Letter from the President of KOGENERACJA S.A.

Dear Shareholders

On behalf of the Management Board of Zespół Elektrociepłowni Wrocławskich KOGENERACJA S.A., I am pleased to present to you the Annual Report of the KOGENERACJA S.A. Group, which outlines the financial results and key events related to the Company’s operations in 2024.

The KOGENERACJA S.A. Group has consistently implemented the next stages of its Business Strategy for 2022–2026, which is based on three fundamental pillars: environmentally friendly energy generation, the provision of innovative energy services, and the optimisation of operational efficiency. As part of our commitments to sustainable development, we are systematically reducing our environmental impact by aiming for a 15% reduction in CO₂ emissions by 2026 and a complete phase-out of coal by 2030.

The most important undertaking remains the newly built gas-fired CHP plant in Siechnice, which is to replace the existing coal-fired unit. In 2023, we completed works related to the construction of the gas connection. Currently, four peak-reserve boilers are already in operation, while the Combined Cycle Gas Turbine (CCGT) unit and the heat accumulator are undergoing trials and testing. The commissioning of the low-emission unit is planned for the next stage of the investment. Thanks to the implementation of advanced technologies and the use of gas as an energy carrier, the production of heat and electricity in Siechnice will be optimised in terms of both efficiency and environmental impact reduction.

Last year also saw an acceleration in efforts to ensure the long-term operation of the Wrocław CHP plant. A production unit located in the city centre, currently generating energy from coal, will be equipped by 2030 with new devices utilising low- and zero-emission technologies. The installation of gas-powered cogeneration units, water boilers, heat pumps, and electrode boilers will not only have a positive environmental impact but also ensure a secure energy supply for our customers in the coming years. In 2023, KOGENERACJA S.A. signed a gas supply agreement with Polska Spółka Gazownictwa, securing the needs arising from its investment plans.

KOGENERACJA S.A. and Elektrociepłownia “Zielona Góra” S.A. both conduct combined heat and power production. Therefore, maintaining a high volume of heat sales to end-users is one of the key elements of our operations. Both companies are systematically developing infrastructure by investing in new connections to district heating systems. In 2024, as a result of network expansion projects, new facilities in Siechnice and the Zawidawie area were connected to the system. Additionally, in cooperation with the district heating network operator in Wrocław, eighty-five facilities with a total heat demand of 32.57 MWt were connected. Elektrociepłownia “Zielona Góra” S.A. connected another thirty-one substations, acquiring 7.05 MWt of thermal power — 8% more than the planned 6.5 MWt.

As part of the connection of new secondary-market customers, Elektrociepłownia “Zielona Góra” S.A. decommissioned four local gas boiler houses and built new sections of the heating network with a total length of 4.1 km. At the same time, modernisation works were carried out on both the network and heating substations. As part of seven projects, approximately 0.77 km of network were upgraded and seventeen substations comprehensively rebuilt. In the newly modernised facilities, compact heating substations were installed, significantly improving the efficiency and reliability of heat supply.

In 2024, the KOGENERACJA S.A. Group generated a consolidated net profit of PLN 202 million, which was PLN 55 million lower than the result achieved in 2023. A key factor affecting the Group’s financial results was the decline in consolidated revenue from electricity sales, which fell by PLN 698 million due to a lower average electricity sales price. This drop was partially offset by lower sales costs, resulting from the absence of a write-down to the Price Difference Payment Fund (a decrease of PLN 568 million). An increase of PLN 74 million in heat sales revenue in 2024 was primarily due to higher average sales prices, despite a lower sales volume caused by higher average temperatures in 2024.

The year 2024 was a time of intensive activity, further development, and consistent achievement of the goals set out in the Business Strategy. We focused not only on ensuring the safe and stable supply of thermal and electric energy but also on implementing solutions to improve energy efficiency, decarbonisation, and minimising the environmental impact of our operations. We achieved significant progress in modernising our assets — we completed key investment stages in Siechnice and advanced the development of concepts for new low-emission heat sources for Wrocław. At the same time, in Zielona Góra, we acquired a record number of new customers, expanded the heating network, and decommissioned local gas sources, which directly contributed to improved efficiency and emission reduction. These actions confirm our readiness for further energy transformation and the construction of a modern district heating system that combines supply security with care for the climate and the needs of local communities.