Companhia Paranaense de Energia - COPEL (CPLE3) Earnings Call Transcript

Well, good morning, everyone. Thank you for joining us for our Copel Investor Day. I'd like to thank all of you who are joining us online and those of you who are here in the city of Sao Paulo with us. I would like to thank Marcel, the Chairman of the Board, Marcel, Andre and Marco Candido. By greeting you, I'd like to greet all of our colleagues, officers and the whole Copel team. And I would like to thank Bruno Laskowsky, Director of BNDS, by greeting you, we'd like to greet all of our shareholders, investors and the Copel employees, all of you who monitor us and follow us. I'd like to start by going over the agenda for today. We are very excited. We have a lot to talk about 2030 vision for Copel. This is the list you can all see on the screen .We are going to go over the vision, our journey, all of our panels and lastly, we will have a panel of financial sustainability, providing support to our growth and future expectations. So let us start today with a message by the Governor of Parana, our controlling shareholder. His message came in writing yesterday, with a material fact communicated to the whole market. I believe that the message was very clear. This is the Eletrobras model with some characteristics, particularly a golden share, that aims to maintain our investment plan in Copel distribution. There is a bill of law addressing this that has been sent to the Parana State Council, and we have to wait for the developments and approvals. So that's all I have to say about this. Having said that, you all read about it, you analyzed the repercussions and you understand the intent of our controlling shareholder, the State of Parana. With that, I want to focus on our 2030 vision. And I'd like to invite the Board of Director, Marcel Malczewski.

Good day, everyone. On behalf of the Board of Directors of Copel, represented by myself, Andriei and Marco, I would like to welcome all of you. I wish you a great Copel day, a great morning together with us so that you can understand, in more detail, what we are thinking for Copel in the coming years until 2030. Well, we have experts here, Daniel. But it always -- it is always good to remember that the energy industry is like a trend all over the world and in Brazil. It is an industry that is going through a lot of transformation. There's a lot of dynamism in this industry, and it is an unprecedented dynamism. And Copel needs to be prepared for the challenges and for the opportunities that come from this transformation. I think that we have opportunities for growth, for market openings and opportunities connected to new business acceleration of growth, and the Board of Directors has been participating, and Daniel knows, and participating actively in this process of planning for the company. This hasn't started today. It's been a couple of years. We have been looking at the challenges and the opportunities. We have been developing cycles of planning. And in recent months, we devoted ourselves, the Board of Directors as well as the Executive Committee of the company, together. We devoted ourselves to develop a more long-term vision for the next 7 to 8 years. So the rule of the Board, I can tell you has been very effective. We've been very present in the management and in designing the future of Copel. Copel made an option. And Copel's option is not to follow the trend. Copel's decision is to play a leading role in writing our own future. And I believe that the Board has been able to make a mark. We have also worked in potentializing the culture of the company. You all know that Copel has a strong culture, but we need to potentialize it to get even more out of this very good and technical culture of Copel. We have been trying to develop our leaders. We have great leaders, great talent, but we need to have a stronger development pace for these leaders. And as a final thought, Daniel, I'd like to say that I am particularly very optimistic about the future of the company. My background is in engineering. So my optimism is responsible. It -- it's not just the optimism for the sake of being an optimist. I'm planning to say that Copel, by 2030, will be in the place where it deserves to be, where it can be. And in the Board, we will contribute for this to happen, and that's why I am very optimistic. And Daniel, I want to congratulate you. Today, it is Daniel's birthday. So happy birthday, and I wish you all a great Copel day.

Marcel, one question for you, because you're the Chairman of the Board. We have 9 Board members. And in the Board of Directors meetings, you're always very keen to talk about execution, execution, KPIs, people, you spoke a little about that and digital transformation. In all of the meetings, this is in the agenda, why is this clear for you?

Well, I'm a technology guy. So to me, digital transformation is obvious. There is no successful company in the future, if this company does not have a great efficiency impact through digital transformation. You cannot have a relevant impact on a company's efficiency without a successful digital transformation process with automation. So yes, we will be focusing on this until 2030 and beyond because we need to speed that up at Copel people. Well, that's a cliche, but people are the main asset of a company. It is the same at Copel. Even if we have digitalization and automation, we'll always have to rely on people's minds and talent, and Copel has a lot of talent. But at the end of the day, it is all about execution. When I joined the Board of Directors, I told you clearly that we would need to have excellence in execution at Copel. If there is one thing that the Board focuses on day after day at Copel is excellence in execution, excellence in execution, and we will continue to do so.

Okay. Thank you very much, Marcel. Stay with us. We'll count on you. So this is the tone of the top. Now, let's see -- our vision for that. I remember in 2019, when we took over, we came up and designed a strategic plan. We would have one-on-one meetings or smaller group meetings with the market. And we always ask you give us the benefit of the doubt. Quarter after quarter, year after year, we have delivered results consistently. Today, Copel is at its best level in its 70 years of history. This is a reflection of the work of our leaders, our managers and our employees. Copel is a collective work of art. And to give you a small summary of what we've done in recent years, and particularly in recent months after Copel's earnings conference call, we prepared a quick video. [Presentation]

Now getting into the second panel. I'd like to invite our Business Development Officer, Cassio Santana da Silva. Cassio, over to you.

