unions. Employee benefits are:

Training programmes (103-1, 103-2, 103-3, 404-2) Transelectrica takes into account to is so that Company objectives can be permanently develop its personnel by accomplished in a world where success means of annual training and professional depends on performance, efficiency, improvement programmes. quickness, the capacity to provide quality, diversity. More than 560 Company All along 2020 Company employees employees benefitted of training participated to training programmes programmes in 2020 (delivered by providers of professional training services) from various activity Employees’ improvement has the domains. purpose to provide the best training there Mention should be made also about the employees, thus approaching the results and benefits of professional training Company need generated by programmes carried on in 2020: investments (which are considerable  Certification of knowledge or, as to refurbish several substations); applicable, extending the validity of  Although the epidemiologic context permits for the colleagues (SSM generated by SARS CoV-2 in 2020 coordinator, electricians of various required a set of restrictions classes, security manager) who impacting training activities, solutions require, during activity, certification were to provide periodical training to proving theoretical and practical UTTs by join personnel. Thus such qualification according to requested periodical joint personnel training standards as well as to Company were provided to 543 people in 2020. standards; In 2020 there was no course or  Course attendance and licensing as traning or any other session regarding site manager for installation, corruption fighting or bribe. industrial equipment for 24

Internships Transelectrica sustained further in in general, and to electricity transmission 2020 as well the professional training of in particular. young generations of specialists in the In 2020 students both of Bucharest energy domain by annual internships. and from the country attended the internships of Transelectrica. au luat parte In 2020 students from Bucharest la stagii de practică studenți atât din, cât și and from the country participated din țară. From among the partners of to interships in Transelectrica Transelectrica with respect to internships were the University Gh. Asachi Iasi, Internships in Transelectrica Faculty of Electric Engineering, Energy represent the uninterrupted confirmation of and applied Information; Polytechnic the Company for active support and University of Bucharest, Power motivation of young generations, to Engineering Faculty; Pitesti University, orientate them towards the energy domain Energy Faculty & Nuclear Technologies, and others.

Employee information, consultation and trade union relations (102-41, 103-1, 103-2, 103-3, 403-4)

Trade unions play an important role union members, showing they recognise with respect to the labour relationship the utility of a union body established in between employees and employer. The order to promote their interests before the trade union promotes and protects the employer. rights of its members, taking into account At the same time the absence of any their needs and opinions. A good relation labour conflict in the last year represents a between employees and employer is relevant indicator of efficient mediation constituted based on efficient between employees and employer. communication between employees’ Taking into account the Company representatives and the Company’s. profile no specific writs were necessary as Similarly to 2020, nowadays as well regards the employees’ freedom to almost all Company employees are trade associate. Responsibility to employees

Training programme and processes that provide labour health and safety

(103-1, 103-2, 103-3)

The entire training process is developed in accordance with article 20 of Law 319/2006 Labour security and health law, with later amendments and additions, with Decision 1425/2006 approving the Methodological Norms to apply the provisions of the Labour security and health law 319/2006, chapter V - Workers the internal Operational Procedure code training on labour security and health and

TEL 18.02 “Employees’ training on labour Training activities are unitary, security and health”. periodical training is united half-yearly and Prevention and protection SSM topics cover 3 years’ cycle. departments have been established, Employee training is performed by dedicated to labour security and health (as the working place managers using topics per the Labour security and health law approved by Company management and 319/2006, Section 2), under methodologic recorded in individual training forms. coordination of the Integrated Labour safety and security activities Management Department with attributions are managed by UMICA – DMI, Company- in compliance with applicable legislation. wide. A person was designated in this Workers’ instruction in labour safety Department to provide labour security and and health comprises 3 stages defined by safety that periodically manages such specific legislation: activities.

Introductive- is delivered by personnel from the prevention and protection departments general training dedicated to labour health and security.

On the job is delivered by the leader of the working place. training

Periodical is delivered by personnel from the preventive and protective departments training dedicated to labour health and security or by the leader of the working place in case of monthly and half-yearly training, under guidance of personnel from prevention and protection departments dedicated to labour security and health

Preventive actions (403-2, 403-3)

Training topics are elaborated for In view of providing proper each legislation-defined stage in order to prevention the following training sessions carry out prevention activities, by the are delivered with frequency as follows: prevention and protection departments  Annually, minimum one training dedicated labour health and security course for every employee; depending on the risk assessment of each  Half-yearly for other categories of working place. technical licensed personnel from Therefore such risks associated to Power Dispatcher departments; each working place are assessed  Monthly for operational personnel individually and measures to reduce them and/or licensed in terms of labour are applied, or to keep them under control health and security in electric by means of other measures provided in substations and half-yearly upon Prevention plans. Concrete measures are periodical joined training sessions; included into Annual labour health and Company-wide there are 21 security programme translated into responsible persons in prevention and practice by qualified personnel in this protection departments dedicated to domain. security and health.

Training the personnel on labour movie pictures, slides, projections, safety and health involves means, computer assisted training. methods and training techniques such as: Various training domains are exposure, demonstration, case study, approached as follows:

Information and awareness building Presentation of work instructions Presentation of specific legislation in for all kinds of risks identified for depending on the activities labour health and safety each working place performed

Description and awareness building Employees are informed about all Describing first aid measures and for measures required for fire new items, labour accidents, events providing examples extinguishing and employees' that have taken place evacuation

The manner in which people travel on public roads both for pedestrian employees and those using public means of transport or Company and/or personal car to travel to / from work and the other way round

Trainings are provided at different In 2020 a number of 120 days was periods with all personnel about their recorded for medical leaves registered travel to and from work. Each employee after work accidents. fills in a Route Form upon recruitment, There has been no death caused by which provides the travel time and route. accidents on the job and there are no The employees responsible for cases of employees with occupational prevention and protection services illness or high exposure to professional dedicated to labour security and health disease. make up the structure dealing also with Moreover there is permanent dialogue labour accidents. between the executive management and One work accident was registered unions to cover occupational health issues in 2020 followed by temporary work and the collective labour contract clearly incapacity and a light accident which has mentions this doman. not resulted in temporary work incapacity.

Organisation of mixed (management – employees) SSM committees and relevant activities in 2020 (403-1)

Labour health and security health issues. Labour health and security committees are established in accordance committees operate based on their own with applicable legislation articles 16, 17, operational regulation. 18 of the Labour security and health law The Company-wide Labour Health 319/2006 in order to consult the workers and Security met 2 times in 2020. From and involve their participation to among the problems debated according to discussions on all labour security and the agenda of each meeting there are:

32 endorsing the annual labour security and endorsing the operational procedures for health programme of the Company; labour security and health; the manner in analysis of labour security and health which labour conditions are provided, issues specified by employees from individual protection equipment for branches and DEN; supervision of the workers, analysis of last year’s labour achievement degree of measure plans security and health activities based on the regarding labour security and health; report and endorsing such report.

Responsibility towards environment

Environmental management system (103-1, 103-2, 103-3)

Environmental protection represents The environmental objectives and an important objective for Transelectrica, targets have been included in the annual in view of the Company’s sustainable Environmental Management programme development. Thus the environmental aimed at reduced pollution of air, water, protection policy is an integrant part of the soil, reduced levels of noise and general one, including as objectives to vibrations, improved waste and used water maintain a performing environmental management, restore the natural management system, to prevent and landscape after maintenance / reduce pollution, comply with the legal development work, protection of flora and national and European requirements and fauna and monitoring environmental sustainable development. factors.

