Sustainability report 2011 by gen energija

SUSTAINABILITY REPORT of the GEN Group

In the heart of the environment In nature all processes have to do with energy one way or another. Be it the flow of a river, a ray of sunshine or a gust of wind, they are all part of the whole. And even though this whole can never be fully understood, we have to, at any one moment, keep in mind what it is capable of and observe the laws of nature, of physics. That way is the only way we can supply electricity efficiently and responsibly both at the same time. This is why in the GEN Group we see the natural and social environments in which we operate as our long-term partners from whom we derive not only energy, but also knowledge. We maximize the energy and knowledge we gain and give them back to the environment in a number of forms. That way we honour our long-term commitment to promoting sustainable development, which has three core dimensions: environmental, social and economic. It is with expertise and experience that we focus our investments on clean, sustainable and renewable energy sources. With the synthesis of the needs and expectations and the capabilities of all strategic building blocks, we operate efficiently and responsibly in the very heart of the environment.

Contents

Index of tables

1.1 About the GEN Group and the company GEN 1.2 Word from the Director 1.3 GEN and sustainable development 1.4 Report's compliance with GRI guidelines 1.5 Outline of the main highlights of 2011

6 10 12 13 14

2 Main topics

2.1 Portfolio of sustainable and renewable energy sources: 99.6% 2.2 Efficient operation: meeting more than 95% of production targets 2.3 Investments in renewable energy sources: EUR 8.1 million 2.4 JEKÂ 2 project: technical bases and studies ready 2.5 Promoting energy efficiency: awareness raising campaigns, measures and projects 2.6 Knowledgeable people: 1026 employees, more than half with higher education qualifications 2.7 World of Energy: more than 3400 visitors in six months

18 22 26 31 36 40 45

3 Key performance indicators

3.1 Business results 3.2 Production of electricity 3.3 Electricity trading and sales 3.4 Investments, research and development 3.5 Employees and development of human resources in the GEN Group companies

50 51 52 53 54

Table 1: An overview of the report's compliance with GRI indicators 13 Table 2: The electricity production portfolio of the GEN Group is based primarily on sustainable and renewable energy sources (data for 2011) 18 Table 3: Balance of emission allowances in the GEN Group as at 31/12/2011 21 Table 4: GEN's performance in 2011: electricity production targets and results (in GWh) available to the GEN Group in 2010 and 2011 22 Table 5: NEK electricity production (GWh) in 2011 23 Table 6: SEL large HPP electricity production (GWh) in 2011 24 Table 7: HESS electricity production (GWh) in 2011 25 Table 8: Electricity production (MWh) of SEL small-scale HPPs in 2011 27 Table 9: Overview of the progress on meeting the set goals in 2011: SEL and TEB's solar power projects 28 Table 10: Overview of small-scale photovoltaic power plants by GEN Group company (installed capacity, electricity output in 2011, output targets for 2012) 29 Table 11: Featured topics in the "Energy-Efficient School â&#x20AC;&#x201C; The Young for Energy Efficiency" contest in 2011 37 Table 12: Number of participating institutions in the Energy-Efficient School project in school years 2008/09 through 2010/11 38 Table 13: Number of employees by company/group and by level of education as at 31/12/2011 40 Table 14: Number of employees by company/group: comparison between 2010 and 2011 (both years as at 31/12) and plan for 2012 41 Table 15: Number of scholarship recipients in GEN Group companies as at 31/12/2011 44 Table 16: An overview of professional events and projects we provided organizational, expert or financial support in 2011 47 Table 17: Business results 50 Table 18: Electricity production targets and results in GWh 51 Table 19: Electricity production available to the GEN Group 51 Table 20: Electricity purchased in GWh 52 Table 21: Electricity sold in GWh 52 Table 22: Investments made by the GEN Group companies 53 Table 23: Number of employees in the GEN Group companies 54 Table 24: Structure of employees of the GEN Group companies by level of education 54 Table 25: Number of scholarship recipients in the GEN Group companies 54

Acronyms and abbreviations

Index of figures

1 Introduction

Figure 1: Figure 2: Figure 3: Figure 4: Figure 5: Figure 6: Figure 7: Figure 8: Figure 9: Figure 10: Figure 11:

The GEN Group as at 31/12/2011 GEN and sustainable development Structure of electricity production sources in Slovenia in 2011 Structure of electricity production sources in the GEN Group in 2009, 2010 and 2011 Comparison of CO2 emissions per kWh produced in 2011 Electricity production units of the GEN Group Timeline of the JEK 2 project Level of education: Doctors of Science Level of education: Masters of Science Level of education: Bachelors of Science/Arts Profiles of visitors to the World of Energy from July to December 2011

7 12 19 20 21 25 34 42 43 43 45

Introduction The GEN Group works in partnership with nature to produce the most widely used form of energy â&#x20AC;&#x201C; electricity. It is generated from various natural resources and sent on a journey through wires, at the end of which it turns into light, heat or the driving force. The energy sources used by the GEN Group to generate electricity are primarily nuclear, hydro and solar power. At GEN Control Centre, which is part of GEN Information Centre, we work on ensuring optimal and quality production of all our power plants and optimizing operating costs for the entire Group.

Photo: GEN Control Centre

Introduction Sustainability report of the GEN Group 2011

1.1 About the GEN Group and the company GEN

Introduction Sustainability report of the GEN Group 2011

1.1.2 Organizational structure of the GEN Group

We give consumers the power to choose. This way we add our share to increasing competitiveness in Slovenia's electricity market and to strengthening the entire national economy. We are a reliable producer of electricity. We create synergic effects by harnessing various sustainable, zerocarbon energy sources, predominantly: • nuclear power, • hydropower, and • solar power.

Investment in the maintenance and optimization of existing, as well as the development of new, production facilities is an important strategic activity of the GEN Group. This is the only way we can provide enough electricity to help reduce Slovenia's dependence on imported energy. Co-investing in various new energy projects presents both a challenge and an opportunity for the members of the Group.

50%

NEK, d.o.o.

100%

SEL, d.o.o.

10%

SRESA, d.o.o.

100%

TEB, d.o.o.

25%

30%

HSE Invest, d.o.o.

2.8%

12.6%

HESS, d.o.o. GEN-I,

d.o.o. Belgrade,

TRADING AND SALES

The GEN Group companies annually produce between 5,600 and 6,300 gigawatt-hours (GWh) of electricity, which makes up 40–45% of the total demand for electricity in the national electric power grid of the Republic of Slovenia.

We effectively trade in electricity. We rely on our knowledge, professional approach and creative energy. We boast an effective array of functions for effective management of risks associated with electricity purchases, trading and sales. Thanks to a guaranteed provision of power and electricity, we give the Group's production sources access to reliable and steady income, while the parent company sees to the optimal sale of power and electricity all the way to consumers. Consumers receive a quality service in the form of a comprehensive supply of electricity and get access to optimized purchase channels.

OTHER INVESTMENTS

The mission shared by all the companies in the GEN Group is to provide a reliable, safe and competitive electricity supply to various consumer profiles.

PRODUCTION

1.1.1 About the GEN Group

OTHER INVESTMENTS

Figure 1: The GEN Group as at 31/12/2011

Serbia

50%

GEN-I, d.o.o.

100%

GEN-I,

d.o.o. Zagreb,

Croatia

6.4%

9.3%

Nova KBM, d.d.

ZEL-EN, d.o.o.

GEN-I,

Budapest Kft,

d.o.o. Sarajevo,

Athens SMMLC,

Sofia SpLLC,

Vienna Gmbh,

100%

Hungary

GEN-I,

Tirana Sh.p.k.,

Albania

BiH

GEN-I,

Tirana Sh.p.k.,

Kosovo Branch

Greece

GEN-I,

DOOEL Skopje,

Macedonia

Bulgaria

S.C. GEN-I,

Bucharest s.r.l.,

Romania

Austria

GEN-I,

Milano S.r.l.,

Italy

1.1.3 About the company GEN – general information

Registered company name: Short registered name: Type of entity: Registered office:

Telephone and Fax: Website and E-mail:

GEN energija, d.o.o. GEN, d.o.o. limited liability company Vrbina 17, 8270 Krško +386 7 49 10 112, +386 7 49 01 118 www.gen-energija.si, info@gen-energija.si

Year of foundation: 2001 Founder and sole partner: Republic of Slovenia VAT ID number: SI44454686 Registration number: 1646613

Bank accounts: Activity: Share capital:

NLB 02924-0090457150 Banka Celje 06000-0904571665 SKB banka 03155-1000503323 E/64.200 Activities of holding companies, K/35.140 Electricity trading and other activities. EUR 26,059,796.00

Martin Novšak Danijel Levičar (until 30/11/2011)

CEO - director: Chairman of the Supervisory Board:

Introduction Sustainability report of the GEN Group 2011

Number of employees (31/12/2011): 50

Introduction Sustainability report of the GEN Group 2011

1.1.4 Governance and bodies of the company GEN

1.1.5 Holding activity of the company GEN

Pursuant to the Articles of Incorporation of the Limited Liability Company GEN energija, d.o.o., the company is managed by the founder (the Republic of Slovenia) directly and through the company bodies: Supervisory Board and CEO - director.

One of GEN's principal operations is activities of holding companies, that is, governing other legally independent companies through equity interests held in them by GEN as the controlling company.

The company is headed by the CEO - director, who is appointed and removed by the Supervisory Board. After the term of five years, the CEO - director may be reappointed. The company has a Supervisory Board, which is made up of five members, who are appointed by the founder for a term of four years and can be reappointed after the term expires. For greater transparency of operations of both the company GEN and the GEN Group, the Supervisory Board established a Review Board. CEO - director: Martin Novšak Supervisory Board: Chairman: Danijel Levičar (until 30/11/2011) Vice Chairman: Gorazd Skubin (until 25/07/2011) Tomaž Savšek, PhD (from 26/08/2011) Board members: Rudi Brce, MSc (until 25/07/2011) Andro Ocvirk, PhD Davorin Dimič, MSc Uroš Saksida, MSc (from 25/07/2011) Tomaž Savšek, PhD (from 25/07/2011 to 26/08/2011) Review Board: Chairman: Andro Ocvirk, PhD Vice Chairman: Branko Ogorevc Member: Davorin Dimič, MSc The financial statements for 2011 have been audited by ERNST & YOUNG.

As a holding company, GEN carries out management operations through equity interests in subsidiaries and jointly controlled entities by participating in general meetings and by managing financial results of the subsidiaries, pursuant to relevant articles of incorporation or memorandums of association. It also approves relevant documents and appoints representatives into supervisory boards of subsidiaries and jointly controlled entities. GEN's management regularly coordinates its actions with the managements of subsidiaries and jointly controlled entities. Based on the business results of individual companies within the GEN Group and the Group as a whole, we find that GEN steers the Group well, that the companies are successful in keeping costs under control, and that they fully follow their respective business plans.

