Annual Report - 2024

Inspiring a zero-carbon future

Jersey Electricity Plc is the sole supplier of electricity in Jersey, serving around 54,000 residential and business customers. The Company's operations include the generation, importation, transmission, distribution and supply of electricity as well as

a range of energy related services and solutions.

Directors, Officers and Professional Advisers

Contents

NON-EXECUTIVE DIRECTORS

Phil Austin MBE

FCIB, FCMI (Chair)

Alan Bryce

MSc, CEng, FIET

Wendy Dorman

BA, ACA

Tony Taylor

BSc (Hons)

Amanda Iceton

BA (Hons)

Kayte O'Neill

BA (Hons)

EXECUTIVE DIRECTORS

Christopher Ambler

Chief Executive

BA, MEng, CDipAF,

CEng, MIMechE, MBA

Lynne Fulton

Chief Financial Officer

BA (Hons), ACCA

SECRETARY

Andrew Welsby

BA, MA, FCPID

REGISTERED OFFICE

Queen's Road, St. Helier, Jersey

Registration No.67

PLACE OF INCORPORATION

Jersey Electricity Plc ('the Company') and Jersey Offshore Wind Limited and Jersey Deep Freeze Limited (together 'the Group') are incorporated in Jersey.

INDEPENDENT AUDITORS PricewaterhouseCoopers CI LLP,

37 Esplanade, St. Helier, Jersey, JE1 4XA

BANKERS

Royal Bank of Scotland International Limited, 71 Bath Street, St. Helier, Jersey

BROKERS

Canaccord Genuity Wealth Management, PO Box 3, 37 The Esplanade, St. Helier, Jersey

REGISTRAR

Computershare Investor Services (Jersey) Limited, 13 Castle Street, St. Helier, Jersey

HELP US CUT PAPER

Printing of this Annual Report is carbon balanced, with trees planted to help offset the climate impact of its production. While Jersey Electricity Plc has sought to reduce the environmental impact of this publication as far as possible, we encourage readers to opt out of receiving printed copies and make use of our website, jec.co.uk/investors, to reduce material and resources used.

4 JERSEY ELECTRICITY Annual Report and Accounts 2024

E S TA B L I S H E D 1 9 2 4

Powering the moments that matter for 100 years

Jersey Electricity reached 100 years old in 2024.

Over the past century, we have become so much more than just an electricity provider. We have become an energy services partner to the Island, we have adapted and grown, in partnership with our community, as our energy needs have evolved.

While the way we have generated the energy that feeds our homes,

schools and public services has changed, we have stayed true to our north star of safely

providing secure, reliable and affordable electricity.

5 JERSEY ELECTRICITY Annual Report and Accounts 2024

2020s

Innovation

and community

Clockwise from left: La Collette Power Station, St Clement solar array, Community beach clean, and Storm Ciarán clean up operation

6 JERSEY ELECTRICITY Annual Report and Accounts 2024

How we performed in 2024

Our Key Performance Indicators (KPIs) are quantifiable measurements which help gauge overall performance and guide our decisions on our operations and strategy.

7 JERSEY ELECTRICITY Annual Report and Accounts 2024

Chair's

Review

In our centenary year, Jersey Electricity has continued to deliver on its promise to 'enable life's essentials' and create value for Islanders

and shareholders. At the same time, through our net zero focused strategy we have begun a significant programme of investment, playing our part in Jersey's transition to net zero.

£135.7m

GROUP REVENUE

£15.1m

PROFIT BEFORE TAX

Phil Austin MBE oversees a team of experienced Executive and independent Non-Executive Directors. Together they provide strategic leadership coupled with strong corporate governance to support the long-term success of the Company.

One Hundred Years of Service

In this, our centenary year, we have taken time to reflect on the significant achievements of Jersey Electricity over the past 100 years, from its formation in 1924 at Albert Pier, to the move to the Queen's Road Power Station in 1964, the formal opening of La Collette in 1973 and the first undersea cable to France in the mid 1980s - all of these developments followed pivotal and bold decisions, which have served the Island well. Throughout the last century, Jersey Electricity has been at the heart of the Island's transformation, empowering our communities and championing sustainability through resilience and visionary thinking.

