Alpiq’s Sustainability Focus

Foreword

In 2024, Alpiq highlighted the need for a unified approach to climate change, recognising that geopolitical tensions and economic fluctuations had shifted global focus and resources away from sustainability. Even strong advocates recognise the need to balance sustainability ambition with practical regulation.

While the EU Omnibus may introduce changes to the scope of the mandatory Corporate Sustainability Reporting Directive (CSRD), Alpiq remains proactive in adapting to current regulations. As part of the preparation, the Sustainability Report 2024 already has the structure of CSRD reporting and includes the first CSRD disclosures.

A key focus in 2024 was the Double Materiality Assessment (DMA), a cornerstone of CSRD. Following an in-depth analysis, Alpiq applied an average rating on “Impact, risk and opportunity (IRO)” level and a threshold of 4.2, (on a scale from 1 to 5) identifying four material topics:

• E1 Climate Change Mitigation
• E3 Water and Marine Resources
• E4 Direct Impact Drivers of Biodiversity Loss
• S1 Working Conditions

The Sustainability Report also covers the necessary disclosures as per Swiss law (OR 964 Art a-c/j-l and associated ordinances) such as:

• Pollution
• Equal treatment (Diversity metrics)
• Business Conduct (Corporate Culture and Corruption & Bribery)
• Supply Chain Due Diligence
• Security of Supply

Finally, the following sections are voluntarily disclosed due to their significant importance to Alpiq:

• Training and skills development metrics
• Business conduct steering

Beyond the DMA, Alpiq also achieved key sustainability milestones:

• TCFD Risk Assessment: A physical risk assessment identified river flooding and landslides as the most critical hazards across Alpiq’s asset locations. Transition risks linked to a lower-carbon economy were also evaluated and integrated into the company’s financial model and risk management system, reinforcing resilience against climate risks.
• Supply Chain Due Diligence: In 2024, Alpiq reviewed its Code of Conduct for Suppliers and the associated risk assessment, which further strengthened its supply chain risk management.
• New Sustainability Organization: To enhance coordination and implementation, Alpiq established a sustainability matrix organization, with a Sustainability Committee serving as the central oversight body.

In addition to navigating regulatory complexities in 2024, Alpiq strengthened security of supply while also reducing the environmental impact of its operations, particularly in thermal assets. Alpiq remains committed to investing in employee growth and development while actively supporting society through various initiatives and financial support.

26 February 2025

CSRD journey

Alpiq’s Sustainability Report 2023 was prepared in accordance with the Global Reporting Initiative (GRI). However, as compliance with the Corporate Sustainability Reporting Directive (CSRD) becomes mandatory for Alpiq as from the financial year 2025, a transition is currently under way to prepare for the creation of a fully CSRD-compliant Sustainability Report 2025 (to be issued in 2026). Alpiq is therefore already making a voluntary effort to follow the European Sustainability Reporting Standards (ESRS) structure in its Sustainability Report 2024, but by no means claims to be fully CSRD-compliant. As part of the ongoing transition, Alpiq is developing a series of metrics, targets, policies and actions, many of which are currently largely missing and therefore not yet included in the Sustainability Report 2024, but which will be disclosed in the CSRD-compliant Sustainability Report 2025. The ESRS Index in the Appendix gives an overview of the CSRD requirements that are already addressed in the Sustainability Report 2024.

Reporting boundaries

On its journey towards a CSRD-compliant Sustainability Report, Alpiq needs to adapt its reporting boundaries. The following section explains how these reporting boundaries are changing.

CSRD requires companies to report on the basis of operational control, therefore Alpiq has introduced an operational control logic to its Sustainability Report 2024. According to this logic, the environmental KPIs for assets over which Alpiq has operational control (fully consolidated assets) need to be calculated as if Alpiq owned 100% of the respective assets (in line with the financial consolidation process under IFRS and Alpiq’s Financial Statement), rather than based on Alpiq’s exact ownership share (as was the case in 2023). The emissions figures calculated under the new methodology therefore differ from the figures calculated based on the exact ownership share. Figures calculated using both methodologies are displayed in this year’s report to ensure a transparent transition from the old to the new methodology.

