Most important strategic risks and opportunities for Stedin Group in 2021

How did we respond to this fact: We are working on integral security that connects the related areas of expertise. Stedin applies internationally recognised standards in order to reduce its vulnerabilities to outside threats, with a focus on prevention, timely detection and the resulting actions. As Stedin bases its cybersecurity on the tried and tested Deming cycle for continuous quality improvement, we arrange to be regularly tested by external specialised parties in relation to the ISO27001 standard. Within Netbeheer Nederland, we make a constructive contribution to the formulation of a European Network Code In addition, we work closely with other organisations in the private and public sector in the field of cybersecurity. At the European level, we do this through the European Network for Cyber Security (ENCS) with other grid managers in other countries. At the national level, we work with the Cyber Security Council, the Vital Infrastructure Committee of VNO/NCW, industry association Netbeheer Nederland and the National Cyber Security Centre, among others. We share information with these organisations on threats and measures, and we also collaborate with them to develop standards and provide mutual support in case of an actual threat. Exercises, such as the largest Dutch cyber-crisis exercise ISIDOOR, are a key element in this regard. You can read more about the impact of this risk in the section on 'Safety and security'.

Strengthening our equity capital base: In 2021, our equity capital base was strengthened through an equity injection of €200 million. It was decided to issue preference shares. Existing shareholders subscribed to this issue. As part of the strengthening exercise, we also made agreements with the shareholders on follow-on arrangements, which we are currently discussing. A review of our long-term financing strategy was also commenced (until mid-2029). This involves us exploring the broad scope of possibilities in governance and shareholder structure for further strengthening our financial position.
Regulation: Stedin Group is engaged in constant dialogue with the shareholders concerned on this issue, on its own behalf as well as with the other national and regional grid managers. In 2021, the new method decision for the regulation period 2022-2026 was announced. In this decision, the ACM has made some changes to the former method decision, increasing, on these specific points, the allowable revenue for the grid managers. However, as the allowable return on investment in general decreases significantly compared to the previous regulation period (in line with the decreasing interest rates), the additional financial capacity is insufficient to tackle the financial challenge.
Alternative financing options: Alongside the follow-up arrangements with the existing shareholders, we also initiated discussions with potential new shareholders. You can read more about the impact of this risk in the section on 'Financial, economic performance'.

Strategic personnel planning: The Strategic Personnel Plan provides insight into and an overview of current and future roles and necessary staffing numbers. While this does not overcome the shortage, it does provide us with a roadmap clearly setting out where we need to train or recruit now in order to minimise the shortage in the future.
Providing training ourselves: In the In-house training school, we provide technical training to colleagues for appointment as fitters and internal advancement to higher technical positions. In 2021, progress was achieved in setting out continuous educational and training pathways. In combination with the insights from the Strategic Personnel Plan, this enables us to take proactive action to address the shortage of qualified technicians in the Netherlands and for the grid managers. This means, amongst other things, that we take action well in advance of extra workload, anticipated or otherwise (including in case of retirement), to take on and train new people and/or to train people from our existing workforce to be ready for further steps.
Labour market campaign: Substantial investment has been made in a labour market campaign in recent years. Stedin was portrayed as an attractive employer, with intensive engagement by colleagues in the organisation. Communication across various media was used to reach specific target groups. Amongst other things, this has boosted the number of visits to our website werkenbijstedin.nl.
You can read more about the impact of this risk in the section on 'Good employment practice'.

Flexibility for managing supply and demand: Encourage deployment of flexibility for managing supply and demand, enabling us to make more efficient use of grid capacity. In 2021, we called up flexibility on several occasions in the Zuidplaspolder, where commercial growers use their CHP installation to help keep the grid load within the permitted limits. - Improved system efficiency: Encourage improved system efficiency. This enables us to make better use of grid capacity by linking local energy generation and use to smart choices of location as well as cable pooling, whereby solar and wind-generated energy is combined, or pooled, on a single cable to increase the capacity utilisation of a connection.- Active lobbying for expanding connection possibilities: We actively lobby to create grid capacity for other types of connections. In 2021, we finalised the implementation of amendments to the Electricity Act. These amendments concern the prohibition of multiple connections for solar farms, cable pooling and supplements to the standard connection methods. In addition to facilitating the connection of more sustainably generated energy, these measures also enable us to make better use of existing grid capacity, amongst other things. The amendments were partly the result of lobbying by the grid managers. - Insight into grid capacity: Maps are published on the Stedin website showing the current grid capacity for power generation as well as consumption. The information this provides on possible restrictions in available grid capacity is useful to business customers in a planning context. For the Regional Energy Strategies (RES), we provide insight into the available grid capacity, including planned grid reinforcements. We have developed opportunity maps to show where new initiatives are most likely to succeed when implemented in a planning horizon up to 2020. This provides public authorities with greater clarity regarding the feasibility of their RES ambitions up to 2020. Stedin will continue to invest in the coming years in making available and planned grid capacity transparent to support the market in general and that of national and regional programmes in the energy transition in particular. - Spatial integration of grid infrastructure: We use master plans to make clear to municipalities and provinces where new infrastructure is needed. In that way, we aim to shorten the lead times for issuing permits, to speed up the availability of new infrastructure.
You can read more about the impact of this risk in the section on 'Facilitating the energy transition'.