Good morning. I'd like to welcome you during the earnings conference call for Tauron Group for first three quarters of this year.

Our meeting will traditionally split into two parts: we will start with a presentation of the earnings that will be made by Piotr Gołębiowski, the Vice President of the Management Board for Trading; Krzysztof Surma, Vice President of the Management Board for Finance; Michał Orłowski, the Vice President of the Management Board for Asset Management and Development. Good morning.

Next, we'll move on to the Q&A session from media and analysts that you can ask via a form. My name is Justyna Łukawska.

I'm responsible for the communications within Tauron Group. Let's start the presentation.

I'd like to ask Mr. President Piotr Gołębiowski to take the floor.

Good morning, ladies and gentlemen. I'd like to present before we move on to the financial results of our assets, let me show you how our assets were used.

I'll start into split it into two parts: let's start with the generation portfolio and then the supply portfolio. The 9 months have passed with the increase, while observing the increased CDS.

This is mainly due to the decline of the coal prices, which was partially compensated with the increase of the carbon emission allowances, but as a principle, the economics of the conventional units have has improved. With respect to the low-efficiency units, 200 MW units, the CDS are permanently negative, nothing much will happen in this area.

Another important element that we observe is an increase of spot and next-day market, balancing market prices, lower wind conditions, weaker wind conditions, and lower outdoor temperatures that had an impact upon our renewables operation. Unfavorable hydrological conditions also due to the 20% less water flows also led to the degrading of the ability to generate electricity from our hydroelectric power plants.

We were dealing also with a relatively higher level of redispatching of renewables sources by the TSO that was above 1 TWh, what was increased by about 65%. This is quite a symptomatic event that will be observing probably also in the subsequent years, in the subsequent months.

An additional element that definitely we felt in many business aspects was the number of negative hours. We had within the first 9 months 354 on the first fixing versus last year's period, similar period, it was 196.

Therefore, we've seen quite a strong growth here. Regarding the electricity generation of our group is 7.7 TWh over the 9-month period.

It's an increase by 5% versus the same period of last year. Regarding the split into conventional assets and renewables assets, in the conventional, it was a 5% increase as well.

In terms of renewables assets, which include wind, solar, and water, hydro, colloquially speaking, the level of production was maintained, it's flat versus the production last year, but we observed an increase of the production from our biomass-fired units, which translated into a total increase of of the production assets low-emission at the level of 5%. The results of a consequence of increase of production from the conventional units was an increase of consumption of coal, which came in at 3.2 million tons.

It's a 3% increase versus the 9 months first 9 months of 2024, and increase of consumption or demand for the carbon credits at the level of almost 6.5 million tons. It was an increase by 6%.

I mentioned the redispatching by the TSO of our capacities. As far as the share of Tauron units in this redispatching is very low because it's at the level of 1%, which versus what's being redispatched all over Poland, but this is a major contribution to it is due to our operations related to anticipating the negative hours auto-redispatching of our generation units: wind farms and photovoltaic farms, which meant that we had a saving of around 4.5 million PLN.

The dispatchability of the units, availability of the units, I assess it as a principle as satisfactory. In terms of renewable assets, it went up versus 2024, our photovoltaic farms and wind farms were working very well.

The wind farms had a 97% availability rate, and gradually the availability rate of hydro power plants is going up, went up by 3%, but still it stays at the level of around 86%. It's worth noting the availability rate of Tauron generation units: 75% of availability rate meant caused by the overhaul, major overhaul of Łagisza power plant.

It took 5 months. It had an impact on the availability rate versus last year, as well as a level of failure rate that we still have to face at Nowa Jaworzno that we are still working on.

It's too high. With respect to the cogeneration units, an increase of availability rate by 2.5%, we consider to be a satisfactory level, and no major reasons except for the partial failures of the units for this availability rate to cause any need to comment in any way.

Let me move on now to the portfolio supply portfolio, supply assets. The domestic electricity consumption was declined by 2.5% during that time.