In Alpiq’s case, operational control is generally exercised over entities in which Alpiq holds a majority stake, with two exceptions:

1. Grande Dixence hydropower plant: With an ownership share of 60%, Alpiq is the majority shareholder of the legal entity that holds the Grande Dixence hydropower plant. However, Alpiq does not have operational control over the Grande Dixence hydropower plant, therefore this asset is not fully consolidated.
2. Emosson hydropower plant: With an ownership share of 50%, Alpiq is not the majority shareholder of the legal entity that holds the Emosson hydropower plant. However, Alpiq does hold 100% of the energy rights and operational control of the Emosson hydropower plant, therefore this asset is fully consolidated.

Due to the complex partner power plant structure in Switzerland and Alpiq’s many minority shareholdings in partner plants, as well as the special case of Grande Dixence, which is not fully consolidated, the strict operational control approach does not truly reflect Alpiq’s energy production portfolio and thus creates an incomplete picture of the company’s business. Therefore, Alpiq has also voluntarily decided to provide information on environmental KPIs for assets not under its operational control (minority shareholdings and Grande Dixence), as from the Sustainability Report 2025, even though this is not required by CSRD. This is also in line with Alpiq’s Financial Statement, which reports in accordance with IFRS.

A list of all Group companies (fully consolidated assets) and minority shareholdings that are reported as investments in partner power plants (non-consolidated assets) can be found in the Notes to the Consolidated Financial Statements (5.4 Group companies and investments) of the Financial Report.

RES portfolio

Alpiq has a diverse national and international power generation portfolio from renewable resources, which comprise hydropower, wind and photovoltaics. Alpiq’s services in many European countries also support large and industrial customers in selling electricity from renewable energy source (RES) assets or in their efforts to reduce the environmental footprint of their own business activities.

The following table provides an overview of Alpiq’s RES portfolio:

Flexible or RES integration assets

Alpiq is fully supportive of the energy transition and actively contributes to the transition in three ways, by: (1) generating low-carbon electricity with a focus on hydropower and nuclear power, (2) enabling the integration of intermittent renewable energy (wind, photovoltaics) by providing flexibility to the electricity system through flexible generation and energy storage, and (3) enabling the integration of third-party renewable energy and flexible generation assets by providing risk and portfolio management solutions through its origination activities.

However, without flexibility, the energy transition is not possible. This issue is becoming apparent in most markets in which Alpiq operates, where the successful expansion of intermittent renewable energy capacity is increasingly causing system challenges and the integration of additional variable renewable energy will be restricted, if there is no increase in flexibility.

Flexibility assets therefore have a significant positive impact on the speed of decarbonisation of the overall energy system and support energy transition objectives. Therefore, in addition to Alpiq’s flexible hydro asset base, Alpiq is strongly expanding its activities in the space of storage assets such as battery energy storage systems (BESS) and hydrogen, the flexibility of which is complementary to the increasing production of intermittently producing RES assets.

Furthermore, the need for flexibility is the reason why Alpiq’s thermal assets play an important role. The combined-cycle gas turbine (CCGT) and open-cycle gas turbine (OCGT) power plants, which represent one type of thermal asset in Alpiq’s portfolio, offer a high degree of flexibility and are ideally suited to balance fluctuations in the electricity grid. They thus play an important role in maintaining system stability and thereby contribute to the energy transition while ensuring security of supply.

CCGT power plants are among the most efficient conventional power plants. Alpiq has shareholdings of up to 100% in CCGT power plants in Hungary, Italy and Spain. In addition to producing electricity, these plants fulfil other requirements such as supplying district heating or black-start capability. Alpiq’s San Severo plant in Italy has been upgraded to enable a 25% intake of hydrogen in the future, but hydrogen input is not currently an option due to the restricted supply of hydrogen and the associated high prices.

OCGT power plants, such as Alpiq’s Vercelli plant in Italy, are less efficient than CCGT power plants in terms of GHG emissions but can be ramped up much faster and enable several starts per day, which makes them ideal in providing flexibility.

Nuclear power plants, the second type of thermal asset in Alpiq’s portfolio, also make an important contribution to security of supply. They complement Alpiq’s portfolio with a share of 40% in Kernkraftwerk Gösgen-Däniken AG (KKG), 27.4% in Kernkraftwerk Leibstadt AG (KKL), and 33% in Centrales Nucléaires en Participation SA (CNP). To actively support the energy transition and continue making an important contribution to security of supply, Alpiq is preparing to expand the operational lifetime of its nuclear power plants, while placing the highest priority on guaranteeing safety. Comprehensive sustainability information for KKG and KKL can be found in their respective Sustainability Reports, which are expected to be published in summer 2025.

