TenneT advances energy transition with EUR 1.6B grid investments

TenneT continued to make significant efforts to advance the energy transition in the first half of 2022, investing EUR 1.6 billion in the grid and again upholding a high grid availability of 99.999 percent despite the complex and unpredictably changing external environment.

To reach 4,975 million euros, underlying revenue increased by 2,407 million euros.

The increased compensation for grid-related costs and the larger asset base were the main causes of this. The underlying operating result rose from 579 million euros to 148 million euros. TenneT is concentrating on both short-term and long-term solutions to complete its crucial task: guaranteeing the ongoing availability of electricity for nearly 43 million end-users across the Netherlands and Germany. Energy security is receiving more attention than ever before.

Short term

TenneT’s operations have been significantly impacted by the Ukraine war, a humanitarian, geopolitical, and security crisis. TenneT and ENTSO-E have worked together to synchronize the grids of Ukraine and Moldova with the European grid in order to support the supply of electricity in those nations. Energy price increases and the urgency of supply security have both been made worse by the conflict in Ukraine. In order to achieve this, TenneT observes businesses increasing their demand for electricity and governments becoming more proactive and ambitious in their efforts to bring about the energy transition. The prices of the raw materials TenneT uses in its assets have been significantly impacted by both the conflict in Ukraine and the COVID-19 pandemic. This applies to copper, aluminum, and steel. High energy market prices have also caused a significant rise in grid costs. These are expenses TenneT is required to pay in order to make up for grid losses, to keep the grid’s energy balance in check, and to cover alternate routes for the electricity when grid sections become jammed or inaccessible as a result of grid expansions. According to regulatory guidelines, these increased grid costs are budget-neutral and will be covered by upcoming tariffs.

There were capacity issues (congestion) on TenneT’s grids in some areas as a result of the electrification drive among businesses and industries and the rapidly increasing demand for electricity, including renewable sources. This was particularly noticeable in the Dutch provinces of Noord-Brabant and Limburg, where new connection requests have been temporarily suspended pending a congestion analysis. TenneT is putting a lot of effort into finding solutions to congestion for these provinces and the entire country, working closely with all stakeholders, including the Ministry of Economic Affairs & Climate and the designated coordinator. This strategy consists of four components, each with distinct roles and levels of involvement for the stakeholders. These include using the grid more wisely, hastening grid expansions, improving communications, and using a more programmatic approach to increase predictability.

Long/Mid term

First off, by achieving economies of scale and standardizing 15 to 20 2GW offshore wind connection systems by about 2030, the ground-breaking 2GW program will enable the faster development of offshore wind energy. The 2GW standard is a significant improvement over the 0.7GW AC and 0.9GW DC offshore-connection systems in use today. By utilizing fewer cables and platforms, it will double connection capacity while saving time, resources, and money. With important market partners, TenneT intends to sign a cooperation agreement that could last up to eight years. The agreement includes converters for the two-way conversion between alternating and direct currents, offshore platforms and onshore stations, and converters. The motivation behind the large-scale tender highlights the long-term goal of accumulating all the necessary resources, including industry sites, personnel, and materials.

Second, TenneT has begun developing what it refers to as the Target Grid 2045. TenneT aspires to design and construct the electricity grid of the future in close collaboration and conversation with governments, ministries, and other stakeholders. The completion date for this is 2045. With Target Grid, TenneT is committed to actively and promptly supporting the governments of Germany and the Netherlands as they move toward a highly electrified, attainable, and climate-neutral energy system.

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