The main directions to achieve environmental objectives

Involving one's own personnel and all Developing methods and channels co-workers in the application of Prevention of air, water and to communicate the Company's environmental policy and reaching the policiy and objectives to all Company's environmental targets and soil pollution stakeholders taking an interest in all requirements of the environmental environmental protection management system by information and training

Reducing the level of Providing knowledge and compliance of the electromagnetic field, noise and Proper waste management vibrations to maximum admissible environmental legislation by levels all Company employees

Protecting the atmosphere, water Introducing environmental and aquatic eco-systems, soil, sub- Conservation of biodiversity requirements in suppliers' soil and terrestrial systems and of the protected natural appraisal and in the protection, as well as human areas documents to procure settlements products, service and work

Monitoring the environmental Increasing the level of factors and assessing the Reducing the consumption of personnel competence, compliance with legal and natural resources training and awareness regulatory requirements

Risks, opportunities and environmental costs

High voltage electric installations equipment, wrong operations, and failures mainly constituted by overhead lines and or during construction and maintenance connection and transformer substations work. represent equipment of significant Environmental aspects are identified environmental impact coming from their and assessed for technology and technical complexity, from the land areas construction from the very first design they occupy as well as from the length of stage. As such they are included in the overhead lines, usually crossing the Environmental Management Plan (for territory of several counties. installation, construction, operation and No pollutants are discharged in the dismantling), which includes the environment during normal operation of Programme of measures to prevent RET installations. Accidental leaks can pollution and reduce impacts, as well as occur of certain chemical substances with the Environmental factors monitoring plan. pollutant impact in case of improperly tight

Environmental aspects related to construction

Type of impact Modes of occurrence (effects) Physical  Impact on soil by opening new access routes, topsoil removal and excavations  Land occupation by site organisation, storage places included  Impacting the flora (by tree cutting)  Impacting the fauna (by habitat fragmentation)  Impacting birds (by constituting aerial obstacles located in their flight corridor)  Generating waste (porcelain, glass, concrete, metals, used oil, packages, rubble, etc.)  Impacting the population and fauna by the noise produced by equipment, transportation means, etc. Chemical  Soil and/or water pollution by accidental leaks of fuel, oil and other chemical substances  Air pollution by means of: - Flue gas emissions (SOx, COx, NOx, COV, suspended powders) from heating installations or transportation means - Sulphur hexafluoride emissions (SF6) – accidental leaks during gas handling or because of improperly tight equipment - Powdery emissions because of construction-installation work - Emissions of volatile organic compounds from paints and diluters, etc. Socio-  Disturbance of social activities, including population moving economic out

Environmental aspects related to operation-maintenance

Type of impact Modes of occurrence (effects) Physical  Land occupation with OHL routes and substation locations  Impacting flora by systematic vegetation removal  Impacting fauna (fragmenting habitats, electrocution, etc.)  Impacting birds and flying apparatuses (aerial obstacles located in their flight corridor, collision, electrocution, etc.)  Danger of electrocution / burns when touching OHL / tower falling near or at road crossings, railroad, water, buildings, etc.  Fire hazard from deteriorated insulation or from accidental conductors’ getting in touch with objects or dry vegetation  Impacting the population and fauna by the noise and vibrations from operation of RET installations or their vibrating  Impacting the population and fauna by the noise generated by corona effects from high voltage installations  Acoustic and luminous effects from corona phenomena  Disturbance of radio and television systems produced by the electromagnetic field

 Electromagnetic field impacting telecommunication installations or other electric networks when they inter-cross or are found nearby  Effects of the electromagnetic field over living beings Chemical  Soil and/or water pollution by accidental leaks of fuel, oil and other chemical substances  Air pollution by means of: - Flue gas emissions (SOx, COx, NOx, COV, suspended powders) from heating installations or transportation means - Sulphur hexafluoride emissions (SF6) – accidental leaks during gas handling or because of improperly tight equipment - Ozone and nitrogen oxides – corona effects at high voltage - Sulphuric acid vapours – from accumulator batteries Visual  Impact over landscapes Psychic  Fear caused by the proximity of RET installations and by their visual and luminous effects

Transelectrica has applied proper Such risk determination associated to measures to prevent pollution and reduce significant environmental aspects for the environmental impact, both during activities / processes performed in operational activities and during Transelectrica has led to a series of maintenance operations, as well as while beneficial effects and opportunities. making investments, which mean construction-installation work.

Finding out new technologies to treat Utilisation of warning gauges / control of used water generated in electric SF6 emissions from SF6-containing substations (water-oil separators, spill equipment warning / control devices) which reduce pollutant leaks outside substations

Results of risk determinations associated to environmental aspects

Construction of concreted platforms to Using pieces of equipment that operate store equipment containing oil which was at low noise levels and providing little withdrawn from operation / new oil- electromagnetic field, observing also the containing equipment and temporary specific applicable norms waste storage

Management of environmental factors (304-2, 304-4, 308-2)

a) Land occupation The area taken up by electric lines and substations: Without safety area [m2] With safety area [m2] Substations OHL Substations OHL Total Transelectrica 3,980,544 3,205,655 7,123,765 520,529,940

b) Sources of soil, underground and terrestrial water pollution During normal operation of RET supply / discharge installations or pieces installations no noxious substances are of equipment. discharged on ground, into underground or Similarly, oil / fuel leaks can occur terrestrial water. Accidental pollution can from motor cars, outfits and transportation occur caused by improperly tight / broken means during construction and equipment containing dangerous maintenance (the oil leaking into ground substances or electro insulating oil, or was retained with absorbent defects occurring to the oil regeneration / biodegradable earth).

c) Sources of air pollution During normal construction, suspended powders, etc.). High voltage maintenance and operation activities of OHLs generate atmospheric pollution by RET installations no significant quantities ozone and nitrogen oxides after Corona of pollutants are discharged in the occurring around active conductors, atmosphere. However during construction, especially in rainy weather. The additional maintenance and operation of RET contribution of such pollutant substances installations the following atmospheric to the existing amount is not major and emissions can occur: suspended powders cannot lead to exceeding the legal - from construction works, or flue gas - information threshold values, beyond from motor cars, electric generating sets which there is hazard for human health. and thermal power plants, ozone in As far as greenhouse gas emissions negligible amounts (Corona effects), are concerned, SF6 leaks from the pieces sulphur hexafluoride - as a result of un- of equipament managed by Transelectrica tight equipment or improper gas handling. amounted to 158.2 kg in 2020, while the Flue gas can occur in case of fires or emissions of equipment not managed by explosions (SOx, COx, NOx, COV, Transelectrica are provided below:

Type of information TOTAL 2020

UTT UTT UTT UTT UTT UTT UTT UTT Bacau Buchares Cluj Constanta Craiova Pitesti Sibiu Timisoara t Total SF6 capacity for equipment 3090,2 25932,149 3071,9 8685,9 8708,82 5585,26 7412,54 3916,7 66403,469 found on site (kg) - Of which closed pressurised 3025,2 25900,149 2995,7 8685,9 8683,92 5585,26 7412,54 3911,7 66200,369 equipment * (kg) - Of which sealed pressurised 65 32 76,2 0 24,9 0 0 5 203,1 equipment ** (kg) Total capacity of new equipment 173,1 3443,049 0 186 2264,2 0 0 345,6 6411,949 filled on site (not by producer) (kg) Total capacity of equipment no 36,4 71 0 349 378,1 55,5 0 4 894 longer used (kg) Emissions upon installation- SF6 0 0,121 0 0 0 0 0 0 0,121 quantity to fill new equipment (closed, pressurised) (kg)

Emissions upon use- SF6 0 48 2,2 0 44,5 16 42,5 5 158,2 quantity to refill the closed- pressurised equipment during service / maintenance (kg) Emissions upon use- SF6 0 0 0 0 0 0 0 0 0 quantity reovered from closed - pressurised equipment during service/maintenance (kg) Emissions upon disposal - 0 0 0 0 0 0 0 0 0 capacity of equipment no longer used (kg) Emissions upon disposal - SF6 0 0 0 0 0 0 0 0 0 quantity recovered from equipment no longer used (kg) When did you begin using SF6 2002 1999 1999 1994 1995 1997 1965 1998 1965 containing equipment

The objective of 2021 is to reduce one studied year, especially in the context emissions below the previous year’s and of European recommendations and find methods to make such reduction requirements. sustainable in the long run, not only in just

d) Sources of used water Electricity transmission does not generate the city drain or it is emptied and carried to technologically used water. The used a station treating urban used water or it is water generated on the locations of RET discharged on ground or into terrestrial installations are: water observing the maximum admissible - Domestic used water from human limits of environmentally discharged activities - which is directly discharged into pollutants; urban drainage or it is emptied and carried To perform its activities to a station treating urban used water or it Transelectrica used 34,894 m3 of water in is locally treated within micro-stations and 2020. The sources of drinking water and discharged on ground or into terrestrial quantities used depending on source are water sources. provided below (expressed in m3): - Rainwater collected into the tanks Local water 23250 m3 of oil-containing equipment and in the networks manholes of concreted platforms for waste Underground 10329 m3 and equipment storage (it can contain oil water from leaks) - it is mechanically cleaned in Other sources 1315 m3 the water-oil separators and discharged in

e) Generating waste Electricity transmission activities do another, depending on the volume of not generate waste directly. Waste comes investment and maintenance work. from construction, maintenance operations Waste generated in 2020 was and human activities. The quantities of disposed of / capitalised by means of waste are different from one year to specific companies.