Introduction Sustainability report of the GEN Group 2011

1.2 Word from the Director

Efficient, responsible and knowledge-based electricity supply The GEN Group maintains its sustainable focus by fulfilling its mission of providing a reliable supply of electricity it generates in an environmentally friendly way and at competitive prices. Sustainability is, therefore, the common denominator of our aims to achieve business excellence and operational efficiency, be environmentally responsible and care for the society, all of which are reflected in our vision, mission and strategy and fulfilled by the Group companies in their day-to-day operations. The year 2011, which was a dynamic one indeed, was strongly marked by a number of major events, accomplishments and milestones: • As much as 99.6% of electricity generated by the GEN Group power plants came from sustainable and renewable sources. Accounting for nearly 91%, nuclear power from Krško Nuclear Power Plant (NEK) is the primary source, followed by hydropower from SEL and HESS, making up nearly 9% of the GEN Group's total electricity output. • The output of the Group's power plants was below targets in 2011 due to extremely poor hydrological conditions year-round, over which our power plants obviously have no control. Still, we are particularly pleased to have met 95% of the production targets. The production at NEK even exceeded output targets. Taking into account the persistently tense situation in the markets, manifested as sluggish economic recovery in the aftermath of the global recession and the resulting decline in electricity consumption, among others, we believe that our business results in 2011 were good. • In nuclear terms, the year 2011 was marked by the devastating earthquake and tsunami that hit the east-

ern coast of Japan. This natural disaster also damaged Japan's Fukushima nuclear power plant, causing the release of radioactive materials into the environment, as a result of which more stringent international nuclear power plant safety regulations were imposed. Safety assessments and inspections were also carried out at Krško Nuclear Power Plant, and the results confirmed that the power plant meets the highest international and European safety standards. • NEK continued to undergo comprehensive technological modernization in 2011 in accordance with its long-term investment plan. Since no planned maintenance outage took place at NEK in 2011, technological modernizations were made while the plant was in operation. Preparation for the annual planned maintenance outage, which started in April 2012, was also underway. In autumn 2011, NEK also marked the 30th anniversary of safe and efficient operation. Since October 1981, the power plant has generated more than 137 thousand gigawatt-hours of electricity. After three decades of operation, NEK remains a highly efficient and safe nuclear power plant in terms of the origin of technology, its modernization, organisation and operation standards.

newable sources. The main investments were made in SEL's existing facilities (mostly for completing Stage 2 of the Moste HPP reconditioning) and in hydroelectric power plants on the lower Sava River (HESS) and the middle course of the Sava River (SRESA). At TEB, SEL and, to a lesser extent, GEN we increased the production capacities of solar power plants and set up the first wind power plant. Still, solar and wind power account for only a small share compared to the primary energy sources used in the GEN Group (nuclear and hydropower).

• As part of the work on the JEK 2 project, in 2011 we completed a legal framework analysis for the construction and operation of a new Krško Nuclear Power Plant unit, and we also launched funding analyses and studies, environmental impact assessments, location and site analyses and a study of the possibilities for setting up district heating for towns within a 100-kilometre radius of NEK. How the project will continue depends on what clear decision the owner, the Republic of Slovenia, will make.

• Knowledge is the common thread that runs through all the GEN Group companies and makes it possible for us to achieve good business results. We recognize the value of educated, knowledgeable, committed and responsible employees. 75 new experts joined the GEN Group companies in 2011, increasing the total number of employees to 1026, more than half of which hold at least a higher education qualification. New jobs are going to be added in 2012 as well.

• In 2011 we made a number of notable investments in the area of promoting electricity production from re-

• We also seek to spread the knowledge of energy and energy technologies among our stakeholders, both

in the immediate and wider environments in which we operate. The central event in 2011 in this respect was the opening of GEN Information Centre and, incorporated into it, the World of Energy, Slovenia’s first interactive multimedia learning centre on energy and energy technologies. From July to December 2011, we have already had more than 3400 visitors. Without knowledge, there can be no understanding, without understanding, there can be no interest, and without interest, there can be no serious, responsible, knowledge-based cooperation and no sound judgement to steer the decision-making on a topic as crucial as our energy future. So, it is no coincidence that the knowledge of energy and energy technologies is the common thread that will lead you through this report. Have a pleasant read. Martin Novšak Director, GEN energija, d.o.o.

Introduction Sustainability report of the GEN Group 2011

1.3 GEN and sustainable development

1.4 Report's compliance with GRI guidelines

The 2011 report on the achievement of sustainable development in the GEN Group and its companies (hereinafter: Sustainability Report) is the third consecutive yearly report of this kind. The report assesses and evaluates the impacts the operation of our power plants, the planning and implementation of development and strategic projects and the relationships with consumers and other key stakeholders in the local and national environment have on the three core dimensions of sustainable development: economic, environmental and social dimension.

The GEN Group follows the guidelines on reporting on sustainable development, so the substance and structure of this Sustainability Report are compliant with the GRI guidelines (Global Reporting Initiative – www. globalreporting.org). This way we provide a clear and transparent view of our operations, results and plans and ensure their comparability at the national and the international level.

The strategic pillars of the GEN Group’s sustainable development have been given concrete forms: • operational performance and business excellence, • environmental responsibility, and • caring for society. The key topics of the Sustainability Report, in alignment with the Annual Report for 2010, are presented in seven main sections, which report on the environmental, economic or technical and social impacts of our operation. The report includes information on the entire GEN Group and its individual companies: GEN energija, NEK, SEL, HESS, GEN-I and TEB. Individual sections of the report contain clear references as to whether the information provided refers to the entire Group or one or more of its constituent companies. We have also managed to define, in more detail than in previous years, future goals regarding the achievement of sustainable development (that is, for 2012). Our plan is to continue to report on sustainability on a yearly basis also in the future, and we are going to try to ensure a higher degree of correlation between operational information and what is known as sustainability information, most of all in the areas of management and environmental and social aspects of our operation.

As illustrated in the "GEN and sustainable development" figure, we see knowledge as an intersection or common denominator crucial for getting results in all the three areas relevant to the achievement of sustainable development. This year's focus on sustainable development is reflected not only in the substance, but also the format of the report. The common thread, which runs through the main sections of the Sustainability Report and the Annual Report, takes us on an ambitious course towards spreading and expanding the knowledge and understanding of topics associated with energy and energy technologies and raising interest in them. We believe this to be the only right way to shape our energy future responsibly.

Table 1: An overview of the report's compliance with GRI indicators Chapter (item) in this report

Enjoy the read. If you have any questions, suggestions or comments, feel free to let us know. The GEN Group Sustainability Report editorial team e-mail: info@gen-energija.si

1. Introduction 1.1 About the GEN Group and the company GEN 1.2 Word from the Director

Figure 2: GEN and sustainable development

business excellence, operational performance

KNOWLEDGE caring for society

The table below includes an overview of relevant GRI indicators by section and by page of the Sustainability Report 2011, denoting compliance both with the standard sustainability reporting guidelines (GRI: Sustainability Reporting Guidelines. Version 3) and specific guidelines for the electric utility sector (GRI: Sustainability Reporting Guidelines & Electric Utility Sector Supplement, RG Version 3/EUSS Final Version).

environmental responsibility

Page in this report

Applicable standard GRI indicators (Standard Disclosure)1

Applicable specific GRI indicators (EUSS)2

5 6

2.1, 2.3, 2.4, 2.6, 4.1, 4.2

1.1

1.3 GEN and sustainable development

3.1, 3.3, 3.4, 3.5

1.4 Report's compliance with GRI guidelines

3.12

1.5 Outline of the main highlights of 2011

2. Main topics

2.1. Portfolio of sustainable and renewable energy sources: 99.6%

2.2 E fficient operation: meeting more than 95% of production targets

EU2, EU6

2.3. I nvestments in renewable energy sources: EUR 8.1 million

EU2, EU8

2.4. JEK 2 project: technical bases and studies ready

EU6, EU8

2.5. Promoting energy efficiency: awareness raising campaigns, measures and projects

4.16, EN6, EN7, EN26

EU23

2.6 K nowledgeable people: 1026 employees, more than half with at least higher education qualifications

LA1

EU14

2.7 T he World of Energy: more than 3400 visitors in six months

4.14, 4.16

3. Key performance indicators

EC1

EN16

Global Reporting Initiative: Sustainability Reporting Guidelines. Version 3.0 (www.globalreporting.org). Sustainability Reporting Guidelines & Electric Utility Sector Supplement. RG Version 3.0/EUSS Final Version (www.globalreporting.org).

1 2

EU2

EU2, EU8, EU14

Introduction Sustainability report of the GEN Group 2011

1.5 Outline of the main highlights of 2011

Here is a brief summary of the topics examined in more detail inside the report:

99.6% of electricity we produced came from sustainable and renewable sources

GEN Group companies made EUR 8.1 million worth of investments in renewable energy sources

Promoting energy efficiency: awareness raising campaigns, measures and projects

As much as 99.6% of electricity generated by the GEN Group power plants comes from sustainable and renewable sources. Accounting for nearly 91%, the nuclear power from Krško Nuclear Power Plant (NEK) is the primary source, followed by hydropower, which makes up nearly 9% of the GEN Group's total electricity output. Read more on page 18.

In 2011 the GEN Group channelled most of its EUR 8.1 million investments in the area of renewable energy sources (RES) into hydropower projects. Of key importance are SEL's investments in its existing facilities and investments in hydroelectric power plants on the lower Sava River (HESS) and the middle course of the Sava River (SRESA). We have also invested in projects for harnessing solar and wind power. Read more on page 26.

We work towards improving energy efficiency and reducing greenhouse gas emissions in Slovenia. We design and carry out awareness-raising campaigns and other measures on the local and national scale, which are aimed at various stakeholders: school children and youth, our consumers, the industry and the public sector. Read more on page 36.

Through efficient operation of the nuclear power plant and hydroelectric power plants we met 95% of the production targets in 2011 3,250 GWh of electricity was available to the GEN Group in 2011. Our production units operated efficiently. NEK even slightly exceeded its production targets. The Sava River flow rates in 2011 were below average, so the electricity output of large hydroelectric power plants fell short of the targets on account of poor hydrological conditions. Read more on page 22.

JEK 2 project: investment in a sustainable energy source As the driver of the expansion of nuclear capability for the production of electricity in Slovenia, the GEN Group campaigns for a technically sound, efficient, transparent and responsible implementation of the JEK 2 project. Based on the outcomes of the studies and analyses carried out so far, we are in favour of building the second unit of the nuclear power plant (JEK 2), with the aim of securing a state-of-the-art, future-oriented electricity supply for Slovenia. Read more on page 31.