Trading and Origination business

In addition to the energy production and trading activities associated with the above-described assets, which create value in Alpiq’s Asset business, the company’s Trading and Origination businesses also contribute significantly to security of supply by providing flexibility. In addition, these businesses play an important role in easing financial pressure on owners and operators of power plants and maximising the value of their operations.

Besides the asset-trading activities that are part of Alpiq’s Asset business, Alpiq’s Trading business comprises proprietary power trading and gas trading. The Trading business increases Alpiq’s profit by leveraging the balance sheet, taking market risks and providing market access. The CO₂ emissions associated with physical deliveries related to the Trading business are included in the Scope 3 emissions disclosed under Climate Change [ESRS E1].

Alpiq’s Origination business focuses on risk management solutions for third-party assets, covering short-term flexibility management, risk management services for industrial customers, sales activities to end consumers and power purchase agreements (PPAs). The PPA business, in particular, allows investors and other asset owners to minimise risks and sustain their investments in renewable assets as well as enabling industrial customers to decarbonise their value chain. Alpiq’s Origination business thus contributes to enabling climate-friendly investments.

Sustainable business statements

The following section presents some specific examples of Alpiq’s actions and achievements in the area of sustainability in order to illustrate its commitment to sustainability and back up its sustainable business statements.

“Alpiq wants to make a significant contribution to security of supply by providing storage capacity and flexible power production.”

Example 1 (see also Key Moments in the Annual Review):

Alpiq continues to invest in flexibility and acquires a 100 MW battery project in France (25 November 2024)

Alpiq is strengthening its position as a provider of flexibility to the energy system with the acquisition of Harmony Energy France’s battery project in the department of Oise, north of Paris. The 100 MW battery energy storage system (BESS), with a capacity of 200 MWh, is scheduled to be commissioned in autumn 2026. This investment is in line with Alpiq’s strategy of focusing on flexibility and its commitment to integrating renewable energy and strengthening security of supply. Further acquisitions of battery storage are envisaged in Switzerland, Germany, France and the Nordics.

Alpiq continues to invest in flexibility and acquires a 100 MW battery project in France | Alpiq

Example 2:

Vercelli 2.0 – more flexible, efficient and climate-friendly (24 June 2024)

Over recent months, Alpiq has completely overhauled the Vercelli gas-fired power plant in the northern Italian region of Piedmont, making it fit for the energy future. Thanks to its flexibility, the plant will provide valuable services for electrical system adequacy and for security of supply in Italy.

Vercelli 2.0 – more flexible, efficient and climate-friendly | Alpiq

Example 3 (see also Key Moments in the Annual Review):

Alpiq acquires 30 MW battery project in Finland and strengthens its position as a flexibility supplier (19 June 2024)

Alpiq has expanded its flexibility portfolio by acquiring one of the largest battery energy storage systems (BESS) in Finland. The 30 MW large-scale battery from Merus Power, a leading Finnish technology company, will have one of the highest capacities in Finland and will become operational in Valkeakoski in mid-2025. The battery energy storage system is primarily used to stabilise the grid. It therefore contributes directly to security of supply and enables additional renewable energy projects. This strategic investment strengthens Alpiq’s commitment to paving the way towards the energy transition.

Alpiq acquires 30 MW battery project in Finland and strengthens its position as a flexibility supplier | Alpiq

“Our goal is to make energy available whenever needed, in various forms, in sufficient quantity at an affordable price.”

Example 1 (see also Key Moments in the Annual Review):

Alpiq acquires 10% of Forces Motrices D’Orsières SA (13 September 2024)

In connection with the renewal of the hydropower concessions of Forces Motrices d’Orsières SA, the primary assemblies of the municipalities of Orsières and Liddes have authorised the sale of 10% of the company to Alpiq from 19 January 2027, for a duration of 80 years. Alpiq submitted a convincing tender and this acquisition will enable it to expand its portfolio of hydropower plants. Between the Orsières and Niollet power plants, the facility produces approx­imately 110 GWh per year, which is enough to supply 24,500 households with electricity.

Alpiq acquires 10% of Forces Motrices d’Orsières SA | Alpiq

Example 2:

The Hongrin dams in the solar age (21 August 2024)

The Forces Motrices Hongrin-Léman (FMHL) have commissioned a new photo­voltaic installation. Located on the crest of the Hongrin dams, the 720 solar modules will supply around 70 households with electricity, mainly in winter, when Switzerland’s energy needs are at their highest. This is part of the FMHL’s ongoing efforts to improve energy efficiency.