Generat Capitalised Disposed Stored Waste management indicator: ed waste waste wste Disposed of, capitalised / generated waste (t) (t) (t) waste (t) 2691.22 277.80 1764.72 649.04 76% (compared to 84% in 2019)

f) Electromagnetic field generated by RET installations

Transformer/connection substations environmental impact of such installations. and the 220V & 400 kV OHL provide quite In accordance with specific studies low impact over their surroundings, being performed by speciality institutes, the found only around RET installations. A intensity of the electric field found near the great part of disturbing effects is caused 220 kV and 400 kV overhead lines by electric induction (into metallic objects decreases with distance, therefore about or structures that are not grounded) and 25 – 30 m away from the line axis the by interference phenomena (radio intensity of this field is zero. interference). The constructive solutions In 2020 measurements showed the adopted for high voltage electric lines and values required by applicable norms have substations provide proper protection not been exceeded in electric substations against the exposure of living beings to the and upon line crossings of roads, railroads electromagnetic field, and diminish the and intensely populated regions. g) Acoustic pollution During construction noise can be reduce the environmental impact of its generated because of work execution or installations and activities. The various during the operation of equipment and environmental conditions at each location vehicles. Afterwards acoustic pollution of RET installations (overhead lines, results from operation, during the vibration electric transformer & connection of RET installations or upon Corona substations, buildings) determine specific discharges in the space around active environmental impacts of each installation conductors. The noise level of Corona in different stages (design, construction & effects 25 m away from the active operation) therefore measures are defined conductor varies from 53 dB in rainy for each individual case, depending on the weather and 33 dB in fine weather. conditions existend on location. Transelectrica SA defines and applies In 2020 no noise exceeding the preventive and corrective measures to maximum admitted level was registered. h) Impact on fauna Such impact is significant and most on towers, above insulator chains, thus especially on birds because they collide preventing the bird’s sitting on the tower and get electrocuted by RET installations (protecting it against electrocution, and within migration corridors or protected insulators from breaking) while deflectors areas. The main migratory corridors of are installed on OHL conductors (devices various types of birds have been detected preventing birds sitting on OHL in Banat, Dobrogea and the Danube Delta conductors) or painted boards, usually regions. mimicking prey birds and thus reduce In order to get birds away from OHL birds’ impact with OHL. areas bird-repellent equipment is installed i) Impact on vegetation This impact is determined by final or height, in order to prevent fires. Such temporary ground occupation and by impact can be significant only in protected vegetation removal within the safety areas areas. of RET installations as it exceeds a certain

39 j) Species found in the red list of IUCN and in the national conservation list with habitats within the zones impacted by operations and the measures applied in order to preserve their habitats Artificial nests have been installed props, such as high voltage towers on high voltage towers in order to protect because there are no tall solitary trees on the Danube hawk, endangered species on agricultural lands and lawns (historical the brink of extinction, as follows: nesting places). - In UTT Timisoara: 34 nests Such installation of artificial nests - In UTT Bucharest: 4 nests belongs to the “Conservation of the - In UTT Constanta: 31 nests Danube hawk in north-eastern Bulgaria, Artificial nests are metallic or wood Hungary, Romania and Slovakia”, a multi- boxes which were installed on high voltage national project with European financing towers, because the Danube hawk prefers since the importance of providing species nests providing good visibility of the area protection and preservation is also and favourable feeding places nearby. It is acknowledged at EU level. necessary to place the nests on artificial

Actions and measures applied to prevent and/or limit the environmental impact (306-3)

Elaboration of documentation •Elaboration of documentation and submission of files to license / re-license the objectives managed by the Company in terms of environmental protection and water management Executing work •Construction or maintenance of drainage networks for domestic and/or rainwater; •Installing water-oil separators to the tanks of oil-containing equipment and storage platforms; •Building concreted platforms for temporary storage of equipment and waste; •Maintenance operations to oil- or SF6-containing equipment in order to prevent leaks; •Painting the towers of overhead lines (OHL) using landscape-friendly colours; •Deforestation / maintaining the safety corridors for OHL; •Land recovery / development (when work is completed) in order to bring it back to its initial condition); Procurement of services with respect to •Monitoring used water quality in Company substations and offices and proposing solutions to reduce pollution according to the terms of environmental and water management permits; •Monitoring pollutant emissions in the atmosphere (noise, electric and magnetic fields, pollutant emissions, ozone concentrations); the values obtained to determine parameters were reviewed and interpreted, leading to conclusions about the level of pollutant emissions and compliance with limit values provided in the legislation; •Waste collection, sorting, transport and capitalisation / disposal of; Environmental management plan •Elaborating environmental management plans for the maintenance, refurbishment / upgrade projects;

With respect to its future activities or reducing the intensity of the Transelectrica aims at reducing the electromagnetic field on ground. Mention environmental impact of its installations, should be made in 2020 there were no mainly by means of activities such as significant leaks providing significant reducing the land areas occupied, environmental impact. reducing the impact over fauna and flora

Waste classification by types and disposal methods (306-4)

Capitalisaton Disposal Recycle Co- Incineration Storage incineration  Printer toner waste  Tiles and  Mineral non-  Tiles and  Synthetic engine, transmission & lubrication oils ceramic chlorinated ceramic  Mineral non-chlorinated insulating and heat materials insulating and materials transmitting engine oils (porcelain heat transmitting (porcelain  Paper and cardboard packages insulators) engine oils insulators)  Plastic packaging material  Wood  Sharp objects  Earth and  Wood package  Infectious-pricky pebbles  Glass package medical waste  Waste mixes  Worn-out tyres  Chemicals of or from  Oil filtres containing construction and  Brake plates dangerous demolition  Ferrous metals substances  Plastic and rubber materials  Plastics  Medicines  Fluorescent  Glass  Plastic and rubber materials tubes and other  Component with no specification  Other engine, mercury-  Other unspecified waste type for car transmission & containing waste maintenance lubrication oils  Mixed municipal  Dismantled equipment containing dangerous  Sludge from oil- waste components water separators  Sludge of septic  Waste of worn-out electric and electronic  Oily water from tanks equipment (DEEE) oil-water  Worn-out tyres  Components taken out of dismantled equipment separators  Oil filters  Lead-containing batteries  Protection clothes  Brake plates  Alkaline batteries  Plastic materials  Concrete  Condenser batteries (personnel  Copper, bronze, brass equipment)  Aluminium  Iron and steel  Ol-Al (cables)  Metallic mixtures (hard iron)  Plastic and rubber materials  Paper and cardboard  Textiles  Fluorescent tubes and other mercury-containing waste  Dismantled electric and electronic equipment  Metals  Wood  Leather

Exceeding the admitted environmental regulation limits and methods to solve such instances (307-1, 308-2)

In accordance with monitoring the contaminated rainwater from the tanks of qualitative physical-chemical indicators of power transformers & shunt reactors, conventionally clean rainwater, of before and after oil separators; of

