Stedin sees demand for electric power triple

Rotterdam, 21 February 2023 – High-volume consumers of electricity applied for 3 GW of new electric power from grid manager Stedin in 2022. This is three times the volume in the previous year. According to grid operator Stedin Group in its annual report published today, this growth has everything to do with global developments and changing customer demand. In 2022, Stedin invested a total of €712 million in the management and expansion of its gas and electricity grids. This is €25 million more than in the previous year: a great result. It is becoming increasingly clear, however, that laying more cables and building more distribution stations alone will not suffice to ensure a sustainable and reliable energy system by 2050. The Netherlands should firmly commit to creating a flexible energy system to which everyone contributes by optimising the use of the available grid capacity.

Stedin expects that this growth in demand will continue in 2023 and that its investment package will increase to a value of €825 million. Koen Bogers, CEO of Stedin Group: ‘The high and unpredictable prices of natural gas have made consumers and businesses eager to accelerate the switch to other energy sources. This is good news for the climate. Our building activity is up 27% compared with last year. At the present rate, the expansion of the electricity grid is unable to keep up with demand for electric power. So we call on industry and other high-volume consumers of electricity to become more flexible in how they use the grid. For example, by consuming power on especially windy or sunny days. This will help to relieve pressure on the capacity bottlenecks in the grid, and will enable companies to respond more effectively to the ever more volatile prices on the energy market.’

More effective utilisation of the electricity grid
Since November 2022, demand for capacity from the national high-voltage grid in Goeree-Overflakkee, the Port of Rotterdam and the entire province of Utrecht has exceeded supply. This is having serious consequences for high-volume consumers of electricity. It has become much more difficult for them to expand their business or introduce sustainability improvements. Bogers: ‘We are already seeing a great deal of collaboration within the Regional Energy Strategy (RES) and the Cluster Energy Strategy (CES), but individual businesses should also improve the way they use the grid before asking us for ultra-high-volume connections. The electricity infrastructure is the backbone of the economy. We will continue to build, but the regions that have the most effective collaboration strategy to optimise grid utilisation will eventually prove to be the most sustainable and show the strongest economic development.’

Energy transition into overdrive
The energy transition gained momentum in 2022. Stedin felt the effects of that every single day of the year. We built or renovated 9 transmission stations, connected 478 new transformer substations and laid 715 kilometres of new cables. This new infrastructure enabled Stedin to realise 630 MW (+27%) for large solar roofs or wind farms in 2022. And we are also seeing more and more consumers taking steps to make their homes more sustainable, as a reflected in the busy schedules of our fitters. In 24,960 homes (+51%) we removed the gas connections and in 31,556 homes (+65%) we upgraded connection capacity to allow residents to generate electricity with solar panels and switch to electric cooking. In addition, Stedin realised 2,655 new connections (+26%) to expand the infrastructure for charging points.

Financial results
The operating result for 2022 came to a profit of €86 million (2021: €124 million). Gas and electricity prices soared in 2022, due to strong economic growth and the war in Ukraine. This also meant that Stedin’s grid loss costs – the costs of electricity losses due to transmission, energy theft and other causes – more than tripled. While Stedin's costs savings programme helped to reduce the negative impact of those grid losses, the company's net profit of €44 million was higher than last year (2021: €21 million).

Attracting new shareholders remains essential
Due to Stedin’s ever higher investments to facilitate the energy transition and economic growth and meet the ensuing changes in energy demand, its financing requirements are increasing. Danny Benima, CFO of Stedin Group: ‘Despite the fact that in recent years our existing shareholders have contributed €451 million, our equity requirement has remained substantial at €1.8 billion. In 2022, the central government set aside €500 million in the national budget for additional reinforcement of Stedin's equity. This commitment has helped us tremendously in addressing the financing issue, but we are not there yet. We therefore urge the provinces of Utrecht, Zeeland and South-Holland and non-shareholding municipalities within our service area to also become shareholders of Stedin Group. This joint effort is crucial if we are to realise our ambitions.’

About Stedin Group
Working together to create an environment filled with new energy. Stedin Group’s more than 5,000 employees work towards this goal every day. We believe it is our responsibility to ensure that all our customers can have sustainable energy where they live, work and do business. As Stedin Group, we are making the energy system more sustainable while keeping it robust and affordable. Stedin Group is comprised of the grid manager Stedin (active in most of South-Holland, Utrecht and Zeeland) and the experts of infrastructure company DNWG Infra, who work together to reach this goal.