Our consumption of electricity on our distribution area remained at a stable level, flat. It didn't go down.

We observed an increase by more than 3.4% with respect to electricity consumption by the households. This was the result of connecting additionally about 50,000 consumers to the grid, but was compensated by about 1% decline of electricity consumption among the B2B customers, partly caused by the reduction of production in the automotive subsector, steelmaking subsector, and the mining subsector.

In terms of electricity supply, we observed the level of 18 TWh, a 9% decline versus last year. The decline by about 1.8 TWh was due to what we already indicated presenting the results of first half of the year: putting in order or systematizing our supply portfolio.

We're trying to eliminate the low-margin-generating contracts, contracts that generate commercial trading risk. Let me be frank here, but also the decline of electricity supplies caused by the partial expansion of our competitive competing, excuse me, companies that in particular are focusing on SME customers.

However, relatively steadfastly, we are observing a decline of this expansionist activities. We are trying to protect our markets, and this rate of acquiring of customers on our in our area by competitors went down by more than 50% versus last year.

The new energy products supply sales are growing. It's about 1% level now, with almost 15% of greening level of sales.

This felt in the total consumption of electricity of customers that have bought our green product versus the total demand of the supply portfolio customers. The number of customers interested in the new energy, the long-term 9-year product that we are offering with at a fixed price went up by 22%.

It is now almost 370,000 of such customers. At the same time, we launched in July a new product: Cheap Hours.

We are very happy with this product on this product now. We have almost 15,000 customers using this product.

An important element that I'd like to emphasize is the element of our product policy that incorporation of customers generates benefits on in energy bills, utility bills. Customers that took advantage of our dynamic pricing within the first 9 months of the year, they gained an average sales price in the region of 420 PLN.

Let me say that this 505 is a benchmark price within including excise, but in case of customers that are actively managing their electricity demand, this level of price level went down significantly. It's a clear indication of how much those products are required, are in demand, and that they find a very high demand in this product offering that we are offering.

That's all regarding the results of our assets, regarding their productivity and operations, please continue.

Thank you, Piotr. Let me now try to present the financial results after the operational operating part.

Regarding the key financial data, if we look at the revenue, the revenue year-over-year went down slightly, -3%. However, let's remember that a certain portion of this revenue is compensation payments.

If we strip out the compensation payments, the sales revenue would go up by close to 4% year-over-year. As a matter of fact, these compensation payments are, in fact, of price freezing to a large extent, and they depend on the level of market price and the price is set in the tariff.

Now the space between the frozen price and the tariff price is much lower, the level of compensation payments is much lower year-over-year, and the number of consumers is smaller year-over-year. If you look at EBITDA, EBITDA year-over-year went up very significantly, markedly, another quarter of very good earnings.

We are continuing a good trend. In total, 3 quarters versus 3 quarters of last year, EBITDA went up by 33%.

Here it's also worth we can boast the consensus of of the analysts. We beat this consensus in the cumulative quarterly analysts' by more than half a billion PLN.

The net profit, 2.9 billion the net profit, also a record-breaking performance in the history of our group. Here the key issue versus last year was total lack of impairment charges, write-downs.

Last year we booked major write-downs related to the conventional assets. As far as CapEx is concerned, close to 3.7 billion PLN in total.

It was very similar, almost flat versus last year. Michał will speak more about that in his section.

However, as far as the net debt to EBITDA ratio, it currently stands at 1.4. It went down by one versus the comparable period of last year.

Here to a large extent this was impacted by very good operating earnings, it resulted naturally in the decline of the nominal debt. If we look at the comparable EBITDA, this difference year-over-year is a bit lower, we are saying that it went up by 15%, and the key aspects such as one-off events that had an impact on the fact that the reported EBITDA differs from the comparable EBITDA are all related to the Supply segment.

Starting from next year, from last year, we kept repeating it a number of times, we got a positive interpretation regarding the VAT deduction in the reduced payments for customers. This is VAT on the 125 PLN, by 125 PLN the individual customers' bills were reduced.