Knowledgeable people: 1026 employees, more than half with at least higher education qualifications We recognize the value of the knowledge of our 1026 employees. We interconnect and exchange the knowledge and experience in a number of ways, among generations and various spheres of operation, as well as among the Group companies. Read more on page 40.

The World of Energy: more than 3400 visitors in six months We believe that questions concerning energy and energy production are among those issues that concern us all. This is why we seek to increase the understanding of this subject and to raise interest in it among various stakeholder profiles. In July 2011 we opened the World of Energy, an interactive multimedia learning centre, which is incorporated into GEN Information Centre. Read more on page 45.

Main topics Like all natural elements, running water gets its energy from the most powerful source, the sun. The sun's heat turns the water on the surface of the seas and in wet soil into water vapour, which rises into the atmosphere and condenses into clouds of various shades. Rain and other forms of precipitation then feed the currents of rivers and streams, which, flowing towards the sea, create a moving force we use to generate new, electrical currents. Investment in the maintenance and optimization of existing production facilities is an important strategic activity of the GEN Group. That way we are able to effectively deliver the right amounts of clean, sustainable and renewable electricity at competitive prices and reduce Slovenia's reliance on imported energy. Our projects aimed at harnessing hydropower are at the heart of our efforts in this respect.

Photo: Inside the turbine building of Moste HPP

Main topics Sustainability report of the GEN Group 2011

2.1 Portfolio of sustainable and renewable energy sources: 99.6%

The GEN Group in 2011 again made a significant contribution towards the achievement of low- or zero-carbon electricity production. Efficiently, safely and, most of all, with a focus on preserving the environment and preventing climate change.

Figure 3: Structure of electricity production sources in Slovenia in 2011

0.7%

Table 2: The electricity production portfolio of the GEN Group is based primarily on sustainable and renewable energy sources (data for 2011) Form of energy

Nuclear Hydro (large HPPs)

GEN Group power plant

Electricity produced in 2011* (GWh)

Electricity produced in 2011* (% of the total GEN Group output)

Krško Nuclear Power Plant – NEK

2,951**

91%

28 259

3,238

100%

Hidroelektrarne na spodnji Savi – HESS Savske elektrarne Ljubljana – SEL

TOTAL

23.8%

41.7%

*The table does not include the electricity produced by small-scale hydroelectric power plants (SHPs) and small-scale photovoltaic power plants (SPPs) because, compared to the output of the nuclear power plant and the large hydroelectric power plants, it accounts for only a small share (a total of 0.04% of the GEN Group's total electricity production). Detailed information on the existing and planned electricity outputs of SHPs and SPPs and on the Group's projects in the area of developing renewable energy sources is provided under item 2.3 of this report.

33.8%

** NEK generated 5,902 GWh of electricity in 2011. Pursuant to the Intergovernmental Agreement on NEK, the company GEN was entitled to one-half of it: 2,951 GWh.

The largest generators of electricity in 2011 were the nuclear power plant (NEK) and the hydroelectric power plants (SEL and HESS). The electricity output of the gas-steam power plant (Termoelektrarna Brestanica – TEB), which does not count as production from sustainable sources, is not included in the above table. The principal function of this production unit within the GEN Group is to compensate for outages at larger production units in the Slovenian electric power grid.

Hydropower Thermal power Nuclear power Small producers

Source: Annual Report on Transmission Network Operation for 2011 (February 2012, available at www.eles.si)

NEK is the largest contributor (nearly 91%) to low-carbon electricity production at the GEN Group power plants. Its 2011 production output was 5,902 GWh. GEN was entitled to half of it, that is, 2,951 GWh.

Main topics Sustainability report of the GEN Group 2011

Figure 4: Structure of electricity production sources in the GEN Group in 2009, 2010 and 2011

12.31%

In terms of CO2 emissions, the GEN Group’s production portfolio, compared to the overall national portfolio of electricity production sources, is environmentally acceptable and focused on sustainability. Figures 3 and 4 compare the structures of electricity production sources in Slovenia for 2011 (source: "Annual Report on Transmission Network Operation for 2011", February 2012, available at www.eles. si) and the GEN Group for 2009, 2010 and 2011 (source: annual reports of the GEN Group for respective years). The structure of the GEN Group's production sources does not include data on the electricity production of small-scale hydroelectric power plants and small-scale photovoltaic power plants (to learn more, see chapter 2.3 of this report).

0.45%

NEK (Nuclear power) SEL + HESS (Hydropower) TEB (Termal power – extra light fuel oil and gas) 87.24%

Figure 5: Comparison of CO2 emissions per kWh produced in 2011 1.4 1.2

1.2

2009

13.67%

0.20%

8.83%

kg CO2/kWh

1.0 0.37%

0.6

0.460

0.2 0.003 GEN

86.13%

2010

90.81%

2011

merely as backup energy in the event of outages of larger production units in the Slovenian electric power grid. The total CO2 emissions created in the generation of electricity in the GEN Group, which are only caused by TEB, amounted to 10,230 tonnes in 2011. This translates to a mere 0.003 kg or 3 g of CO2 emissions per kWh produced. Slovenia's national average, however, taking into account the production of electricity from fossil fuels, is 0.46 kg or 460 g of CO2 emissions per kWh produced. Table 3: Balance of emission allowances in the GEN Group as at 31/12/2011 Balance of emission allowances Granted CO 2 allowances from previous years carried forward

SLO average

TPP

Great electricity production results of the GEN Group (Fig. 5) in terms of CO2 emissions can also be attributed to the fact the production almost entirely relies on sustainable and renewable sources: notably nuclear and hydropower. The percentage of electricity generated from fossil fuels (extra light fuel oil and gas, which are used as fuels by TEB) is minimal, as it accounts for less than 0.4% of the GEN Group's total electricity production and is used

Amount of CO 2 (in tonnes) 102,486

Granted CO 2 allowances for 2011

65,200

Volume of CO 2 emissions in the 1–12/2011 period

10,669

Remaining balance as at 31/12/2011

0.8

0.4

0.0

Main topics Sustainability report of the GEN Group 2011

157,017

TEB obtained a permit to emit greenhouse gases pursuant to the Environmental Protection Act. The volume of granted CO2 emission allowances for the 2008–2012 period has been defined according to the Ordinance on the national plan for the allocation of emission allowances. The granted volume is 65,200 tonnes of CO2 emission per year. In 2011 TEB emitted 10,669 tonnes and carried forward to the next period the remainder of the allowances together with the remainders from previous years (in the amount of 102,486 tonnes of CO2 emissions). Having carried forward allowances in the amount of 157,017 tonnes of CO2 emissions, also in the future TEB will not incur any additional costs associated with allowance purchases, which will have a positive effect on the performance of TEB and the entire GEN Group.

2.2 Efficient operation: meeting more than 95% of production targets

3,250 GWh of electricity was available to the GEN Group in 2011. Our production units operated efficiently. NEK even slightly exceeded its production targets. The Sava River flow rates in 2011 were below average, so the electricity output of hydroelectric power plants failed to reach the targets on account of poor hydrology. But thanks to the optimized operation management and electricity production control via the GEN Control Centre, the production figures for the entire Group were nonetheless good, meeting over 95% of productions targets. Table 4: GEN's performance in 2011: electricity production targets and results (in GWh) available to the GEN Group in 2010 and 2011 Year

Target

Result

Ratio

2010

3,142

3,123

0.9942

2011

3,405

3,250

0.9543

2.2.1 With 5,902 GWh, NEK exceeded its targets in 2011 Operating results NEK, the largest production unit in the GEN Group, which delivers base-load electric power on the daily load curve throughout the year, generated 5,902 GWh of electricity in 2011 and so exceeded its production targets. Pursuant to the Intergovernmental Agreement on NEK, the company GEN was entitled to one-half of it, which equals 2,951 GWh of electricity. Safety assurance and investments by NEK in 2011 As far as nuclear industry goes, the year 2011 was marked by a devastating earthquake and tsunami in Japan, which also damaged the Fukushima nuclear power

Main topics Sustainability report of the GEN Group 2011

plant. International analyses were quickly followed by rapid implementation of improvements required in order to assure safety in the event of unforeseen events. NEK too carried out internal safety assessments, on the basis of which short-term measures to prevent and mitigate the consequences of beyond design basis nuclear accidents were defined. The inspections and analyses confirmed the high level of robustness of NEK, which meets the highest international and European safety standards. NEK continued to undergo comprehensive technological modernization in 2011 in accordance with its long-term investment programme. The investment cost was EUR 48 million. Since no planned maintenance outage took place at NEK in 2011, technological modernizations were made while the plant was in operation. Preparation for the annual planned maintenance outage, which started in April 2012, was also underway. Planned technological modernizations in 2012 Also in 2012 the investments in technological modernization will be based around administrative requirements and operational experience to ensure that the safety and stability of the power plant are maintained and increased. April marked the beginning of the planned maintenance outage, which is expected to take 39 days. The main activities during the planned maintenance outage will be the replacement of the reactor head, the replacement of the rotor on the main electric generator and the commissioning of a third emergency diesel generator. The funding earmarked for technological upgrades in 2012 totals EUR 55.4 million. EUR 45.5 million of the planned investment cost will be financed internally with funds derived from depreciation allowances, and the rest will be sourced externally by NEK.

Main topics Sustainability report of the GEN Group 2011

Table 5: NEK electricity production (GWh) in 2011

2011

Target/ 50% target

NEK

5,900/2,950

Result/ 50% result 5,902/2,951

Ratio 1.0003

NEK's unit capability factor (in compliance with WANO): 99.2% Performance Indicators as defined by the World Association of Nuclear Operators (WANO) confirm that in 2011 NEK again met its key operating targets.

NEK's 30th anniversary of operation In the autumn of 2011 NEK marked the 30th anniversary of its first synchronization with Slovenia's power grid. Three decades ago a series of landmark events took place over a period of one year, marking a successful completion of the construction of the power plant, the installation of systems and the commissioning of the power plant. The reactor building passed the containment leak testing in February 1981, and the reactor was loaded with fuel in May that same year. The next technical challenge and milestone was getting the reactor to operate steadily at a constant capacity, which was achieved in September. Results of reactor testing during low-power operation confirmed that the design and configuration were suitable and conservative. The testing performed as the power plant was brought into full-capacity operation began with the first synchronization of the power plant with the power grid, which took place on 2 October 1981. Since then, NEK has generated over 137,000 GWh of electricity. According to the NEK management and based on the results of all safety inspections, after three decades of operation NEK remains a highly efficient and safe nuclear power plant in terms of the origin of technology, its modernization, organisation and operation standards.

