JSC Atomenergoprom Annual Report

JSC ATOMENERGOPROM / ANNUAL REPORT / 24 2 BUSINESS STRATEGY 2.1. BUSINESS STRATEGY UNTIL 2030 Business context Trends in the development of the nuclear industry The development of the nuclear industry is influenced by a number of factors, including 13: - Global population growth from 7.9 billion people in 2022 to 8.5 billion people by 2030 and an increase in the share of urban population from 57% to 60%; Global GDP growth of around 3% per year; Growth of global electricity output and con- sumption. Global electricity output is expect- ed to increase by 22.9% compared to 2021 and reach 34.8 TWh as early as in 2030, with the Asia Pacific region accounting for two thirds of the growth; Accelerating greenhouse gas accumulation. In 2022, carbon dioxide emissions reached a new high of more than 36.8 billion tonnes. In 2022, the increase in emissions totalled less than 1%, well below the 6% growth in 2021, which was due to an accelerated econom- ic recovery after the start of the COVID-19 pandemic. The level of global carbon dioxide emissions remains stable, which necessitates more decisive action to accelerate the tran- sition to clean energy and achieve climate targets. The development of low-carbon power gener- ation, including nuclear power, is a necessary prerequisite for reducing emissions and achiev- ing international climate targets. In recent years, environmental aspects of the electricity industry have come under closer scrutiny, which has driv- JSC Atomenergoprom has identified two groups of factors that have the most significant impact on the Company's global operations: 1. The economic and geopolitical situation. Although global economic growth outpaces that of the Russian economy, as a global company JSC Atomenergoprom sets itself higher growth targets, despite persisting political pressure and a general trend towards growing protectionism. 2. The technological landscape. Global technology trends form a separate set of challenges for the development of the industry. New technologies are evolving rapidly; global markets are increasingly shaped by trends that started to emerge as recently as five to ten years ago, such as the rapid development of renewable energy generation, exponential growth of the scale of digital transformation in manufacturing, growing markets for new materials and manufacturing solutions. The rate of innovation is also accelerating, and, as a result, technological solutions become obsolescent increasingly fast. Strategic development takes into account both the current set of global technology trends and the level of their development. en an increase in the share of low-carbon power in the global energy mix. In 2022, amid price shocks, rising inflation and disruptions to traditional energy supply chains, the global commitment to low-carbon and sustainable energy solutions was reaffirmed and strengthened. The zero-emissions strategy adopted by major economies will significantly accelerate the electrification of the global economy, which will necessi- tate active development of all zero-carbon energy sources, including nuclear power generation. In the long term, the global nuclear power industry as an energy source will remain in demand. In Feb- ruary 2022, the European Commission adopted a resolution on the inclusion of nuclear power in the EU Green Taxonomy, a classification of sustainable activities for investors. The International Energy Agency 14 forecasts an increase in installed nuclear capacity from the current level of 393.8 GW15 to 471 GW by 2030. Thermal power generation will yield to nuclear energy primarily because of CO2 emissions. This has a negative impact on the environment and drives up the cost of energy since many countries have imposed CO2 emission fees. Projects to install CO2 capture and utilisation systems at thermal power plants in order to minimise emissions are expected to be developed in the future. However, current estimates show that an increase in the LCOE of thermal power plants by more than 40-60% will make them economically unviable. Due to these factors, nuclear power will remain in demand in the long term. The Company's competitive position The competitiveness of services provided by JSC Atom- energoprom is based on its unique facilities, technical capabilities and human resources, as well as the expe- rience of coordinating R&D and design organisations. The Russian nuclear industry is one of the global lead- ers in terms of research and development in reactor design, capabilities and technologies in the nuclear fuel cycle and in the sphere of NPP operation. Russia has the most advanced enrichment technologies in the world; nuclear power plants with water-cooled wa- ter-moderated power reactors (VVERS) have proved their reliability over one thousand reactor-years of fail-free operation. JSC Atomenergoprom's competitive advantages Integrated offer for the entire NPP life cycle, which guarantees a competitive cost per kilowatt-hour (LCOE); Use of reference technologies meeting the highest safety standards; Assistance in securing funding (including under the BOO (Build - Own - Operate) scheme) and building project infrastructure (legal framework, employee training, community relations, etc.). For more information on the Company's main competitors, see the section 'Markets Served by Atomenergoprom'. Long-term strategic goals JSC Atomenergoprom's strategic development is underpinned by the long-term business strategy of ROSATOM. ROSATOM's business strategy until 2030 has been developed based on the goals set by the government for the civilian branch of the nuclear industry; it was updated in 2020 and approved by ROSATOM's Supervisory Board on 28 April 2020. 13. Data from the World Bank, the IMF, the IEA World Energy Outlook 2022 (Stated Policies Scenario), IEA CO, Emissions in 2022, and the IAEA. BUSINESS STRATEGY 14. IEA, World Energy Outlook 2022 (STEPS). 15. Power Reactor Information System (PRIS) of the IAEA (https://pris.iaea.org). BUSINESS STRATEGY JSC ATOMENERGOPROM / ANNUAL REPORT / 25

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