The other portion of those one-off events in the Supply segment, one can say, stems from the non-uniform allocation of revenue and cost. This was due to the very not typical events of setting the tariff for 1.5 year in 2024.

Let us remember that the beginning of July last year, the tariff in the middle of the year was changed, and it was set for a period of another 18 months. At least that's what the assumption that meant that the cost that of electricity that already were hedged last year, they were higher than the tariff-based revenue.

On the other hand, the costs for the current year were to be a could be lower versus the tariff-based revenue. This difference is 275 million last year of losses from the on the margin on the G tariff.

This year, of course, had it not been for the other event, this revenue should be higher accordingly in the 3 quarters by 270 million PLN. This was mainly was the main reason for this comparable EBITDA to be slightly lower than the reported EBITDA.

Let's move on to the slide showing the EBITDA in and the results of individual segments. Here invariably our number one generating the key part of EBITDA in the group is Distribution, another year where more than 60% of EBITDA is generated by this segment.

The second-biggest contributor to EBITDA, it's worth mentioning that this EBITDA of first 3 quarters in the Distribution segment reached more than 8.3 billion PLN. The second segment that is key in our case is the Supply and Wholesale Trading segment.

Here the EBITDA close to 800 million PLN. Again, this is the second-biggest contributor contributing segment to EBITDA.

Number three spot on the podium, every year this change, this to a certain extent, and the Renewables is alternating with conventional generation segment. This year the conventional generation segment generated better results versus the Renewables.

I will elaborate on that on the next slide. Let me just add here that all the all the EBITDAs are positive, this is also a very good result in the context of the past years when not all segments in our group were generating positive EBITDA results.

Moving on to the next slide describing individual segments. As I mentioned, the key segment, Distribution, an increase in the comparable period by more than 700 million PLN.

Two key factors, one can say: one, as far as to generate this margin here, higher value of regulatory asset base, this is the result of the investments that we made in past years; and the second factor is the weighted average cost of capital that close to 0.4 percentage point went up year-over-year. This is the key factor behind the increase of the EBITDA in the Distribution segment.

The second factor, which is more variable over time, is the settlement of the regulatory account. This year we have a positive settlement of the regulatory account; last year regulatory account was negative, this year is positive, next year is going to be negative again.

This is, as a matter of fact, the result of settlement of the volume, the difference between what was agreed upon in the tariff and what was actually performed in the n+2 timeframe, 2 years later. The actual performance volume is accounted for in the segment with a 2-year lag, 2-year delay.

Regarding the Renewables segment, the key factor, unfortunately, it declined by 71 million PLN year-over-year. The key factor behind it was the decline of the prices on the market.

This had a direct impact upon the EBITDA of this segment. Regarding the Generation segment, good results here, good earnings year-over-year.

The volume went up, and however, one thing is the supply sales volume that Piotr mentioned, the production volume and sales volume. The sales volume is important here.

In the current year, the margin due to an increase of sales volume went up by 300 million PLN, we managed to generate good earnings, good results. It is generated in all three areas: it is result of an increased futures sales, increase on the balancing, increased sales on the balancing market, and increased sales on the spot market.

All those factors contributed to the fact that year-over-year, we have a higher EBITDA by 300 million PLN. Regarding the second important component of this growth, more than 100 million was generated by the system services, ancillary services, an increase of revenue from the capacity market.

This is first of all an inflation-based increase where this revenue is increased by this rate. Let us remember there's a lag and the conversion inclusion of the high inflation rates from previous years.

The balancing market we mentioned a number of times, last year in June, a new balancing market was launched. Of course, in Q3 it became highly normalized, but the first two quarters generated a strong growth year-over-year.

Moving on to the Heat segment, here the result, one may say, is worse year-over-year. However, if we strip out the one-off event, that in the core operation the result is slightly better year-over-year.

Especially in the district heating part, the results are better. Of course, here the key factor behind it was volume, margin generated, increase of the transmission rate, transmission tariff.

