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Hello everyone and welcome to Chess Group Financial Results 2024 conference call. It's my pleasure to welcome Martin Novak, Chief Financial Officer and Pavel Sirani, Chief Sales and Strategy Officer who will walk you through the presentation and then we will have time for questions and answers. I'm now handing over to Martin.

Thank you. Good afternoon and good morning, everybody. I will go through first two sections of the presentation. So, when you look at slide three, you can see actually our EBITDA and net income results for 2024. uh there compared to our guidance from november 12th we actually increased the real numbers significantly so we achieved 137.5 billion check round ebitda and 38.1 billion adjusted that income the reasons that actually led to higher ebitda than originally expected in november are are coming from Two parts. One is actually generation segment, which is plus 5 billion check rounds. The main reasons are listed on the slide. Revolution of derivatives, high prices, then originally anticipated update of provisions and lower cost. and higher operational availability of our nuclear and hydroelectric plants. In other segments we had lower purchase cost of commodities and also higher revenues from connection of the customers into distribution segment. So very simply taking our adjusted income and applying our payout ratio of 60 to 80 percent of of this adjusted income, you would come to a potential dividend of 19 to 25 billion Czech crowns or 35 to 47 Czech crowns per share. On the next slide, we have more information about our acquisition of GasNet. We acquired Czech gas distribution that covers the vast majority of the territory. You can see it actually on the little map. With the exception of Southern Bohemia and the capital city of Prague, we cover the entire Czech Republic. And actually numbers are consolidated since September 1. We acquired 55.21% stake. The remaining 45% is held by two financial investors. There are main indicators, financial and also volumetric data. Those that are actually worth highlighting is the size of the distribution of 59 terawatt hours are actually transported of natural gas a year, 65,000 kilometers of gas distribution network, almost three quarters are actually hydrogen ready. 2.2 million connection points in the country. EBITDA around 11 billion Czech crowns annually and net income about 4 billion crowns annually. And, you know, this asset is not only a very interesting investment from financial point of view, but also would help us actually to achieve our goals in converting our heat plants to CCGT where more gas will be needed. And also in the future, also power plants having better access to infrastructure and of course gas as a result of our trading operations. Next slide, you can see actually a few highlights of our nuclear assets. With more details provided, I would just maybe stress that we are increasing the generation volume in existing power plants and our ambition is to achieve 32 terawatt hours per year. We are actually getting close in 2025, 31.8 TWh that you would like to produce, as you will see later. The details of how this should be achieved are provided in the text. We also ensured or contracted non-Russian nuclear fuel from Westinghouse with the first deliveries to be provided this year. We selected a preferred supplier in a tender for construction of new nuclear units in Dukovane. It is KHMP, Korea Hydro Nuclear Power Company of South Korea. It was actually selected as a preferred bidder in July 2024. Negotiations on the contract actually are ongoing. and signing the contract should be happening sometimes during the second quarter of this year. We also became a strategic shareholder of Rolls-Royce SMR and continue to prepare SMRs in our country. South Korea, on next slide actually, KHMP information is provided with more details. So basically, one more thing is worth mentioning. Also, the paperwork actually and the approval processes are running according to schedule. So on February 27, we received a zoning permit. uh for new dukovani side uh and we also uh negotiate not only the colony to extension but also a having option on two nuclear units in tamilin uh on next slide you can see details on our partnership with rose royce uh we acquired uh approximately 20 stake on march the 4th and the logic is as we already stressed out last time in November that we would like not to be only customer of future SMR providers but also participate through our chain of suppliers on construction of those units not only for us but for other customers as well and be able to utilize actually our expertise and supply chain in those projects. Again, more detail is provided on the slide. On the next slide, you can see how we are doing in ESG agenda. In 2021, when we started officially communicating ESG, Agenda, we set a goal to be among 20% best companies worldwide measured by CSR Hub. And we are actually now, we have got actually gotten between six or among 6% best companies. So we already overachieved our original target as you can see on the chart. on the left side with again more details provided. So we are happy that we are on the right track. Financial