41 underground water of manholes; of noxious items are rarely quantified in domestic used water and used water from water. Potential sources to increase the car garage sampled from Transelectrica’s concentrations of such water indicators electric substations in 2020 and in can be: accordance with results, the physical- - Pipe leaks; chemical indicators found in used water - Used oil from substation equipment; samples fell within the maximum limits - Improper storage of electric and admitted for pollutants discharged in the electronic waste; environment. However there were a few - Fungicide, insecticide, pesticide and slight exceeding of specified values for fertiliser substances spread on soil; indicator Zn2+ in samples taken of - Paints and pigments used for substation Domnesti (oil separator output equipment maintenance; of TRAFO 5 and final outlet), substation - Precipitation that can wash Brazi Vest (oil separator output, AT3), atmospheric deposits of industrial substation Gura Ialomitei (oil separator emissions, and also from traffic and outlet, TRAFO 3+4) and substation transport (exhaust gas, wear of zinc- Teleajen (oil separator output, AT2), and containing tyres, engine oil and fuels for indicator Cu2+ in the sample from releasing zinc on motorways); substation Teleajen (oil separator output, Consequently seeing such results AT2). careful supervision of fore-mentioned Taking into account that throughout indicators is recommended in the water last year no exceeding was recorded in samples from problematic sites in order to such substations, but also that such provide uninterrupted assessment of exceeding is minor we can deem such possible environmental impacts. cases as sporadic, which for the time In 2020 the National Environmental being have no significant negative impact Guard made no inspection; controls were on water quality. performed by SGA Salaj, SGA Ialomita, However mention should be made SGA Olt – Slatina, following which the most zinc and copper of used water does Company had received no not come from specific points, this being recommendation of major measures. the reason why sources of potentially

Future measures to diminish locally identified problems (103-1, 103-2, 103-3,

203-2)

Environmental protection Education

Transelectrica in its transmission Having turned ourselves towards system operator capacity considers it has corporative social responsibility means we major responsibility towards future provide support to education to enhance generations and permanently strives to its quality both with respect to the find sustainable economic solutions to technical area, which is specific for the develop and upgrade its installations Company and in terms of support according to the European Union’s domains. To sustain such ideas we will environmental protection requirements, all further commit ourselves towards active the more so because it has obligations involvement in higher education quality in under the membership condition in specific Transelectrica activities. Greendeal context and other agreements; all these are important and have direct Health impact over national measures. Our environmental policy takes over The health of employees and of the commitment to perform all specific everyone around is a priority for activities in responsible manner and pay Transelectrica, therefore we will further proper attention to environmental impacts continue to help the specific associations and sustainable performance, by means of in the following years in order to promote clear objectives provided in the table eligible projects meant to improve below: Romania’s health system. Taking into account the unusual circumstances facing the whole world in 2020, the measures applied Company- Rational utilisation of natural resources wide in the context of SARS CoV - 2 pandemic aimed at diminishing its negative effects and assumed: Reducing the pollutant emissions in the - Elaborating notes on the preventive environment and measuring them protective conduct against Covid 19; - Permanent information of personnel Proper management of waste resulting from about the pandemic and authorities’ maintenance and refurbishment activities recommendations; - Implementing the tele-work system, Periodical monitoring of environmental factors personnel information and training (water, air, soil, noise, electromagnetic field, waste) about the proper operation of such a system; Upgrade and refurbishment of installations with - Elaborating a Business Continuity best-in-class technolgies, by which environmental Plan to provide safe operation of the pollution is prevented or reduced National Power System in the pandemic context; Providing knowledge and observance of environmental legislation by all Company - Implementing measures to prevent employees, by means of information, training and motivation undesired pandemic situations:

taking employees’ temperature, Corporative volunteering changing the working time, alternative use of tele-work; In Romania an increasing number of - Multiple procurements of services, employees consider the Company’s social protective & preventive equipment and ethical values as very important. This provided to employees or used in is the reason why employees are offices; important public for the corporative social - Multiple steps were taken from the responsibility strategy of Transelectrica. beginning of 2020 to hire a labour Corporative volunteering is the most specialised doctor, which was relevant team-building method, since achieved in July 2020; employees are more and more involved To date COVID 19 infections have into the activities which are organised; the been managed according to the internal purpose of the Company is to promote this Regulation on the Measures to be applied activity as much as possible into the in Transelectrica during the alert state in futurea order to prevent and fight COVID 19 Unfortunately given the pandemic, effects, and all such situations were kept 2020 was not good for corporative under control. volunteering but we will provide such activity in the future to make up the gaps of last year.

Corporative social responsibility

Corporative social responsibility policy (103-1, 103-2, 103-3)

Transelectrica furthers its  Supporting the humanitarian participation in the development of the initiatives of non-governmental society it performs in, as it has major associations; importance for the Company’s  Participation into the development of fundamental values. By means of its social culture and communities; responsibility projects the Company takes  Providing support to employees in into account both society’s interests and case of major health issues; those of its employees, shareholders,  Getting employees involved into community and the environment. corporative volunteering The main Company objectives of programmes; corporative social responsibility are:  Investing in environmental  Investment into young people’s protection; education and development;

Examining the community needs (203-2, 413-1)

As far as community needs are education and access to it, health, concerned, the most important problems electricity and drinking water. Romania is faced with for the time being We will be permanently concerned are the social (poverty and social inclusion with the situation of local communities and of disfavoured groups) or the economic consider we should constantly contribute ones (unemployment, low revenues), but by means of efficient solutions and also the issues occurring in activities. complementary domains such as quality of

Involvement in the society (413-1)

In order to support the development People’s Association of Romania, of a sustainable performing Romanian Association Developing Cultural society Transelectrica is getting involved in Objectives, Polytechnic Foundation the communities where it performs, while Timisoara or the Natural Vacaresti Park attempting at the same time to get as Association. close as possible to the needs of people In terms of performance the outside the Company’s impact areas. Company managed transposing over 91% The context generated by Covid-19 of the budget allotted in 2020 into pandemic turned Transelectrica’s efforts corporative social responsibility, going especially to the medical area providing above the 90% target established at the support the social categories having got beginning of last year. In 2021 we would direct negative impact. like to exceed again 90% and allocate all In 2020 we shouldered organisations amounts to important causes, with such as National Red Cross Society, Blind significant impact over the society at large.

Projects with Transelectrica’s involvement in 2020

 Education and training

Sustaining pupils from technical Colleges and High Schools of Romania

The Company got actively involved in activities sustaining education, in order to provide young students with a proper studying environment. In time we cooperated with educational institutions of the power domain by providing equipment to research laboratories and study grants to pupils and students who got particular results. Furthering the 2019 partnership, in 2020 Company supported the Polytechnic Foundation of Timisoara to award prizes to its best students.

Me and the World Association Education, especially in disfavoured areas with great need of permanent investment, is one of the most importan domains where social-corporative efforts should be focused. Thus in cooperation with Me & the World Association Transelectrica has contributed to covering expenses for the “Children for children!” project by purchasing books, school supplies, sweets and also the expenses of involved personnel. This project impacted significantly the participating children, bringing a spark of light in a year dominated by medical issues when almost all corporative social responsibility campaigns turned to this domain or, in other cases, in social areas to help people placed in difficult situations by the pandemic.

 Humanitarian activities

National Red Cross Society

Considering the circumstances generated by Covid-19 pandemic Transelectrica involved in supporting the organisations that acted towards quickly solving the occurred problems. Thus two sponsorships were granted to two subsidiaries of the National Red Cross Society to aid disfavoured people in those areas, and to stop difficulties during the pandemic. Taking into account the exceedingly great efforts made by specific associations, but especially by the National Red Cross Society, we deem such circumstances like those of 2020 require general mobilisation of all organisations active in Romania, to support such activities.

Maya & Friends Foundation

Transelectrica contributed to financing the project “Together for our seniors”, which intended providing a hot meal to old people of Valiug. This supported the organisation to get involved in a disfavoured region in financial terms, and to provide things that are normal in different circumstances.

Blind People’s Association of Romania

Many times primary senses are ignored by most of us, because they seem natural and simple. However whenever they are absent a person’s life is fundamentally changed. This is why Transelectrica sponsored the Blind People’s Association of Romania to procure a Braille Fonfold D V5 printing equipment, which will facilitate a little bit the life of blind people supported by this association.