On the district heating part, results are better, but on the electricity sales part, the results are better, but the main determinant factor that the year-over-year result was weaker is the effect of the deconsolidation of the Tameh Czech subsidiary last year. In in the recalculation of this deconsolidation, the company generated last year extra extra results in the region of 64 million PLN.

It was a one-off event that couldn't have been repeated this year, it was a determining factor for the results earnings of the segment in the first 3 quarters. Regarding the Supply segment, having an improvement year-over-year, more than 100 million PLN, the EBITDA went up.

Here one may say that two of three key factors behind it: after the negative one I already mentioned, it's negative, it's a one-off event that was positive in 2024, the positive tax interpretation, VAT tax interpretation, but we have the two factors: much higher margin for on the sale of electricity to the business customers and the MSEs and a bit higher margin in the G tariff. Here one could see why only such a difference, although try to factor on the first bridge that we described the comparable EBITDA, we're indicating 250 million PLN.

Let us not forget that we other factors were negatively had a negative impact here. The negative impact came from the profile issue and the prosumer issue and the payments for the distribution in this segment.

These two factors have a negative impact. That's why it's not a these factors do not translate, these one-off factors do not translate on the increase of EBITDA that is stems from the sale of electricity to individual customers.

If we can move on now to the issues related to debt. For some time now, we've been showing the full bridge both the gross debt as well as the net debt.

Looking starting from the gross debt, it went down by more than 2 billion PLN year-over-year. Of course, the key aspect is the operating results, as showed before, the operating results are much better year-over-year, as showed before, it has an impact upon the operating cash flow, and generally it led to a decline of debt.

What we also like to draw attention to is, of course, in the 3 quarters this year versus 3 quarters of last year, it improved balance of working capital. If we look at the individual item that probably are interesting for throughout this bridge is a slight decline in the provision for the carbon credits.

This is due to slightly lower prices, average prices, including the average purchasing price of CO2 allowances. What we have been showing for two quarters now, or since the previous quarter, is the matter of including the National Recovery Plan funds.

Here we want to be fully transparent: we are showing the full inclusion of in the first in total this we drew more than 900 million PLN in the Distribution segment, out of which 300 slightly more than 300 million were included in the debt according to the IFRS 9, whereas remaining almost 600 million were included in the prepayments and accruals according to IFRS 20. In total, you can see that this due to the difference in the interest rates, a significant portion of this debt is treated as a subsidy-based component, therefore, is included in the prepayments and accruals item.

Another thing that I drew attention to in previous quarters is the declining level of the bonds, subordinated bonds. This is, of course, the debt with the highest interest rate due to its nature, and we are gradually exiting this debt.

In December last year, we exited, and let me explain right away that our intention is to repay the significant portion of this debt in December of this year and March next year. This item will be going down.

For the lease item, this is item can go up because the lease according to IFRS 16 also includes the easements, rentals, and is strictly related to our growth in renewables and the Distribution segment. Finally, the other side that the group's liquidity is stable, first of all, due to the good operating result, secondly, due to the available sources of financing: so more than 6 billion PLN capable financing we had as of September 30.

That's all regarding the financials. Let me hand over the floor to Michał, who will speak about the investment portion.

Michał Orłowski (Vice President of the Management Board for Asset Management and Development):

Ladies and gentlemen, the total CapEx of Tauron Group for first 3 quarters of 2025 came in at about 3.7 billion. It's a stable level, flat versus last year.

Our largest segment remains the distribution line of business, where CapEx close to 70% of this year's CapEx, with 46% was allocated to the construction of the new grid connection both for the sources and the new consumers, and about 37% for refurbishment and replacement of grid assets. Apart from that, we are continuing the replacement of meters with smart meters.

Now in our grid, we have installed 2.4 million of meters, we are complying with the regulation target at the current level. It's also worth to mention the dispatcher communication.

