## Get inspired: EDP

Featured case study - accelerating the energy transition


### Business Impact From Clearly Outlining Transition Path

EDP has ambitious climate transition goals incorporated into its Business Plan: Coal free by 2025; 100% renewable energy generation by 2030; and Net Zero across its value chain by 2040.More than 40 years ago, EDP started as a utility company in Portugal and grew to become a global energy major and a leader in the energy transition. Today, EDP is present in  five regions: Iberia, Europe, North America, South America and Asia Pacific, with more than 13,000 people and 29 GW of energy installed capacity.Climate Transition Plans are essential as they translate climate ambition into pathways for action, facilitate the coordination of multiple related climate efforts across a company and address communications needs towards a wider range of stakeholders.Having a clear transition path and transparent reporting against targets can materialize not only lower carbon emissions for an organization but also several opportunities for value creation. These can include: higher employee attractiveness; better financing access and lower cost of capital from Green, Social, Sustainability & Sustainability-linked Bonds (GSSSBs); higher market valuation; as well as strategic integration of material aspects, such as reduced costs while reducing carbon footprint, growth revenues from innovative business solution, risk management that protects and ensures resilient businesses.


### Delivering Net Zero With Internal Buy–in For Climate Transition Plan

To support the delivery of ambitious Net Zero targets, validated by Science Based Targets initiative (SBTi), EDP launched an internal Net Zero Acceleration Taskforce to assess challenges, identify optimal decarbonization levers, engage with supply chain/partners/global community, and drive transformation. Throughout its work during 2022, the most material findings of this taskforce were presented to the Executive Board of Directors, ensuring the integration of Net Zero pathway into the Business Plan. This set the base to build the Climate Transition Plan, which pivots EDP’s existing assets, operations, and business model towards a trajectory that aligns with sound climate science, supported mainly by the Business Plan 2023-26 under a broader pathway for a Net Zero goal in 2040.This internal work led to the synthesis and update of the climate governance model, aligned with the Task Force on Climate-related Financial Disclosures (TCFD), Climate resilience strategy and risk management process. This model details the climate-related targets and KPIs, and the alignment of the Climate Policy with the Paris Agreement goals, following accepted best practices.The Climate Transition Plan published in 2023 was presented at the Annual General Meeting (AGM) for consultative vote and received a strong shareholders’ positive support of over 99%. The Board engagement and the “Say on Climate” from shareholders brought consistency and credibility on the path to follow.To ensure that strategic alignment is kept, the review of the Climate Transition Plan will follow the Business Plan updates review cycles, and annual progress reports are delivered to provide a comprehensive account of the material progress against the baseline year 2020 (first report over progress in 2023 submitted to 2024 AGM with over 99% positive votes).You can read EDP’s Climate Transition Plan and  CTP Progress Report 2023.


### Transition Away From Fossil Fuels In A Fair Way

While investing in new renewables capacity, EDP must phase-out its thermal generation. EDP’s Business Plan drives gross investments of 17Bn between 2024-2026 to renewable energy and grids, aiming to reach a total installed capacity of 23 GW by 2026.The last year of investment in thermal assets by EDP was 2020 with the acquisition of a company in Spain that included electricity distribution assets, 500 MW of renewable generation and two coal thermal power plants, which were in the process of being dismantled and that added up to almost 1 GW of potential network access rights.EDP will be coal free by 2025. The first step was carried out during 2020 with the decommissioning of Sines’ coal plant, ceasing EDP’s coal generation in Portugal. In Spain, conversion from coal to gas in one power plant is followed by requests to public authorities to decommissioning the remaining coal assets in the country.  Today, our coal capacity is marginal in our overall portfolio (3% vs 8% in 2020) confirming the steadfast delivery of EDP’s commitment to have zero contribution of coal to our revenues by 2025 year-end.EDP has undertaken the responsibility of working together with governments and local authorities in promoting a Fair and Just Transition in the regions affected by the closure of its plants, with plans to convert all of its thermoelectric plants (PT, ES and BR)  into green energy production centres, plus plans to continue investing in the regions where these centres are located, promoting not only the energy transition of the communities involved, but also a fair and inclusive transition.This includes initiatives such as, support for professional training and requalification, promotion of entrepreneurship, incentives for the local economy, support for job creation and search, among many other that have generated a positive social impact like the Futuro Activo program in Sines or the ENTAMA program in Spain.


### Driving Decarbonization Along Our Supply Chain

While phasing out thermal generation towards 100% renewable generation, EDP’s main challenges lie beyond the company’s own operations, in scope 3 emissions, particularly in our supply chain.  EDP is adjusting practices and leveraging technology to meet compliance obligations while managing risks and exploring opportunities to positively impact on supply chain decarbonization.Since 2022, one of the steps EDP is implementing to tackle the challenge of reducing supply chain emissions whilst growing its renewable deployment is the engagement with wind and solar suppliers with the purpose of improving data quality. As a result, EDP has been able to report with a higher level of precision on supply chain emissions whilst mapping the carbon footprint impacts of both suppliers and their products.In 2023 supply chain emissions decreased 12% compared to 2022, when there was a 20% increase on built renewable capacity. This translates into a 26% reduction on emissions intensity per MW that can be explained by having lower emissions factors from suppliers, compared to the industry averages, but also by developing projects with equipment that have lower carbon footprints.