More wind farms and solar parks could be connected to the grid once regulations are amended
20 - 30% more wind farms and solar parks could be connected to the existing power grid, providing the grid is permitted to work more efficiently. The power grid is currently installed in such a way that it is designed to cope with the highest peaks in supply and demand, whereas those peaks only occur a few days per year. As a result, much grid capacity remains unused the rest of the time. Technical options for using the grid more efficiently are available. However, existing regulations do not always allow them to be used. It is therefore time these regulations are changed. It is also important that the government coordinates the choice of the location and size of solar parks and wind farms. To ensure a stable financial position in the future, it must be possible to incorporate investments in advance into the rates charged. Enexis Groep advocates this on the occasion of the publication of their 2018 annual report.
Peter Vermaat, CEO Enexis Groep:
“In addition to a safe and reliable energy distribution, we paid a lot of attention in 2018 to a future-proof energy supply. We strengthened our infrastructure in various locations so we are ready for a rapid increase in sustainably generated energy and a higher demand for power. However, that is not possible everywhere at the same speed. For instance, the grid capacity in the Netherlands is not designed for a large increase in solar parks. Which is unfortunate as we are now forced to disappoint customers. We are therefore campaigning for new legal frameworks to accelerate the energy transition and we are looking into which technical solutions are feasible.
We will also be using our expertise in 2019 to support regional governments in defining their Regional Energy Strategies. To prepare our grids for local wishes, it is crucial to know about plans well in advance and to be able to contribute our ideas. The transition to a sustainable energy supply in combination with a growing economy and a shortage of technical personnel is a great challenge. We are therefore putting increased emphasis on recruiting, training and retaining technical staff as achieving our goals is based upon the energy and expertise of our employees.”
Excellent grid management
We expect that demand for electricity will rise even further due to increasing electrification of mobility and heating. Another development is that an increasing number of private customers are generating their own energy. In 2018, over 78,000 private customers started feeding back energy into our grid, an increase of around 45% compared to 2017.
Enexis Netbeheer extended the power grid in several places in 2018 to provide enough capacity to transport all future solar and wind energy. At the same time, Enexis Netbeheer is promoting efficient grid usage and smart solutions to avoid having to invest excessively in grid reinforcement. Moreover, the limited availability of technicians in particular will present a dilemma for society in the coming years. However, we are not making any concessions when it comes to working safely. The safety index LTIF has improved to 1.48, but we are still not satisfied (2017: 1.65). Safety is, and will always be our top priority.
To keep our grid in optimal condition, safeguard a safe and reliable supply of gas and electricity and continue the roll out of smart meters, Enexis Netbeheer spent € 789 million in investments and operating costs in 2018. Before making choices and taking decisions regarding these long-term investments, we carefully weigh factors such as reliability, safety, statutory requirements, costs, customer satisfaction and sustainability. In 2018, Enexis Netbeheer succeeded in limiting electricity outage time to on average 16 minutes (2017: 13.8 minutes). This is well below the long-term national average. For gas, this is 90 seconds (2017: 50 seconds). This increase was caused by a small number of exceptional outages.
Accelerating the energy transition
Increasing sustainability in the built-up environment is one of the greatest challenges for the energy transition. Together with municipalities, housing corporations and homeowners, Enexis Groep is searching for suitable and affordable solutions, with the ultimate goal of a carbon-neutral built-up environment in 2050. At the neighbourhood level, the grid operator advises on the best and most cost-efficient solution, taking into account the local situation. Enexis Groep does not believe that a radical transition to all-electric is the best choice in every case. In order to accommodate the local situation, we advise a pragmatic approach that is flexible enough to adapt to new technological developments. In this way, plans for increasing sustainability are implemented and the costs remain under control.
Financial position
Our result after tax is €319 million (2017: €207 million). This increase can mainly be attributed to a revaluation of the deferred tax provisions. Our normalised result after tax is €243 million (2017: €222 million). This increase is primarily due to a favourable revenue development; total revenues increased in the past year by €47 million to €1,445 million (2017: €1,398 million). On the other hand, there was an increase in operational costs in particular for strategic projects to improve customer processes and ICT. The improving economy and the government subsidies available to stimulate sustainable energy production have led to extra demands from customers in the form of extra grid expansion and sustainable projects. The gross investments in electricity and gas grids have therefore increased by €44 million. In 2018, Enexis Holding’s creditworthiness remained unchanged with a Standard & Poor’s credit rating of A+ (Stable Outlook) and a Moody’s credit rating of Aa3 (Stable Outlook).