Good morning, Daniel. Good day everyone joining us here and online. Now we'll speak a little about our strategic journey, and how we'll get to 2030. In our agenda, we have 3 main pillars: decarbonization, as Daniel mentioned. It is our ambition of making Copel a 100% renewable energy company. Second pillar, capital allocation, which became like a mantra for us. Since 2020, in capital allocation, we defined an investment policy, which advocates the kind of asset, size, location for the assets. We have very well-defined rules for Copel to look for assets, and we have discipline in execution mentioned by myself. And innovation, third pillar, the icing of the cake. And I will speak a little about corporate venture, Copel's interest. All right. So let's get started, and let's speak about our first asset in our decarbonization, UEGA. UEGA is a thermoelectric power plant operating in the Merchant modality, 484 megawatts. Concession expires in 2029, with the possibility of renewal. And the most important fact about UEGA it is a 0 kilometer asset. We did a major inspection held in August of 2020, that ended in August. That puts the asset at its best operating condition to extend its useful life. What else is important about this asset? It matches the timing of our strategic planning of decarbonizing our grid. And this match Petrobras initiative of divesting 18 -- minority stake 18%. So Petrobras has put their stake for sale. So we should follow that process. We are finalizing ours, that is to have our 82% working interest for sale in a structured process so that players, that master the gas chain, and we believe that this is very relevant to create value in this kind of asset, may buy not only 18% of the assets so that they can buy 18% or 82% or 100% of the asset. So with the right timing, we can make this asset profitable for us, and we can then continue to decarbonize our power grid. Another very important assets that Daniel mentioned is Compagas. Copel holds 51% stake of Compagas. And since we have executed a similar process with telecom, here, this fit our strategy of focusing on energy assets. So the outcome for Compagas afterwards will speak a little about the renewal of the concession. But as soon as we renew the concession, we would have assembled process to Copel Telecom and auction and Stock Exchange, a transparent competitive process that is clear. And we feel that it's going to be successful because this is an asset with unique characteristics. We are at a final stage of renewing a concession. This asset should be sold with 30 years of concession and a modernized concession. This concession renewal here on the screen, and I'll draw your attention particularly to the first item, which is a change and it costs a plus to a price cap model. As you all know, these privileges that the concession be managed with a lot of efficiency. The concessionaires remunerated for that, compensated for that. And that's an important -- that is an important modernization in this concession model. Some that are public and have been disclosed since the public consultation in February. The rent of BRL 508 million for the renewal of the concession. A very important topic is the internalization of gas in the 10 mesoregions of the state through physical and virtual gas pipelines and a WACC of 9.12%, which gives us a lot of safety for profitability of the concession. Our expectation is that after the renewal of the concession, which is at an advanced stage, in the governance of Compagas and Copel, we can have this auction between 180 and 210 days after renewal. Foz do Areia. Foz do Areia is like the ice -- is a [indiscernible] for us. It is the biggest client of Copel. It is an asset that we operate just like all others very carefully, and it is an important asset for the company. So where do we stand in terms of renewal of the concession? Well, information is available in the ordinance of the Ministry of Energy, that the draft of the new concession agreement has been approved for an additional 30 years, in addition to the material fact. And I'm just detailing the material fact information. There is a grant bonus defined of a little over BRL 1.8 billion, a WACC of 8.27% and a future energy price of a little over BRL 177. So the conditions for renewal of the assets are very clear, safe. And now this is a process that needs to develop. Life here at Copel has been very busy. We're always into acquisitions, assets, auctions. Yesterday was no different. Our life was very busy yesterday. The original plan for this asset was to have an auction for divestment of shareholding control 50.1%. By selling our shareholding control, we can renew the concession for 30 years. If the material fact this as yesterday becomes a reality, our priority is to renew with 100% of the asset for Copel. But one way or another, what we realized is that this asset has great attractiveness. There are many strategic financial self-producing players getting information about the asset. Of course, financial players, because this asset has assured return, particularly with the operation and maintenance, we've been providing for this asset. And we also have engaged advisers and customs. The best player for this asset is Copel. The asset is already very well managed, right? This is a winning team, you shouldn't change it. So we already have that [indiscernible]. We have Santander as our financial assistance and [indiscernible] our legal assistance. So let's talk about our growth agenda. I would like to remind you, and this is a legacy from the administration. When we look at asset acquisition, as I mentioned, when I started, we created an investment policy by the type of asset. We have a policy -- investment policy for transmission hydroelectric photovoltaic wind power plant. So we've developed these policies very careful. And here, we tackle the type of asset location and what type of synergies that we might have for our business, the size. So we have a minimum size to create a new cluster or to continue investing in operating clusters and also our partnerships if we do have partners or not. Our corporate structure, and I'll talk more about that in the last bullet. So what is powerful information here on this slide? It is what the policy will bring to our daily practice. So what it has allowed us was to acquire 2 assets with 2 digits of profitability, and we know that we can go even further. So looking at this year, Vilas, Aventura Santa Rosa Mondino, we published that. And the market realized that these are assets that are 2 digits of profitability. Also in Marcellus, stress that is the discipline and execution of projects that are already in the company's portfolio, our greenfield so Copel generation and transmission, for instance, has executed Jandaíra , which is a farm that we acquired in the auction of 2019. We delivered it 2 years ahead of time. So it's really we are walking the talk, and we are showing in practice what our policies state. And finally, the last bullet here, which is very interesting. How can we bring in more profitability? How can we increase these 2 digits results? We monitor the market, and we realized that there are very good people with complementary investment thesis, complementary to ours. So very good people develop assets and at the right moment, they rotate those assets. They turn these assets profitable by M&A. What these partners need? They need a PPA. And a lot of times, they also need some financial proceedings. So we are monitoring the market in our pipeline. I would say that our possible future acquisitions might look for assets that are in an earlier moment minimizing risk because of this combination of investment thesis, risk and execution, bringing in assets that provide us a synergy with PPA in the free market with self-production and also assets that in an operating moment would fit into our G&T. So this is a very important moment of our growth. Now talking about these initial avenues, both assets as well as services. And I think Daniel already touched on that, and I'll go over this briefly. So what does it mean to add 2 gigawatts to the portfolio? That is something very significant. This year, the part that -- the wind farm that we acquired is of 260 megawatts. So this year's target, it's there. But if there is a good opportunity, we still have time up to December 31. About transmission, Daniel also mentioned, about -- we're disciplined. And the auction said too bad. We were not awarded. We were very frustrated. But as I usually tell my team, we have to play against ourselves. Someone might take ourselves very close to the abyss, but we will not jump. This is our decision. And about distribution, Daniel also mentioned that our focus here is to grow by new concession areas and to consolidate our base impairment. We have a continuous improvement then plan in our distributing company in our concession today, Max, we'll talk more about that. We are very proud. We have 0 disallowances. We have no investments that are not prudent. And in terms of monitoring opportunities, these are not opportunities that come out every day, but we are monitoring from time to time, all those operations that might add scale and synergy to us about services. This is a very significant topic when we look at our future scenario because here, really, we want to have our customers and clients at the center of all our actions. So we want to have a large commercialization company, and we have one of the largest ones. But the idea is to have a commercialization company or a subsidiary or a business area that is large and profitable. And how can we do that? We will follow up the clients' journey. And it doesn't matter what size this client is, it might be a captive client with additional services. The services might be provided by Copel, might be a large client or a client from the free market that might contract services in high production. We already have a model developed and leasing and matching mode. We also have services available related to energy efficiency for these large clients. So to improve operating efficiency and the energy management for these clients also one of our commitments, and we can already deliver that. And about distributed generation, Daniel has already mentioned. And I would like to add to this defensive strategy. We developed a plan that is very well structured, starting with the very beginning of the projects and the land up to the management of our clients' portfolio that go into DG in the state of Parana. We are doing that with our own funding and as well as without our own human resources, and we are monitoring opportunities to consolidate that market when you look at that rationally. Well, no one knows Parana's distribution as ourselves, and we know how we can use distributor generation as a tool to improve energy management in the state of Parana. That's right. And I think this is the main message, one-stop shop is a reality when you're able to guide the trajectory of our clients. So this is a clear understanding, with the clients that are already in our base, we want to turn them loyal and to retain them. And the ones that are not in yet, we want to bring demand. We want them to become part of our client base and also force that everyone can be happy with us. And finally, I would like to address innovation, especially 2021 was a fantastic year. When we think about open innovation for Copel, and this has extended itself to 2022 also. I will -- I would like to remind you about what happened in 2021. We had a program called Copel holder that allowed us to access the global ecosystem of innovation. So we had a contact with over 200 start-ups related to the energy area in the 5 continents, and we chose 5 for concept proofs, 1 company from Asia, 3 Brazilian companies and another company. And I can tell you that they brought a lot of oxygen. They really changed our mindset. It was great to have this contact with the type of maturity from these companies. And we realized that we needed to have a clear message for the system. That's why we developed our innovation thesis. This is what you see on the screen, and that organizes the way we want to position ourselves and how we want to communicate with the innovation ecosystem. And obviously, after the POCs moved forward, and we saw the strategic value for the company as well as the potential of scalability and the economic and financial potential that the businesses have, we realized that we did not have the right vehicle to have a relationship with these start-ups in the long-term strategy. So we created what we call Copel Ventures, which is the corporate venture capital of Copel. Here, we have more details on how this fund is going to work yesterday. We published the selection, the notes -- the notice to select someone that is qualified that can work us and select and work with a fund of BRL 150 million, where Copel is going to be the single quota holder and we are going to work in a strategic point of view, of course, to improve the pains and foresee and work with the opportunities that we already have at Copel, but also that can be scalable to the energy market. Therefore, we also have a financial approach here in addition to the strategic 1 to that type of partnership. So we believe we will have between BRL 2 million to BRL 10 million per round because we are looking for companies that would fit in this early stage. These are businesses that have a thesis of product, a service, and that really right now, they need something attractive. And Copel is a great environment for that because with our engineers and our businesses and our farms, we can test and scale businesses to the energy market. And up to December 21, we are open, with the second round of Copel holder to select companies, start-ups that can help us in these challenges, renewable energies. And here, we are talking, especially about green hydrogen, about storage and these are future bets and we want to have small bets on those. And we want to position ourselves in a consistent way. Energy as a Service, which is to take care of our clients' journeys. What kind of services we can add to our current clients' portfolio so that we can continue with this and they are happy with this as well? Asset management, this is very important for a company that has such a great asset combination as ours. And this is important to generate efficiency. And in a regulated market as ours, efficiency a lot of times comes in from those that are out of the industry, the ones that are coming in, in from a nonregulated point of view. So this is important for us. We need to bring start-ups and that can help us in that opportunity as well. Smart grid -- and as Mark said, it's everything that is related to energy, IoT, electromobility because a lot of people are already turning into profitable and monetizable models in the electric reality and also innovative processes. These companies also have that trend to use the daily activities of large companies and improve processes. So these are the challenges that we have for this ecosystem. A registration will be opened up to December 21, and Copel holder is our main generation of opportunities. Having Copel holder the way that we will have it in a perennial way and having Copel Ventures, a fund already established -- we believe we have the right entry doors to develop this innovation area, Daniel. So that's what I had for my presentation.