After three decades of operation and a production record of more than 137,000 GWh of electricity, NEK remains a highly efficient and safe nuclear power plant. Investments in technological modernizations totalled EUR 48 million and preparations for the planned maintenance outage, which started in 2012, were underway in 2011.

Main topics Sustainability report of the GEN Group 2011

2.2.2 SEL and HESS unable to meet production targets in 2011 due to poor hydrology

Table 7: HESS electricity production (GWh) in 2011 2011 HESS

SEL: 259 GWh SEL, which generates electricity exclusively from renewable sources (predominantly hydro- and solar power), only met some 83% of its production targets for large hydroelectric power plants in 2011 on account of subnormal hydrology throughout the year. Compared to 2010, when a record output of 382 GWh was reached thanks to favourable hydrological conditions, in 2011 SEL generated 259 GWh (instead of the planned 313 GWh).

Target

Result

Ratio

0.6557

Figure 6: Electricity production units of the GEN Group

Main topics Sustainability report of the GEN Group 2011

2011 was an acutely dry year in hydrological terms Hydrologically speaking, 2011 was a markedly dry year. Even in the spring and autumn months, when water levels are typically higher, flow rates of rivers remained low. Water levels in April, September and November were down from normal by more than 60%. On the yearly level, river flow rates were as much as 38% below the average flow rates in the 30-year comparison period from 1971 to 2000. (source: ARSO)

Table 6: SEL large HPP electricity production (GWh) in 2011 2011 SEL - large HPPs

Target

Result

Ratio

313

259

0.8276

HESS: 28 GWh

The production figures of the GEN Group's hydroelectric power plants were satisfactory despite low flow rates of the Sava River throughout 2011. Their aggregate output was 259 GWh of electricity. Production control and supervision have been optimized from the GEN Control Centre.

In 2011 the balance subgroup GEN, based on GEN's equity interests, obtained 28 GWh of electricity (which accounts for 15.4% of HESS' total output) from HESS and under the agreement with HSE, based on the equity interest in HESS, an additional 2 GWh, which makes a total of 30 GWh. This means that only 65.57% of the production target was met. The reason why HESS was unable to meet its production targets is poor hydrology, that is, subnormal flow rates of the Sava River throughout the year, the same as with SEL.

Nova Gorica

GEN-I, d.o.o. – Business Unit Nova Gorica

Ljubljana GEN, d.o.o. – Business Unit Ljubljana GEN-I, d.o.o. – Business Unit Ljubljana

Krško

GEN, d.o.o. GEN-I, d.o.o.

Nuclear Hydro Solar Thermal Business unit

Main topics Sustainability report of the GEN Group 2011

2.3 Investments in renewable energy sources: EUR 8.1 million

In 2011 the GEN Group channelled most of its EUR 8.1 million* worth of investments in the area of renewable energy sources (RES) into hydropower projects. Of key importance are SEL's investments in its existing facilities and investments in hydroelectric power plants on the lower Sava River (HESS) and the middle course of the Sava River (SRESA). We have also invested in projects for harnessing solar and wind power.

2.3.1 Hydropower – key projects and investments SEL's central development project: completion of Stage 2 of the Moste HPP reconditioning SEL consistently carries out regular major maintenance work on its facilities and makes intense development efforts in terms of harnessing renewable energy sources. In 2011 SEL spent EUR 5.22 million in depreciation allowances and other own resources on investments and development. The most important project in 2011 was Stage 2 of the reconditioning of Moste HPP. All the technical and mechanical work was completed and the systems went online as part of start-up test runs. A technical inspection of the facility was carried out by the relevant authority in November, after which a building permit was issued. An application for an operating licence has also been submitted for approval. The operating licence is expected to be issued in the first half of 2012. Other major investments in hydropower made by SEL in 2011 were the upgrade of the secondary system, reconstruction of the 110 kV switching station at Mavčiče HPP, replacement of the turbine control system at

In addition to investing financial resources into its running and new projects to tap hydropower, the GEN Group, through the knowledge and experience of its people and through its strategically planned training scheme, makes a substantial contribution to the efficient operation and maintenance of its existing hydroelectric power plants: Moste HPP, Medvode HPP, Mavčiče HPP and Vrhovo HPP.

Vrhovo HPP, overhaul of the process water pumping station and extension of the floating wall at Vrhovo HPP, and reconstruction of the 110 kV transformer substation at Moste HPP. In 2012 SEL plans to channel its financial resources into investments and the development of its existing production units, as well as into searching for opportunities in the area of harnessing renewable energy sources for generating electricity. The estimated total amount earmarked for investments and development is EUR 7 million. HESS project: the GEN Group puts EUR 2.73 million into the construction of hydropower plants on the lower Sava Thanks to our in-depth knowledge of hydroelectric power plant technologies and remarkable experience in this area, in 2011 we continued to expand and diversify our hydropower production portfolio. The main focus was on the construction of hydroelectric power plants on the lower Sava River (HESS). GEN invested EUR 2.23 million in HESS in 2011, and the investment of the entire GEN Group in HESS amounted to EUR 2.73 million. SRESA project: GEN and SEL join the project The construction of nine (or ten) hydroelectric power plants on the middle course of the Sava River from Ježica to Suhadol is being planned. The hydropower plants would be set in the following locations: Ježica (or Tacen and Gameljne), Šentjakob, Zalog, Jevnica, Kresnice, Ponoviče, Renke, Trbovlje and Suhadol. By signing the Deed of Partnership for the establishment of the company SRESA in November 2011, the companies GEN and SEL joined the project as holders of a 10% and 30% interest in the company respectively.

*The total amount of EUR 8.1 million comprises investments made by the GEN Group companies in HESS, SEL and SRESA and in TEB photovoltaic power plants. The purchase of the interest in SEL, however, is not included because it is a financial investment (though still considered an investment in RES).

Production at small-scale hydroelectric power plants SEL's small-scale hydroelectric power plants (SHP Mavčiče and SHP Vrhovo) generated 459 MWh of electricity in 2011, which is 3 MWh more than planned. At the same time, this also represents a 29 MWh increase over the 2010 production of SEL's small-scale hydroelectric power plants, which was 430 MWh. Table 8: Electricity production (MWh) of SEL small-scale HPPs in 2011 2011

target (MWh)

result (MWh)

Ratio

456

459

1.0066

SEL small-scale HPPs

2.3.2 Solar power Production capacities of photovoltaic power plants are small compared to the rest of low-carbon and zero-carbon sources in the Group (mostly nuclear and hydropower). Still, investments in the development of knowledge and human resources and in the expansion of technologies for tapping solar energy to generate electricity represent an important area of development for the GEN Group. In this respect, we managed to meet most of our goals for 2011 and we have also set clear goals for 2012.

Of the EUR 8.1 million worth of investments that the GEN Group made in renewable energy sources (RES), in 2011 most of it went into Stage 2 of the reconditioning of Moste HPP (company SEL). EUR 5.22 million was earmarked for investment and development. All the work was completed and the systems went online as part of start-up test runs.

Table 9: Overview of the progress on meeting the set goals in 2011: SEL and TEB's solar power projects Plans for 2011 (source: Sustainability Report of the GEN Group 2010)

Results, plans for 2012

SEL Small-scale photovoltaic power plant SPP Vrhovo 2 (right bank of the Vrhovo HPP reservoir, on the power plant‘s energy dam, nominal power: 355 kW): obtainment of production unit declaration and guarantee of origin of electricity) Small-scale photovoltaic power plant SPP Medvode 2 (roof over the switching station in Medvode, nominal power: 26 kW)

completed, power plant in operation

TEB A stand-alone solar power plant "Solar Park SPP TEB 4“ (nominal power: 504 kW): obtainment of a building permit, contractor selection, and start of construction

SEL SEL added two more photovoltaic power plants, SPP Medvode 2 and SPP Vrhovo 2, to its existing three operating photovoltaic power plants (SPP Mavčiče, SPP Medvode 1 and SPP Vrhovo 1) in 2011. The total electricity output from all five small-scale photovoltaic power plants in 2011 was 665 MWh, of which the largest share (nearly 422 MWh) was contributed by SPP Vrhovo 2. Small-scale photovoltaic power plant Medvode 2 This small-scale photovoltaic power plant, with a nominal power of 26 kW, is located on the roof over the switching station in Medvode. SEL completed the designs for the load-bearing structure and finished electrical installation work in April 2011 and obtained from the power distributor Elektro Gorenjska permission to connect to the distribution

Main topics Sustainability report of the GEN Group 2011

ü/û

Partially completed: completed documentation for obtaining a building permit, revised tender documentation. Future of the project dependent on the economic situation and other TEB‘s projects (PB 1–3).

grid. Setup and installation work was completed in November 2011. After that, an internal technical inspection was carried out and a declaration for the production facility for generating electricity from renewable energy sources was obtained. The investment in SPP Medvode 2, which totalled EUR 103,544 in 2011, is now closed and the power plant is in operation. Its 2011 production output was 1 MWh. Small-scale photovoltaic power plant Vrhovo 2 SPP Vrhovo 2, with a nominal power of 355 kW, is SEL's largest photovoltaic power plant. Its estimated annual electricity output is 404 MWh. In the first quarter of 2011, SEL collected all the required documents and signed an agreement to receive a bonus for the electricity produced. This solar power plant generated nearly 422 MWh of electricity in 2011.

TEB Small-scale photovoltaic power plants reach 106% of the target

Main topics Sustainability report of the GEN Group 2011

They generated an aggregate of 171 MWh of electricity, and the output target for 2012 is 159 MWh.

As a producer of electricity, Brestanica Thermal Power Plant seeks to increase its utilization of renewable energy sources and its energy efficiency. TEB's small-scale photovoltaic power plants (SPP TEB 1 from 2009 and SPP TEB 2 and SPP TEB 3 from 2010) exceeded their planned target on account of favourable weather conditions in 2011 and finished the year at 106% of the target.

Last year TEB completed the documentation for obtaining a building permit for the installation of a stand-alone photovoltaic power plant "Solar Park SPP TEB 4", with a nominal power of 500 kW, and revised the tender documentation. How the project will continue in the future depends on whether the economic situation will improve and the progress made on the project to replace old gas units with new ones (PB 1–3).