The Hongrin dams in the solar age | Alpiq

“By pushing the energy transition and minimising the impact on the planet, we are shaping the future world of energy.”

Example 1:

Tormoseröd wind farm: Another step forward for renewables in Sweden
(17 September 2024)

Alpiq has held an official inauguration to announce the successful completion of the Tormoseröd wind farm, the state-of-the-art renewable energy project in south-west Sweden. The wind farm, which Alpiq co-owns with Fu-Gen, marks a significant milestone in Sweden’s green energy transition and reinforces the partnership’s commitment to sustainable energy solutions across Europe.

Wind Park Tormoseröd: Another step forward for renewables in Sweden | Alpiq

Example 2:

Norvento Enerxía strengthens its alliance with Alpiq for the representation of six of its wind farms in Galicia (9 January 2024)

Madrid – Norvento Enerxía and Alpiq have reached a new agreement for the provision of market access services in 2024.

Norvento Enerxía strengthens its alliance with Alpiq for the representation of six of its wind farms in Galicia | Alpiq

“We are committed to transforming into a sustainable business.”

Example 1:

Commissioning of a new low-head turbine (30 September 2024)

Forces Motrices de Martigny-Bourg (FMMB) officially commissioned Switzerland’s first very low head (VLH) turbine. Installed in the tailrace of the Martigny-Bourg run-of-river power plant, the new turbine will generate some 850,000 kWh per year, equivalent to the average annual consumption of almost 200 households. It will therefore optimise the hydropower available on the site, with no additional impact on the environment.

Commissioning of a new low-head turbine | Alpiq

Example 2:

Reuse of replaced laptops and desktop computers (3 July 2024)

Alpiq replaced all PCs (laptops and desktop computers) in its locations in Switzerland, the Czech Republic, Italy and the Nordics. The replaced devices were thoroughly checked and securely wiped of all data and then offered for purchase to Alpiq employees in the locations at a discounted price. Devices not sold to employees were reintroduced into the lifecycle for sustainable use, contributing to the efficient use of valuable resources and a better climate.

Example 3 (see also Key Moments in the Annual Review):

Alpiq acquires a majority stake in the Finnish hydrogen pioneer P2X Solutions
(12 April 2024)

Alpiq has emphasised its commitment to climate protection and strengthening the security of supply by acquiring a majority stake (54.9%) in the Finnish hydrogen pioneer P2X Solutions, which is headquartered in Espoo. The partnership-based participating interest is effective immediately, although P2X Solutions will remain an independent company. This acquisition shows that Alpiq is strengthening its position in the Nordic countries and becoming one of the leading companies in Northern Europe in the production of green hydrogen.

Alpiq acquires a majority stake in the Finnish hydrogen pioneer P2X Solutions | Alpiq

“In our projects, we carefully weigh up the protection of nature and the use of natural resources.”

Example 1 (see also Key Moments in the Annual Review):

#prixalpiq 2024 – The circular economy at the heart of water management
(31 October 2024)

For the fourth year running, the #prixalpiq has recognised two projects that promote sustainable water management with the support of municipalities in the Swiss canton of Valais. The municipality of Grimisuat has been chosen as the 2024 winner, with its project entitled “Grimisuat irrigation network – sustainable water storage and management”. The jury gave its “Coup de Cœur” to the association for water management and development planning in the Aletsch region, for its project entitled “Sustainable water supply planning in the Aletsch region”. To enhance the awards ceremony and facilitate debate on subjects beyond water management, a panel discussion on the topic of “The circular economy: utopia or reality?” took place at the University of Applied Sciences and Arts (HES-SO) Valais-Wallis in Sion.

#prixalpiq 2024 – The circular economy at the heart of water management | Alpiq

Example 2:

Alpiq to help prevent forest fires in Sicily by installing special cameras on wind turbines (21 October 2024)

The summer fires that rage in Sicily destroy nature and often cost lives. As part of a pilot project with Sicilian authorities, Alpiq Energia Italia will install special fire-detecting cameras on selected turbines with the repowering at its Monte Mele wind farm. This serves as an early warning system and helps identify the source of the fires.