Very good. Thank you very much. It is very clear, right, very transparent. I just would like to say that Copel ventures in addition to those relationship with the start-ups, Copel and BNDES and Banco do Brasil are the only state-owned companies that were able to develop Copel ventures like this one. So we are excited about that. Congratulations, Cassio. Thank you. So now let's turn to our next panel, operating excellence of our businesses. I would like to bring in Monsier Carlos Bertol from Copel Generation and Transmission.

First, I would like to agree to Daniel. And also, I would like to greet all employees from Copel Group. Also all the members of the top management, all the members of the Board on behalf of the Chairman of the Board. And now so I would like to greet everyone that is following us here in this Copel Day and everyone else that follows in the streaming platforms, and such an important event for all of us. So we have prepared the presentation, in which we will analyze the trajectory of Copel generation and transmission. And how we developed this trajectory and how we reconnected with this vision, with this growth purpose, that we have for Copel generation and transmission. The topic of the span operating efficiency places us in a position to move forward and look for established objectives. I would like to say that we are very happy about the results that Copel generation and transmission is posting all these years, especially after 2019 here at Copel. This provides us a lot of opportunity to grow. And that's why it went through a whole set of -- it went through a transformation so that we could host these results. I will talk about 7 topics. 100% renewable generation, energy transmission, and I will conclude with the new operations center that we just delivered at -- 3 that has all administrative structure for Copel. When we took over Copel generation and transmission in 2019, it had 5.7 gigawatts of installed capacity. And I would like to comment that 87% of the power matrix came from HPPs, therefore placing us in a very susceptible position, depending on GSF effects. From 2019 to 2022, we installed 1.3 gigawatts of installed capacity in our electric matrix. In 2019, we had leader HPP start-up in 2020, the start-up of Cutia and Bento Miguel Complex, 312.9 megawatts of installed capacity in '21. We then concluded our SHP Bela Vista 28 installed capacity, and we acquired Villas wind farm with 186.7 megawatts of installed capacity. In '22, we concluded Jandaira project with 90.1. And also, we acquired the wind farm, Santa Rosa & Mundo Novo and Aventura with 260.4. This was the trajectory of 1.3 megawatts -- or gigawatts of installed capacity throughout these years. And what does that represent now? We have already reduced the HPP stake. So 77% is of HPP in our electric matrix, but we already have 17% of wind farms part of our matrix and 6% comes from our thermal electric plants, and we want to have 100% renewable matrix, 100% decarbonized, and that allows us to have a sustainability seal in our electric matrix. So what is our major challenge when we look ahead? When we received the guidelines from our Board of Directors for growth, we saw the opportunity to grow sustainably in generation and transmission anchored in a portfolio that could be 100% renewable and not as susceptible to GSF with recurring cycles of unfavorable hydrology. This is a concern of ours, and we do have competence to move forward with it. And what does that growth represent from 7 to 9 gigawatts of installed capacity, and additional capacity in a minimum 2 gig of capacity that is an annual growth from 250 to 300 megawatts of installed capacity. And therefore, we are going to have a huge transformation in our hydroelectric matric hydraulic stake is going to come down to 56. The wind share is going to go up to 29. And here, we are adding a cluster of photovoltaic solar generation. So a matrix that is going to be 100% renewable, right? Daniel. And on the other hand, to sustain that diversified growth with this new cluster of solar generation, we have to optimize the existing structure so that we can operate these assets with quality and efficiency. Also out of the 9 gigabit that are installed here, we have what [indiscernible] mentioned, we have the sale for the decarbonization of the matrix of [ 50484 ] for Araucária thermal power plant and the renewal for 30 years -- for extra 30 years of GBM FDA. For the transmission segment in 2019, we had 5,700 kilometers of transmission lines. We added 600 kilometers, and we also added improvements and reinforcements that were authorized by the regulating agency. These all were prudent investments and ahead of time from the regulatory term that was established by these approvals. So now we have a 6,300 kilometers of transmission lines, and then this horizon of 1922, we will be implementing 2,000 kilometers more, reaching 8,300 kilometers of transmission lines, becoming a relevant transmission company in the electric system in the national interconnected system. We have to improve the digitization of our OEM processes. And also, we have a strong commitment as Copel generation and transmission. As Marcel mentioned, we have a commitment with efficient. We always aim efficiency of our processes. And here, I will dive into efficient actions we have taken at Copel Generation and Transmission. We optimized our decision-making structure focusing on the strategy of portfolio management, also OEM management and also partnership management. So in this period of time and in this scenario, we had a reduction of 164 employees, almost 10% of its headcount. And that meant an increase, as we mentioned from 1,300 megawatts of installed capacity and also 600 kilometers of transmission lines, so we increased our assets and we brought down our headcount, and we increased operating also we modernized our installations, and we were able to retrofit some of the critical equipment of our HPPs and we reestablished a very quickly our assets that were underperforming for some reasons. So what is important for us also is the robotization of our processes and also the programming of our efficiency services. So Copel is operationalizing 30,000 documents a month. That is thanks to this robotization process. Also the collection of charges as well as the billing of generation and transmission contracts. This is the structure and also the rebuilding of transmission assets. With all these actions, we have KPIs that measure efficiency with a very frequent condition of cost optimization and increase of our net operating revenue. The first indicator is our net operating revenue, and we have head count and services over the net operating revenue. We see a significant drop in those -- so you can see the movement here from 2018 to 2021. Then we have our PMSO over our net operating revenue. We also see efficiency from 22%, reaching 13% now in 2021.

[ Roberto ] I think you will be able to see that throughout the company. We grow in size. We reduce our headcount. We gain efficiency, and we reduce costs. I think the figures talk about this process about this efficiency driver. Exactly these are the actions that are allowing us to move towards efficiency. And also, we have redirect in addition to efficiency, of operating management for G&T, we replanned the execution, the projects for generation and transmission. And this is a case that we can bring to you and that shows the efficiency we are working on. And this is for Jandaira Wind Complex 90.1 megawatts of installed capacity. And we are going to start supplying in January of 2025 over a month. We have delivered it in commercial operation 2 years ahead of time. We have an office with projects that are already structured with PMI methodology. And this year, it was among the 10 top in the PMO award for 2022. This is a great progress that Copel was able to achieve. Now a very strategic and relevant topic for Copel Generation and Transmission and for the Copel Group. We have here our well-succeeded portfolio strategy and mitigating the risk of GSF, GSF is bringing us some hard times because of its seasonality. Sometimes it's higher, sometimes it's lower. And here, we clearly see that in 2022, what do we have? Our portfolio of assured power 2,764 megawatts average, 15% of this portfolio was under contracted -- was not contracted to so that we could work with the GSF level. 85%, it was already contracted, and this is what we are already doing now. And down here, we have the Pmix of the energy sales target in 2022. We have all these years ahead, 8 years where we established our targets for energy sales. And we want to reach that level of contracting, maintaining a GSF hedge to face GSF so this is a strategy that we consider well succeeded. We are improving our model so that we can have a price forecast 4 megawatt hour as well as to manage the GSF, and that affects our portfolio. And now so this has a very important topic in our commercialization strategy, following the market trends. But here, we have a natural hedge of 15%, as [ Bertol ] mentioned, that is very strategic and very important. And here, we have the Pmix, so we are going to sell A+1, A+2, A+3, as we understand that the prices are more attractive and good prices for the company to guarantee an average price so that we can always have a small balance of energy for A+2, A+1, we do believe in that strategy. We have been doing that in the last 5 or 6 years. But this is a vision that considers the opportunities to have as much contracted energy as possible that allows us to have more stability. And in moments like this one is which the price is so many times at the spot price at the floor, right? So we have to be calm and wait because of current prices now are reflecting a situation because we left a hydro crisis in the past. And now we are having the best MLT in the last 5 years. The fifth best in history. So you see -- so this is a very sensitive topic.