Table 10: Overview of small-scale photovoltaic power plants by GEN Group company (installed capacity, electricity output in 2011, output targets for 2012) GEN Group company/ Production facility

Installed capacity (kW)

Total output in 2011 (MWh)

Effectiveness in 2011 (%)

Output target for 2012 (MWh)

588.6

665

108

640

SPP Mavčiče

71.4

114

SPP Medvode 1

58.8

112

SPP Medvode 2

SPP Vrhovo 1

77.4

120

SPP Vrhovo 2

355

422

104

404

2. TEB (total)

169.8

171

106

159

SPP TEB 1

38.1

106

SPP TEB 2

81.8

111

SPP TEB 3

49.9

216

799.4

867

112

843

1. SEL (total)

3. GEN SPP GEN TOTAL

Main topics Sustainability report of the GEN Group 2011

2.4 JEK 2 project: technical bases and studies ready

GEN Small-scale photovoltaic power plant on the roof of GEN Information Centre The small-scale photovoltaic power plant on the roof of GEN Information Centre has an installed capacity of 40.32 kW and its estimated annual output ranges between 40 and 45 MWh. It was put into operation in May 2011 and produced 31 MWh of electricity by the end of the year. Installation of the first wind turbine for home and commercial use

Thanks to our in-depth knowledge of hydroelectric power plant technologies and remarkable experience in this area, we continued to expand our hydropower production portfolio in 2011. The main focus was on the project to build hydroelectric power plants on the lower Sava River (HESS), in which the entire GEN Group invested an aggregate of EUR 2.73 million.

SEL installed a small wind turbine, with a nominal capacity of 2.2 kW, at its Medvode premises in March 2011. It is a BTPS wind turbine (Blade Tip Power System) suitable for home and commercial use, which operates at wind speeds as low as around 1 m/s. The system has been fitted with a Li-ion battery and an inverter, which supply power to some of the exterior lights and operate even in the event of external grid outage. All the work was carried out in-house and at their own expense. Its planned annual output is 2,750 kWh.

As the driver of the expansion of nuclear capability for the production of electricity in Slovenia, the GEN Group campaigns for a technically sound, efficient, transparent and responsible implementation of the JEK 2 project. Based on the outcomes of the studies and analyses carried out so far, we are in favour of building the second unit of the nuclear power plant, JEK 2, with the aim of securing a state-of-the-art, future-oriented electricity supply for Slovenia. Slovenia's energy policy is aligned with the European energy policy, whose main goals are to promote energy efficiency, electricity from renewable energy sources (RES) and cogeneration of heat and power (CHP) and to prevent climate change. The Government of the Republic of Slovenia also included the option of building the second unit of Krško Nuclear Power Plant (JEK 2) among its set of measures and projects aimed at securing development. The GEN Group fulfils its mission first and foremost through investments in clean, sustainable and renewable energy sources for supplying Slovenia with electricity. We place the greatest emphasis on maintaining and expanding our nuclear capability as one of the cornerstones of the sustainable development of Slovenia's energy industry. The JEK 2 project meets many of the sustainable development requirements in all the three relevant dimensions: • social: reliable and safe production and supply of electricity in the long term by using the best, most advanced and safest technologies; • environmental: minimal impacts on the environment and optimal utilization of space; • economic: price stability and competitiveness, both for households and the Slovenian economy.

2.4.1 Progress of the JEK 2 project so far As the driver of the expansion of nuclear capability for the generation of electricity in Slovenia, the GEN Group campaigns for a technically sound, efficient, transparent and responsible completion of the JEK 2 project. In the preliminary stage of the project, since 2006, we have carried out a number of activities that led, among others, to the completion of project feasibility studies. The purpose of the studies was to examine the energy, environmental, technological and economic feasibility of the project. The project feasibility studies and analyses have been joined together in a single, comprehensive document titled "Prefeasibility Study of the JEK 2 Project". In January 2010 we submitted to the ministry responsible for the energy industry an application to obtain an energy licence, complete with all the required supplemental documentation and supported by a comprehensive, revised prefeasibility study, which was also accompanied by an opinion of principle issued by ELES on the connection of the planned facility to the transmission system of the Republic of Slovenia. In addition, the following key documents have already been prepared: • conceptual design of the JEK 2 project, which includes technological solutions developed to accommodate for specific needs of various possible power plant suppliers; • assessment of the project's impacts on the economic and social indicators in the local and wider environment; • strategic assessment of environmental impacts (for siting purposes); • a draft environmental report for the overall environ-

mental impact assessment of the new JEK 2 unit at the planning level (for the process of drawing up the National Energy Programme). The expansion of the nuclear option was briefly described and defended in a consultative document entitled "The Green Book on the National Energy Programme of Slovenia", on the basis of which concepts and scenarios for the National Energy Programme (hereinafter: NEP) were later developed. It should be noted here that all the scenarios of the proposed NEP include further use of nuclear power as a major energy source for the generation of electricity. The unveiling of NEP, which started in 2011 in Slovenia, will continue to take place in the neighbouring countries in 2012. The international cross-border unveiling and assessment are expected to conclude in the first half of 2012.

2.4.2 Events and activities in 2011 The news and aftermath of the devastating earthquake and tsunami on the eastern coast of Japan, which claimed the lives of more than 20 thousand people, resonated around the world and in the nuclear industry in particular in 2011. This natural disaster also damaged Japan's Fukushima nuclear power plants, causing the release of radioactive materials into the environment, luckily without any loss of human life. The disaster caused a shift in the sociopolitical acceptability of new projects to build nuclear power plants in some countries around the world and in the EU. In the wake of the natural disaster, numerous analyses and studies are being conducted to determine the causes and effects of the Fukushima accident. As part of safety analyses and in response to the introduction of more stringent safety standards after the Japan earthquake, we at GEN analyzed the huge international reaction of various countries to the new situation

Main topics Sustainability report of the GEN Group 2011

in the areas of safety requirements and energy policies. We found that only three countries changed their position on nuclear power: Germany, Switzerland and Italy. Other countries, such as the USA, the UK, France, Finland, Sweden, the Czech Republic, Russia, China, India, etc., on the other hand, are keeping nuclear power as a major sustainable source of electricity and are carrying on setting up projects and building new nuclear power plants. NEK conducted a number of in-depth safety analyses in 2011. In the most recent safety analyses they also addressed the safety issues that came to light after the earthquake and tsunami in Japan. The results confirmed that Krško Nuclear Power Plant as it is today maintains a high level of safety and that the JEK 2 project is feasible from the safety standpoint as well. Analyses carried out on the basis of safety characteristics of potential reactors for the new unit of Krško Nuclear Power Plant have shown that these also comply with the more stringent criteria of the so-called stress tests. The safety analysis was carried out in compliance with the highest international IAEA (International Atomic Energy Agency) safety standards as well as EU standards. A safety report for the purposes of the National Energy Programme was also produced. This report includes sections from the safety report that are needed in the preparation stage for NEP. It provides an overview of safety characteristics from suppliers offering pressurized water reactor systems with a capacity between 1100 and 1600 MW, which is in line with the estimated JEK 2 capacity as defined in the draft NEP. The design and analysis of the legal framework for the construction and operation of the new unit of Krško Nuclear Power Plant were completed in 2011. The aim of this assignment was to analyze all relevant national, European and international laws that must be adhered to dur-

Main topics Sustainability report of the GEN Group 2011

ing the implementation of the project. This way we aim to reduce any risks that might come to light as a result of subsequently identified legal barriers, both during the construction and operation of the nuclear facility.

2.4.3 Studies underway Apart from the above studies, which were conducted and completed in 2011, analyses and studies in the following areas are currently underway: • financing, • environmental impact assessments, • facility location, and • possibilities for district heating. Financing In terms of financing, we are currently working on a preliminary analysis of the investment programme and we are looking into various financing options. We have drafted a financial scheme of the project, which envisages the participation of the company GEN and other strategic investors. Since we are still in the early stages of the project, only the basic financial scheme has been drafted so far. A detailed environmental report and facility location analyses A detailed environmental report is currently being drawn up. We are also continuing with facility location analyses. The results obtained will allow us to optimize the micro location for the new nuclear power plant. Possibilities for district heating As part of the preparations for the JEK 2 project, we are also looking at possibilities of using the heat from NEK

So far we have conducted, in the framework of the JEK 2 project, those expert studies that allow a well-grounded political and social discourse on the energy future of Slovenia and on the future role of nuclear energy. The project is now entering a stage where, in order for the project to continue, it will be up to the owner, the Republic of Slovenia, to make a clear decision.

for district heating. The main purpose and goal of this assignment is to technically, economically and environmentally identify and evaluate the possibilities for setting up district heating and cooling for Krško and Brežice and larger urban areas in a 100-kilometre radius using the heat from NEK. This way we will be able to contribute an even larger share towards sustainable heating because this type of heating is very competitive, and it helps reduce greenhouse gas emissions and increase the share of domestic energy sources.

2.4.4 Continuation of the JEK 2 project in 2012 The project is now entering a stage where, in order for the project to continue, it will be up to the owner, the Republic of Slovenia, to take a clearer position on the construction of JEK 2. So far we have conducted the expert studies in the framework of the JEK 2 project that allow

Main topics Sustainability report of the GEN Group 2011

a well-grounded, broader political and social discourse on the energy future of Slovenia and on the future role of nuclear energy. Given that activities for the adoption of a new National Energy Programme are to take place in 2012, all the bases have been covered to go ahead with the siting procedure and to defend the preservation and expansion of the nuclear option in the new national strategic document. Up to 2011, the JEK 2 project was on schedule. Project feasibility studies have been completed, and the required technical documents to support the decision-making process at the level of the National Energy Programme and the technical bases for the preparation of the national spatial plan have been prepared. This includes conceptual design specification, prefeasibility study, conceptual designs, project requirements and preliminary environmental and safety reports. How the project will continue is up to the owner, the Republic of Slovenia.

Figure 7: Timeline of the JEK 2 project Operation Construction Preparing for construction Preparing for tendering, tendering & contract

Implementation

year 10 years 5 – 9

years 3 – 5

years 1 – 3

Decision made by the owner (RS) to go ahead with construction Preparation

Site analysis & siting Analyses & feasibility studies

Completed

Underway

Why Slovenia needs nuclear energy The electricity supply situation in Slovenia has been growing increasingly intense over the last decade. As gross domestic product grew and the standard of living moved closer to that of developed EU Member States, power consumption increased as well. Because domestic production could no longer keep up, Slovenia experienced a shortage in electricity as high as 25%. With the onset of the global economic crisis, which struck in 2008, the situation has changed dramatically. The downturn in economic activity caused the demand for electricity to drop. But given the nature of the decrease in consumption, it can safely be said this is only a temporary state of affairs. Once the economy has recovered, the consumption will again rise in line with the long-term trends and projections. Apart from these general trends in the projected growth in electricity consumption, in Slovenia we are also faced with the issue of relatively old energy production facilities, which will have to be replaced some time in the future. At the same time, we are growing increasingly aware of the impacts of the energy industry and other economic activities on the environment and the importance of delivering on the EU climate and energy commitments. Nuclear energy plays a central role here since it can make a substantial contribution towards reducing greenhouse gas emissions (compared to producing the same amount of electricity using other available technologies). All this calls for a thorough consideration of using nuclear energy in Slovenia in the long run, which can be achieved by extending the life of Krško Nuclear Power Plant (NEK) and by planning and going ahead with the expansion of NEK production capabilities – building a new unit, JEK 2. JEK 2 can contribute substantially to the development of a modern, forward-looking, reliable, safe and environmentally friendly electricity supply at stable and competitive prices in Slovenia.