outlook for 2025 on slide number nine. This is important slide. Actually, we are aiming at 125 to 130 billion EBITDA and 25 to 29 billion check rounds of net income. The main changes year over year are lower prices, power prices that are declining in the future. and also lower revenues from ancillary and regulation services and lower revenues from coal sales. Positive effects might be coming from or will be coming from us acquiring GasNet, which will bring about 7 billion Czech crowns into our EBITDA and higher utilization of nuclear plants, where we should increase year-on-year utilization pretty significantly. Selected assumptions of the current forecast, we aim to produce 43 to 45 terawatt hours in the Czech Republic. Average realized prices of electricity generated in the Czech Republic are 120 to 125 euros per megawatt hour. Total depreciation and amortization of around 50 billion Czech crowns, 6 billion of which is attributable to Gasnet, and another 7 billion is attributable to accelerated depreciation on coal assets. Windfall tax of 26 to 30 billion to be expected on 2025 numbers. So those are the main highlights of the year. Now I would continue with financial results and detailed discussion on EBITDA and net income. mainly comparison with 2023, which is on slide number 11. You can see that our operating revenue has grown slightly by 1% to almost 345 billion Czech crowns. Our EBITDA, as already mentioned, is 10% higher on a year, achieving 37.5 billion. Operating income 93.4 billion or 11% better. Income taxes are actually a function of pre-tax profit, which means it's growing as well as our EBITDA is growing. So in total almost 53 billion Czech crowns, 32 billion out of which is attributable to windfall tax. Our net income is actually 30.5 billion, which is 3% better over 2023. Adjusted net income is actually 9% lower. Adjusted net income has achieved 31.8 billion check rounds, and I will cover the adjustments on the further slides. Operating cash flow is somewhat lower, mainly due to significant amounts of cash coming back from margins in 2023 and it achieved 124.4 billion Czech crowns. CapEx almost a quarter or 25%, 24% higher than in 2023, achieving almost 57 billion Czech crowns. Our net debt as of 31st of December has grown to 102 billion or 203 billion Czech crowns, increase of 34% and net debt to EBITDA ratio is well below our target and it is actually on 1.5%. Next slide, you can see actually split of our breakdown of EBITDA. On the right slide, on the right side, actually on the right picture, you can see the breakdown of 137.5 billion split among various segments of our business. Generation from nuclear is almost half of our EBITDA, 65.3 billion. Generation from renewables, 8.6 billion. Trading, 5 billion. Sales segment, 9 billion. Distribution, which is the second strongest segment, 27.2 billion, which also includes gasnet for the last four months of 2024. And then we have actually fossil generation and mining, 13.7 and 8.8 billion. Those actually emission-free activities in our EBITDA are now achieving 84%, which is significant improvement over 2023. And our emission-based EBITDA is now only 16%. So again, it's moving us closer to our targets in the future. Next slide. So you can see actually comparison for waterfall chart, getting us from 2023 EBITDA of almost 125 billion to 2024 EBITDA of 137.5 billion. There are a few items that move it upwards and two items that move it downwards. 7.1 billion improvement on generation segment, generation facilities. out of which 10 billion is actually a lack of cap on the revenues that was only in place in 2023 and it was 10 billion Czech crowns. So this is the main variant, actually something that we did not have to pay in 2024. Trading, although it's showing negative variance, trading has achieved 3.6 billion result, which is way above usual average, but it is below last year as the volatility was significantly lower in 2024 than in 2023 and maybe 2022. So we are getting back to normal, I would say. Mining activities minus 3.4 billion check rounds mainly due to lower prices of coal that we supply to our coal plants and lower amount of coal to be supplied to third parties due to lower demand for coal due to market conditions. On the other hand, we compensate this by lower operating cost of 1.6 billion check rounds. Distribution segment is now comprised of two entities. It is just distribution, which is such a distributor, which is actually power generation or power distribution and gasnet, which is gas distribution. Gasnet is a new segment, which we did not have before. So in full EBITDA for four months of 2024 is actually included and there was nothing in 2023. So it's all actually positive impact. In Czech power distribution, we had significant improvement versus 2023, but the vast majority of it is actually coming from so-called correction factors, of which we will have to return actually in 2026, after it is audited in 2025. Sales segment, 2.7 billion better result. Retail segment, 1.8 billion improvement, mainly due to declining purchase prices of commodities. And ESCO or energy services is helping us with 700 million check rounds. On next slide, you can actually see the year-on-year changes in