So I'm sorry for interrupting you. Yes, great contribution. Thank you for your support because then we can interact on this topic. Let's move forward.

Like I said, in our COPEL G&T is improving its techniques and its models to have a better predictability of prices and to actively manage what a deficit percentage GSF. Even by maintaining our grade hydraulic accounts for 30% and we want to get to a 100% renewable grade. Moving on to the next slide. We follow and assess the sector environment. In the sector environment, there are 3 topics that draw whole lot of our attention and interfere in our generation and transmission assets, which is a public hearing. On the 2022 ordinary review of the assured energy of hydroelectric power plants. And this is then every 5 years. And this one will take into effect in January 2023 for another 5 years in the simulations and in the analysis that we did, there will be a reduction of our portfolio, as we showed some time ago of about 3%, but there's also GSF increase as we reduce the physical guarantees. The denominator is also reduced so the GSF is a little higher and exposes us a little less. We have also followed and we're done because this has a positive reflection for us. We followed on the approved methodology for enhancing the locational signal of TUST and TUSDg. This was approved by ANEEL in 2 resolutions. In our wind and hydro portfolio, we would have a reduction of 14% by 2030 in the consolidated result but PL 365 of 2022 was approved by Congress, by the lower housing, needs to be approved by the Senate house. Yes. But here, I think I have to make a comment. We will add the Senate House with the senators that we have a contact with because we consider this an interference of the legislative on the regulatory body, i.e. ANEEL. And this sends a bad signal to the market. So I just want to reinforce the position of the company. Yes, Daniel, that's an important comment. We have institutional work, and we have achieved a number of things that are interesting for Copel and for the sector and also a review of the methodology for payment of RBSE financial installments. This had been judged in 2 levels of court and it's under evaluation by ANEEL. There are 2 different appeals and being assessed by 2 different directors of ANEEL. And hopefully, by beginning of next year, we'll have a solution so as to have no impact Copel Generation and Transmission. And understanding this judgment on RBSE is final. And to end, I want to say that we completed the construction of the new generation and transmission operations center. Like I said, it's located in [KN3]. It's a modern facility, a safe facility and the equipment in the operating the generation and transmission systems are interconnected, one single operator can operate the transmission platform and the generation platform, bringing operating efficiency. Because of that -- this is a very digital state-of-the-art system. And because of that, we can sell the old headquarters that is located in a noble neighborhood of [ Curitiba ] with almost 100,000 square meters. And that is going to bring funds for the company and reduce our maintenance cost. And this is the strategy that we have. We have GBM [indiscernible] GPS. These will be separated from the plant concessions, and they will be sold. GBM and FDA, well, we have had a sale process, we were not successful, but we will relaunch that. And this process is being well conducted with quality and efficiency by our Officer of shareholders, [ Adriano Fadalto ]. And thank you very much for your attention, for the opportunity to present this panel. Thank you, operator. I want to invite Maximiliano. Still talking on operating excellence, I'd like to invite Max to speak about Copel distribution. I will just go. Max over to you.