We continue the implementation of TETRA, which was especially important term in case of failures, disasters, and problems with the grid, also enables emergency communication in crisis situation. The second largest segment were Renewables regarding the CapEx.

Year-over-year, we've been observed a significant decline. This decline is partly due to our investment cycles.

I will elaborate on it on the next slide. We have several investment projects that are close to completion, therefore, the outlay is not fully reflect the tangible progress on these investment projects.

We can expect that those investment projects in Q4 will accelerate. We are also facing the launching of further investment projects, especially the battery energy storage systems in case of getting funds from the national government and further photovoltaic projects.

That's Renewables. Regarding the Generation, we are talking about bringing our assets to make it usable, to extend its life cycle in line with the strategy for Łagisza power plant, our second most efficient unit, 460 MW unit, also with a strong heating component, so much better economics than the 200 MW units.

This year we're dealing with the final major overhaul in the life cycle of this unit's operation. In the strategy, we plan that the Łagisza power plant will be operating until 2035, hard-coal-fired, that's recent major overhaul required to enable it to operate over that timeframe.

Apart from that, we are continuing the repair program for Jaworzno 910 MW units. The availability rate this year was unsatisfactory for this unit, now we are performing repair actions that were defined at the time when we were finalizing the talks to end the dispute with Rafako.

These are the final adjustments to make the unit to operate at a higher availability rate and in a more predictable manner generate electricity. Regarding the Heat segment, this year we are completing two major investment projects, the gas-fired boilers: Katowice and Bielsko.

These investment projects are already commissioned. However, the outlays related to the completion of those investment projects are not fully yet visible here on the slide.

This is due to the process of talks and settlements with contractors. We also launched a major project over 40 million PLN, and this is gas-fired engines also in Czechowice, a project that financially is not yet fully visible in financial outlays, but next year those expenses will accelerate.

The majority of our expenses for the transition of the Heat segment will be seen in the next year. The majority of the siting decision are related in next year and the 2028-2029 timeframe will be the majority of CapEx.

Supply segment and other: here for IT investments, we allocated 100 million PLN; maintenance, soft lighting about 50 million; expansion of the fiber-optic network as part of the program subsidized partly from the National Recovery Plan and the Operational Program Digital Poland, 36 million; and finally, implementation of the Central Information System Market on the energy market, 20 million within the first 3 quarters with a higher spending plan next year. Moving on to the investments in the Renewables, we are about to complete the Nowa Brzeźnica and Sieradz wind farms.

Here we're at the stage of final acceptances, we are planning to complete both of these investment projects by the end of this year. The wind farm Miejska Górka is moving faster than we originally assumed in the schedule.

The first turbine was already installed, further turbines are being delivered, and in the coming quarters further turbines will be installed. Bałtów and Postomino PVs are also close to the completion.

We are planning to commission by the end of the year. Energy storage systems: Trzebinia and Czechowice, these are our first energy storage facilities.

They are physically already at the construction sites. We are at the time of testing, basic security, and powering up, and we are planning to commission them in February of 2026.

On the list of energy storage facilities that are under construction, we assume there will be significantly more projects in the coming months. We are facing a number of investment decisions regarding the construction of further battery energy storage systems.

That's all regarding the investment projects, let's move on to the Q&A session.

Thank you very much for the presentation. Let's move on to the Q&A session.

Let me remind you that you can ask them using a form. The first question: Why did you make a decision in the dominating part to use the Chinese solutions for the smart electricity meters?

Don't you see the threats from the operating or maintenance point of view? Michał Orłowski (Vice President of the Management Board for Asset Management and Development):

Ladies and gentlemen, let me remind you that in the Distribution segment, we are dealing basically with the majority of technologies and solutions coming from the domestic entities. The majority of technologies we are using is implemented locally.

The construction works are performed by far by the Polish companies. The meters that we are buying are the certified meters.

We buy them under the public procurement law procedure. They are also tested by us regarding the stability of their operation and in terms of complying with our cybersecurity standards.

