Stedin achieves investment milestone but faces growing pressure on the electricity grid

Stedin Group achieved an investment milestone of EUR 1,096 million in 2024. According to the grid operator’s annual report, this is an increase of 30% compared to the previous year. Last year, Stedin cooperated closely with municipalities to shorten the procedures for installing transformer substations by six months, from nine to three months. The grid operator expects the acceleration will only begin to have a noticeable impact in a few years. It will not prevent Stedin from experiencing more and more pressure on the grid at local level. The grid operator reiterates that it is vital to work together to make better use of grid capacity, for example by using less power between the hours of 4 p.m. and 9 p.m. This will leave enough capacity on the grid and slow down rising expansion costs.

Expanding grid capacity

Last year, Stedin worked on the construction of 854 megavolt amps (MVA) by laying cables and by building and renovating transmission stations. Of this, 344 MVA is new power added to the electricity grid. This new capacity is enough to power 230,000 households at once, which is around three-quarters of all homes in the municipality of Rotterdam. Last year, the grid operator laid 1,013 kilometres of new cables and installed 353 new transformer substations (33% more than in 2023): almost one transformer substation a day.

Agreements reached with 65 municipalities

Transformer substations convert high voltage from the electricity grid to low voltage suitable for power sockets. In the period up to and including 2030, Stedin will be installing 5,000 new substations to create more capacity on the grid for new homes, schools and other facilities in districts. All these new transformer substations can only be installed thanks to intensive and constructive cooperation with municipalities. To achieve this, Stedin reached agreements last year with 65 municipalities (over 80% of all municipalities in our coverage area) to make a single plan per district on the locations of the new transformer substations. This will ensure that municipalities know what is required and that procedures are completed six months faster. 

Additional measures

Stedin had to take measures in several areas in Utrecht (Amersfoort Vathorst, Baarn, Eemnes, Montfoort/Lopik), Zeeland (Walcheren) and South Holland (Dordrecht and Gouda) last year to prevent overload and possible grid outages. In these areas, electricity demand sometimes peaks between the hours of 4 p.m. and 9 p.m. during the winter. These spikes can be so high that there is a risk of power outages if the grid operator does not take action. When this happens, Stedin deploys reserve capacity to increase the available power in an area. Grid operators usually deploy this capacity during maintenance or major disruptions. It is not initially apparent to consumers and businesses that the failure reserve is being used. If a cable fails, however, there is no backup and power outages can last longer than usual. On Walcheren in Zeeland, the failure reserve was not enough and Stedin had to make use of two generator units in the busy holiday period around Christmas. It will need to do the same during the busy Easter period on the island.

Stress test

Koen Bogers, CEO of Stedin: ‘We more often increase the load on cables and transformers so we can continue to connect new customers where possible. However, this is the first time we have had to deploy reserve capacity and generator units to make sure that consumers and businesses have power during peak winter hours. We are carrying out a major stress test on the electricity grid in a growing number of areas. There is more pressure on reliability, and customers may experience more frequent power outages. Stedin does everything in its capacity to keep everyone supplied with power, even if we need to use diesel generators or gas generators. By temporarily allowing some extra CO2 emissions, we are ensuring that sustainability and expansion plans can still go ahead.’

Flexible use of electricity 

To ensure that companies do not have a combined negative impact, for example by using too much power during the evening peak, Stedin makes arrangements with them. Agreements were reached with 15 companies in 2024. These and previous agreements provide 167 megawatts of flexible capacity. Stedin is also appealing to households. The rise of products such as solar panels, heat pumps and electric car chargers means that households are placing an increasing burden on the grid. In 2024, Stedin launched the 'eClock': a tool specifically aimed at households. The eClock shows consumers the best time to use electricity. This campaign will be followed up in 2025 with a physical eClock on the streets and an app.

Financial figures

Operating profit for 2024 was €306 million. This was slightly higher than last year (2023: €293 million), mainly due to higher tariffs. Net profit amounted to €158 million, €12 million less than last year (2023: €170 million). This was due to higher financial expenses resulting from a one-off charge of €46 million for early repayment of a long-term loan. This one-off charge will be offset by lower interest expenses in the future. A substantial part of the net profit will be invested in grid expansion. Due to increasing investments Stedin Group’s negative free cash flow increased from €262 million negative in 2023 to €469 million negative. In 2024, this negative free cash flow was largely financed by the issue of new shares and an additional green bond.