Performance

Whilst, in operational terms, the 2023/24 year got off to a very difficult start with Storm Ciarán, the performance of the Group, throughout the year was a good one.

The ongoing Russia - Ukraine war and the rising tensions in the Middle East continue to create uncertainty in the energy markets and, despite some easing during the year, along with falling inflation, they remain unstable and above historical levels.

Revenue for the Group rose 8.5% in the year to £135.7m, producing a Profit Before Tax of £15.1m. Unit sales of electricity remained flat, with growth in connections and fuel switches being offset by efficiencies. Our Energy Business delivered a Return on Assets of 7.3% in year, delivering an on target performance of 6.3% on a rolling five year basis.

All our other businesses continued to perform in line with expectations.

Chair's Review (continued)

Chair's Review (continued)

Strategic Investment: net zero readiness

Senior Appointments

Thank You

An investment of £180m is planned over the next five years to improve the energy network and services. This year, 'The Big Upgrade' began on the electricity network, with a £120m investment programme aimed at strategic asset replacement and network reinforcement, ensuring both network health and capacity are ready for net zero. Additionally, a £30m resilience programme commenced at La Collette to significantly increase supply security for the Island. Our renewable strategy continues to progress on-Island whilst we remain in discussion with the Government of Jersey (GoJ) about what role Jersey Electricity could play if they proceed with an offshore wind project.

Our first on-Island utility-scale solar array is currently under construction, with commissioning planned for January 2025.

Corporate Governance

The UK Corporate Governance Code 2018 requires the Board to set key areas of focus for the year. In 2024 these included:

1. Working with stakeholders, planning for and making demonstrable progress toward Jersey's net zero contributing to reduce the Company's own carbon
2. Continuing to address affordability by helping with energy efficiency and delivering our products services as sustainably, and at as low cost, as

We have made good progress in both areas and more details are provided throughout this report, see pages 30 to 45.

There are also reports from the Nominations Committee, Audit & Risk Committee and Remuneration Committee on pages 86 to 97.

The Board determined its key areas of focus for 2025 as follows:

1. Continue to progress towards Jersey's net zero goal and continuing to reduce the Company's own carbon footprint.
2. Continue to support customers with energy efficiency, ensuring our stakeholder outcomes are safe, reliable, affordable and sustainable energy services.

The tenures of Alan Bryce, our Senior Independent Director and Chair of the Nominations Committee, and Wendy Dorman, Chair of the Audit & Risk Committee, will conclude in December 2024 and July 2025, respectively. To ensure a seamless transition, we have undertaken a competitive recruitment process, led by independent search consultants, and I am delighted to welcome to the Board, with effect from 1 October 2024, Iman Hill and Roger Blundell, both experienced directors with broad industry and commercial backgrounds.

I would like to thank Alan and Wendy for their significant input during their time on the Board. Jersey Electricity has gone through substantial change during their tenure and their experience and guidance has played a big part in its success.

In looking back over 100 years of operation, it is amazing to see the how the Company has developed into what it is today - the brave, and sometimes bold, decisions that were taken along the way, and the life-changing technological improvements which could never have been anticipated. Throughout all of that, though, there has been a constant - the dedication, expertise and passion of our staff to provide the best service possible to our customers, at all times. For that, we thank employees, past and present.

Finally, I would like to extend my thanks to my fellow Directors for their support and expertise. It is very much appreciated.

"I am proud of the work does in pursuit of its and together, with the Board, confident that the Business will play a pivotal role in supporting Jersey's sustainable future."

"Our first utility scale solar array will be commissioned in January 2025, delivering up to 4MW of renewable power to the grid. This is the first of our large scale projects focused on increasing energy sovereignty and long-term supply diversity."

Chief

Executive's

Review

2023/24 has been an unprecedented year for Jersey Electricity. We launched a major strategic programme to ensure our infrastructure remains safe, reliable, affordable, and sustainable, supporting Jersey's net zero transition. During Storm Ciarán our operations and infrastructure showed great resilience, and I am very proud, not only of the JE team but also the whole community in the way it responded.