net income. So we are starting with EBITDA. that is 10% higher. Depreciation amortization is actually 6.4 billion or 18% higher, mainly due to us including actually Gasnet depreciation, which was 2 billion for one third of 2024. We have higher depreciation on coal assets because we decided to accelerate actually depreciation of coal assets. in October 2024 so this is an effect of one quarter of a year and we also have high depreciation in other segments mainly just distribution. Then asset impairments 2.3 billion a significant part of it is actually being reversed back into adjusted net income, as you will see later. So those impairments are mainly related to impairment on our mining assets. Other income and expenses, the largest variation is coming from interest income and expenses, which interestingly enough was zero in 2023. where we had a lot of cash coming from margining actually from power exchanges being deposited at relatively high interest rates leading to the fact that our situation that basically our interest received the interest paid was equal however this is not usual situation so now we are again back to normal where our interest paid is higher than interest received by three billion check rounds I already commented on income taxes, so we are coming to net income of 30.5 billion and adjusted net income 31.8. there are two adjustments one is actually 1.9 billion of non-cash charge into income that we actually return back which is actually impairment of a mining company so we increase actually net income by 1.9 and we decrease it by 0.6 billion and this is actually non-control in non controlling interest in So this is actually a net income that is attributable to minority shareholders that we, according to accounting rules, fully consolidate, but for purposes of adjusted income, subtract from the net income. So this is how we get to 31.8 billion CZK. On the next page, you can see nuclear and renewable generation. We achieved 29.7 billion. 29.7 terawatt hours of power generation in nuclear plants, which is 2% lower than in 2023. Mainly it is due to lower plant availability of tamaline. This will significantly change in 2025 when we assume a 7% increase. This is mainly due to shorter scheduled outages of tamaline. and we should be getting closer to 32 terawatt hours, actually 31.8 precisely. On renewables, we had a good year actually in renewables. We had better results in Czech Republic due to better hydroelectric plants output in 2024. On the other hand, we don't expect it in 2024, 2023, I'm sorry, we don't expect it in 2024, I don't expect it in 2025. So again, there should be a little decrease in hydroelectric by 0.1 terawatt hours. And in total, we would expect to produce the same amount of power from renewable 3.7 terawatt hours in 2025. So overall increase of nuclear and renewable generation should be 6%. Next slide. You can see our generation coming from fossil fuels. We have identical generation from Czech-based power plants, 14.1 terawatt hours in 2023, 2024, and the same expectation for 2025. We had a decrease actually between 23 and 24 on Polish plants of about 18%. And as you know, we actually disposed Polish plants on 6th of February. They were actually transferred, the ownership was transferred to the buyer. So we have only 0.2 terawatt hours produced actually in Poland and that will be it. It will be nothing more coming from Polish plants. further this year. On natural gas generation, we had practically no change between 23 and 24, and we expect actually 29% decline in 25 due to lower, expected lower deployment of Pocharadis CCGT due to market conditions. Next slide is fairly important. You can actually see how much power is hedged, how much power we actually sold. This also provides information about 2024, which is 100% clearly delivered. And in the orange bubbles, you can see actually average achieved prices. uh and in the table below actually what portion of power it is so for example for 2025 we were 90 hedged on December 31, 2024. The same chart on the right side is actually showing the information for the carbon credits that we purchase as well in the moment when we sell actually coal-based power. and on the last slide from this section you can see selected events of q4 we actually sold polish assets to rest invest group company as i said on 6th of february very successful transaction from our point of view uh part of our decarbonization strategy we would like to stay in poland we are very active in poland in uh esco services but uh we decided to leave power generation gold market Temelin and Dukovany meet the requirements of the new international standards for environmental management. We again actually received certificates proving that. And we also sold 15% stake in a company Veolia Energia Czech Republic. We historically had a 15% stake, which was a result of the larger transactions when we got actually a stake in heat plants in the Czech Republic. So now we decided actually to dispose after many years of holding this financial investment, basically this take back to Veolia Energy International. So this is all for me. And now I will hand over to Pavel Tseranyi to go through customer segments and implementation of Vision 2030.