Main topics Sustainability report of the GEN Group 2011

Key benefits of the planned JEK 2 project: • a safe and reliable supply of electricity (from 8 to 12 TWh per year, depending on the size of the plant); • a domestic energy source: reduced reliance on imported electricity; • a competitive energy source: affordable, predictable and stable prices of electricity; • an optimal solution in response to the environmental requirements and standards, reduced CO2 emissions on the national scale; • third-generation reactor (improved technology, enhanced safety, higher economic competitiveness); • reduced amounts of existing and future radioactive waste (mostly due to the possibility of reusing or recycling up to 96% of the mass of the nuclear fuel); • base and peak load operation; • compliance with the highest international safety requirements and standards; • possibility of recovering useful heat (district heating – locally and on a wider scale); • opportunity for the Slovenian economy to participate in all the development stages (design, construction, equipment manufacturing, outfitting and installation, co-financing); • positive effects on the nation's economic development and standard of living, highly skilled jobs. JEK 2 project – a look ahead In order for the JEK 2 project to go ahead, the following will be of particular importance in the future: • equal consideration of all electricity generation technologies at the national and the local level, setting priorities, • making a clear and timely decision in favour of the sustainable use of nuclear energy in Slovenia (the new National Energy Programme, amended laws and regulations), • establishment of a dedicated interdepartmental government body for steering and coordinating activities in the field of nuclear energy.

Main topics Sustainability report of the GEN Group 2011

2.5 Promoting energy efficiency: awareness raising campaigns, measures and projects

We work towards improving energy efficiency and reducing greenhouse gas emissions in Slovenia. Our portfolio of sustainable, zero- or low-carbon electricity generation sources, notably nuclear and hydropower, represents one of the steps towards achieving energy efficiency. This will enable us to meet the rising future demand for electricity in a reliable, efficient and environmentally friendly way – through shifts in technology and by effectively reducing the reliance on primary energy sources. In terms of energy efficiency, the GEN Group develops and implements awareness-raising and other measures on the local and national scale that are aimed at various stakeholders: school children and youth, our consumers, the industry and the public sector.

2.5.1 A portfolio of sustainable energy sources In the GEN Group we are aware of the fact that most measures for promoting energy efficiency entail technological shifts, that is, replacement of primary energy sources with electricity, which naturally only causes electricity consumption to rise. One of the principal goals in terms of energy in the EU and in Slovenia is to reduce the primary energy consumption by 20% by 2020. This can only be achieved by increasing the production of electricity to replace the primary energy sources, fossil fuels in particular. The average annual electricity consumption is forecast to increase by 2% per year up until 2020 and by about 1% per year up until 2050. It is, therefore, all the more imperative that electricity is generated from environmentally friendly, sustainable and competitive sources. So, the GEN Group's contribution to increasing energy efficiency can clearly be seen in our portfolio of sustainable energy sources used in generating electricity.

2.5.2 Raising awareness and setting up energy efficiency projects The GEN Group promotes energy efficiency among its stakeholders in a number of ways: • by spreading knowledge and raising awareness among future generations, that is, school children and youth, of energy and energy technologies, as well as the environmental, social and economic aspects of energy-focused projects and challenges, with a special emphasis on energy efficiency;

In the 2010/11 school year, like in the previous year, the Energy-Efficient School project was divided in two parts. In the first part, the participating schools, which are at the same time consumers of electricity supplied by GEN-I, kept track of how much energy they saved in the current school year (compared to the same period the year before) on account of the organizational, technical, awareness-raising and other measures that they had implemented. Ten schools participated in this part of the project. They received financial incentives from us for each megawatt-hour (1 MWh) of electricity saved in the period in question.

• by providing services and advice that promote energy efficiency among our consumers, households and the industry alike, and by promoting electricity production from renewable energy sources (RES) and through combined heat and power (CHP – cogeneration);

The second part, which involved a research and creativity prize contest titled "Energy-Efficient School – The Young for Energy Efficiency", aimed at four different age groups and addressing a variety of subjects related to energy, electricity and energy efficiency, brought together 23 schools with 101 research and creative projects.

• by conducting expert analyses and studies in the Group’s companies that will help promote energy efficiency in the industry and the public sector.

Table 11: Featured topics in the "Energy-Efficient School – The Young for Energy Efficiency" contest in 2011

The Energy-Efficient School project: 31 participating schools, 101 submitted projects Promoting energy efficiency among school children and youth is at the heart of the GEN Group’s activities. With the long-term, nationwide Energy-Efficient School project, initiated in the 2008/09 school year, we seek to raise awareness of the importance and efficient use of energy among primary and secondary school students, teachers and mentors, and head teachers of Slovenian primary and secondary schools and halls of residence. We know full well that only responsible and knowledgeable young people will push forward and expand the future achievement of the sustainable development of Slovenia and beyond, also and particularly from the perspective of our energy future.

age group

featured topic

first (primary school grades 1–3)

Where Does Electricity Come From? Find an Electrical Device

second (primary school grades 4–6)

Warm Clothing for Schools Energy Ramble

third (primary school grades 7–9)

Energy Situation in My School

fourth (secondary school)

Potential for Electricity Savings in My School

The Energy-Efficient School project redefined: "The Young in the World of Energy" At the end of the 2010/11 school year we put our heads together to see how we can upgrade and redefine the

The nation-wide awareness-raising Energy-Efficient School project was renamed "The Young in the World of Energy" in 2011 after the opening of GEN Information Centre and The World of Energy. The scope of the project was expanded to include the key topics on energy, energy technologies and the future of energy in Slovenia.

project for the 2011/12 school year. Given the fact that we opened the World of Energy, an interactive multimedia learning centre on energy and energy technologies, earlier in July 2011 as part of GEN Information Centre, we decided to align this awareness-raising project for young people more closely with the contents, more specifically exhibits and experiments, presented inside the World of Energy. The Energy-Efficient School project was renamed "The Young in the World of Energy", and its mission was expanded to include education and raising awareness of and interest in sustainable energy sources, the various modes of electricity generation, benefits of energy efficiency, and so on. In 2011 we continued our cooperation with the Eco-School programme. At the beginning of the new school year we presented the redefined project and action plan to mentors from primary and secondary schools at a nationwide event, the Conference of Coordinators, in Brdo pri Kranju. The activities on the project range from redesigning the website to reflect the new name and mission of the redefined project "The Young in the World of Energy", to preparing subject-specific teaching material for mentors on various subjects having to do with energy, organizing workshops for mentors and giving interested primary and secondary school groups free guided tours of the World of Energy. Table 12: Number of participating institutions in the Energy-Efficient School project in school years 2008/09 through 2010/11 School year 2008/09

School year 2009/10

School year 2010/11

Primary schools

Secondary schools

Halls of residence

TOTAL

Main topics Sustainability report of the GEN Group 2011

Promoting energy efficiency among consumers GEN-I, the company specializing in electricity trading and sales in the GEN Group, provides a variety of services and products whose aim is to promote efficient use of energy among consumers. They continued with the following key activities in this area also in 2011: • They perform individual assessments and analyses of load curves on a regular basis for all consumers whose annual consumption exceeds 2 GWh of electricity (these account for nearly 90% of the GEN-I portfolio). Together with consumers, they then take a closer look at the planned load curves and, based on the findings, draw up suggestions and recommendations for reducing costs. • Consumers of electricity have a chance to work with the GEN-I analytical division to assess the costs associated with their future projects in terms of what electricity costs can be expected. They develop a customized electricity offtake plan in order to optimize expected overall costs. • They have developed a product that lets large industrial customers adjust the offtake rates of their major power consumers. In this way, the end user has the ability to decide, based on intra-day price movements in the market, to decrease or increase the consumption rate according to the expected price fluctuations. This is also a strong financial incentive towards making sure large power consumers are run when the load on the power grid is less severe and the prices are lower as a result. • All GEN-I customers get to use for free an advanced web application called TERMINAL, which was developed in-house. With TERMINAL, consumers can track their past consumption, keep an eye on the

associated costs and look at the expected consumption rates for the periods ahead. This enables them to make responsible decisions concerning any special measures that need to be adopted. • In February 2011 GEN-I organized the 4th annual partner meeting, which was attended by nearly 100 of GEN-I's large business customers. The expert lectures and discussion also focused on challenges concerning the promotion of energy efficiency. Purchasing electricity from producers holding a declaration for their production facility The GEN Group places a special focus on purchasing electricity from producers with approved and registered production facilities, or what is referred to as a declaration, for the production of electricity from renewable energy sources and through combined heat and power (CHP or cogeneration). In this segment the GEN Group, along with its partner with which it jointly controls the company GEN-I, is the market leader in Slovenia. We support these producers of electricity by offering them prices that are higher than those set by the law, which in effect represents a direct financial incentive. GEN-I organized an expert meeting in September 2011, which brought together 80 producers. Representatives of professional organizations and competent ministries provided useful information and tips on how to sell electricity into the power grid. GEN-I purchased 177 GWh of electricity from these producers in 2011, which is a 26% increase over 2010. GEN-I also provides producers of electricity from RES and CHP with prompt, up-to-date information on price fluctuations in the electricity market and on regulatory changes, and organizes expert meetings whose aim is to further expand knowledge and raise awareness, exchange experience and establish closer relationships.

Main topics Sustainability report of the GEN Group 2011

Setting up energy efficiency projects The GEN Group companies engage in the planning, setting up and implementation of projects that are directly tied to energy efficiency, mostly through the highly efficient cogeneration of heat and power (CHP, or cogeneration, and also CCHP, or trigeneration, which includes cooling). In 2012 TEB is going to carry on working on and investing in setting up small CHP and CCHP plants in various locations across the municipality of Krško, provided that the relevant technical conditions are met, for example, if the construction of business facilities in the Vrbina Industrial Park is started, and if projects are confirmed to be economically viable. Medvode CHP Plant The Medvode CHP Plant, which uses natural gas for supplying the Medvode HPP office building with heating, exceeded its production target of 18 MWh in 2011: it generated 22.4 MWh of electricity and produced enough heat to completely satisfy the heating demand of the office building from 1 March to the end of 2011.