As the challenge of decarbonisation becomes increasingly urgent due to global warming, the need to ensure Jersey continues to have a safe, reliable, affordable and sustainable energy system becomes all the more imperative. Jersey Electricity plays a significant role in supporting the Island's net zero ambitions and has committed to achieving net zero by 2040. In 2023/24, we focused on three major areas to ensure these goals are met; firstly network investment branded "The Big Upgrade" focusing on transmission and distribution; secondly supply security and backup which advanced the La Collette Resilience Project; and finally long term clean, green energy which made significant progress in developing on- Island solar as well as advancing our strategy around offshore wind. The flexibility of the Group's business model allows investment to be targeted to have the greatest impact on net zero as well as create the most value for all stakeholders.

£108.1m

ENERGY REVENUE

£13.0m

ENERGY BUSINESS

PROFIT

The progress described in these pages is largely due to the efforts of our JE team, which includes our skilled colleagues, suppliers and partners. Ensuring a safe, healthy and inclusive working environment for our colleagues and contractors remains our primary priority.

Affordability

Although the wholesale energy market has shown signs of stabilisation in 2024, prices are still above historic levels and the overall economic environment remains challenging.

Despite the continued and significant upward pressure on our importation costs, we have been able to greatly shelter our customers from the significant prices rises experienced elsewhere. Since the Russian invasion of Ukraine we estimate that customers in Jersey avoided around £200m of costs that they would have faced elsewhere.

However, we have not been completely immune from increasing costs and in January 2024 we implemented a 12% increase

in tariffs, with a further increase of 7.5% to be implemented in January 2025. We have worked hard to ensure any increase in prices are kept as small as possible and our standard domestic tariff continues to benchmark well compared to other jurisdictions with UK price capped tariffs being around 50% higher than Jersey's equivalent tariff.

Our importation contract with EDF continues to perform well and I am pleased that we have been able to materially hedge Jersey's remaining electricity requirements through to the end of 2027, reducing our risk to further volatility in the wholesale market significantly. Our contractual arrangements with EDF to supply electricity ends in December 2027 and our negotiations to secure competitive contractual arrangements from January 2028 are well progressed.

Chief Executive's Review

Chief Executive's Review (continued)

Financial Performance

2023/24 was a solid year of financial performance. Group Revenue for the year to 30 September 2024 increased year- on-year by 8.5% to £135.7m, assisted by the 12% tariff increase implemented in January 2024. Group Profit Before Tax at £15.1m this year was broadly in line with last year's level of £14.9m.

We imported around 95% of Jersey's electricity requirements from France with the remainder from on-Island sources. This resulted in an average carbon intensity of distributed energy of 24.85 gCO2e/kWh.

Unit sales of electricity of 609 million, represented a slight increase above 2022/23 of one million units. Although we continue to see underlying growth in connections and fuel switching to electricity, this is largely offset by efficiency in usage of electricity. This reflects our strategy to encourage energy efficiency by offering free monitoring services such as those facilitated by the MyJE app whilst at the same time encouraging new customer-product relationships such as electric transportation and electrified heat solutions.

Network Investment ("The Big Upgrade")

This programme represents our largest investment programme we have undertaken for some years. 'The Big Upgrade' will see JE investing £120m in the electricity network over the next five years.

Jersey already has a highly resilient, low-carbon grid, with spare capacity at all voltages. Although demand is currently falling as energy efficiency gains outstrip demand growth,

we forecast a 25% increase in peak demand to meet the Island's net zero 2050 target.

The investment programme is aimed at ensuring JE delivers subsea cable replacements, transmission and distribution asset replacement and increases generation capabilities that support Jersey in its transition to net zero. As part of this programme we have accelerated the replacement of our oldest subsea cable, as it has started to show signs of deterioration. See page 38 for more details.

Supply Security

Jersey has an enviable record of supply security. 2023/24 has delivered a customer minutes lost of 9.5* (2023:4.0) and customer interruptions of 19.3* (2023: 4.4).