Thank you, Martin. So splitting to page number 20, just a quick overview. The customer segments contributed 36.1 billion CZK with 23.2 coming from distribution, I also already mentioned. On the distribution, it's about 33% year-on-year growth. Electricity distribution now, gas distribution obviously is the addition of GasNet here with only the four months where we actually consolidated gasnet out of about roughly 11 billion check runs which was the full year EBITDA. The sales segments contributed roughly 9 billion and those were about 42% year-on-year growth. So overall all of the customer segments fared nicely in 2024 and obviously we expect the same or better even in 2025. Now, in terms of some of the other numbers, in terms of electricity distribution, which means basically consumption, we see a flat development year on year. After the decreases since 2020, we basically see stabilization and looking forward, we see the opportunity for growth. And similar situation in gas, again, year-on-year basically flat with a very slight growth. But again, we perceive this as being kind of the local minimum with the outlook being of consumption growth. Now, why the consumption should grow on both of these is as electricity and gas replace coal in all the aspects of coal being used, either in electricity and heat, that would be mostly gas, or also in household heating and industry, which would be more on the electricity side. Going forward, the demand for Looking at the retail segment, I'll start with the number of customers. We basically see a flat development, 1% decrease. Again, we see the situation stabilized. We have acquired roughly 400,000 customers since 2020 as a number of customers basically returned to like a very reliable partner which Chess is and there's now a slight correction with some of them going and looking for other options at the same time the number of customers which we started off in 2020 was 2.85 million. So we still see a very significant growth compared to the pre-crisis situation. In terms of the volume, the volume in retail might look a little bit misleading. As during the crisis, there are also some SME customers coming to České Prodé, which normally is a household only supplier. uh there was a a window of opportunity for them to get better prices by by the switch uh now they're typically three-year contracts expired and they are coming back to chess esco so uh a large part of this volume drop is actually uh a migration to chess esco uh in terms of the energy services we see uh the growth uh both in the revenues as well as uh the actual profits to continue. We experienced 14% growth year-on-year and we expect 7% forward-looking. What we recognize and what we see in the market is that regardless of the discussions in the public arena in terms of further development, Green Deal and so forth and so on in Europe, the mostly industrial customers are still looking for ways of safe energy, save money, and with this also reduce emissions. And that is causing the demand for our energy services companies being just as going to Republic and Eleveon in the other parts of Europe. Now a quick overview from the customer segments of selected events in Q4. You all heard that we have worked to develop our LNG business, so bringing gas through LNG cargoes through Netherlands and in the future also through Germany. Our teams also worked on developing other routes of gas and one of them is importing gas to Europe from Algeria through undersea pipe and into Italy and then from Italy further into Europe. And we've concluded the first contract starting in October last year with Zonatra, which is kind of the national RGN gas company. The other piece of information is a long-term cooperation agreement with the city of Ust-in-Labem, one of the regional capitals, where we agreed to supply them with heat in the long term. That would be from the Trmice side, where we intend to build a combination of gas-fired and biomass-fired heating and CHP stations. This follows the same development for Kovultov, coming from other Prunejov and Trusimets' side, as well as Northern Moravia, coming from the Dětmarovice side. And last but not least, just a highlight, we have achieved 100 high-performance public charging stations number with 55 being built in 2024. I think the density of the charging network is quite high in Czech and especially the share of the high performance charging stations is way above European average. And the good news is, again, that we see also growth in the usage. So also the volumes of electricity charged through our charging networks are going up by tens of percent over year on year. Now, a quick recap of how this all fit into our vision 2030 Clean Energy for Tomorrow. Just a reminder, we are working on our strategic initiatives under two pillars. One is transforming our generation portfolio. The second is providing the energy solutions to our customers so they can also transform their energy usage. Now, we get asked to what degree this is or this is not and will be or will not be impacted by the public discussion on the Green Deal goals, targets, developments. We are sure, we are confident that it will not impact our strategy significantly. Our strategy has always been aimed at achieving all three goals of the energy trilemma, and that is energy security, energy competitiveness and energy sustainability. Now sustainability is the part that is being kind of discussed now obviously in terms of security and competitiveness. These are goals that nobody questions and all our activities that we are doing are targeting all three of these. So we definitely aim to continue in delivering our strategy Now, pages 26 and 27 highlight some of the achievements. Many have been already mentioned by Martin in the era of nuclear. Let me mention just a couple more. The construction of the second LNG terminal we have contracted starting 2027 in Stade has started, has been launched. And then I already mentioned we are working on achieving our targets to convert our heating station portfolio to gas and biomass by 2030. So there's construction going on a number of sites. And last but not least, we are also working on expanding our renewables portfolio. We have added roughly 40 megawatts of new renewables just last year being supported from the Modernization Fund. And we have just a little less than 160 megawatts of solar power plants under construction and more in the pipeline. in terms of the customer activities again a number of things have been already mentioned i just put some highlights uh i think our uh colleagues in uh just distribution the electrical grid uh have been uh successful in uh answering the demand from our customers to connect new uh solar photovoltaic panels typically rooftop by now we have connected almost 30 000 of those So with a record investment of 20 billion Czech crowns last year, we're also working on digitalization, both in distribution and supply. So I think overall, we are meeting all of the targets we have set forth within our vision. And we also see demand for these services still continuing from our customers. In terms of the priorities for 2025, Again, basically along the two main pillars plus sustainability or ESG, we will work on operating our nuclear power plants at maximum capacity. We expect the generation to grow quite a lot. Obviously, a number of milestones are ahead of us on both the large and the small modular reactor programs. will continue again in our program for renewables build-up and heating station transformation. Now, last but not least, the law, which for the Czech speakers, which is now in the final stages of approval, contains a paragraph which allows the Ministry of Industry to introduce a capacity market uh so that that would be the last piece in the uh generation portfolio puzzle for the czech republic and we hope that once the law is passed uh the ministry of industry will uh start uh working on on introducing capacity market or also like plain vanilla uh gas fired backup power in terms of the energy solutions and our and customers customer segments Again, basically alongside digitalization, investment into new connections. And 2025 will be the year when we will see much more flexibility-based products being available for our customers. There is a rollout of smart electricity meters starting this year. and with this our supply companies will offer more products for customers to participate also in the in the sport market and be able to you know get involved in demands and management and so forth and so on. And obviously in the sustainability I think we have done and as already mentioned a lot of work in improving our ESG score and this is something we want to maintain and work on further. And with this, I'd like to conclude and hand over back to Bar.

