What Terna does and the sector in which it operates

(Organizational Overview and External Environment)

Terna is the largest independent grid operator for electricity transmission (Transmission System Operator - TSO) in Europe, and the sixth globally, in terms of Capital kilometers of lines operated.

Terna manages the transmission of energy in Italy and guarantees its safety, quality and cost-effectiveness over time. It ensures equal access conditions to all grid users. Terna also develops market activities and new business opportunities using the experience and technical expertise gained from operating complex systems. It creates value for shareholders through its strong commitment to professional excellence and its responsible behavior towards the community, respecting the environment in which it operates.

In Italy, Terna carries out its role as TSO under a government-granted monopoly. Relationships with the electricity sector operators are strictly regulated by the Authority for Electricity and Gas (AEEG).

Terna‘s investment plans (the Electricity Transmission Grid Development Plan and the Safety Plan) are drawn up in response to the efficiency and safety needs of the electricity service and are subject to departmental approval.

The information relevant to this element relates to the Group's organizational structure, its main activities and services, as well as to the wider energy framework in Italy.

The context description, on the other hand, includes legal, legislative, social, environmental and political factors, which influence the company's ability to create value in the short, medium and long term. "Risks and uncertainties to which Terna and the Group are exposed" is covered in the relevant element "Opportunities and Risks".