Driving force for a sustainable energy system

Sustainability securely embedded in Enexis's strategy in 2014

• Energy consumption of 4,500 households saved due to energy savings in 1,800 transformer stations
• Reuse of waste material increased by 14% to 13,291 tons, 7,250 tons of CO2 avoided
• Number of participating Neighbourhood Power neighbourhoods rose to 53 in 2014 (2013: 3)

Expanded investment programme mainly due to increase in smart meters

• The scale of the work on the grid increased in 2015 to EUR 675 million (2014: EUR 603 million)
• Increase in replacement investments in 2014, investments in the grid remained stable at EUR 357 million
• Annual electricity outage time in 2014 amounted to 17.7 minutes (multi-year average 22.4 minutes)

Customer-oriented offer of smart meters

• Smart meters were offered at 174,000 addresses in 2014 (2013: 129,000)
• Customers value the smart meter offer with a score of 7.4 (2013: 7.5)

Return in line with previous year

• A 1% increase in revenue to EUR 1,402 million (2013: EUR 1,386 million) due to a limited increase in tariffs
• Profit of EUR 265.5 million (2013: EUR 239.1 million) also due to cost reductions and incidental gains

Peter Vermaat, CEO Enexis:

"Our figures over 2014 show that the foundation of Enexis's business operations is strong. For instance, the reliability of the energy grid is at the required level and return is in line with the previous year, the cost savings programme is successful and the tariffs also remained low in 2014. Fortunately, there have been no serious work-related safety incidents this year. However, the safety at work of our employees remained below our expectations, in spite of an intensive safety awareness programme. In view of the importance of safety in our daily work, we will organise a follow up of the internal safety programme in 2015. The energy transition accelerated further in 2014, for instance, we observed an increase in the number of solar installations, public charging points and wind parks in our servicing area. Taking these developments into account as well, we have reformulated our strategy. This strategy is in line with the Energy Agreement in
which a balance is found between, on the one hand, ensuring that the existing energy grid remains reliable and affordable and, on the other hand, making the grid future-proof. This is why Enexis works on, for example, energy savings both within its own company and in its direct environment. With our extensive multi-year investment programme, we are preparing our energy grid step-for-step in order to establish the necessary preconditions to achieve the government target of a completely sustainable energy supply in 2050. In this manner, sustainability is securely embedded in our strategy".

Key figures

Sustainability securely embedded in Enexis's strategy in 2014

Enexis actively reduced the grid losses in 2014. For instance, the annual energy consumption of approximately 4,500 households (15.2 GWh) was saved in 2014 by taking energy-saving measures in 1,800 transformer stations. In addition, 1,618 more tons of waste were reused in 2014 than in 2013. As a result, waste management is now no longer a cost item for Enexis. In addition to increasing the sustainability of its own business operations, Enexis is working on increasing the sustainability of the energy supply in several ways, for example in joint pilots with energy cooperatives or by smart charging of electric vehicles. Enexis is also working on achieving the Energy Agreement by successfully contributing to energy savings in the residential area. Saving energy is of strategic importance for Enexis as this will ultimately reduce the necessity to expand the grid. The number of Neighbourhood Power neighbourhoods, where local residents are motivated to realise energy savings together, increased in 2014 to 53 from 3 at the end of 2013. In addition, the number of participating schools in the programme ‘The sun gives you Energy', whereby schools invest in solar panels and are provided with lesson material, rose to 124 from 6 at the end of 2013.

Expanded investment programme due to increase in smart meters

The investments in the expansion of the grid rose in 2014 after decreasing for a number of years, which appears to point to a careful recovery of the economy. In total, more than EUR 600 million was spent on the energy grid in 2014. This work package rose to EUR 675 million in 2015, also due to an increase in investments in grid replacements, smart meters and ICT in the grids. The annual electricity outage time developed positively to 17.7 minutes (2013: 23.6 minutes). However, the annual gas outage time rose to 89 seconds (2013: 50 seconds), of which 53 seconds were due to a gas outage among 306 households in Enschede because of a broken water pipeline that caused the gas pipeline to break and fill up with water.

Proven customer-oriented offer of smart meters

Customer satisfaction regarding the offering process of the smart meter was valued at a stable high level in 2014 with a score of 7.4. Smart meters were installed at 174,000 addresses, which was 8% below the planned number of 190,000. The reason for this was that the number of requests for smart meters from customers remained below our expectations. The offer planning was made available to market parties in accordance with the smart meter roll-out covenant in connection with the large-scale offer of smart meters.

Return in line with the previous year

The Dutch supervisory authority ACM has decided to lower the maximum permitted tariffs in the period 2014-2016. Enexis was able to charge a modest tariff increase of approximately 1% in 2014 as the tariffs charged by Enexis in previous years were below the permitted tariff. As a result, revenue rose slightly in 2014. Enexis's tariffs will decrease by on average 3.8% in 2015. Further process and efficiency improvements resulted in a cost reduction that, together with a number of incidental gains from the release of provisions, has contributed to an increase of the net profit to EUR 265.5 million. This resulted in a net return of nearly 5% on the capital employed of over EUR 5.3 billion, which is in line with the previous year and fits the permitted return.