Yes, thank you. And we are now open to questions. I can see that Arthur Sidbon from Morgan Stanley raised his hand. Arthur, you can unmute yourself and ask a question.

Hello, can you hear me? Yes. Great. Thank you. Thank you very much for taking my question. The first one is on the evolution of the dividend because the 25 net income guidance is lower than your 24 profits. I was wondering how do you think about dividend evolution in that context? Will you try to smooth the dividend decline by maybe paying a lower payout this year and increase it next year, or maybe paying above the guidance range on payout next year? Or is the dividend volatility not really a key issue, a key concern for you, and you won't necessarily change your payout ratio for that? So that's the first question. The second one on networks, actually, electricity and gas, I think, if I'm not mistaken, that the regulator has confirmed the initial proposal of an allow return of 6.9% a few days ago. First, is that correct? And should we have in mind any important change in the final document compared to the initial proposal? And if it's correct, is that a good enough return for you to invest further in electricity networks?

and maybe one last question on the windfall tax uh if there's been any update on discussions whether or not it will indeed end at the end of 2025. thank you very much i'll answer first and third question uh dividend uh you know what we propose is actually in line with our dividend payout ratio uh that was adopted i guess two years ago if i'm not mistaken And, you know, that's, that's what it is. So technically speaking, if the profits are lower, are lower, the mathematically calculated payout ratio will also be in nominal terms, terms lower, I think it's too early to really discussed dividend of 2025 in 2026, way too early, and we will be announcing our proposal as a management of the dividend for 2024 in the spring of this year. So that's probably as much as we can say. Windfall tax, according to the law, factually valid till the end of 2025. So we don't hear really about abolishing it for 2025. There is no initiative on cancelling the tax for 2025, but there is also no initiative of prolonging it. This was really set for three years by the law. So there is an end to it, and we would assume that this is what it will be. And now maybe Pavel on the distribution.