Good morning, everyone. Especially good morning to you, Daniel. Happy Birthday. I wish you all the best. I suspect that he scheduled Copel Day today, so he wouldn't have to host a party for everyone. Well, it is a pleasure to be here in Copel Day to speak a little about Copel Distribution. So let's get going. The question then never stops. Why to invest in Copel why to invest in Paraná, the most obvious answer is because the Paraná GDP historically grows above the Brazilian GDP. And recently, we received news that made us very happy that we are the fourth largest economy in Brazil, [ going ] ahead and strong and trying to catch up with the third and second ranked states. And of course, that reflects in Copel, a great market is systematically growing above the average for Brazil. So much so that for December 2022, we expect to connect our customer -- our consumer number 5 million, which means that our customer base continues to grow. Another 2 reasons to invest in Paraná are these 2 indicators that are very common in distribution, very traditional, nontechnical losses related to theft and fraud and corporate default. Over time, we have always been among the best companies in the sector regarding nontechnical losses. And in 2022, we have the third best result among the largest DISCOs in Brazil, which comes to show that indeed, this ratio is very low for us. As regards corporate default -- default in 15 to 365 days. We always had very low numbers but in 2022, the highlight is that most likely we are going to have the best result in our history. Most likely below 1%. Of course, the numbers are not closed yet, but it's all pointing to the best result in our history under 1%. Now reading these 2 indicators differently, we can say that our market, our clients, the Paraná customers are very honest, they are not into front in their excellent payers. And that is definitely a great competitive edge for us. Another very important point is our remuneration basis. Despite our great efforts to invest in our grid from 1 tariff review to another, we grew from BRL 4.9 billion to BRL 8.4 billion or 71% increase. We're still very depreciated. We used to be the most depreciated remuneration basis among all large DISCOs. Now we're doing a little better, but we're still in the fourth quartile. We had 60.3 in percent in 2016 and got to 57.3% in 2021. And we have the second lowest tariff in Brazil, showing that we have a huge room to continue to invest in our grid. We have a lot of room for that. And all of that with our traditional zero gloss guarantee in the last tariff reviews, we did not have one single real denied in the last tariff reviews. Not one single real was denied, which is a very interesting fact. And talking about investments, we have been doing our homework. We have been increasing our investments. An interesting highlight in 2020. In the last year of the previous tariff cycle for the first time in our history, we crossed BRL 1 billion mark of investment. And we started this tariff cycle stepping on the gas, almost BRL 1.3 billion in 2021. For this year, it is estimated that our investments will be over BRL 1.6 billion in the expectation. Of course, if everything help us, we want to continue to grow our investments. And of course, we should reach a peak in 2025 when this tariff cycle ends and for us to continue to invest in more than that. If we want to continue to invest well, we created a program called Transformação based on 4 pillars. Parana Trifasico, The Smart Electric Grid, Total Reliability and Cultural Transformation. I will focus on the ones that have the most immediate impact. The most famous one Parana Trifasico or Parana Trifasic. It is a program that aims to renew our rural networks that are totally depreciated. Our rural grid, they expect the 1980s when Copel was a pioneer. And for that, we used a construction aspect that was simpler, cheaper with monobasic grades. At the time, they did the trick. It allowed us to take [ electrified equity ] to rural consumers that have no electricity. But now 40 years later, this is a depreciated grid. It's a fragile, the weak link for us. And that is why, in addition to turning a monophasic into triphasic grid, we are using protected cables, automated equipment and all of that changing the path, removing the wires from the middle of the forest, bringing the lines to the highways and that improves power quality and has a huge potential to reduce O&M reduction -- O&M cost, I mean. This is a multiyear program. On October 31, we celebrated kilometer 10,000. We were able to deliver 10,000 kilometers. And by the end of this tariff cycle by 2025, we want to complete 25,000 kilometers of triphasic grid with investment of BRL 2.8 billion. Another project which is very interesting is The Smart Grid. In Portuguese, Rede Elétrica Inteligente. That is the largest project being executed in Brazil. It's going in its 3 phases. It's going to reach on 1,610,000 customers, BRL 820 million and this project also has a huge potential to reduce O&M costs, operation and maintenance costs. In addition, it brings the possibility of offering new products and services to our customers. And obviously -- and this is a prudent investment. It's going to compose our remuneration basis. And all of that led us to a 2-digit return of this project. So this project is being executed on schedule and Phase 1 has been completed now in the beginning of 2023, 462,000 customers. We have Phase II contracted. We already have a winner. The works are starting another 511,000 customers and a highlight. The cost per point of BRL 408 is the lowest cost in any project being executed in Brazil, which shows that we are very efficient in our procurement, BRL 408 per point. And also, we are including rural customers in this package. So this is very relevant. In Phase III, more than 637,000 customers, Phase III should start in mid-2023. This is a project that makes us very proud. It shows our innovative and Orphan Guard spirit that Daniel and Marcel mentioned. We are creating the rules. We are not just following the rules. Talking about digitalization, we are practically revolutionizing our systems in practically all areas, we are working hard, always seeking what there is -- that is best in the market to offer in terms of grid management, robotization, metering management, team management, asset management and even customer relationship. We are trying to digitalize, bring state-of-the-art software and I'll focus on the first one, ADMS, to give you an idea. This is a project of some dozens of millions that we invested. It's going to manage the whole operation in our grid to list a deploy, just to give an idea of how complex this system is. And strictly on schedule, impeccable deployment. It will help us have a peaceful and safe relation with DG and it will allow us to remove from the smart -- to get out of the smart grid, everything he needs to offer. You should start in the beginning of 2023, bringing a lot of productivity to our system. And speaking about productivity, there's another technology that has come to stay. We can no longer work with our drones. We have the second largest fleet of drones in Brazil. In the electricity sector, we are #1. It seems that we only use for the Sao Paulo highway piece. We have 119 drones in operation in all kinds of activities. The most obvious ones, such as grid inspection, but oversight of service -- oversight of field, in the physical inventory our people discovered that we can increase productivity if we have a drone to count materials. Field survey for projects and even for cable laying. Off course it's not the cable itself, it's a guide cable, but we've used the drone for that as well, always increasing productivity. I want to zoom in in this photo. You can see here this photo taken by a -- was taken by a drone. I am sure that if our electrician went up in the poll, he or she would not have a perfect view of the service to be performed. So you can imagine the productivity gain we have with this equipment. And of course, this translates into operating efficiency. We have the 2 most important items in a distributor, DEC & FEC. How many times on average, a customer has a power cut since we renewed our concession contract in 2015, we had a reduction of greater than 50% in DEC & FEC. This is significant. If we get these 2 results for 2021, 7.22 and 4.83. That puts us in the first quartile among the best distribution companies in Brazil. This is very important to us because our concession has different challenges. Our concession has big challenges. For example, there are a huge number of rural customers. And also weather events, storms that hit us frequently. So despite of that, we are in the first quartile among the best in the company. And when we talk about operating management, we have 4 obsessions. The first is to serve our clients well, our customer as well. And we have an incessant quest for the optimization of costs so that we can also increase productivity. And we always want to increase efficiency and this indicator shows a little bit of everything. The previous one was our obsession to serve customers well. And this is how much we spend to serve every customer. In a little over 5 years, we were able to cut cost by 1/3, actually more than 1/3, minus 36%. In terms of reducing how much we spend to serve a customer and to serve them a lot better. So to serve customers a lot better, we're spending a lot less. And of course, this needs to have an impact on EBITDA efficiency. Story stretch in 2014 when we had inefficiency of minus 86%, it hurts to say that minus 86%. But we've been gaining efficiency and we hit an important milestone in August of 2019 when we cross for the first time this threshold of efficiency. We started being efficient. And we had expected this to happen in 2021, but we delivered that in August of 2019. And in the end of 2021, we reached 21.1% efficiency, which places us among the 6 top efficiency companies. Now in 2022, we had a slight reduction. Some of you might have found this strange. We dropped from 21% to 12.4%. Exactly in our best quarter in our history, how can that be? BRL 530 million in one quarter, the very best quarter in our history and exactly in that quarter, we had a reduction in efficiency. But we increased our base by 70% in the last tariff review and 2022 is the first full year. The tariff review happens in the middle of the year. So 2022 was the first full year when we increased the remuneration basis. We increased the regulatory EBITDA, which is the denominator of this calculation. So instantly, there is a reduction in efficiency. Although we had a great increase in EBITDA, the ratio with regulatory EBITDA dropped at all. But don't worry, very soon, will return, and we already returning to that same level of growth. And the sky is the limit. And this whole journey brings us to some acknowledgments recently. ANEEL created the best Ombudsman award. And for additions, we won 2 times and were ranked second twice, which is the obsession for the customer -- focus on our customers. And speaking about customers, we have Abradee, Abradee gives us a customer -- gives a customer satisfaction award in 10 years. We won 8 times, the award of most satisfied customer of Brazil, which reinforces our focus obsession for our customers. We also had international acknowledgment in the IberoAmerican Management Quality Award, which placed us among the best companies in the world, not electric companies but best companies in the world in terms of management quality. This was a milestone for us. And in Brazil, we have a crazy fierce risk or race with another distribution company in a healthy race, of course. This other company won in 2018, 2019, 2021, we were ranked second. They were first and finally, in 2022, with a constant purpose, always improving, we finally beat them and got the management quality award. Now we can say we have the best management quality in Brazil. And all of these awards and prices and everything that I mentioned before, our focus on operating efficiency, focusing on cost, all of that prepared this so that in 2021 after 20 years, we were again getting the biggest Abradee award, which is the best distribution company in Brazil. We had won this in the year 2000, and we got this main award again to crown the great effort of our wonderful team at Copel Distribution. All of that give us an ambition -- we evolved right Daniel. But we have this ambition of perhaps be able to share a whole operating management efficiency with another distribution company, another concessioner another company. So why not. If the market offers a good opportunity, you can be sure that we are already to seize the opportunities and take our management philosophy beyond the borders of our concession area. Thank you very much.

You can see the enthusiasm and the energy that we all have. Matt, please stay here. I'd like to invite Bertol back on stage, please. And moving to Panel #4. Max Bertol and myself will participate in Panel #4. Together with Fillipe Soares of Copel Mercado Livre in free market.

Talking about experience, customer experience and synergy. This panel, the 4 of us, I want to speak a little about experience this journey we've talked about. But let's also put into context market opening. That started in the end of the 1990s. But now we are seeing infralegal and legal measures talking a little about this topic. And that we understand they're very positive. So perhaps you could start giving us a market view and then will continue.

Perfect, Daniel. Good day, everyone. It is a pleasure to be here to speak a little about the scope that we started with our Chairman mentioning our mantra. Digitalization and discipline and execution. Our CEO, also speaking about our strategic journey together with [ Cassio ]. And then this panel, we'll have an opportunity to show you how the subsidiaries interact with the holding and how we are going to execute everything that we are projecting. And forecasting our strategic and customer journey. So let's start with market opening. At the moment that has been lasting for some -- a couple of decades. The free market was created in 1995. But I highlight how pioneering Copel was in this market, a pioneering approach that we see in all of our businesses. We had the first free market contract. The first free market customer was with Copel's Energy. A customer that was beyond the border of the state of Parana, showing that we were in the search for new products in new markets and how we can include all that in Copel's portfolio. And the market has grown, Copel has grown with the market. If today, the free market represents almost 40% of national consumption, Copel is among the top 10 companies supplying this free market. It seems that the free market is free, but normally industrial customers that they choose their suppliers. They look at generation assets. They look how satisfied they are with distribution. That's an important, very, and Copel is among the top suppliers in the free market, but with market opening, and I'm talking about Group A, it is a reality [indiscernible] and ordinance published this year by the Ministry, opening Group A customers for 2024 with different characteristics. Today, we have 30,000 companies in the free market, representing 38% of national consumption. These are large consumers. The one I can migrate from Group A are 106,000 units that are able to migrate, but they add only 10% more of national consumption. So it's a lot more pulverized. We cannot repeat the same strategies that brought us this far. And I go back to our Chairman's words, digitalization is key, it's not digitalization in the future. It's digitalization we do it internally every day with Leticia's team, with partners we'll have to deepen our digitalization in order to be successful in this new market of high voltage and low voltage as well? And how can we close the whole cycle? we use the benefit, the synergies we have, because we are an integrated company with an open innovation program to bring innovation innovative solutions in the digitalization front to serve customers. So with a proof of concept, we identify new products and services, we can include them in our portfolio and offer them to our customers. And it's a certain innovative solution is positive with the accretion of Copel Ventures. It can become a new avenue for growth. And with that, we closed the cycle, and we have the benefit of being an integrated company. That's all, Max. How GeT, as we call it GeT, is seeing market opening?

