Press release
High energy prices impact grid manager Stedin in first half of 2022
Rotterdam, 28 July 2022 – Grid manager Stedin invested €324 million in expanding, reinforcing and maintaining its gas and electricity grids in the first half of 2022. This is €20 million more than in the same period last year. This can be read in the grid operator’s half-year report published today. Due in part to the high energy prices, the operating profit was lower than expected at €39 million. Due to rising energy prices, grid losses are expected to increase even further in the second half of 2022.
Because of the strong economic growth and the war in Ukraine, gas and electricity prices have increased since the end of last year. This also means that Stedin’s grid loss costs, the costs of electricity losses due to transmission losses, electricity theft and other reasons, rose to €89 million in the first half of 2022 (2021: €25 million).
Customers are stepping up work on the energy transition
Higher energy prices not only mean higher costs for Stedin, but also generate more work. They demonstrably trigger customers to step up their sustainability efforts. For example, the number of reinforcements of electricity connections carried out by Stedin went up by 70% in the first six months of 2022 compared with the same period last year. The same trend is visible in the number of removals of gas connections as part of the energy transition: this figure rose by 58% to 4,578 removed connections. The total installed capacity of solar panels (on rooftops and in fields) increased by 12% to 2,654 megawatts.
Stedin’s CEO Koen Bogers: ‘We have noticed for a number of years that customers are making their homes more sustainable, the number of applications has soared in recent months. We also see a rising trend in battery-related initiatives, while electrification and increased sustainability in the industrial sector is accelerating. In addition, many new housing developments are all-electric and economic growth has led to the emergence of new logistics centres and businesses, which also drives up electricity consumption and therefore the required grid capacity.’
Additional equity contribution
Stedin expects to invest a total of €719 million in the gas and electricity grids in 2022 and at least another €8 billion in the period from 2023 to 2030. In order to be able to continue investing, additional reinforcement of our equity will be required. To be able to make the required investments based on the Climate Agreement, Stedin’s capital requirement is €1.8 billion. Additional ambitions such as FIT55, RepowerEurope and the congestion management payments will increase this amount even further.
Stedin CFO Danny Benima: ‘We do not expect that all the capital required will be provided by our current shareholders. The central government has a role to be play here as well. In order to maintain the required level of investment, Stedin needs to have certainty that its equity will be reinforced. This will be the first crucial step in the process of finding a structural solution for the grid operators’ capital requirement. According to the most recent rating analysis by S&P, there should be clarity about a capital contribution from the central government by the end of 2022.’