Last year we advised that we had undertaken a comprehensive review of our Security of Supply Standard, prompted by the energy crisis (driven by Russia's war on Ukraine), the demands of the Carbon Neutral Roadmap and the 2021 French fishing dispute. The review resulted in the Board's approval of the La Collette Resilience Programme, a critical programme which will ultimately lead to the installation of new Gas Turbines at the site to provide an additional 50MW of capacity.

The programme commenced this year with work to prepare the site for construction. The programme is expected to take up to four years at an estimated cost of £30m and will lead to the formal adoption of the enhanced Security of Supply Standard by summer 2028.

Long Term Green, Clean Energy

Our strategy is to import competitively priced low carbon power from France, from nuclear and certified hydro-electric sources alongside the development of diversified, indigenous renewables as they become economically viable. In addition to importing power from France, we are continuing to work hard to reduce the costs of Island sourced renewable energy to make them a meaningful and viable alternative component in the mix, as we build further on our knowledge and capabilities.

Offshore Wind

During the last year we have continued to explore Offshore Wind including examining how it might be optimised in Jersey's energy system, possible roles for JE and how we might helpfully partner with the Government of Jersey. We have regularly engaged with the Government's Future Energy Group, a subcommittee of the Council of Ministers, as well as with potential partners, to explore how the proposals can be most effective for Jersey.

On-Island Solar

During year we launched our Solar 5000 campaign. This represents our goal to power the equivalent of 5,000 homes with solar power by 2030. We are hoping to achieve this based on a mix of utility scale ground mounted solar arrays supported by continued parallel investment in rooftop solar.

We are finalising construction of our first utility scale ground mounted solar array in St Clement. The array will deliver 4MW of energy and is scheduled to be commissioned in early 2025.

With planning permission now in place for the next array in the north of St John's on the edge of Sorel, we expect to start construction imminently and commission later in 2025.

Stakeholders

Our Customers and Community

We continue to work closely with the Government to support the delivery of the Carbon Neutral Roadmap (CNR) and delivery of the Island's net zero goal by 2050.

Our People

Our people are crucial for achieving our vision of a zero-carbon future. Our success relies on a committed, engaged and capable workforce. Developing a diverse team with an inclusive culture, where everyone feels valued and supported to reach their full potential, is a key strategic priority. During the year we migrated to a new employee engagement system and the results from this were a pleasing top quartile performance relative to UK Energy and Utilities peers with an ePNS score of 34 and a response rate of 75%. We nevertheless are striving hard to incorporate the very best practice and continue to better ourselves.

Our Shareholders

Through our strategy, which aims to achieve financial resilience, we deliver a stable, reliable return for our shareholders. This year our Return on Assets for the year was 7.3%, which represented 6.3% on a 5 year rolling basis, in line with target. We increased our dividends by 5.3% .

Outlook

Although the macro-economic environment is easing, it remains challenging. Geopolitical uncertainty persists with the ongoing conflict in Ukraine and escalating tensions in the Middle East, contributing to instability in the global energy market.

The majority of our energy volumes are now largely hedged through to the end of 2027, significantly reducing our exposure to further volatility in the wholesale market. However, continuous monitoring of the market remains essential.

Our focus will be on supporting our customers in achieving maximum energy efficiency and on developing new products and services that can facilitate the transition for customers from fossil fuels to sustainable low-carbon electricity at an

"The majority of our electricity needs are now largely hedged through to the end of 2027, significantly reducing our exposure to further volatility in the wholesale market. However, continuous monitoring of the market remains essential."

Our customers and our community are at the heart of everything we do.

In 2024 we achieved a customer satisfaction score of 77.5, placing JE second amongst a peer group of 35 other electricity and water utilities. This is an excellent position, but we do not take this for granted and we know there is more to be achieved.

This year we have launched our "Think Customer" initiative. This initiative represents an investment in improving people skills, processes and systems to ensure that the Company is fully equipped to deliver a consistent customer experience across the group.

We have continued to support the community and NGOs throughout the year with active involvement in more than 40 community projects and initiatives across the Island.

Government

During the year, and at the request of Government, we have continued to support the administration of the Low Carbon Heating Incentive Scheme (LCHI) as well as a similar scheme for the purchase of electric vehicles.

affordable price.