On the distribution, you're correct that the base WEC for both electricity and gas distribution is 6.9 pre-tax. However, there is a bonus WEC of up to 1.5%. So combined, we are looking at 8.4% pre-tax. And the KPIs to achieve this bonus is mostly driven by investing in excess of the depreciation. It differs for gas and electricity. For electricity, it's 1.6 times capex over depreciation to achieve the maximum bonus. And there's a number of other KPIs, but it's quite a lot of details that we can share offline. And just concluding, looking at the KPIs, looking at the cost of capital and looking at our plans, we believe that we should achieve the full bonus. So we are looking at 8.4% pre-tax WACC.

okay uh the next question comes from piotr jentzelovsky from city

Good afternoon, everybody. I have three questions, please. So the first one on the nuclear production, you are guiding to almost 32 terawatt hours. Is this the number we should assume going forward? So you will have around 32? Because I remember historically you had the targets to achieve higher production and it never materialized. And so how should we think about this number in the future? So that's the question number one. Second, can you please provide an update on this, whatever you can say on the negotiations regarding this construction of the two reactors? It was meant to be closed, the financing for it and potentially disposal of your SPV at the end of first quarter. Now we're talking about the first half and you have an election coming up later this year. So is there any risk that it slips post-election? and how advanced you are. So any update would be helpful. And then finally on the realized prices, can you maybe break down the realized price for the Nucla versus Lignite? How does it compare? Because you still combine the two assets together, but they seem to have very different production profiles. one working baseload, the other more like seasonally in winter. So if you can say anything, how much of a premium lignite gets?

So I would answer the first and third question. 32 TWh is something that is a result of basically our ability to exchange fuel in the units once in 18 months. So not necessarily every year. And that was one of the reasons why the power generation was relatively low in 2024. compared to 2025 where we will be getting close to 32 terawatt hours. So I would not necessarily say that in 2026 actually we will be again on the same number. It might be again lower actually than 2025 because we will be replacing fuel In those units where we will not be replacing fuel actually this year, you know, so 2030 goal is to achieve steady 32 terawatt hours but It's not that it will be automatically from now on every year like that. So I That's the first question. The second question, realized prices, what we do, we actually sell our power output both for nuclear and lignite plants in a straight line method three years ahead. And in terms of selling baseload, there is no difference between nuclear plants and lignite plants. However, we keep about 10% of position open as you could see actually on our numbers on the chart where it shows how much power was sold and which years ahead. So I think we had like 10% open position at the beginning of January for 2025, which takes into consideration various peaks and opportunities on the market. which clearly are not coming from nuclear because nuclear is running in a steady way and this coming more from gas where we actually don't hedge it at all and coal. That's the answer. Basically coal and gas are used to cover the peaks, stable nuclear output isn't. But when we actually do hedges that you can see actually on those slides, they are the same price for all units. And the KHNP or government negotiations?

Look, I think what we understand is that the commitment to finish this process is still there. It's still valid. And I think here we are talking about a a potential delay of a couple of weeks which would be used to really make sure that all the contracts are negotiated to the best possible situation or the the best possible form and i think it's kind of you know if well invested couple of weeks uh if it uh aimed at improving the improving the uh improving the contracts and i don't think there should be anything beyond that that you should kind of get from it or look into it okay thank you very much very helpful uh next question from bram boring of woodland company

Yes, hello. With regards to your CapEx, you published in the report the new update. It looks like now you're expecting CapEx to peak in 2027 at somewhere around $83 billion, and then to drop off fairly.

Hello?

Yes, we can hear you. Yeah, okay. Cheers. Then drop off in 2930. My question is to do with the renewables portion of that CapEx, because it's been, frankly, quite low and low for a while. So I'm curious about what you were including for renewables in 25 to 27. Come on, please. And then if you are – and then to ask about the long-term 2020 – the long-term solar capacity in the czech republic six gigawatts i believe it was should i understand that your capex in 28 30 is is sufficient as it were to allow you to reach that six gigawatts thank you look on the renewables the way

We decided to plan the investments is basically based on the programs that are now available. So from this perspective, obviously the 25 billion or 23 billion of renewables with the peak of 27 would not be enough to build 6 gigawatts. And we are ready to expand the renewable program beyond what is now being in the plan as soon as we see better conditions for the renewable projects. We have asked for a number of projects to be supported from the modernization fund, but with the capture solar prices decreasing and also the conditions of the modernization fund being more strict. we don't see that much opportunity beyond what we've already either launched in terms of construction or what we've applied for and we'll be kind of following closely what other programs and let's say markets would be created for further renewables obviously the government now approved a law which introduces so-called acceleration zones in the Kripke Republic. Obviously, there is still some legislation process between the government approval and the actual law. So we'll see how quickly will that be put in place. Obviously, if this starts, there could be quite a big opportunity for wind to be constructed. and that wind would come on top of it and we would then update you on our capex plan as soon as as we will see uh you know that this kind of has been put in legislation and then there is this window of opportunity for wind so this is how we eventually decided to approach renewables because the situation simply changes uh too quickly and the programs are are changed uh you know year on year uh and uh it's difficult to to give like a long-term plans Obviously, our balance sheet allows for more investments into renewables than what you see right now in the plant.