As of today, in reality, these are mainly Chinese solutions because of their price competitiveness. However, as part of the entire CapEx that we have, they have a relatively small portion, and the share of local content is very significant.

We have certified solutions, and they are fully certified.

Another question: Are there any premises for Tauron to pay out dividend next year?

Let me take over this question. Of course, it keeps coming up again, again, again during our earnings conference calls, and I will not change our rhetoric too much because last time we said that we intend to take the decision on the dividend after we have completed the full financial year, have a full view over the full financial year.

We are looking at the subsequent years as well, and based on the data, we will take a decision as far as the payout of dividend is concerned. Reemphasize here that, once we start paying out the dividend, we want this to be a continuous process, not a one-off.

Definitely, this projection of further subsequent years has a major bearing on the decision to pay out the dividend.

Thank you very much. Following questions are similar, let me read the first one: What's the risk of a decline of regulatory asset base to WACC, weighted average cost of capital, to 8.59%?

Also, non-tariff revenue can drop, or should we add the 35% of CapEx component to the regulatory asset base this year? The recent announcement by the President of Energy Regulatory Office regarding the decrease of weighted average cost of capital to 7.8%, 7%, impact upon the process of approving the distribution tariffs for 2026?

By how much the regulatory asset base can go up in 2026? Michał Orłowski (Vice President of the Management Board for Asset Management and Development):

Let me start, and I'll ask Krzysztof to supplement my answer as far as the non-tariff revenue and the financial perspective. Regarding our knowledge as of today, we know that we are in the tariff process.

The expected results will come in middle of December. In parallel, certain proposals came out with a working group working at the Ministry of Energy, the conclusions of which are to be known first quarter of next year.

As of today, it's difficult for us to comment on what will be the results of work of this working group. We are happy to see distribution companies being present in this working group represented by PTPiREE, key trade organization of the distributors, which represents 95% of the network.

We see it as a good opportunity to discuss tariff mechanisms. Number of questions that came up both during our earnings calls and during direct conversations with financing institutions, foreign investors, each time they ask about the weighted average cost of capital.

It's a good opportunity to discuss it, not on how much the WACC will be in the given tariff period and what should be the remuneration for the utility sector on the long term. We have examples of Western countries, in Spain for instance, where that sets up targets for a longer timeframe.

We know what has passed regarding the results, limits for the financing institutions and our investments. At the same time, translates into the decline regarding the potential expectations of financing institutions.

Therefore, such a discussion about the long-term model for remuneration of the distribution assets could be definitely worthwhile. I think for all the participants of the market, it would be beneficial.

However, the levels themselves, the figures themselves, as of today, we know that the results of work of those working groups are to be known in first quarter, therefore, we actively through Tauron Dystrybucja subsidiary will definitely be taking part in this regulatory dialogue. As of today, it's difficult for us to comment on specific levels, as we understand that group is to work out a solution that will combine the interests of the distributors and consumers.

Let us remind you that the distribution investments are key for the energy transition. We have certain industries that require more electrification, increase of consumption in heat, the capacity, connection capacity.

On the other hand, distribution is a backbone that enables connecting new sources, the battery energy storage facilities, and enables paper operation of the system. We hope that the results of this Distribution segment will allow us to support energy transition and implement our strategy.

Krzysztof, would you like to add?

I'd like to refer also to individual parts of the questions that were asked here, because there was a question about the 35 component of the CapEx. Of course, this is, of course, connected to the entire tariff-related discussion.

However, in our opinion, 35% of CapEx added to regulatory asset base as of the end of the year is justified, and so far there were no discussion about including the subsequent years. Regarding the tariff-related revenue, here I can say that they're good, but this is a recurring component.

I understand the issues here, the connections, grid connection, resultant power collisions, or revenue from the passive energy, or other accounts, I could put it this way, that I quite prepare about that. Regarding the tariff itself, let's remember that tariff is very important, and at the end of the day, the EBITDA stemming from that in the Distribution segment is very important for our group and for the entire investment process.

