Terna's Business Model

(The Business Model)

The Italian electricity system supply chain consists of four segments: the production, transmission, distribution and sale of electricity. Terna ensures the electricity transmission phase, an essential service to the community but one that does not involve a commercial relationship with end-users: it is a business to business activity. Specifically, Terna - through its subsidiary Terna Rete Italia - manages the dispatching of electricity and the development and maintenance of electricity transmission infrastructure. These operations are managed under the government-granted monopoly; the means of payment is determined by the Authority for Electricity and Gas.

Increased operational efficiency - including procurement management - the timely realization of investments and financial management optimization all have a positive impact on value creation.

Good performance in response to specific incentive schemes can further improve results. 

Through its subsidiary Terna Plus, the Group seeks business opportunities both in Italy and abroad, which can help create value in addition to the regulated activities in Italy. These activities leverage Capital the skills acquired through transmission activities. The dividend policy reflects the two components of value creation.

The centrality of the "Business model" in the structure of Integrated Reporting means that there are multiple connections to other content on Strategies, Opportunities and Risks and Performance. References to the Strategic and Development Plans for the grid have not been replicated and can be found in the "Strategic Objectives" Element, while content concerning consultation with local institutions can be found in "Opportunities and Risks." Aspects related to Terna’s organizational structure and to its operations (e.g. energy transmission and other activities) can be found in the “Organizational Overview and External Environment” Element, while the results are examined in "Performance".