 Environmental activities

Natural Vacaresti Park Association

In 2020 we sponsored the purchase, location and decoration of a structure enabling the running of the visiting mini- centre ‘Nature at your doorstep”; locating photo-voltaic panels and organising activities dedicated to biodiversity in the Natural Vacaresti Park. A space was developed on the main path at the Urban Rangers House where visitors can find out the park history, information about species and habitats, and get eco-system services.

Energy efficiency (102-15, 103-1, 103-2, 103-3, 302-1, 302-4)

Romania has been European Union 2010/30/EU and cancelling Directives Member since 1 January 2007 and during 2004/8/EC and 2006/32/EC; pre-adhesion it committed reviewing and  Directive (EU) 2018/2002 of the tailoring legislative provisions towards European Parliament and Council of enhancing energy efficiency, including it 11 December 2018 amending also in the development and refurbishment Directive 2012/27/EU on energy of the electricity transmission network. efficiency;  Law 121 of 18 July 2014 on energy Transelectrica elaborates efficiency (to apply Directive 27/2012 each year the “Energy on energy efficiency at end users’), efficiency improvement updated; programme”  National Action Plan of Energy Efficiency (PNAEE IV 2017 – 2020); Regulations have been conceived so  Law 372/2005 on the energy as to address distinctly the industrial performance of buildings, updated; sector (economic agents in this domain),  Patterns for the total annual energy the tertiary sector (economic agents, consumption return and the energy public institutions, non-governmental analysis questionnaire for energy associations, etc.) and the residential consumers, transmitted by the sector (population). The energy efficiency Ministry of Energy; regulations are meant to promote and In 2020 Transelectrica wrote and stimulate approaches and mechanisms approved its Energy Efficency Strategy. In such as: accordance with such strategy energy  Energy management at the efficiency is approached in entire CNTEE consumer’s; Transelectrica SA by five main directions,  Developing technologies efficient in namely: energy terms as well; 1. Reducing the amounts of electricity to  Promoting new renewable energy compensate losses within RET (CPT); sources; 2. Reducing the electricity consumption  Development and diversification of supplying auxiliary services of electric energy efficiency services; substations;  Professional training and education 3. Reducing the electricity consumption on energy conservation; of administrative offices;  Promoting international cooperation 4. Reducing the heat consumption for programmes on energy efficiency; buildings (both by reconsidering the Energy efficiency activities of installations and by increasing the Transelectrica are grounded on the energy efficiency of buildings); requirements from internal legislation in 5. Reducing the fuel consumption of the compliance with the applicable European car fleet; legislation, namely: Taking into account that  Directive 2012/27/EU of the European Transelectrica is found in the category of Parliament and Council of 25 October industrial consumers above 1000 toe (tons 2012 on energy efficiency, amending of oil equivalents), legal requirements Directives 2009/125/EC and establish certain obligations for the Company, such as:

 Every 4 years’ performing the energy  Filling in the last year’s ‘Consumption audit on an outline of energy return’ and ‘Energy analysis consumption established by the questionnaire’; economic operator, which should  Elaborating each year the represent at least 50% of the ‘Assessment report for the growth economic operator’s total energy potential of energy efficiency in consumption; electricity networks’ and the ‘Plan of  Allocating the Energy Manager annual measures and investments to responsibility to a licensed expert; improve energy efficiency in the Electricity Transmission Grid’;

Current activities in the energy efficiency domain

In general energy efficiency improving measures of CNTEE Transelectrica SA are found in the investment programmes based on the 10 years’ RET Development Plan. Current energy efficiency activities pertain to:  Energy audits made in technological 3. Extending the ‘infotehnic’ database; terms but also to buildings; 4. Elaborating terms of reference for the  Optimising the electricity and heat “Smart grid pilot project - Building a consumption in Transelectrica’s smart-grid solution to use renewable buildings; energy and storage for the auxiliary  Updating the specific requirements to services in the 400/220/110 kV upgrade transmission network assets substation Brazi Vest”; according to the energy efficiency 5. Completing the study on the use of Li- growth targets; Ion batteries for auxiliary services in  Using the ENTSO-E (cost-benefit) Transelectrica’s substations and methodology to validate investment turning the associated consumption projects, including energy efficiency flexible; indicators; 6. Developing the feasibility study to install two modern means of reactive Among the 2020 activities specific for power compensation (FACTS) in the energy efficiency are the following: 400/220/110/20 kV Sibiu Sud & 1. Performing the second energy audit 400/220/110/20 kV Bradu substations; stage in the buildings managed by 7. Initiating the technical documentation Transelectrica; to promote principles of passive 2. Practical application of the Energy builidngs for the inventories of Efficiency Strategy; Transelectrica; Using electricity from renewable sources

Transelectrica procures electricity to  In the short run on the Day-ahead cover one’s own technologic consumption Market to cover differences between (CPT) and the electricity consumption of CPT forecasted at the beginning of the 81 high voltage substations managed the year and the one daily by the Company: forecasted, and on the Intraday  In the long-term, on the centralised Market (PI) in case of forecast markets managed by OPCOM;

changes during the day, as close as Centralised Market of bilateral electricity possible to the delivery time; contracts representing 54.41% of total In accordance with the Electricity CPT, according to the electricity label labelling regulation appoved by ANRE returns notified by contractual partners, Order 61/12.10.2016, published in the the Company procured 160,136.78 MWh Official Gazette 836/21.10.2016 (with later from renewable sources. amendments and additions, made by In case of electricity procured on the Order 214/03.12.2019), the submission DAM, PI and PE the producer/supplier / term of electricity labelling returns is 1 trader associates the national structure of June in the year following the reporting primary energy sources and the annual one, consequently in 2020 electricity national average values of environmental labels are not yet available. indicators, calculated and published by Since electricity labels for 2020 are ANRE by 1 April a fiecărui pentru anul available from 1 June this year, according anterior. In 2020 the structure by types of to the ANRE-approved electricity labelling primary renewable energy sources of regulation we provide the 2019 available electricity output was the following in data for contracts concluded on the Romania:

Structure tipuri de surse primare regenerabile de Producţia de energie electrică în energie a producţiei de energie electrică din România în anul 2019 [%] Romania hydroelectric 26,75 wind 12.09 solar 2.62 biomass 0.68 others 0.01 Total 42.16 Thus the electricity procured on the DAM, renewable sources amounted to PI and PE to cover CPT in 2020 from 188,188.46. Year Quantity procured on the Renewable sources [%] Quantity of renewable DAM, PI & PE [MWh] sources [MWh] 2020 446,367.32 42.16 188,188.46

In order to cover the auxiliary service Furnizare by SFEE Muntenia Nord. In consumption of the 81 electric substations accordance with the contractual partner’s manged by the Company, in 2020 electricity labels, the electricity quantity electricity was procured through the procured to cover auxiliary services in Romanian … Exchange under contract 2020 from renewable sources was of C93/2019 concluded with Electrica 14,441.47 MWh. Year Partner Quantity Renewable Quantity of [MWh] sources [%] renewable sources [MWh]

2020 Electrica Furnizare, by SFEE 43,186.21 33.44% 14,441.47 Muntenia Nord

New technologies

The Energy Union’s strategy aims at 2. Installing sensors and developing increasing the utilisation of renewable smart infrastructures in order to electricity sources in the generation mix, monitor the condition of critical which should enhance the clients’ assets; positions and place households and 3. Implementing security solutions with enterprises in the focus centre of the respect to information confidentiality, European energy market. The roadmap of availability and integrity; ENTSO-E proposes using new 4. Non-destructive investigation technologies for such challenges. systems for the inaccessible Among the utilisation lines of new components of OHL towers technologies we can find: (underground guys); I. Digitalisation 5. Bird-repellent protection systems II. Standardisation and data exchange; according to the requirements of the III. Integration of storage systems; Environmental Guard; these are IV. Greater efficiency in utilisation of the solutions protecting the birds with Electricity Transmission Network; habitats near high voltage lines; To Transelectrica the need to 6. Systems attenuating the OHL expedite technological innovation is galloping by means of pendulum obvious. The development of new items; technologies for network equipment and 7. Determining and using the modelling methods will enable the transmission capacity established in Company to carry out its mission in an dynamic mode as complementary evolving power system. This mission is method for more efficient operation also shared by the Regulatory Authority in of existent infrastructures; the energy domain that encourages In 2020 new projects of interest were network operators to look for innovative found with respect to using new solutions. technologies, of which mention can be The Company is focussing more on made of the following: integrating the technology than on 1. Using RTDS - Real Time Digital innovation or the manufacture of the new Simulation systems for technologies themselves. Transelectrica-wide system At the same time the strategy investigations; sustains that the development of smart 2. Using Li-Ion batteries for auxiliary technologies requires significant efforts to services in Transelectrica also implement a great number of “smart substations and turning flexible the initiatives”. associated consumption; In accordance with the programmes 3. Replacing the car fleet of the developed or initiated these last years in executive branch with electric motor Transelectrica with respect to developing cars; new technologies we can find: 4. Promoting passive house principles 1. Implementing technologies for for the buildings managed by network monitoring and control, Transelectrica; including to its components;

