"Batteries are now an opportunity. Whoever builds them fast will seize it."

We are currently working intensively on two new energy projects: we are building both the Hrušky 5 ancillary services facility and the SNaPS Ždánice combined heat and power plant.

In the last Report, we informed you that the MND Group, through its subsidiary MND BESS (Battery Energy Storage System), has jumped straight into the battery business. We are currently in various stages of preparing several battery storage projects with a total capacity of around 42 MW and an installed capacity of over 100 MWh. In the Czech Republic, our target is to reach a total capacity of 50 MW, which is not far off.

First wild water, then green hydrogen. Pavel Srbecký and Jakub Drnec are the main figures of the startup Nano Advanced, which MND joined last year. The company is developing an innovative hydrogen generator that is tailored to renewable resources. Its advantages are high efficiency and, above all, a longer lifetime. According to Pavel Srbecký, production is sold out two years in advance - and that's before the final product is finished. Such is the current market interest in hydrogen production machines.

As in the previous year, archaeological research of a large skeletal burial site from the time of the Migration of Nations (6th century AD) in the locality of Mušov - Roviny under the Pálavské vrchy Mountains, which is carried out with the support of MND by the Institute of Archaeology of the CAS, continues this year.

In mid-October, we inaugurated the first project of cogeneration units connected directly to a gas well in Borkovany. The equipment, which is the first of its kind in the Czech Republic, was visited by the Minister of Industry and Trade Lukáš Vlček.

MND is preparing the largest investment of 2025 - a 12 MW battery storage facility in Breclav with a capacity of over 30 MWh. This project is our entry into an area that is fundamentally changing the energy industry. Battery storage provides grid stability, commercial flexibility and contributes to the transition to a more sustainable energy mix with a higher share of renewables. New legislation and falling battery prices are opening up new opportunities in the Czech Republic. MND wants to develop projects not only in our country but also in the more advanced markets in Germany. Battery flexibility will play a key role in balancing demand, managing price fluctuations and supporting the decarbonisation of the energy sector. We are starting with Breclav, with more projects to follow.

In recent years, Artificial Intelligence (AI) has become one of the most discussed technological phenomena. For a long time now, it has not only been discussed in the context of science fiction films or scientific research institutes. Thanks to increasingly powerful computing and the availability of data, AI technologies have seen a huge boom in recent months. AI is now making real inroads into all aspects of our lives, from work to healthcare, science, education and entertainment.

MNDs are looking at different market segments where it would be worthwhile to invest or at least be commercially active. One of the areas that caught our attention is the market for ancillary services and the volatility of electricity prices on the so-called spot market, where the price of electricity for the following day is determined. In cooperation with the Energy & Production Division, we are working on using our own gas for electricity generation (G2P Borkovany) and on investing in battery storage.

MND is entering a new business that has great potential. We are finalizing the Borkovany Support Services Source (BSSS) project, the core of which is an electricity generating facility that will be used to regulate imbalances in the Czech Republic's electricity grid once it is operational.

MND, a. s., Energy Division, has made a capital contribution to Nano Advanced, s. r. o. This is another significant step in the development of hydrogen technologies. MND was the first commercial producer of green hydrogen in the country, and MND Gas Storage is preparing for the possibility of storing a mixture of hydrogen and natural gas. Further hydrogen technology projects will require the acquisition of electrolyzers with power input up to 1 MW. Unfortunately, the delivery time for suitable electrolysers is three to five years due to the complexity of their production, and for this reason a capital entry into a company that would produce the equipment in priority for our company and adapt it to our needs seems to be a more interesting option.

The MND Group has entered a new phase in the renewable energy sector. In cooperation with our Ukrainian partner Zinoviy Kozytsky, whose company played a key role in the construction and completion of the ORIV joint wind farm project in the Lviv region, the supply of green energy to the Ukrainian grid officially started in February 2024. Ten state-of-the-art NORDEX wind turbines, type Delta 4000 - n149/5.4-5.5, with a capacity of 54.6 MW, are currently being prepared to increase the wind farm's capacity to 60 MW.