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Enexis sees growing pressure on the electricity grid in residential districts

27 Jul 2023

The trend of longer waiting times for large-volume business customers, who apply for a new connection or an upgrade of an existing connection, continued in the past half year. The number of applications tripled compared to last year. In addition, the number of voltage complaints due to temporarily switched off inverters for household solar panels was nearly three times higher than in the first half of 2022. Moreover, in the past sunny months, we saw overburdening of the local low-voltage grid occurring in more and more areas in villages, districts, and neighbourhoods, resulting in more power outages. At the same, we invested the unprecedented high amount of € 556 million in the expansion of the electricity and gas grids in the past half year. This is stated in the interim report of the grid operator Enexis which was published today.

Dutch households and businesses are switching to electricity en masse. This transition is taking place faster than the national and regional electricity grid can handle. In 2022, for the first time in our existence, this led to a shortage of transmission capacity for feeding electricity back into the grid and consequently longer waiting times for large-volume business customers who wanted a new or upgraded connection. This trend continued in 2023: the number of applications has tripled in the past months. The shortage of transmission capacity has major consequences for our customers. Customers have to postpone their plans to settle in our regions, expand their business or switch from gas to electricity. We understand this frustrates our customers. Frustrations that we also feel: we want to help customers realize their ambitions. However, there is no quick definitive solution.

To limit the shortage of transmission capacity, we are doing everything we can to expand our capacity faster than we already have in the past. We invested € 556 million in our grids in the first half of 2023  - a huge amount (first half of 2022: € 462 million). This resulted in 1,250 megawatt additional grid capacity. Moreover, we were able to welcome 188 FTEs new technical personnel. This puts us well on track to achieve our annual target of 361 FTEs.

While we were working on our grids, our customers could continue to count on a reliable energy grid. The average electricity outage time amounted to 11.2 minutes in this period (first half of 2022: 7.8 minutes). The increase is partly caused by a number of major incidents with a relatively long outage time and by overloading of the low-voltage grids, resulting in more power failures.  The average gas outage time was 104 seconds (first half of 2022: 101 seconds).

Households are also opting for a more sustainable energy supply by, for example, installing solar panels and heat pumps and switching to electrical cars. As a result, households are taking up more capacity of the electricity grid. This is a direct consequence of households actively increasing their sustainability and shows that the energy transition is accelerating. In our service area, we see a strong increase in the pressure on the electricity grid in residential districts.

Overburdening of transformers

The number of voltage complaints due to temporarily switched off solar inverters at consumers was nearly three times higher than in the first half of 2022. Due to the huge volume of generated electricity that consumers feed back into the grid, we saw overburdening of the local low-voltage grid occurring in more and more areas in villages, districts, and neighbourhoods. Around 500 low-voltage outages occurred in the first half of 2023 due to overburdening of our transformers, of which most outages occurred in Groningen and Drenthe. Whereas 267 low-voltage outages occurred in our service area during the whole of 2022. In the coming months, we will upgrade transformers in areas where overburdening occurs most often on sunny days. However, a structural solution will have to come from the large-scale upgrading of the electricity grid.

Upgrading our grid demands a different way of working

The large-scale upgrading in the coming years of our low-voltage grids in villages and cities requires making clear choices, creative solutions, and a new way of working. Mariëlle Vogt, CFO Enexis: “We started with a district approach for the large-scale upgrading of the low-voltage grids. A proactive investment strategy in which we expand the low-voltage grid in the areas where we see congestion occurring. We are thus expanding our grids in the coming years faster than ever". In addition, we make long-term agreements with contractors, in order to have extra capacity to carry out the work. By moving up the chain, contractors are able to carry out projects to upgrade our grid as independently as possible. This provides more clout for carrying out upgrading projects.

Our profit decreased; however, reliability remains equally high

Net profit over the first half of 2023 amounted to € 15 million. This is € 74 million lower than in the same period last year. Although our revenue increased by € 135 million, the costs of transmission and distribution losses of electricity and gas rose by no less than € 227 million. As a grid operator, we are responsible for the purchase of energy to compensate electricity and gas that is lost during distribution. The cost of compensating these distribution losses was considerably higher, mainly due to higher energy prices.

In order to finance the energy transition, we issued a € 500 million green bond in June 2023. We can use these funds to continue to invest in in the expansion and sustainability of our grids.

For more information, please read the complete interim report of Enexis.