European projects which Transelectrica is a partner of

European research project important outcomes for what electric CROSSBOW power systems are to become in the following decades. CROSSBOW (Interconnection management by interconnecting European research project renewable energies and storage units FUTURE FLOW under a trans-national wholesale market) is one of the largest research-innovation Transelectrica has been part of the projects financed by the European consortium dedicated to the “FutureFlow” Commission under the Horizon 2020 project coordinated by the Transmission Programme, a part of H2020-LCE-2016- and System Operator of Slovenia (ELES), 2017 (COMPETITIVE LOW-CARBON under the programme financed by the ENERGY) topics under LCE-04-2017 – European Commission with respect to “Demonstration of integration in a system implementing a competitive pan-European of smart grid technologies and smart market, while also accomplishing the storage, against the background of higher community emission reduction targets, shares from renewable energy sources”. Horizon 2020 – “Call for competitive low- The project consortium has 24 carbon energy” in the “Transmission grid partners (of 13 countries): 8 Transmission and wholesale market” section”. and System Operators of South-Eastern The project has 4 years’ Europe, 1 Distribution Operator, 1 implementation stage while it aims at Regional Security Centre, 2 Large approaching a series of aspects in the producers, 5 Universities, 6 Partners from context of new network codes being industry and one Association. elaborated and issues coming up such as This project began in November balancing electric power systems and 2017 and is now found in the technology establishing regional markets for system development stage, having already services. defined its “requirements” and “use cases”. FutureFlow approaches the Transelectrica is one of the application domain of secondary transmission and system operators of the frequency control, from generation to total 8 involved, with the most mature consumption and will provide performance market and playing an important part in at international level for such specific the project in terms of its network and activities of electric power systems. Taking geographical position. into account such objective the partners in At the end of the 48 months the the FutureFlow project are exploring new project proposes developing and finding solutions of power system balancing and solutions for a more efficient utilisation of flow management within the Europe-wide interconnection lines, the producers from electricity network. “Modern” consumers renewable sources and the storage units approached by FutureFlow will be able to distributed in the entire Balkan region increase or decrease their consumption in (SEE Region), by means of developing 9 a matter of seconds and thus will also products. They will represent new options accomplish their control functions, which for the present-day players as well as for nowadays are achieved mainly by the the future ones on the energy markets. thermal hydro power plants as well as by Transelectrica will participate into the conventional thermal power plants. most of the working packages organised The project is addressing both the therein, bringing its wide-scale contribution Transmission and System Operators as into this project from which it expects well as to the traders on the electricity

52 market and to manufacturers of industrial services for an efficient power system” components and of communication for the project under the Horizon 2020 framework electricity domain. programme, and axis LC-SC3-ES-5-2018- From among the project 2020: TSO-DSO-Consumer: Large-scale accomplishments so far mention can be demonstrations of innovative grid services made of the following: through demand response, storage and • Study on the balancing markets of small-scale (RES) generation, was one of four Transmission and System the two projects which were approved in Operators, in terms of control the summer of 2018 under this axis. potential, the technical There are 42 partners in the project characteristics of controllable consortium, the project began in January consumers (Demand Response – 2019, it will be developed for 48 months DR) and of distributed producers and aims at demonstrating an (Distributed Generation – DG). Study Interoperable Architecture of Network with respect to market adaptation for Services at pan-European level (ASRIE), participation of large wind power which will become an interface between parks to secondary control and the the electric power system (TSO & DSO) impact of forecast errors on the and clients (consumers), which will enable electricity output from wind sources their coordinated operation and service on the secondary control market; procurement by all the players involved • Elaborating the general architecture into this chain. The latest generation of of the Future Flow (FF) platform for - technologies will be developed and automatic activation, jointly, of the applied under this project relying on secondary control reserve (aFRR) “Blockchain” and “Big data management”, and detecting the connections and which will provide new opportunities on the implications for redispatching. Energy Market as well as benefits for the Analysis of controllable consumers integration of renewable sources, for load modification for industrial, reduction of electricity costs, etc. commercial consumers, industrial The project will provide the following platforms with self-generation but novelty components: also renewable sources with installed - New services: market rules, capacities above 1 MW; coordination and flexible distributed • Participating entities, the processes allocation from distributed energy to be elaborated, the data necessary sources; to be exchanged for secondary - Digital technologies: Internet of control (aFRR) and the redispatching things, big data management, capacities; Blockchain, Novel AI; • Identifying the requirements with - Advanced communication and respect to interactions in-between information management platforms that aggregate aFRR and technologies: which are meant to analysing the cyber security assist the plug-and-play model for requirements for data transmission; various services and tools on an IT platform sustaining the European research project implementation of the Interoperable INTERRFACE Architecture of Network Services at pan-European level (ASRIE); “INTERRFACE – Interface - Data models: will increase their aRchitecture to provide innovative grid confidentiality and will have a new

structure, providing a heterogeneous especially as regards involvement, unified exchange between various changing the role of consumers and players from Europe; the energy market by managing their - Changes and developments in the needs and capabilities; roles of players within SEN:

Research and innovation

Current and future challenges for transmission and system operators (OTS) (302-4)

The relevant technological changes that power systems are provided in the will establish together a new reality in the following figure:

Digitalisation

It will lead to higher volumes, quality and topicalness of information about the actual operation of the RET. This will contribute to informed decision-making, better RET planning and maintenance processes, so as to simultaneously minimise risks together with operational costs.

Solar energy

The developments of photovoltaic generating technologies will reduce the cost of solar energy up to 40% in the next ten years, while the price of modules will drop more than 20% for each capacity doubling. By 2025 the photovoltaic technology will provide the cheapest electricity generation in many parts of the world.

Energy storage

For its better management in the context of technological development

Bidirectional communications

For a better involvement of end clients in the improved quality of services they benefit of

Smart electricity networks

Smart grids will begin to provide self-management and will include characteristics enabling self- configuration in order to manage security, safety and reduce losses; self-regulation to approach voltage variations and self-optimisation to damp disturbances. New modelling techniques will be developed for the design, testing and verification of electricity network management.