Well, market opening is here. It is an exorable it's going to happen and Copel has identified opportunities for growth in assets. We have a large portfolio of energy to serve our customers, and we have this projected growth with assets with average megawatts to supply.

And COPEL GeT and Copel Merc -- Mercado Livre Copel free market, we have a leading role in the sector with the market opening expanding and growing. Max, what about discuss, how does [indiscernible] see market opening?

Well, we look at this with very good eyes. Market opening is a natural evolution of the model. And the main thing is that it brings benefits to all, particularly to all stakeholders, particularly the end customers. Now, of course, it needs to come with other elements, other tools. So that we can better manage some impacts that we'll have, I mean, being over contracting. But I have a peace of mind. We know that the industry led by ANEEL will know how to develop tools that will address that point. Or else customers in the regulated market will end up [indiscernible] whole bill of over contracting involuntarily, we sure of that. Well, we know all of us know that this market opening is just the tip of the Iceberg in a broader context, which is 414. Sooner or later this year or next year, this is going to be approved, and then we will have a special structure and a significant review in the electric sector. So I would like to hear from you that separation balance from energy, what do we have in terms of opportunities here for Copel in 414 issue? Opened -- the market opening and the bill of law 414 is the modernization of the electric sector. We are waiting for that update in the sector. I remember that the bill of law 414 started in 2017 with a public hearing CP33, it went for public hearing. All the stakeholders contributed, the way it happened, it was this public hearing that was designed by Paulo Gabarro, Palo Pedrosa Gutili, Barroso, [indiscernible] significant names in this industry. And now it's the bill of law, 414 is ready to be approved, and the separation between ballast and energy, that's -- this bill of 414 is the beginning of that separation. And the contracting of the ancillary services for price offer is the beginning of the market opening now. So Daniel, we are paying attention to the capacity auctions, the expansion of the capacity for the system. Marcelo , actally you were there, and you see that there are 2 areas available to install 2 generators of 480 mega each, adding capacity in the system of almost 900-and-something mega if Copel offers that in terms of capacity for a system that will need to meet this load. Marcel opportunities for 414 for distribution. Well, we actively participated in 414, not only Copel also via [ Abradee ] see this is a way that we have to improve the model. And we see this bill of law of 414 as an opportunity for a distributing company. This is the phase of distribution. We know that we will be able to cater to that, and we expect to have returns, of course and to have remuneration for instance, adding meters, regulator, commercializing and also digital services. We are already prepared. We have the largest project in Brazil, The Smart Grid. So we see that as a great possibility, the contact with customers and billing and so on, also tariff flag by our right? We can control that. We have the meters for that. So we see this as a great opportunity for new revenues for the distributing company. So Fillipe, I would like to hear from you the possibilities and how that is going to happen this experience and the journey for our clients?

Of course, as an integrated company, and it has been said in the beginning of our day, the electric sector is undergoing constant changes, tax changes, government changes, industry changes and it's important to have a relevant footprint in all 4 segments, Generation, Transmission, Generation and Commercialization being a leader in each one of these businesses. And that allows us to be more resilient to changes. I will give 2 examples here in this long list. This is just a brief summary of changes that are coming from 414 in commercialization. For instance, pricing by offer that was going to affect the Generation and Commercialization, but both of them are already working with risk management mechanisms. Of course, if it changes, we'll have to make a few adjustments. But the core of this activity, which has reached risk management, we already know how to do. We have experience in that. Also, the development of the regulated commercializing company. This is a commercializing company in which we already are leaders, and we are going to help the group to structure -- to cater to this need faster than someone that is starting from scratch. And I think this is the good thing about being integrated here. And when [ Marcelo ] says that when the theory meets practice when the strategic journey meets the clients' journey, what we have here is that we are talking about the client at the core. But what we have to consider is that how the client is going to reach us, it's by the free market, the commercializing company. So we have through the single door and an opportunity to improve our services. And to measure our services also to bring in opportunities to the group. And in the group to provide solutions and then send the solutions back to clients. So okay, I want something so should you look distribution or commercialization? Commercialization is a single entry door for these clients. And also important here, as Cassio mentioned, is that energy is a commodities market. It's another pillar we have to tackle. Price is important. How can we leave this trap of always been fighting for prices? We have to add services. This has to be in our portfolio. So I know that today, our strategy has been major energy blocks with competitive prices, gaining market share, but we cannot stop there. This is not going to allow us to have better profitability. We have to add services coming from Copel Ventures, Copel Holdings. And these are our main areas, focus and also the journey of the client, how is that going to work on a daily basis? Max just mentioned that a well-serviced client that is in the captive market. This is going to be the market opening. This is a market reality. But how are we going to tap into that? We are not going to be sitting and waiting, we are going to provide to these clients. If we are in the captive market and we can migrate to the free market. Why don't you migrate to the free market? So high-voltage clients will give them the opportunity to migrate. They will continue working with us, but they can work in the retail mode for the low-voltage clients that we cannot open that because they -- that depends on the law. We are going to offer them the distributed generation as a protection manager. And for the free market clients that are not in Parana, we are continuing offering that renewable energy, for instance, with delivery guaranteed with a lot of safety and for large consumers that are in the free market and that want to work with Copel, that want to be a partner in the renewable generation, we are going to be the self-producer in wind and solar projects. And of course, we have done that in the past in the 90s also partnerships with electric energy partnerships. And also in this cycle of our needs and our objective of growing generation as a large commercialization, we can offer the details we had in the past, but for projects that we want to have in our portfolio. So this is a little bit of the clients journey that we have here, a Copel Mercado free-market, obviously, catering to these clients and improving profitability. So in a single channel for the free market clients, Copel free market and that Copel's to work in partnerships with [ GeT ] and with projects and migration of distributing company and other areas? And how can we improve the profitability of the business in this context? That's very important. How can we add to these services? What is good here is that this is a strategy of prospection, as a strategy for profitability for our clients in another Parana high and low voltage, I have products. I have consulting services to offer clients, for clients to migrate to each environment you're going to migrate, we have the renewable energy certificates, I-RECs that we can offer and also services and solutions that came from Copel [Volt]. This is an assessment in a diagnosis for energy efficiency. So at that part of the portfolio, we are adding services on the other hand and we also have to see the price of volatility. You mentioned that we came from horrible history in the past and to the best level of reservoirs in the 10 years. So this volatility is not only a risk, but it's also an opportunity we work on trading, respecting the risk limits that have been approved by the management, not only to be the largest commercializing company but also a reference in terms of profitability. We have a strong expertise in this risk analysis and the risk management. Max explaine me something and you mentioned in a slide that Copel was chosen as the distributing company with greater customer satisfaction 8 times from the last 10 years. What can we learn this expertise in the captive market and bring it to the free market?

