Press release

Reserve space for accelerated expansion of electricity grid 

Rotterdam, 21 February 2022 – Stedin Group invested €687 million (2020: €620 million) in the maintenance and expansion of its gas and electricity grids in 2021. This is a record investment figure for Stedin, but to achieve the climate goals and keep up with economic growth, the energy transition will need to be accelerated further still. One of the bottlenecks increasingly faced by Stedin is a lack of space for the expansion of the electricity grid. That is why grid manager Stedin is calling for more space to be reserved for this well in advance, both above and below ground.

Koen Bogers, CEO of Stedin Group: ‘Stedin’s service area is experiencing tremendous economic development that attracts lots of businesses. The overhaul of the electricity grid to enable that growth is an operation that will take years to complete. We are increasingly faced with bottlenecks that impede this work. Those include limited financing, as well as a scarcity of materials and skilled workers. In our service area, we see that the energy transition is slowed down by a lack of space, at a time when we actually need to accelerate it. Until 2030, we will build two to four large distribution stations each year, which on average represents a threefold increase in our annual construction output.’ 

Reserve space for expansion of the electricity grid

Stedin Group calls on the new Dutch government, as well provinces, regional energy strategies and municipalities, to work together with grid managers to ensure the necessary room is reserved for the overhaul and expansion of the electricity grid. When planning new housing developments, industrial estates and data centres, as well as solar and wind parks in areas designated under the regional energy strategy, space needs to be reserved for electricity cables and stations. Reserving space well in advance would make it possible to start earlier with the dialogue with local stakeholders, buying of land and changing of zoning plans. That would reduce the total lead time needed to build a distribution station, meaning that consumers and businesses can be connected to the grid sooner.

Investing in solutions

In 2021, Stedin also invested in solutions to make smart use of the limited space available, such as by introducing modular construction of distribution stations. Under this new method, all Stedin stations are built according to a fixed design, so that the exact dimensions and required land area are known from the outset. Modular construction also speeds up the building process. As an example, in 2021, Stedin announced that insufficient grid capacity was available for large new solar roofs on the Dordtse Kil industrial estate (video). However, by buying land for a new modular distribution station at an early stage in partnership with the municipality of Dordrecht, the project lead time was shortened by two years. Therefore, businesses on the industrial estate will now have access to more grid capacity, including for their solar roofs, in 2025 instead of 2027. 

Acceleration of the energy transition in the past year

In its annual report (extract) published today, Stedin reports that the percentage of new-build homes without a gas connection in Stedin’s service area increased to 90% in 2021, compared to 89.2% in 2020. Stedin realised 2,791 new connections for charging infrastructure, a 39% increase compared to 2020. Stedin’s customers are also making a big contribution to the energy transition. The number of gas connections removed to enhance sustainability increased by 177% to 12,484 in 2021. The number of connections that were upgraded to enable power generation with solar panels and electric cooking increased by 23%. Furthermore, 90% of Stedin’s customers were connected on time or by their preferred date. The capacity of solar panels installed at consumers’ homes in Stedin’s service area increased by 25.4% to 1,177 megawatt peak (2020: 939 megawatt peak).

Work package will only increase further

Stedin expects to connect around 313,000 charging points and almost 6 gigawatts of renewable power from wind turbines and solar panels on the roofs of residential properties to the grid by 2030. This will require laying medium-voltage cables with a total length of 1,850 kilometres, roughly the distance from Rotterdam to Lisbon. In addition, the capacity of many of the main distribution stations will need to be upgraded, and hundreds of new transformer kiosks will need to be built. These figures have been calculated based on the current Dutch climate agreement. This calculation does not include the even more ambitious goals of the EU’s ‘Fit for 55’ package and the new Dutch coalition agreement. Therefore, Stedin’s work package will only increase further in the coming years.

Financial results

The operating result for 2021 came to a profit of €124 million (2020: €129 million). Due to the high energy prices, the grid manager’s costs for network losses increased. This was one of the factors resulting in a decrease of the net profit to €21 million (2020: €42 million). Due to Stedin’s ever higher investments to facilitate the energy transition and economic growth and meet the ensuing changes in energy demand, its costs and depreciation expenses are increasing. These cost increases are pushing down its operating profit and will not be offset until later, in line with the current regulation framework. Danny Benima, CFO of Stedin Group: ‘We reached a key milestone in 2021. A large majority of Stedin’s shareholders subscribed for additional shares in order to increase the company’s equity by €200 million. We are delighted by this strong show of support from our shareholders, but we need even more capital to achieve the ambitious climate goals set by the EU and the Dutch government. We will therefore continue our discussions with existing and potential new shareholders in order to improve our balance sheet position.’ 

Read our extract annual report 2021