Main challenges for the operators of electricity transmission systems in terms of research and innovation:

• Developing the information technology sector society-wide and economy-wide will also impact power systems. Using HPC data extraction Passing from a supply system based on copper to one increasingly integrating information technology, data (High Performance Computing) management and nodes, which also sustains cybersecurity issues acquires capital significance

• It is required to continue the efforts to use new materials, Using new materials and concepts, standards, instruments and algorithms that will technologies process ever more information in order to address the security issue and that of power system stability

Developing methodologies and instruments to operate the • And this to better manage the network, closer to its physical limits network closer to its physical limits, without endangering its security

Greater utilisation of renewable • In order to increase network flexibility sources

• Such as accumulator batteries that have brought about new solutions and challenges in the power system and the need to extend the range of options contributing to system Developments of other sectors services

• Digitalising the power system and the cybersecurity issues associated to such developments; more active client participation on the electricity market Digitalising the power system represent challenges which the power system respond to by investments into research and innovation activities

• TSOs will have to develop expert systems and support instruments for decision-making with a view to anticipate Maintaining system security possible emergency circumstances, to provide early and stability warning to system operators and suggest possible solutions with their success likelihood in real time

Objectives of the Research and Innovation Strategy (302-4)

The research & innovation strategy technology demonstrations consolidates the Company’s vision with (validating technologies in relevant respect to modernising the transmission and operational environments); network and providing the support  Partnerships under competitive necessary for the implementation of procedures (to deliver and priorities which are included in the commission products and solutions); Development Plan, Administration Plan VII. Personnel participation into events and Management, thus sustaining the with important innovation & research implementation of digitalisation. component both in national and The main directions provided in the international frameworks (e.g. “Strategy of CNTEE Transelectrica SA for ENTSO-E, CIGRE, congresses, research and innovation” are as follows: round tables, symposia etc.) will also I. Innovation represents the success include knowledge sharing, prerequisite to accomplish the spreading best practices etc. within Company’s mission and vision; the Company, in an integrated II. Innovation will be a priority promoted regulated manner. for the Company’s basic activities, VIII. Structuring the general and specific adding plus value by digitalising objectives in correlation with the processes, improving services and methodology promoted into ENTSO- increasing the personnel’s E’s research and innovation strategy; performance; IX. The Company’s research and III. Innovative solutions, technologies, innovation strategy will comply with systems and concepts necessary for the centralised organisation model key activities will be implemented in (steering committee, strategy general in the Company when: administrator, putting processes  They have been tested and validated under procedures, well defined roles, under ‘pilot projects’; and objective-centred management).  Or they have been critically X. Research and innovation papers will assessed under completed projects be financed as a priority both from in other organisations; one’s own sources and from others, IV. Innovation will be the engine reaching to the level of the most enabling the Company to implement consistent group of European the concepts of Learning network operators (e.g. non- organisation; reimbursable financing programmes, V. Innovation and research will sustain subsidies, grants, partnerships, etc.); ‘Digitalisation’ as a major objective; The objectives included in the VI. In the Company research will focus Research and innovation strategy add on developing the following pillars: value to the following domains:  National and international  The Company’s strategic vision; partnerships in fundamental and  Asset management; technological research (observance  Improving performance indicators of basic principles, formulating (KPI); concepts regarding technologies for  Developing essential capabilities for experimental demonstration of such network operation; concepts, validating the technologies  Capitalising the opportunities to in laboratories); improve the Company’s  Partnerships with solution and performance; equipment suppliers for product /

 Developing competence for The strategy sustains that network Company personnel; digitalisation is clear opportunity for an  Maintenance and operational efficient development and management of activities; the power system, which has proved its  Developing partnerships with the profitability as regards improving service holders of technologies and quality and operational costs. solutions; The following tactical documents Also the research and innovation were elaborated and approved in view of strategy provides operationalisation for the digitalisation: vision of all stakeholders, in the sense of - Part I: “Technical policy regarding asset implementing a flexible infrastructure, digitalisation under the modernising open and interoperable under a digital initiatives within CNTEE Transelectrica”; portfolio where traditional processes, - Part II - Concept of “Geographic especially the manual ones are eliminated Information System and Outage or digitalised so that information can be Management System”; accessible in real time. - Part III – Concept of “Testing laboratory The digital transformation of the for digital technologies and personnel energy industry will bring about new competence”; challenges for the management teams, - Part IV – Concept of “Health Centre for operational specialists and Company RET Assets; partners. The Company complies with all The pilot project was launched conditions to become a “Learning “Refurbishment of Alba Iulia substation organisation” if it fully uses the potential of using the digital substation concept”, being new technologies with a view to obtain now in the procurement stage of design, digital transformation. which will demonstrate the following To sustain such objectives, concepts: beginning 2018 the Programme to - Digital substation implement the digital transformation - Condition monitoring concept (2018-2027) was approved and - Asset management has been applied. - Passive & Smart building The actions and activities comprised - E-Learning under the portfolio of initiatives within the - Health index Digital Transformation programme targets - Risk index increasing the Company performance by - Health centre means of: - Test laboratory of digital  Innovation of operational and technologies & developing personnel managerial processes; competence  Innovation by introducing digital - Gerographic Information System technologies; - Outage Management System  Innovation by introducing new In October 2020 a Contract was concepts changing also the signed for digital services (FS & ToR), for Company’s business model; 18 months.  Developing strategic capabilities in In November - December 2020 the Company (e.g. personnel, working meetings were held following strategic assets, structure, which 10 Minutes were signed, clearing up processes, etc); essential technical issues of the design stage.

Also the following projects were In 2020 we elaborated: initiated in the digitalisation domain:  Conceptual note; 1. Pilot project “Optimising the  Design topic; operation of the 400 kV OHL Isaccea –  Feasibility studfy; Tulcea Vest and 400 kV OHL Gura  Terms of reference to procure Ialomitei – Lacu Sarat by installing design & work services; monitoring systems” intends supply and 3. In 2020 the Feasibility study and installation of on-line monitoring Terms of reference were drawn up to equipment to the two OHLs, 400 kV “Procure and install 21 integrated Isaccea – Tulcea Vest and 400 kV Gura monitoring systems for the transformer Ialomitei – Lacu Sarat. In 2020 two units of Transelectrica substations”. engineering meetings provided in the Technical-economic indicators were contract were held and detailed the list of approved all through 2020; the estimated equipment; technical details were project term is of 42 months. established for equipment, IT & TC There will be 3 stages of achievement: solutions, as well as the technical  Stage 1, installing 12 monitoring operation of installations, etc. systems, estimated term 17 2. Project “Optimising the operation of months; the 400 kV OHLs existent in SEN, used for  Stage 2, installing 3 monitoring interconnection and for power discharge systems, estimated term 10 from nuclear power plant Cernavoda and months; the renewable power parks of Dobrogea,  Stage 3, installing 6 monitoring by installing on-line monitoring systems systems, estimated term 15 (smart grid)” aims at implementing on-line months; monitoring systems onto 23 OHLs to The public procurement procedure increase the operational security of SEN was initiated in 2020. At present the and the transmission capacity by putting procurement documentation is in the the Dynamic Line Rating (DLR) concept in economic offers opening stage and the operation. winning bidder will be decided before long.

Asset management challenges for Transmission and System Operators (TSO)

Transelectrica’s smart grid policy • Network operation (dynamic asset assumes objectives and targets for the management instruments will enable following 10 years and also sustains the additional proactive measures meant to asset management strategy of improve network security and resilience; Transelectrica. monitoring the condition of network assets From the smart grid perspective will enable network operators to use the asset management will enable important full asset capacity, thus enhancing network developments in the following domains: resilience and continuity); • Network planning (the new asset • Socio-economic impact (asset management methods will enable a more management innovation can improve efficient network planning by extending the network development by balancing various infrastructure, which allows monitoring the risk issues in system operation and can condition of network assets, thus enabling contribute to reducing the defect rate a more performing maintenance and within systems); development programme);

Concepts will be operationalised by  Partially the digital substation idea means of the technical policy with respect (concepts which sustain the to asset digitalisation under the Company’s digital transformation); modernisation initiatives within  In the elaboration of design Transelectrica. documentations by the: This document will be used and  Company; applied by the Company’s organisational  Design services provider; entities and also by the providers of design  Work contractor; services: The pilot project which will test the  Into the implementation of Company innovative concepts and technologies projects for development of RET proposed under the strategic documents assets which promote: approved Company-wide is the  Fully the digital substation concept; refurbishment planned for the 220/110/20 kV substation Alba Iulia, which will be 100% digital.

Benefits of applying smart grid concepts and standards (302-5)

The benefits of applying smart grid network assets will sustain the network concepts and standards to sustain a operators’ decisions with a view to improve performing asset management: the general resilience of power systems,  Improving financial performance; thus contributing to a higher integration of  Well consolidated decisions energy sources. regarding investments and asset To improve risk management within maintenance; transmission networks one needs to  Risk management associated to implement predictive maintenance policies the operation of power systems; based on more accurate estimations of  Improved services and results; asset lifetime.  Higher operational efficiency and Real time monitoring of power flows effectiveness; within networks and the condition of  Extending the lifecycle of assets; network assets can significantly contribute Periodical preventive maintenance to decisions made for asset management activities relying on the reliability of (maintenance, upgrade, replacement).