As I said as a model, we assume the earnings in the Distribution stay within the Distribution. However, based on the EBITDA generated by Distribution, we develop the debt capacity of the entire group.

This magic net debt to EBITDA 3.5, 4 is based upon the group's EBITDA enables implementation of this project not only in the Distribution, but for the whole group based on its debt capacities. The higher EBITDA in Distribution, we can implement more investments that will bring to better energy transition for the entire group.

The discussion has also had an impact upon the Distribution, but on the debt capacity of the entire group. That's all I think we can say about the distribution tariff.

Thank you very much. Next question: What is the risk of setting up provision in Q4 in the trading line of business?

I assume that these are the issues related to write-off or charge to the fund. If not, please supplement this.

Let me answer in this context. There's an indication from the Energy Regulatory Office about the audits having been initiated at electric utilities related to the amount of the charge of the write-off to the fund at the end of '22 and full 2023.

We cannot say much about the level of risk only after the audit and the final conclusions, we'll be able to evaluate whether there's a discrepancy between our approach to the calculation of the allowance versus what the President of Energy Regulatory Office's position is. Then we'll take a decision whether this provision should be set up.

Thank you. Hard coal prices in 2026 can be lower than the ones observed now on the spot market?

The current hard coal prices became equal to the ARA ports versus Polish prices, the Polish index. We suppose that this level of prices will not be lower, will be at a similar level as far as what we are observing today and we are foreseeing for the next year.

Next question: What was the result in Q3 of 2025 on the buybacks of electricity and on the balancing market in the Generation segment?

The total result on the balancing market and the electricity buybacks in the context of capacity offers, about 150 million PLN in Q3.

What is the expected negative impact of the settlement of regulatory account in 2026? Here

it's quite a simple answer. We already know these figures: 170 million PLN in '26 alone.

I'm not talking about the year-over-year comparison. This year we have positive, minus 170 million coming in next year.

Thank you. The next question: Why such a weak result of Renewables in Q3?

Let me put it this way, that the key factor, as I mentioned in the presentation, of course, the lower prices year-over-year. However, let's remember about two other factors, namely the volume.

Volume also is lower. Why the volume is lower?

One can start thinking about it, but unfortunately, the meteorological conditions were not favorable. We commissioning new wind capacities, and still the volume of electricity generated from wind is lower year-over-year.

Of course, hydroelectric power plants, unfortunately, the volume was a determining factor. Finally, the factor that was quite important, we have a major decline on the green certificates market, not only some units of ours are losing those entitlements due to the 15-year timeframe having elapsed, and secondly, the prices on the market are declining year-over-year.

The key factor being the price on the market, second factor the volume, and the first factor, the declining price and decreasing volume of green certificates.

Thank you. The next question is coming from Mr.

Paweł Puchalski: Isn't the company concerned that due to the very low CapEx in the Distribution, significantly lower versus the regulatory, the regulator can decrease the WACC of Tauron in 2026 as it happened in 2025?

Michał Orłowski (Vice President of the Management Board for Asset Management and Development): I am a bit surprised by the way this question is formulated: an increase of 18% year-over-year in the Distribution and calling it very low and significantly lower than the '31. In fact, we informing before the between 15% and 25% increase of CapEx year-over-year in Distribution is reasonable level so that the implementation market could adjust and provide appropriate supply and to have us a sufficient number of permits for implementation of investment projects needed by the distribution business.

Growth is definitely as planned, on track. We don't perceive this CapEx as very low.

It's an increase that is in line what we assumed in the strategy. Of course, there was no split per year, but this is part of our assumptions.

Let me say that last year and this year, we are a bit above the plan because Distribution has a certain flexibility of spending year-over-year, therefore, definitely we do not consider the increase of close to 18% after the first 3 quarters as a very low CapEx. Here we do not expect this to be specifically penalized due to the CapEx level.

Thank you. Next question: What capacities in the battery energy storage systems do you expect to arrive at the end of 2026 and at the end of 2027?