Yes, you said it well, we have a history of great success in the relationship with our clients. I dare to say that Copel Distribution is the company that has the happiest client in Brazil. And I would say that, that is so because we are obsessed in providing good services. We hear, we listen to our customers here, a couple of distribution. Of course, we participate all the surveys, we analyze all the data that we receive, but we understand that the contact with customers and clients is an opportunity to understand them better, what are their demand, their needs, they're pains? Therefore, we can be always improving. And a quick example here is that 2 years ago, we implemented a new control item based on this contact, this understanding that was -- this was a client's pain. We developed the first call resolution, both in our call centers as well as in our stores. So how many of the problems we would tackle and solve in the first time. It seems kind of obvious, but when we went back to our procedures. We found that many times, we asked the clients to call again. And so this is important, and we had taken care of that already. So in addition to being obsessed in the clients, we have really to be interested in their needs. And there is a single Copel program which is each customer matters. And a comment on that very briefly. Yes, when we address a DEC, we address the average, and that is being reduced. But when you see the outliers that do not -- that are not involved in DEC, but these clients do have power outage for a long time for 48, 72 hours because there is a different type of service for those. So this is pioneer and so we are working on that. I do not know about any other company that is doing that type of specific control for each one of our clients. [Bertol] to conclude our panel. The client that has a relationship with Copel has a guarantee of energy delivered? Yes. if you contract Copel, you will have the safety and the supply of energy with all that portfolio of megawatts hour It's this supply this market that is opening that is increasing and that safety allows us to cater to this market. And especially with all the advantages of having an integrated group of commercialization, distribution, generation and transmission and Copel Group that favors the offering of a good product. And with Copel's brand, which is very strong. Yes, and with the ballast of Copel, those 15% of hedge that we allow for the GSF risk, for the energy of hydro power plants, we have a plan for up to 23rd to replace that by renewable generation because it is generating more energy when the water crisis is higher so that we can hedge the GSF. So we will have more energy there. Therefore, we conclude this panel. But I think that one of the main advantages and the importance of Investor Day is so that our investors and shareholders can get to know the management, can get to know the answers, to see how we work. We work together. We are working in an integrated fashion. I think this panel can translate that. We are focused on our clients and customers. And that goes throughout Copel. This was the main objective here and we wanted to show you how we work. This is a company of 68 years old, 6,000 employees totally focused in our clients. Thank you all very much. And now we'll have a quick break for 10 minutes, and then we will be back with the ESG block and then a Q&A session. [Break]

Hello, welcome back. We have our initial panel with hard skills and now for this specific panel, we'll talk about soft skills. I would like to invite our Management Officer Ana Leticia Feller and our Compliance Officer Vicente Loiacono. We are going to talk about ESG and people.

Good morning, Daniel. Good morning, Ana. Good morning, everyone. So we're starting this panel to put things into context that how much Copel is at the vanguard in terms of sustainability and how it has been well recognized in its ESG practices. We have a video that will show you now. [Presentation]

What a nice video, what a great story. We are proud to be here. Copel's journey in ESG has a 68-year history. It follows the company. This is not something that was just created now, but Copel sustainability is there since day one. It is in our DNA. I would like to highlight some ESG pillars and some of the topics that we have seen in this video already. In 2020, in the governance pillar, we received the Pro-Ethics Seal in 2021 with a broad state reform, in addition to the migration to Level 2, we created committees to support the Board of Directors. We have a development -- sustainable development committee that is responsible to support the Board in the ESG and people topics. And recently, we are part of the UN Global Compact. And adherence to the 100% transparency movement. Also, we have in the environmental power, we developed and we received the B Concept from CDP in 2021, the neutrality plan for carbon. As we have shown that was developed. And now in 2022, it will -- it was developed with a strong connection with our strategic planning and also decarbonization metrics for the company. ESG at Copel is the pillar of our culture. And as we have seen, when Daniel talked and also Marcelle when addressed us, that's all present in our strategy. But let's look to the future now. And in the future, our objective is very clear. It's to neutralize the direct emissions up to 2030. And we will be doing that by this carbon neutrality plan that is based on 4 pillars. We are going to set goals. We are going to decarbonize as we already heard this morning, the alternatives to compensation. And here, we have opportunities as we have seen in the prior panel and the I-REC and also neutrality embedded in our strategy, as we mentioned. And this is going to be permanent in our planning. Copel, 2030 will be 100% renewable, and we will be doing that by committing to robust commitments. 2 of them already were mentioned by [ Cassio ] and these involve investments in TPPs, growth leverages, focusing in solar and wind power, but other sources and alternatives are also being analyzed by the company. And I should highlight 2 other commitments regarding sustainable operations, the electrification of our fleet and also zeroing our emissions by compensating residual emissions. About our electrical fleet, we are keeping an eye on mobility, innovation, the electric vehicles environment in Brazil, and we will be moving towards that gradually in a very organized fashion, we will be directing 15% of that fleet now in '20 -- by 2025, 2027, 30% and 2030, 50% of our light fleet is going to be electric. Now the way that we are going to zero and offset emissions, I should highlight that Copel about its buildings, headquarters and the main administrative hubs. It is going to certify by WELL certification, all these buildings. And that allows us to add 2 pillars. The social environmental pillars and the environmental air, water and lighting for these buildings and the social pillar, food health, comfort and well-being as a home for everyone that uses those buildings and aligned to a low carbon economy. All the energy consumed will be in the hubs, in the operating units and the buildings, in the offices. All of that will be compensated by the company by solar energy by 2030. And we'll be doing that first by solar energy farms and second by solar panels and the reservoirs of our power plants. Well, here, we have something very important that I'd like to stress we sign a video. 10% of the -- or 30% of the bonus for the company and employees are related to our ESG goals. 10% by our neutrality plan and performance of our sustainability indexes and that allows us to disclose that to Copel Group, 10% is going to be related to internal controls indicators. Here, we have a success case. I think Copel has evolved in internal controls. Greatly, our Board of Directors can classify to that. We did grow from 2017 to today in that area. And 10% is going to be related to the occupational health and safety indicator. Just a quick comment here. First, we looked at everywhere at Natura and other companies, and we have not seen any company with 30% of this type of incentive in the short term related to ESG. We have had experienced people analyzing this, and no one has ever seen that type of percentage. But not only the percentage itself, but how important it is. And also the message is that we convey to the company, to the leaders and to our employees. Look, this is what we have in our net zero decarbonization plan. How are we the Dow Jones, this is positive. This is plus and the other 2 bring us down. So it is a company's obligation to have a control and environment with any -- no material efficiency. Nothing significant if -- this is our obligation. And if we don't do our obligation, we are penalized and also with 10% extra -- so this is not an objective. This is an assumption. So it's 0 accident in-house and also from outsource. This is an obligation. Okay. Yes. And this last one, I would say that this is one of the most important ones because our focus is 0 fatal accidents in our own head count, in our own labor and also outsourced labor. Okay. The prioritization of SDGs at Copel. In year 2000, Copel was a pioneer in the electricity sector as signatory of the Global Compact. And in 2018, a long time later, with other companies, it adopted the 5 prioritary SDGs for the electric sector. And now we have something new. Education is the way you change the society and nation as well. And so we are prioritizing ESG #4, quality education. This is a way that we can ensure inclusive and equitable education, and we organize that in pillars. First, by providing support projects, by higher education institutions, state and federal universities, laboratories, for instance, for engineering courses and other courses related to Copel. We also help with scholarships and internships and other initiatives. And also, we are going to develop study projects that are specific in specific topics, but for instance, climate, change working with human development and also diversity. Talking about diversity, I would like to mention another important commitment for Copel. We are going to increase in 40% the number of women and the high leadership by 2025, and we'll be doing that by programs of leadership -- the women's leadership development programs. And for -- to talk more about that, Ana, please.

