Stedin seeks more help to reduce pressure on the power grid
In 2023, grid manager Stedin invested €832 million in expansion and maintenance of their grids. This is €120 million (+17%) more than in the previous year which is stated in the annual report of thegrid operator. Stedin will also accelerate its investments in 2024, but it cannot prevent more network congestion. Stedin calls on consumers, businesses and governments to jointly reduce the pressure on the power grid and make optimal use of renewable energy sources.
In 2023, Stedin installed 266 new transformer substations and 892 kilometres of powercables. Together, this generated 513 megavolt-amperes of additional capacity. This could power all the homes of a city the size of Rotterdam. Despite these efforts, Stedin has 1,100 wholesale clients on the waiting list for a new or heavier-duty electricity connection. The number of complaints about power-quality doubled: some 3,000 consumers reported to Stedin that, with some regularity, the inverter of the solar panels failed because the cable in the street was full of solar power at noon.
Koen Bogers, CEO of Stedin: ‘Stedin does everything within its capacity to expand the power grid. Between now and 2030, we will be investing at least €8 billion. But that won't be enough. Particularly in the evening peak, between 16:00 and 21:00, and on sunny spring and summer days, the grid is bursting at the seams. This is becoming a growing social problem. We ask consumers and businesses to adjust their behaviour and consider when they need a lot of electricity. For consumers, Stedin is launching an awareness campaign for this in March. After all, the moment you use power has become an important consideration. If we change our behaviour, grid operators can free up more capacity, which can then be used to connect businesses on the waiting list, as well as new-build homes and schools.’
Charging points off during peak hours
Stedin states in its annual report that municipalities and provinces can also help by making judicious choices to make better use of capacity on the busy power grid. Stedin advocates turning off most charging points in the street between 4 p.m. and 9 p.m. Of all the capacity that Stedin is adding to the grid until 2030, 20% in some urban areas will be used by charging points in the streets. Stopping charging in the evening peak frees up extra capacity on the grid. For every charging point switched off in the evening peak, Stedin can connect roughly one more new-build home. This could eventually add up to additional capacity for 45,000 homes.
Charging cars around dinner time is by no means necessary for everyone. This can also be done at other times of the day, for example when there is a surplus of solar power =or at night when the grid is less-used. Stedin argues that in the new sustainable energy system, the Netherlands must choose more clearly what gets priority and what does not. Stedin is therefore appealing to municipalities, provinces and charging point operators. Together, they can ensure that avoiding the evening peak becomes the norm for charging points.
Financial figures
Stedin can look back on a solid financial year. Operating profit for 2023 was higher than last year at €293 million (2022: €136 million) and net profit was also higher at €170 million (2022: €81 million). This was mainly due to higher transport revenues. The majority of the higher net profit will be reinvested in further grid expansion. Due to the many investments made by Stedin, the free cash flow is negative: € - / - 262 million in 2023 (2022: € - / -297 million).
A milestone in 2023 for the financing of Stedin's investments was the € 500 million participation of the Dutch State as a shareholder of Stedin Group. This also had a positive impact on the group’s credit rating and provided an additional €600 million in equity headroom. Standard and Poors (S&P) has reaffirmed Stedin's credit rating, A- with a stable long-term outlook.
Danny Benima, CFO of Stedin: ‘The capitalinjection from the State – and very likely also in the short term the contribution from the province of Zeeland, province of Utrecht and several municipalities in our service area – has filled an important part of our capital need for the coming years. In 2026 we will again assess what, if any, capital need remains. So on the financing side, there is a bit more headroom now, but that’s not everything we need to do. In terms of bringing in enough staff, availability of materials and reducing the lead times of spatial planning procedures, we still have a lot of work to do in the coming years.