About this report (102-3, 102-48, 102-49, 102-50, 102-51, 102-52, 102-53, 102-54, 102-55)

Transelectrica has been publishing Core option) and it comprises the reporting the fourth sustainability report, which interval 1 January 2020 – 31 December continues the road began in 2018 using 2020. the previously acquired experience to The information included in the present ever more relevant indicators for Sustainability Report of Transelectrica are stakeholders. not dealing in exhaustive manner with the This report has been executed in non-financial Company aspects, however accordance with the Global Reporting it relies on what stakeholders have notified Initiative Standards (GRI Standards – as being domains of interest. This report

60 brings about, besides updated information worldwide, without limiting ourselves to about indications known from the past, compulsory subjects for reporting as new items that place the Company on the specified in applicable legislation. line of institutions paying additional Thus furthering the reporting practice attention to globally important areas – Transelectrica intends providing annual environmental protection, employees’ reporting of non-financial information. protection and welfare, reduced gender The contact point for questions or for inequality or promoting sustainable any other additional information is in the activities. central office of Str. Olteni 2-4, Bucharest We have further selected this 3, Department of Non-Financial Reporting reporting standard in order to make certain and Corporative Responsibility from stakeholders receive relevant information Transelectrica. in compliance with present-day trends

GRI INDEX

General aspects

Indicator Indicator details Report Page chapter 102-1 Name of the organisation 1 5 102-2 Activities, brands, products and services 1 10 102-3 Location of central headquarters 9 62 102-4 Location of operations 1 10 102-5 Shareholders and legal form 1 10 102-6 Markets where it is active 1 10 102-7 Extent of the organisation 1 21 102-8 Information on employees 2 27 102-11 Approaches in terms of precaution 1 12 102-12 External initiatives 1 23 102-13 Affiliations 1 23 102-14 Message from the Directorate 4 102-15 Impact, key risks and opportunities 7 49-61 102-16 Values, principles, standards and norms 1 9 102-17 Codes of consultation and ethical concerns 1 20 102-18 Structure of corporative governance 1 21 102-19 Delegation of competence 1 22 102-20 Responsibilities at executive level regarding the economic, 1 20-21 environmental and social issues 102-21 Consultation of stakeholders with respect to the economic, 1 18 environmental and social issues 102-22 Membership of the highest governance body and its 1 21 committees 102-23 Chairperson of the highest governance body 1 21 102-24 Nomination and selection of the highest governance body 1 21 102-25 Conflicts of interests 1 20 102-26 Role of the highest governance body in determining the 1 21 purpose, values and strategy 102-27 Information of the superior structure 1 21-22 102-28 Assessing the performance of the superior structure 1 21-22 102-30 Efficiency of risk management processes 1 12 102-31 Reviewing the economic, environmental and social issues 1 18 102-32 Role of the highest governance body 1 18 102-33 Communication of critical concerns 1 13 102-35 Remuneration policy 2 29 102-36 Remuneration determination 2 29 102-40 List of stakeholder groups 1 18 102-41 Collective labour contracts 2 30 102-42 Identification and selection of stakeholders 1 18 102-43 Approach concerning the involvement of stakeholders 1 18 102-44 Key subjects and concerns 1 18-19 102-45 Entities included in the consolidated financial statements 1 11 102-46 Definition of the report contents and its limits 1 18-19 102-47 List of material topics 1 18-19 102-48 Rectifications of reported information 9 62 102-49 Changes in the report 9 62 102-50 Period of reporting 9 62 102-51 Date of the most recent report 9 62 102-52 Cycle of reporting 9 62 102-53 Contact point for questions 9 62 102-54 Compliance with GRI standarde – Core or Comprehensive 9 62 102-55 GRI Index 9 62

Approached topics

Indicator Topic / indicator name Report Page Comments chapter Ethics in business and anticorruption policies 1 20 103-1 Explaining the material topic and its limits 1 20 103-2 Components of the management approach 1 20 103-3 Assessing the management approach 1 20 205-1 Operations performed to manage risks associated to 1 20 corruption 205-2 Communication and training with respect to 1 20 anticorruption policy and procedures 205-3 Corruption incidents confirmed and activities 1 20 performed 206-1 Actions related to anti-competitive, anti-trust 1 20 behaviour or monopoly practice 418-1 Confirmed complaints with respect to protection 1 20 violations / loss of clients’ data Development and diversity of human resources 2 27-30 103-1 Explaining the material topic and its limits 2 27,29-30 103-2 Components of the management approach 2 27,29-30 103-3 Assessing the management approach 2 27,29-30 401-1 New employees and personnel fluctuations 2 28 401-3 Leave provided for child rearing 2 27-29 403-4 Subjects regarding occupational health and security 2 30 covered by formal trade union agreements 404-2 Development programmes for employees’ abilities 2 29 and transitory assistance programmes 405-1 Diversity in governance and execution bodies 2 24-25 405-2 Ratio between basic salary and the women’s and 2 28 men’s remunerations 406-1 Discrimination incidents and corrective actions 2 27-29 applied Information, consultation of employees and 2 27 Indicator propriu relation with trade unions Labour security and health 3 31-33 103-1 Explaining the material topic and its limits 3 31 103-2 Components of the management approach 3 31 103-3 Assessing the management approach 3 31 403-1 Employees’ representation within mixed SSM 3 33 (management-employee) 403-2 Types of work accidents, occupational illness, days of 3 32-33 medical leave absenteeism and number of deaths caused by working accidents 403-3 Workers with high incidence of professional illness or 3 32-33 high risk of getting professional illness Strategy and sustainability plan 8 49-55 Indicator propriu Risk management 1 11-13 Indicator propriu Responsible relationships with the community 6 44-48 103-1 Explaining the material topic and its limits 6 44-46 103-2 Components of the management approach 6 44-46 103-3 Assessing the management approach 6 44-46 203-2 Significant indirect economic impact 6 44-46 413-1 Operations involving local communities, impact and 6 44-46 development programmes Protecția mediului 4 34-41 103-1 Explaining the material topic and its limits 4 34 103-2 Components of the management approach 4 34 103-3 Assessing the management approach 4 34 Significant impact of activities, products and services 304-2 4 37-40 over biodiversity 304-4 Species found in IUCN’s red list and in the national 4 37-40 conservation list with habitats in areas impacted by operations 306-3 Significant spills 4 41

Indicator Topic / indicator name Report Page Comments chapter 306-4 Waste classification by types and disposal methods 4 42 307-1 Incompliance with environmental laws and 4 42 regulations 308-2 Negative environmental impact and actions taken 4 37-39, 42 Innovation, network improvement and energy 7,8 49-61 efficiency approach 103-1 Explaining the material topic and its limits 7 49 103-2 Components of the management approach 7 49 103-3 Assessing the management approach 7 49 203-1 Investments into the infrastructure and associated 1 16 services 302-1 Electricity consumption of the organisation 1, 7 16, 49 302-4 Reducing the electricity consumption 7,8 49- 51,56-61 302-5 Reducing the energy need of products and services 8 61

GLOSSARY

AGA – Shareholders’ General Assembly ANRE – National Regulatory Authority in the Energy domain BVB – Bucharest Stock Exchange CE – European Commission CPT – One’s own technological consumption CRE – Romanian Energy Centre dB – decibels EGRC – Risk management team of the Company ENTSO-E – European Network of Transmission System Operators for Electricity GRI – Global Reporting Initiative GWh – Gigawatt hour KPI – Key performance indicators kV – Kilo-volt LEA / OHL – Overhead electric lines MW – Megawatt MWh – Megawatt hour TSO – Transmission and System Operator DAM – Day-ahead Market PI – Intraday Market PE – Balancing Market RET – Electricity Transmission Network SEN – National Power System SNA – National Anticorruption Strategy TWh – Terrawatt hour UNO-DEN – Operational Unit of the National Power Dispatcher