Alpiq to help prevent forest fires in Sicily by installing special cameras on wind turbines | Alpiq

Example 3:

Raising awareness of invasive plants among the younger generation (27 June 2024)

On 17 June 2024, primary school pupils enthusiastically uprooted invasive plants that threatened the stability of the banks along the Trient watercourse in the municipality of Salvan (canton of Valais). Xavière Schröder, Environmental Project Manager at Alpiq, organised this action to raise awareness among the younger generation of the importance of preserving local biodiversity and playing an active part in protecting the environment.

Raising awareness of invasive plants among the younger generation | Alpiq

“Alpiq offsets the impact of its projects on the environment with compensation measures.”

Example 1:

The Trient: balancing flood protection and biodiversity (14 November 2024)

Nant de Drance SA is implementing 14 environmental compensation measures in connection with the construction of its pumped storage power plant. These include ecological restoration and flood protection on part of the Trient watercourse at Vernayaz. The first phase of the work – enlarging the Trient – is a key step in the flood control programme. Following the flooding in the canton of Valais in November 2023, which was caused by a rise in the levels of several watercourses including the Trient, the municipalities of Vernayaz and Martigny welcome this project. It aligns with their commitment to addressing flood protection for the local population as an urgent priority.

The Trient: balancing flood protection and biodiversity | Alpiq

Example 2:

Environmental measures bear fruit (23 January 2024)

The realisation of the Nant de Drance pumped storage power station in the municipality of Finhaut in the Valais, like any construction project, has had a certain impact on nature. Xavière Schröder, Environmental Project Manager at Alpiq, supported by Grenat Sàrl environmental bureau, is working closely with nature conservation organisations (WWF and Pro Natura) and the federal, cantonal and municipal authorities to offset these impacts and enhance local biodiversity.

Environmental measures bear fruit | Alpiq

“With the Alpiq eco-fund, we are supporting the creation of more habitats to preserve or revive biodiversity.”

Example 1:

Breeding pool enhancements keep the toads singing (27 May 2024)

A 1-hectare pool landscape in Härkingen in the canton of Solothurn that serves as a vital spawning ground for endangered toads has been restored and enhanced with the support of the Alpiq Eco Fund. The habitat will also benefit several other species that have become rare to the region.

Breeding pool enhancements keep the toads singing | Alpiq

Example 2:

11 kilometres of river renaturalised to enhance biodiversity (2 April 2024)

Eleven kilometres of small and medium-sized rivers have been revitalised in the canton of Solothurn thanks to the support of the Alpiq Eco Fund. Natural and local materials were used to slow down the flow of the rivers and promote the development of aquatic flora and fauna.

11 kilometres of river renaturalised to enhance biodiversity | Alpiq

“It is important to Alpiq that its employees remain mentally and physically healthy.”

Example 1:

Assessment of Health & Safety Culture

Alpiq has undergone an external assessment of its Health & Safety culture, with the objective of reviewing and improving the Health & Safety culture in order to lower the probability of incidents that have an impact on employee health and safety. The assessment is a voluntary addition to the ISO certifications of the organisations in Alpiq’s International division, which was conducted based on an anonymous self-perception safety survey covering people mindset and behaviours, thereby identifying potential areas of concern and establishing the basis for an industry benchmark. By constantly improving Health & Safety standards, Alpiq protects its most valuable assets – its employees – and contributes to an increase in employee satisfaction, trust and engagement, creating a positive impact on employee well-being.

“Inclusion of diversity is key for success.”

Example 1 (see also Key Moments in the Annual Review):

Alpiq is certified as “Great Place to Work”

After receiving the renowned “Great Place to Work” certification, Alpiq officially became a certified employer in Switzerland and its other company locations in Spain, Italy, Germany, France, Czech Republic, Finland and Hungary for the first time in December 2024. This certification is largely based on a positive assessment of the workplace culture by the employees themselves, so Alpiq has demonstrated its commitment to promoting a workplace in which employees feel valued and can develop professionally. The certification also strengthens Alpiq’s employer brand and its profile as an attractive employer.

Example 2:

Alpiq offers internship to engineering student from Burkina Faso

In collaboration with the Burkina Institute of Technology (BIT), Alpiq offered a 4-month online internship to an engineering student from Burkina Faso, allowing him to get an insight into the world of energy, gain international experience and write his bachelor thesis about solar plant reliability. After the successful completion of his internship and defence of his bachelor thesis, it was decided that Alpiq will continue the collaboration with the BIT, offering one internship space per year to one of their students, and thereby contributing to the education of new generation engineer leaders in Burkina Faso.