Affordable and efficient services

Efficiency

In 2018, a five-year efficiency programme was launched with the aim of continually reducing our expenditure. The initial target was to achieve a reduction of €150 million by 2022. In 2020, we raised the target to €180 million, to be achieved by the end of 2025. From 2018 to year-end 2021, we have achieved savings of €143 million. We are therefore well on track to achieve the total level of savings of €180 million by the end of 2025. We are not only looking to achieve savings on operating expenses, since we also critically review whether investments are really necessary. You can read more about our investment plans and the investments made in 'Investments in our grids'.

We are realising a large part of the efficiency improvement through the results on our strategic initiatives. We are targeting smarter work practices, greater use of digitalisation and more collaboration in chains with customers, suppliers and utilities. This year, we prioritised preventing and remedying failures as efficiently as possible. We are also seeing positive results in our efficiency through the phased integration of DNWG in Stedin Group. The integration and digitalisation of support activities also generates significant savings. We are working more efficient, but the volume of our work is also increasing. This resulted in an increase in costs in absolute terms, compared with 2020, by €55 million to €1,155 million.

Multidisciplinary work

Collaborating below ground with drinking water companies, for example, offers numerous advantages; we carry out our work more efficiently, achieve savings, make better use of scarce personnel and reduce the inconvenience for local residents. By means of joint planning, in the form of the simultaneous replacement of gas and water pipelines, for example, we were able to reduce costs by approximately 7% in 2021 compared with 'solo' projects. We are entering into covenants for multidisciplinary work with more and more municipalities. An example is Rotterdam, where we jointly plan and execute our projects with the municipality and water company Evides. In 2021, this comprised 19 projects. For these 19 projects, this yields cost savings of more than 2% of total project expenditure.

The projection for gains to be achieved through multidisciplinary work was €2 million. More than €3 million was achieved this year. Further savings are set to follow in the years ahead on the basis of the joint contracts we have in place and are also expected to be realised from 2023 through duplication-free activities below ground, in which we will apply a revised allocation of roles and duties.

In the Stedin area, we are working to deliver on multidisciplinary work. We do so, for example, by issuing tenders to prepare for the collaboration with the drinking water companies Dunea, Vitens and Oasen. We cannot yet eliminate duplication in this work. We are, however, already doing so in the collaboration with Evides – in the province of Zeeland and in due course also in the Rijnmond Region. You can read more about this in the section on 'Non-regulated activities'.

Smart cable replacement

When replacing parts of the grid, in addition to assessing the quality of the grid, we also take account of future capacity needs. Smart replacement means that Stedin replaces its 10 kV cables that require replacement with 20 kV cables, where possible.

Better matching of failure-related work

In 2021, we took steps to optimally match the work required and resources available for resolving and preventing failures. We use data and digital technology to facilitate swift action in response to interruptions. Failures show a clear time pattern (season, week, days, hours). We use these data to predict the work needed to deal with failures. At present, we look 4 to 18 months ahead. This allows us to identify trends sooner, benefiting our ability to anticipate them.

Affordable energy by facilitating the energy market

Stedin is mainly known for the work we carry out on the energy network. Behind the scenes, we process a vast amount of data correctly and in a timely manner in our systems. This includes information on the capacity of connections, metering data and data for processing charges for all the energy flowing through our network. The customer is billed by the energy supplier, with the invoiced amount also including the costs of grid management. The energy supplier then pays Stedin monthly for using our network. We ensure well-functioning processes at a socially responsible price level. As a result, customers benefit from the ease of switching to a different energy supplier, the insight into their energy consumption and how easy it is to return energy to the grid.

Energy prices

High energy prices place a burden on the liquidity of market parties such as energy suppliers. Agreements have been made at the national level about how to deal with a market party that is no longer able to supply its customers with energy. The situation is closely monitored, and if necessary, immediate action is taken. In our role, we monitor the monthly payments made to Stedin by market parties. In 2021, we filed three notifications with the Netherlands Authority for Consumers and Markets (ACM) regarding lost earnings sustained by Stedin. We ensure that the lost earnings from the bankrupt party are correctly processed in the future tariffs. We also ensure that administrative matters are taken care of for all customers who move to another energy supplier following a bankruptcy. In 2021, approximately 43,000 customers of Welkom Energie, KEN/Anodey, Fenor and Sepa Green Energy in particular were affected by this.

Virtually 1 grid manager

Stedin has invested in good cooperation with other grid managers. Under the motto ‘virtually 1 grid manager’, we harmonise our processes to guarantee market parties increasingly the same standard of quality. Each year, we measure satisfaction among the many players in the sector.

In the 2021 measurement of market parties’ satisfaction with grid managers, Stedin continued its improved rating performance of recent years. The market rated gave our services a score of 7.3, and the Customer Effort Score was also much improved. This puts Stedin Group in a good second place position among the grid managers.