Main topics Sustainability report of the GEN Group 2011

2.6 Knowledgeable people: 1026 employees, more than half with higher education qualifications

We recognize the value of the knowledge of our 1026 employees. We aim to interconnect and spread the knowledge and experience in a number of ways: among generations and various spheres of operation, as well as among the Group companies. We encourage efficiency, dependability, commitment and responsibility among our employees. The GEN Group also maintains its focus on sustainability, that is, the intersecting set comprising business excellence, environmental responsibility and caring for the

society, by paying ongoing attention to the education and training as well as professional and personal growth of its employees. Both in terms of existing and future human resources (today's students), with the help of which we will be able to make our strategic development plans a reality. Due to the complexity and scope of work in the GEN Group companies, more than half of the 1026 employees in the entire GEN Group hold at least a higher education degree.

Table 13: Number of employees by company/group and by level of education as at 31/12/2011 COMPANY/ GROUP

Levels 1–4

Level 5

Level 6/I (voc.)

Level 6/II (higher edu. & BA/BS)

Level 7 (BA/BCs & MA/MSc Bologna)

Level 8/I (MA/MSc)

Level 8/II (PhD)

TOTAL

GEN

GEN-I (group)

121

269

176

623

SEL

115

TEB

117

106

372

121

297

1026

NEK

TOTAL

The data in the table refer to whole companies or groups, disregarding GEN's equity interests in individual companies and the rules of consolidation.

Table 14: Number of employees by company/group: comparison between 2010 and 2011 (both years as at 31/12) and plan for 2012 As at 31/12

2010

2011

plan for 2012

Number of employees

963

1026

1041

The number of employees in the GEN Group went up by 63 in 2011 over 2010. In 2011 the personnel numbers increased in the companies NEK, GEN-I, GEN and TEB. The reasons for higher employee numbers in 2011 were: • recruitment in the light of extensive education and training needed to replace employees that will retire, • rapid growth of the companies, and • employer's obligations under scholarship agreements. The only company where the number of employees went down in 2011 over 2010 was SEL, on account of retirements and expiration of fixed-term employment contracts. Such a low employee turnover rate undoubtedly goes to show that our employees are motivated to work in an environment that stimulates knowledge, responsibility and connecting.

The GEN Group employed 1026 people in all in 2011. By awarding scholarships we contribute to the development of human resources in the subject areas that are crucial for the future of the energy industry. These are physics, electrical engineering, energy, computer and information science, mechanical engineering, and civil engineering and construction.

Level 8 academic qualifications (Masters and Doctors of Science) are: • nuclear engineering, • nuclear energy, • electrical engineering, • nuclear physics, • physics, • mechanical engineering, and • economics.

Main topics Sustainability report of the GEN Group 2011

Figure 8: Level of education: Doctors of Science The GEN Group employs 13 Doctors of Science.

Main topics Sustainability report of the GEN Group 2011

Figure 9: Level of education: Masters of Science 23 GEN Group employees hold a master's degree. 9%

15% 22%

23%

MSc in mechanical engineering

MSc in electrical engineering 30%

MSc in economics Other

38%

PhD in nuclear engineering

39%

Figure 10: Level of education: Bachelors of Science/Arts 297 GEN Group employees hold Level 7 qualifications.

PhD in nuclear energy 21%

24%

PhD in electrical engineering

BSc in mechanical engineering

PhD in nuclear physics

BSc in electrical engineering

PhD in physics

BSc in civil engineering

Other 6%

BSc in economics Bachelor of laws Other 13%

35% 1%

Main topics Sustainability report of the GEN Group 2011

2.7 World of Energy: more than 3400 visitors in six months

Investments into the development of future human resources The GEN Group makes carefully planned investments in the education and training of its leadership and management across all the key areas of activity of the Group companies. The rapid growth and expansion of individual companies and the ambitious development projects, notably the JEK 2 project and projects to promote renewable energy sources, demand that we systematically plan for future recruitment of highly qualified human resources with specialist knowledge. The GEN Group companies carry out training programmes in the simulators at NEK and TEB, in the NEK Maintenance Training Centre and in the ICJT Nuclear Training Centre of the Jožef Stefan Institute in Ljubljana. Human resource planning is one of the major management challenges for the GEN Group. Unfortunately, Slovenia has been facing a shortage of suitable human resources in recent years, which is especially true for the Posavje region. By providing scholarships to secondary school students and undergraduates, the GEN Group has taken an active approach towards developing human resources in expert areas crucial for the development and future success of our Group and its individual companies. These areas comprise mainly the following natural and technical sciences: • physics, • electrical engineering, • energy technology, • computer and information science, • mechanical engineering, and • construction and civil engineering. The GEN Group runs its own scholarship scheme, which included 64 primary and secondary school students on company scholarships at the national level and scholarships under the Posavje Scholarship Scheme at the re-

gional level as at 31/12/2011. 53 scholarship recipients are on company scholarships, and 11 on scholarships awarded by the Regional Development Agency. Table 15: Number of scholarship recipients in GEN Group companies as at 31/12/2011 No. of scholarships 2009

No. of scholarships 2010

No. of scholarships 2011

NEK

SEL

TEB

Company

GEN GEN-I

TOTAL

The total number of scholarship recipients was lower in 2011 against 2010 by ten. Some of the scholarship recipients finished study programmes for which they received scholarships, and some of them lost their scholarship for failing to complete their study requirements.

We believe that questions concerning energy and energy production are among those issues that concern us all. For this reason we seek to increase the understanding of this area and raise interest in it among various stakeholder profiles, which should also lead to responsible, knowledge-based thinking, active involvement and assessment of the decision-making processes concerning the energy future of Slovenia. In the GEN Group we aim to spread the knowledge of topics related to sustainable energy sources, electricity production and supply, and responsible, evidence-based shaping of our energy future, as well as promote learning and raise awareness and interest in this area. In July 2011 we opened, as part of GEN Information Centre, the World of Energy, an interactive multimedia learning centre on energy and energy technologies, the first-ever institution of its kind in Slovenia.

Figure 11: Profiles of visitors to the World of Energy from July to December 2011

14%

35%

16%

30%

GEN Information Centre, which made its grand opening in July 2011, combines: • the interactive multimedia information and learning visitor centre on energy and energy technologies called the World of Energy, • GEN Control Centre, and • business premises that bring together all of GEN's business functions in one location. From its opening to the end of 2011 the World of Energy registered more than 3400 visitors, most of them school children and people from expert circles. The highest turnout, 1041 visitors, was recorded in October.

School groups Expert groups Saturday workshops Groups from abroad Other

Main topics Sustainability report of the GEN Group 2011

Table 16: An overview of professional events and projects we provided organizational, expert or financial support in 2011 The World of Energy is an innovative and, most importantly, instructive addition to the Posavje energy region, Slovenia and the wider European area. The mission of the centre is to provide comprehensive information and explanations and interactive exhibits and experiments to bring energy and energy technologies closer to visitors and spark interest in natural and technical sciences among the young. Smaller in scope but still an important part of activities at the World of Energy is the preparation of special programmes, lessons and workshops, which GEN develops in collaboration with teachers from the schools in the Posavje region, for talented primary and secondary school students. The World of Energy was developed by the GEN Group (mostly companies GEN energija and NEK) in partnership with the ICJT Nuclear Training Centre, which is part of the Jožef Stefan Institute, and the Agency for Radwaste Management (ARAO), and in cooperation with a German-based partner that specializes in setting up interactive multimedia learning centres. Events and projects aiming to spread knowledge of energy and energy technologies

The World of Energy brings together under one roof the knowledge of energy and energy technologies that we derive from the operations of all the GEN Group companies. It gives an evidence-based, comprehensible and interactive view of the various aspects of a comprehensive electricity supply: energyspecific, environmental, economic and social. By spreading knowledge and raising interest, the centre makes a vital contribution towards the fulfilment of the GEN Group's mission.

In 2011 we provided organizational, expert or financial support to prominent national, regional and local industry, business and educational events connected with energy. In addition to projects aimed at spreading knowledge of the energy industry and energy-related topics, the GEN Group also supports individuals, organizations and projects in the areas of sports, culture, charity and others, both in the local and regional environments in which our companies operate and also nationwide. Roughly one-half of funding is set aside for local and regional projects, and the other half for projects on the national scale.

Conferences

Location

Target audience

Ljubljana, Slovenia

Energy industry professionals

Brdo, Slovenia

Energy industry professionals, business professionals

EnRe, Energy and Responsibility International Conference

Čatež, Slovenia

Scientists, researchers, engineers and practising professionals working in the area of sustainable energy

Nuclear Energy for New Europe, International Conference of Nuclear Experts

Bovec, Slovenia

Energy industry professionals, business professionals

CIGRE - CIRED, 10th Conference of Slovenian Electric Power Engineers

Ljubljana, Slovenia

Energy industry professionals, business professionals

Microsoft NT Conference

Portorož, Slovenia

Slovenia's central technology and business IT conference

Energy of the Future, 5th conference: Renewables and Energy Efficiency, New Realities and Opportunities

Ljubljana, Slovenia

Energy industry professionals

En.odmev 2011 Strategic Energy Conference

Ljubljana, Slovenia

Energy industry professionals, business professionals

Novi Sad, Serbia

Energy industry professionals, business professionals

Vienna, Austria

Energy industry professionals, business professionals

Brussels, Belgium

International professionals

Velenje, Slovenia

Primary and secondary school students

ARAO, Workshop – Revised Proposed Standardized List of Items for Costing Purposes in the Decommissioning of Nuclear Instalations

Ljubljana, Slovenia

Energy industry professionals, business professionals

IFNEC Infrastructure Development Working Group: Emergency Preparedness and Response Workshop

Vienna, Austria

International professionals

Velenje, Slovenia

International professionals, secondary school and higher education students

Krško, Slovenia

Secondary school students

Ljubljana, Slovenia

Individual students or student groups

Zhangchengang, China

International professionals

Corporate Governance of State-Owned Energy Companies, 2nd Conference Innovation in Energy – Revolution in Business, 3rd Strategic Conference

ECOS 2011, Conference on Efficiency, Cost, Optimization, Simulation and Environmental Impact of Energy Systems IAEA Ministerial Conference on Nuclear Safety Nuclear Safety in Europe, 1st European Conference on Nuclear Safety Educational Events, Contests and Workshops ECO Quiz

Education & Development Energy Ground MIC Velenje: Roundtable on Renewable Sources are Our Future Education Center Krško - Sevnica: You are a Technogenius – Technogenius Makes the World Go Round Reactor Project: Nuclear Energy Today and Tomorrow contest Workshop: Power Uprate Technology of Nuclear Power Plants

