TenneT reports on a successful 2023
The company achieved a record high of €7.7 billion in grid investments coping with grid congestion and bottlenecks.
Image for illustration purposes.
Netherlands, Arnhem: TenneT’s 2023 investments, 70% higher than in 2022, could expand, strengthen, and modernise electricity infrastructure. The company continued its solid performance partly because of long-term partnerships. Grid availability remained at 99.99993%, while the company continued expanding high-voltage grids in the Netherlands and Germany.
TenneT invested €7.7 billion in 2023 (Netherlands €2.9 billion and Germany €4.8 billion), while annual investments will grow to at least €10 billion. The increase is due to higher investments in onshore and offshore grid expansions, for example, the 2GW Program. TenneT’s 10-year investment plan for the period 2024-2033 amounts to €160 billion.
Underlying revenues decreased by €0.6 billion to €9.2 billion, due to the decline in ancillary service costs originating in lower market prices for costs incurred by TenneT. Underlying operating result (EBIT) increased to €1.8 billion, partly because of higher tariff compensation due to increased regulatory reimbursement in line with increased interest rates, the strongly grown reimbursement of costs of capital on investments and higher results from TenneT’s joint venture BritNed.
The company is in a solid financing position, as last June the Dutch state provided €1.6 billion to cover the funding requirements of its Dutch part. It is exploring a potential sale of its German operations to KfW, acting on behalf of the German State. There is no certainty that a transaction will materialise, so the State has provided a bridge loan facility of €25 billion, safeguarding TenneT’s investments for 2024 and 2025.
The electrification of society is a positive sign of the energy transition; however, it leads to long waiting times to be connected, especially at TenneT’s regional 110-150 kV grids. The company is thus focused on grid expansions to alleviate congestion. Expansion on land is making progress in Germany due to acceleration measures over the past two years, but several “lost years” are now having an impact on harvesting wind energy in the North Sea. The company’s Target Grid 2045 gives an approach to ensure that the high-voltage infrastructure necessary for a sustainable system is completed efficiently and effectively and is ready by 2045.
In 2023, TenneT began the construction of Suedlink, signed contracts with four cooperation partners to develop the North Sea as a hub for energy production, delivered the offshore grid connection system for Hollandse Kust (Noord) and Hollandse Kust (west) Alpha, was handed over its 13th offshore grid connection system in Germany, DolWin6, completed the approximately 140 km Westküstenleitung, the 61 km high-voltage connection Ganderkesee-St. Hülfe and the 40 km high-voltage connection between Eemshaven and high-voltage substation Vierverlaten (Groningen), researched the feasibility of two submarine interconnectors, announced its Target Grid vision, and appointed Maarten Camps and Kuldip Singh as members of its Supervisory Board.
Source: TenneT