Michał Orłowski (Vice President of the Management Board for Asset Management and Development): Here

we do not publish detailed forecast. What can I say, we won the capacity market auction with 170 MW capacity level.

The production must start before 2027. However, a large portion of this project, we accelerating in parallel there is a portfolio of projects that were submitted for the National Recovery Plan funds for the National Environmental Protection Fund, waiting for the decision.

I will not give you the exact figures. This is depends upon these two factors.

In 2027, we expect a major acceleration. We want at the end of 2027 to be talking about a potential hundreds of megawatts, than tens of megawatts, but in 2026 it's going to be still a year where we will not be able to reach those levels.

Another question: Whether in the capacity market auction for 2030, will you take part with the gas-fired projects? If so, which ones?

Michał Orłowski (Vice President of the Management Board for Asset Management and Development): Regarding the capacity market auctions in 2030, I had another question about the status of readiness of those projects. We are now at the point where Łagisza, Jaworzno, and Łaziska projects can take part in the capacity market auction, the matter of advance payment will be decided in the coming days.

There's an option for us to take part as far as details of the auction strategy for our taking part in this is quite a trade secret, quite an important one, but the projects are possible. Participation in this auction of those projects are possible.

We're talking about two 400 MW units: Łagisza and Łaziska, and 67 MW in Jaworzno in the gas-fired technology, peaking, open-cycle gas turbine. The tenders have not been announced yet, however, they will be announced in the coming months.

Thank you very much. What are Tauron's plans in the context of the December auction?

I think I partly addressed. Let's move on to the next, 19th question.

Next question: What are the plans of the company for the upcoming capacity market auction implementation of further gas-fired projects and battery energy storage systems projects? Are they dependent upon acquiring the support?

Michał Orłowski (Vice President of the Management Board for Asset Management and Development):

Regarding the gas-fired projects, we discussed already. As far as the battery energy storage systems are concerned, we don't see first market for achieving profitability of this type of projects.

We are now dealing with the adjustment factors for the energy storage facilities make the level of support per megawatt is relatively low, definitely lower than for the other types of units. Therefore, we don't see any connection to the capacity market auctions, but let me be frank, there are other sources of finance that are important, in particular the subsidy program organized by National Environmental Protection Fund, which have a major impact upon the economics of our battery energy storage systems, but

support systems, yes, but not as the capacity market auction. Regarding the battery energy storage systems, we have a supplement to the question regarding the trading: The risk of setting up a provision in the G group,

in the trading segment? It's difficult to assess.

We filed the tariff application. Don't get any response.

Energy Regulatory Office is working all the time. We don't have any feedback, neither positive nor negative.

We are patiently waiting for the first assessment of the parameters of regulatory revenue that we proposed. We'll see what happens.

Energa sold recently its shares in one of offshore wind farm projects. Are you considering such an option?

Michał Orłowski (Vice President of the Management Board for Asset Management and Development):

I think that regarding our offshore wind farm projects, let me remind you, we are a minority interest holder in Bałtyk Wind Farm II, the main Bałtyk II, PGE is the main shareholder. At this stage, I will not be giving any detailed comments.

We are at the stage of holding strategic discussions about the future of this project, held jointly with our partner. We will be informing in the regulatory filings, if the decision is made regarding this project.

Another question: What is currently the level of outlays on the peaking gas-fired units per megawatt? Michał Orłowski (Vice President of the Management Board for Asset Management and Development):

The topic is dependent upon the technology and details, but order of magnitude: 2 million PLN per megawatt, 3 million PLN per megawatt. These are roughly the amounts we are talking about this type of technology.

Depending upon the detailed solutions, they may vary slightly.

Thank you very much. That was the last question.

That's all for today. Thank you very much for all the questions, for the answers, for the presentation.

We encourage you to follow our activities on an ongoing basis, and I wish you a nice day, and see you at the next conference calls. Thank you very much.

Thank you.

See you next time. Thank you.