Key performance indicators Not only do we make electricity flow, in the GEN Group we also successfully regulate flows of knowledge, which is clearly reflected in our operational efficiency, business excellence, environmental responsibility and care for the society. We constantly polish and expand our knowledge, for we realize full well that knowledge is the cornerstone of our operations that pave the way for a future of exceptional advancements. Professional training of NEK technical personnel is carried out through programmes geared to provide specialist skills and qualifications in the areas of maintenance, engineering, radiation protection, and safety and quality assurance. The practical part of training takes place in the NEK simulator, in workshops and on site, also in cooperation with outside contractors and equipment vendors. The ongoing professional development programme also involves 140 maintenance staff, with annual training sessions organized in three one-week blocks. Photo: Member of NEK maintenance staff at the NEK Maintenance Training Centre

Key performance indicators Sustainability report of the GEN Group 2011

3.1 Business results

3.2 Production of electricity

Table 17: Business results

Table 18: Electricity production targets and results in GWh

GEN Group

2008

2009

2010

2011

plan for 2012

Assets in EUR million

609.98

654.64

679.90

719.84

747.61

Equity in EUR million

470.21

521.65

525.26

528.64

538.43

Revenues in EUR million

280.11

299.8

385.09

573.97

547.27

EBIT in EUR million

64.98

66.84

32.93

25.93

17.71

EBITDA in EUR million

96.13

97.38

64.23

74.78

58.76

Net profit in EUR million

51.90

57.79

31.74

20.72

15.76

Value added in EUR million

121.35

124.27

92.53

105.29

91.06

Return on equity

11.52%

11.65%

6.06%

3.93%

2.97%

4,229

5,197

7,239

9,509

8,526

Equity financing rate

77.09%

79.68%

77.26%

73.44%

72.02%

Long-term financing rate

90.21%

92.84%

88.45%

84.79%

91.96%

Operating fixed assets rate

60.48%

56.84%

54.52%

50.92%

50.69%

Long-term investment rate

66.38%

63.12%

60.73%

58.82%

72.75%

Equity to operating fixed assets

1.28

1.40

1.42

1.44

1.42

Long-term financing of fixed assets

1.33

1.44

1.43

1.41

1.24

Immediate solvency ratio - acid test ratio

1.75

3.79

2.04

1.47

1.40

Quick ratio

2.61

4.80

2.92

2.65

2.70

Current ratio

3.35

5.87

3.43

3.26

3.25

Operating efficiency ratio

1.31

1.30

1.10

1.05

1.03

Net return on equity ratio

0.12

0.06

0.04

0.03

Electricity sold in GWh

The GEN Group's key performance indicators reveal that business was good in the period from 2008 to 2011. Still, it may be noted that the global recession is also reflected in the selling price of electricity and the falling rate of profit as a result. The GEN Group is nonetheless

healthy and ready to take on new challenges brought about by the fierce competition in the open market. We have sufficient assets and equity to make new investments in those electricity generation projects that will help us fulfil our mission and strategic goals.

Electricity production targets and results (GWh)

Key performance indicators Sustainability report of the GEN Group 2011

target 2010

result 2010

ratio 2010

target 2011

result 2011

ratio 2011

target 2012

2,695

2,690

0.998

2,950

2,951

1.000

2,655

SEL

308

382

1.239

313

259

0.828

315

TEB

100

0.063

100

0.119

100

1.182

0.656

NEK*

HESS SHP and SPP GEN Group total

0.81

0.77

0.951

1.2

1.3

1.077

1.3

3,142

3,124

0.9942

3,406

3,251

0.954

3,113

* The ratios for NEK (2010 and 2011) are calculated based on the proportion of the targets (50%) to the results for the years in question.

Table 19: Electricity production available to the GEN Group Electricity production available to the GEN Group (GWh)

2007

2008

2009

2010

2011

plan for 2012

GEN Group

3,053

3,331

3,117

3,123Â

3,250

3,113

Electricity production increased consistently in 2007 and 2008, but in 2009 it was slightly lower due to NEK's planned refuelling and maintenance shutdown. The 2010 production figures were higher than in 2009. The 2011 production results were very close to the targets, and this despite the unplanned NEK shutdown due to the activation of busbar protection in the transmission system operator's switching station and despite low flow rates of the Sava. The regular maintenance outage of NEK is scheduled to take place in 2012, which means the production target will be set slightly lower. TEB, whose main function is to provide reliable ancillary services in the form of tertiary frequency control, recorded 100% start-up and operational reliability in 2011.

Key performance indicators Sustainability report of the GEN Group 2011

3.3 Electricity trading and sales

3.4 Investments, research and development

The electricity purchase and sales figures of the GEN Group companies have been going up consistently over the past three years.

Table 22: Investments made by the GEN Group companies Investments by GEN Group companies

Table 20: Electricity purchased in GWh Electricity purchased

2008

2009

2010

2011

plan for 2012

GEN Group companies (GWh)

6,671

9,237

13,645

18,094

16,341

Table 21: Electricity sold in GWh Electricity sold

2008

2009

2010

2011

plan for 2012

GEN Group companies (GWh)

6,671

9,237

13,645

18,094

16,341

The purchase portfolio of the GEN Group companies comprises electricity generated in the Group's own production units and electricity purchased from other domestic and foreign producers and energy brokers. Nuclear energy is the prevailing energy source in the portfolio, and a significant share in the composition of the portfolio is also occupied by renewable energy sources and the possibility of providing ancillary services, particularly tertiary frequency control. Electricity is purchased from large producers and producers who hold a declaration for their production facility. This way we help promote the use of electricity generated from environmentally friendly sources. Purchases from the GEN Group's own generation units continue to make up a large part of the entire purchase portfolio.

From the perspective of electricity retailing in Slovenia, the connection between GEN and GEN-I is crucial for the GEN Group. The key feature of the relationship between the two companies is that GEN-I sells electricity for GEN on clearly defined terms and conditions. Most of GENâ&#x20AC;&#x2122;s annual production is sold based on GENâ&#x20AC;&#x2122;s annual sales strategy, which is approved by the GEN Supervisory Board. The provision of the right amounts of electricity on a day-to-day basis, in order to deliver on the signed deals and to optimize the sales process, is carried out through short-term purchases of electricity to make up for shortfalls and through sales of excess electricity, if and whenever applicable.

2008 (EUR million)

2009 (EUR million)

2010 (EUR million)

2011 (EUR million)

plan for 2012 (EUR million)

GEN

31.7

7.6

5.1

48.7

115.1

HESS construction project

23.6

3.8

1.8

2.2

99.3

JEK 2 construction project

0.2

0.3

0.4

1.1

3.9

IS GEN construction project

0.8

2.2

4.9

Capital injection in GEN-I

2.4

1.5

Capital injection in NKBM

20.0

SRESA

0.01

1.1

Other

7.9

0.3

0.6

18.9

10.8

NEK

11.7

15.3

17.7

27.1

27.7

SEL

7.6

8.0

6.6

5.2

7.7

TEB

4.7

10.5

1.9

0.8

9.5

GEN-I

0.8

0.4

0.6

0.4

1.0

56.3

41.8

31.8

82.3

189.6

GEN Group

Development funds in 2011 were put into projects promoting sustainability, primarily the construction of hydroelectric power plants on the lower Sava River (HESS), the JEK 2 construction project, the establishment of GEN Information Centre and the buyout of the remaining equity interests in SEL, making it possible for SEL to join the joint company SRESA and continue to invest in hydroelectric facilities. In 2011 the Group also made a number of other investments important for its regular operation.

Key performance indicators Sustainability report of the GEN Group 2011

3.5 Employees and development of human resources in the GEN Group companies

Acronyms and abbreviations

Table 23: Number of employees in the GEN Group companies No. of employees GEN Group

2007

2008

2009

2010

2011

plan for 2012

878

919

991

963

1026

1041

The data refer to whole companies or groups of companies, disregarding GEN's equity interests in individual companies and the rules of consolidation.

Table 24: Structure of employees of the GEN Group companies by level of education Structure of employees of the GEN Group companies by level of education

2007

2008

2009

2010

2011

plan for 2012

Levels 1–4

153

140

132

115

106

103

Level 5

345

360

378

351

372

376

Level 6/I

102

114

190

116

121

118

108

Level 6/II Level 7

254

280

260

267

297

300

Level 8/I

Level 8/II

878

919

991

963

1026

1041

Total

Table 25: Number of scholarship recipients in the GEN Group companies No. of scholarships GEN Group

Acronyms and abbreviations Sustainability report of the GEN Group 2011

2007

2008

2009

2010

2011

plan for 2012

• • • • • • • • • • • • • • • • • • • • • • • •

ARAO – Agency for Radwaste Management ARSO – Slovenian Environment Agency BSc/BA – bachelor's degree BTPS – blade tip power system CCHP – combined cooling, heat and power / trigeneration CHP – combined heat and power / cogeneration CO2 – carbon dioxide d.o.o. – limited liability company ELES – Elektro-Slovenija, d.o.o. EU – European Union EUR – euro EUSS – Electric Utility Sector Supplement GEN – GEN energija, d.o.o. GEN-I – GEN-I, trgovanje in prodaja električne energije, d.o.o. GEN IC – GEN Information Centre GRI – Global Reporting Initiative GWh – gigawatt-hour HESS – Hidroelektrarne na spodnji Savi, d.o.o. HPP – hydroelectric power plant HSE – Holding Slovenske elektrarne d.o.o. HSE Invest – HSE Invest, d.o.o. IAEA – International Atomic Energy Agency ICJT – ICJT Nuclear Training Centre Intergovernmental Agreement on NEK – The agreement between the Government of the Republic of Slovenia and the Government of the Republic of Croatia governing the status and other legal relationships regarding investments in Krško Nuclear Power Plant, its operation and decommissioning;

• • • • • • • • • • • • • • • • • • • • • • • • • • • •

JEK 2 – Krško Nuclear Power Plant – Unit 2 kV – kilovolt kW – kilowatt kWh – kilowatt-hour kWp – kilowatt-peak MSc/MA – master's degree MW – megawatt MWh – megawatt-hour NEK – Nuklearna elektrarna Krško, d.o.o. (Krško Nuclear Power Plant) NEP – National Energy Programme NKBM – Nova kreditna banka Maribor, d.d. NPP – nuclear power plant PhD – doctoral degree PB – gas unit RES – renewable energy sources RC - Republic of Croatia RS – Republic of Slovenia SB – Supervisory Board SEL – Savske elektrarne Ljubljana, d.o.o. SHP – small-scale hydroelectric power plant SPP – small-scale photovoltaic power plant SRESA – Srednjesavske elektrarne d.o.o. TEB – Termoelektrarna Brestanica, d.o.o. TPP – thermal power plant TWh – terawatt-hour USA – United States of America WANO – World Association of Nuclear Operators ZEL-EN – ZEL-EN, razvojni center energetike, d.o.o.