Okay, so right now, let's call it the long-run capex of around 66 billion isn't compatible with a target of 6 gig of PV in the Czech Republic. And we have to think about a lower number. Do you have an idea what that number... Let me ask you this. You told us what's under construction. What was operational at the end of 2024, please, for Czech PV?

Look, I think we are looking at roughly 160 megawatts of operational. This year. This year, and then there's another 160 under construction. Just not to confuse it, these are similar numbers. There's like a little over 160, a little less than 170 operational. And at the same time, a very similar number around 160 is under construction. Similar numbers, but different things that they describe.

All right.

But this is not like there's not a 160. For the money you see there, we'll get more. We'll get more than this for the money you've seen there.

You'll get more than that for the money you see there. Okay, well. And then, well, to help me unpick that puzzle, could you just give me an all-in number, capex 25 to, say, 28, all-in number for coal-to-gas switching?

The coal-to-gas switching is... Roughly, the numbers that we have included is roughly 68 billion in the presentation that was published.

Great, thank you very much.

We have a follow-up question from Artur.

Before we go into the question, also on this one, I would like to explain, we don't know how exactly the capacity markets will look like, so what is included in those 68 billion is the coal-to-gas switching in combined heat and power, because there we know what's happening. We get the support from others and we also get a special support for combined heat and power production. Now, similar with the situation in renewables, we will present the exact plan on how much backup gas capacity we intend to build once we understand what the market looks like when it starts and what are the conditions. We have a number of projects in the pipeline. So this would also come on top of these 68 billion, the kind of gas backup power that we would build against the new capacity market if it's introduced.

And assuming that it's introduced, that spending on new CGTs and similar would start roughly when? 2029? Later? Roughly.

2028, probably early as 2029, 3031.

Cool, thank you very much.

Okay, we can take the next question from Petr Bartek.

Good afternoon. Two quick questions. First, maybe if you can share your view on the carbon prices going forward, say mid-term, not only for this year, what you see in terms of regulation, you know, the impact from the situation in the USA and elsewhere, whether you would expect any change in the outlook? And second, when you speak about the CHPs, gas-fired CHPs for heating, if you are also looking at, for example, power-to-heat solutions, so you would use the solar production for heating. Thank you.

I'll start with the second. I mean, we... to pilots and testing of like a combination of solar and heat pump. But honestly, just the solar production and the heat consumption are as misaligned as it gets. So we are not getting beyond pilots. So that's on this one. And the first question... Oh, carbon threads. Look, honestly, we don't know. We don't know any more than you do. We see the discussion. What we understand is that there's a lot of discussion on the combustion engines. There's discussion on EU ETS2. I haven't heard much about discussing about EU ETS1. I don't know if you have heard, so this is what we are seeing. This obviously predates, EU ETS1 predates the so-called Green Deal. At the same time, can something very unexpected happen these days? Yes, anything can happen. So we are really kind of just kind of waiting, waiting to see what will, how this discussion will develop.

And basically behave the same way as always. So whenever we sell actually coal, fire, electricity, we buy carbon credits to lock in the margin, you know, that's all we can do.

Okay, thank you. Maybe if you can share a little bit about the spot margins on the natural gas-fired power plants. I saw quite high production in Q4, if I'm not mistaken. So whether you see any development in the market which you could comment on?

Look, anytime there is not enough sun and no wind, it's the Bonanza 4 gas part, right? So that was the Q4 last year.

Which is in winter.

And then we do expect that this situation will be happening in winter. And that's when the gas stations come in.

okay it seems we do not have any further questions so thank you everyone for participating if some further questions come up to your mind just contact investor relations thank you very much and goodbye