The next twelve months will present both challenges and opportunities for the Group. We are aiming to complete our post-2027 importation contract by the end of the financial year and will continue to explore potential synergies with offshore wind post-2032.

With continued emphasis on our strategic programmes, the coming year will see us advance our infrastructure investment programmes, increase local renewables penetration, expand product offerings for fuel switching and leverage digital innovation to enhance operational efficiency.

Jersey Electricity's people, assets and businesses play a central role in the community, adding significant societal value to the Island. This presents an enormous opportunity for Jersey to benefit Islanders at a local level and demonstrate leadership within the international community.

We have an ambitious agenda and much work ahead,

but we are well-positioned to continue delivering safe, reliable, affordable, and sustainable services now and long into the future.

Purpose, Vision and Values

Our Purpose

Our Purpose is to 'enable life's essentials' by providing the people of Jersey with safe, reliable, affordable, and sustainable services today and long into the future.

Our Vision

Our Vision is to 'inspire a zero-carbon future' by being the energy partner of choice whilst working to seven key success factors of that Vision.

Our Values

Our Values

Our six core Values are key to our culture. They guide the behaviours we expect of each other as we work together towards our Vision.

Responsibility

We accept responsibility

for everything we do,

safeguarding the natural

environment and the

local community, as well as the interests of all our customer and people.

Our Strategy

Our Strategy

Our strategy has for many years been to supply low carbon electricity to homes and businesses on the Island, whilst maintaining competitive prices and delivering long-term stable returns for shareholders. Our strategy is designed to meet our four key stakeholder outcomes to deliver a safe, reliable, affordable and sustainable service that delivers a great customer experience, throughout all our businesses and operations.

Climate change affects everyone and the transition towards net zero is rapidly evolving. At Jersey Electricity, we understand that sustainability goes beyond net zero, focusing on maintaining an ecosystem that's sustainable for today, tomorrow and the long term.

Our strategic priorities are focused on not just achieving net zero within our own operations but also embracing our crucial part in supporting Jersey's overall transition to net zero. Our focus is on driving progress towards net zero by developing, building, and operating clean, green, secure and affordable electricity infrastructure that delivers the needs of today and the future. We aim to offer comprehensive 'beyond the meter' solutions that facilitate customers moving to a low-carbon future at an affordable price.

To summarise, our strategic priorities deliver a sustainable transition to a decarbonised future that provides value and benefit to all our stakeholders.

Stakeholder Outcomes

Our priorities are:

• Create value of all stakeholders,
  by providing fair pricing for customers and fair return for shareholders
• Deliver a well-invested network,
  a highly skilled, diverse and engaged workforce committed to a zero-carbon future
• To enable customers to convert domestic and commercial premises to value-for-money, low-carbon electric heating and cooling solutions.
• Provide integrated 'beyond the meter' services that put customers at the heart of the energy system.
• Develop affordable local renewable energy solutions.
• Lead in the application of technology to benefit customers by providing new and improved services and driving efficiency in our businesses.
• Provide private and public electric vehicle networks to enable a convenient solution that encourages cleaner, more efficient, electric transport.

Key resources critical to success

Employees

The success of our strategy is dependent on the talent, diversity, innovation and values of the people we employ.

Customers

We must ensure that we deliver a great customer experience that meets our customers' requirements not just for today but over the long term. Maintaining our customers' confidence by delivering a safe, reliable, affordable service over the long term is vital in ensuring our customers have sustainability. We aim to always deliver the right solutions, in the right way.

Communities and society

We need the support of the communities we work in and the backing of society to deliver a sustainable decarbonised future.

Government

Our relationship with government as policy maker as well as shareholder is critical to maintain momentum behind our strategy.

Natural environment

Using the Island's natural resources to build renewable sources of energy

as well as building and delivering products and services that are themselves sustainably sourced is critical to our success.

Shareholders

Maintaining a sound approach to managing risk and sound finances enables us to remunerate shareholders appropriately to support the investment required to deliver our strategy.

Partners, suppliers and contractors

We rely on a healthy, on and off Island supply chain that can support our strategy.