Thank you, Vicente. Good morning, everyone. Everyone that is here with us and also everyone that is following us and streaming. It's nice to start the day listening to Marcel and Daniel in stressing the importance of people in our strategic planning, in our strategic reference. And what I bring to you is how we are going to bring all that to our organization, taking care of our people and how we are working diversity. I will start with this topic linking on this initiative, there's affirmative condition of Copel of increasing the number of women and the top management. I am very happy to be able to be part and contribute to this project of increasing diversity in leadership at Copel. And how are we going to do that? Well, we are doing that because we know women here are very well prepared, and that allows us to have a great base to move forward and diversity with affirmative actions that provide us an even more inclusive environment and that increased the number of women here in the leadership area. So we are going to start mapping the profile of our leaders, and we'll take important actions for women that will encourage great development and also self-awareness and self-knowledge, because sometimes women need to break internal barriers and they end up the willingness of these women to take on leadership role. So we are going to work with development, training, mentoring, counseling and also will follow up all these women in the journey that they are going to go through. But a women leadership program is not the only work that we are doing to develop people. One of the actions is in the broader project, which involves training development for Copel in 2030. And this has, as a principle, the strategic alignment, the readiness for new challenges. The pertinence of the teams and the enhancement of our culture, which Marcel and Daniel already mentioned, we understand this is very important for the process. Therefore, we developed the global leadership program and the program to develop our employees with 2 clear objectives. One of them is to improve the already existing skills and the other one is the development of needed skills, so that we can face all challenges that are being set for Copel 2030. To support the development of all these projects and programs, we mapped the technical skills and also the behavioral skills. And just as Marcel and Daniel have mentioned, leadership have a crucial role, and I should highlight now the skills needed for our leaders. We need to take care of our people. And if our people are our competitive advantage, leaders have to look at that in a very careful way. Therefore, we are going to develop an inspiring leadership, who is going to create a trustworthy environment, which will allow them to develop, to train these people. And as we do that, we can engage teams towards a common objective. So by looking at people, the leaders also can have a better efficiency in their results and better delivering their results as well. But we have to have that special look at those people that will really deliver and that will be part of the results of this organization. I talked about one of the pillars that we are developing to support this strategic growth, which is the skills development. But we are also working on our empowerment of culture and on our digital transformation that everyone already mentioned this morning. Now in terms of this culture empowerment, we know this is a long journey and this long journey needs to go through a relentless search for an even more collaborative environment. We talked a lot about synergies and the search for all benefits of our company because this is an integrated company, and that's what we will be doing. And how are we going to get there? We will get there by reviewing our organizational structures and also revealing our internal processes. When we take these actions and these initiatives, we are able to provide our employees an even fuller vision of this journey that we are moving through. Without that, we cannot have engagement of our teams. So we'll work on these actions, so that the teams are able to see the importance of each one of these activities at the end and that these activities, they have a great potential to generate value for all our stakeholders. We also spoke about innovation, consummation, the ecosystem of innovation and how we work with the ecosystem of startups, so that we can evolve even more in our digital culture, making our teams more agile and prepared to develop innovative solutions. In a nutshell, this is a long journey. We knew that this requires strong work. We'll work with our inspirational leadership so that we can play an essential role in growing our business. And lastly, in this presentation, last but not least, the right Marcel and Daniel, we have digital transformation as a pillar to support for us in our journey. As mentioned, in the other panels across our businesses, the main assumption is serving the needs of our customers. For that, as everyone has mentioned, we are deploying a number of technologies, but we'll continue to focus on security, deploying state-of-the-art technologies and focusing on customer experience. We won't lose sight of what we are applying in the organization, digital channels, robotization, automation of our processes, use of AI, artificial intelligence in all of our processes to improve efficiency even further. We want to have a lead vision of the organization by reviewing our processes. We'll use agile methodology and tools for all of our new services and products. and something, which I believe is very important, has to do with a data-driven culture. We need to use big data processing tools. So that we can use all of the data available to us so that we can improve and demonstrative in our decisions. With all of these adding edge technologies and along the journey that we are designing will ensure operating efficiency of our businesses has presented before, and we will grow our business. With the underlying assumption, customer experience and customer satisfaction. Thank you very much.

Vicente, join us. Something that is very important is the highest cybersecurity levels. This is a recurring issue in Brazil and around the world and Copel is working on IT and [ TO]. We are more than tripling investments in cybersecurity. And something that is important is that digital transformation is cross cutting. It involves all of the businesses, but with the vision of the company and the context and a cross-cutting theme, which is cultural empowerment. It's not transforming culture. Copel's culture is already very good, but it needs to be empowered to cope with the new sector challenges. We are working a lot on that, particularly in distribution. It's quite advanced, but we are expanding the culture environment approach to all of the holdings. So we have special care about this topic.

Yes Daniel -- because we will have a new way of being enacting, but we'll get Copel to 2030 as we plan. And one comment regarding the whole of the agenda. We spoke about a story in the video. But I would like also to speak about sustainable goal for increasing education. What happened in any example from a large company. They're all in the sustainable goals, but in the sustainable goal number 4, SDG 4 focused on education, that is very important, not only for our business, but for Brazil as a whole so we see education as a great value. So thank you, Ana. Thank you, Vicente. And now we are moving to our last panel. Thank you. We'll move to our last panel with our CFO, Adriano Rudek De Moura to speak about leverage, dividends and the financials that will sustain our business. Moura over to you.

All right. Good day, everyone. Sorry. I hope you still with energy in you, so that we can end this Copel Day. This is a very special day for us. We have more than 600 people connected here, face-to-face and online. It's a record audience and we are very happy to share the vision of the future with you. This last panel talks a little about the financial strategy, so that we can support a whole growth plan. And it is sustainable growth minor. It's not growing at any cost. We spoke a lot about this today. And the good news is that it is doable, it's feasible, though it is aggressive, it is feasible, and it is sustainable. Before we get into the details, I would just like to emphasize -- because when we speak about financial sustainability at Copel, it is important that we remember our fundamentals, which are helping us in this journey. The first fundamental is a cash focus. Perhaps this is a little too operational, but it is the pillar that ensures operating efficiency, we have to be sure that our operation is the most efficient as possible. I believe we have advanced a lot in these pillars, particularly recruiting investments in businesses that are no longer core to us, starting with Sanepar. We had a stake at Sanepar in 2017. We were able to sell that in a number of other minor businesses and now finalizing with the sale in 2021 of Copel Telecom with a premium of almost BRL 1 billion. So that was an important homework done. We still have Compagas in the list for divestment. It is an important divestment to us, it is in our agenda for the coming months. In terms of cost and operating efficiency, cost reduction and operating efficiency, I think we still have room for improvement. We have improved already. But in the 2023 planning, we are in the second round of that planning. We will present it, submit it to our Board in December, will include a number of cost reduction initiatives that will continue to improve operating efficiency of the company. And finally, scale gain. I believe we're evolving a lot in that regard, particularly regarding acquisitions, Copel is becoming very competitive, particularly in some investment areas. The second fundamental pillar is efficient capital allocation. We heard a lot about that today. Well, it will continue to be one pillar that will -- I should say, ensure our arrival, the moment that we have a clear investment policies we have. A high-level governance based on the same market benchmarks and particularly a well [indiscernible] of risk diversification, we'll be able to ensure 2-digit investments and IRR, and you saw recent examples of the investments made with 2-digit profitability. The third pillar, balanced capital structure. This is our competitive edge. I think we spoke about this in the last Copel day. We had an opportunity to speak about the journey that starts with a low leverage level of 1, an inadequate capital structure. And we said that we were going to go on this spot until we got to a leverage of 2.5 and no more than 2.7 ratio. We haven't gotten there yet, but it is a journey that will bring us an adequate capital structure, so that we can be more competitive in terms of investments.

And Moura, just something important here since 2019, we've been seeing this when leverage was below 1. We were saying that we were going to have a balanced capital structure in the mid- to long term. In other words, capital allocation plus dividend payout. And now when we ended Q3 at 1.9 with a goal of 2.5. We are doing this in a safe, healthy way and being conservative.