Construction

In 2023, we again invested heavily to create more grid capacity. We are making every effort to prevent congestion, or to resolve it as quickly as possible. We are doing this by building faster, for example. In 2023, we invested a total amount 832 million, which is € 120 million more than in 2022 and an all-time record. We used that money to add substantial transmission capacity to our grid, among other things. In 2023, we added over 500 MVA in new capacity to our grid, which would be enough, for example, to supply every home in Rotterdam with electricity all at once.

The largest portion (around 75%) was added for large-scale industry, such as large customer connections in the port area. The remaining 25% is needed to build new homes, make existing buildings more sustainable, accommodate mobility growth, and facilitate expansion in the SME sector and natural growth. All in all this is a great result. At the same time we find that many of our projects are long-term and multi-year: on average, they take five to ten years from start to realisation. This means that it will often take several years before the work we are doing now and the steps we are taking to accelerate will start to bear fruit. Fortunately, some results are already visible. For example, we resolved the first bottleneck in 2023 via a structural grid expansion: capacity is now available again around Middelharnis on Goeree-Overflakkee (see box).

Investments in our grids

We divide our investments into three categories: customer-driven investments (investments requested by customers or government authorities), grid-driven investments (investments to increase grid capacity or maintain grid quality), and meter-driven investments (investments in smart meters). Compared to the previous year, there was a sharp rise in in all categories in 2023, but especially in our grid-driven investments. This is in line with the ever-increasing challenge of adding capacity. 

Customer-driven investments

Customer-driven investments are made at the request of customers and public authorities. Customer-driven investments in 2023 amounted to € 285 million, which is € 33 million (13%) higher than in 2022. We were expecting an even larger increase in customer requests for grid expansion, especially in house building, but this increase did not materialise in 2023 due to the faltering housing market. The necessary customer-driven investments will remain high in the coming years, driven by economic developments and (the pace of) the energy transition.

Grid-driven investments

The grid-driven investments are the investments that we make to increase grid capacity and guarantee the quality of the existing grid. This includes the replacement and reinforcement of stations and grids. Our grid-driven investmentsin 2023 were € 490 million. This was € 80 million more than in 2022. Some of the planned grid-driven investments were delayed due to issues in the environment (such as lengthier planning procedures or ecological obstacles) and/or lack of materials at suppliers. We used the capacity freed up this year to accelerate several other projects, so as to minimise delays. This means that we virtually achieved our target to realise the grid-driven scope in respect of electricity (99% of 100%). We also achieved our target for grid-driven investments regarding the gas grid, primarily relating to the replacement of brittle pipelines (110% of 100%). Having replaced or removed 212 kilometres of brittle gas pipelines this year, we are on track to remove all brittle pipelines from our gas grid before 2028. By removing brittle pipelines, we are helping to reduce CO₂ emissions.

Meter-driven investments

Our investments in smart meters in 2023 were € 41 million. This is € 7 million more than in 2022. We were expecting to achieve more in this area as well. However, various activities were postponed pending the approval of the bill abolishing the netting scheme and its impact on the further roll-out of smart meters. Currently, 87% (2022: 84.7%) of households in Stedin’s service area have a smart meter.

Other investments

Other investments in 2023 amounted to € 16 million (the same as in 2022), with € 10 million invested in IT and the telecommunications network. In the increasingly complex and flexible energy system, it is necessary to have (ongoing) insight into the status of our (electricity) grid. Telecom is therefore an indispensable asset for our business operations, which is strategically expanded and managed. 

Investments in numbers

In order to ensure continued gird reliability in the future, and thus prevent or reduce congestion, our activities include adding new capacity, building medium-voltage units and laying kilometres of new cable.

Medium-voltage units are one of the most important links in the supply of energy to our customers. These units convert medium voltage into low voltage. The electricity is then fed into the low-voltage distribution grids, which ultimately ensure that the electricity reaches the low-use consumers connected to the grid. In 2023, we built 266 of these units; almost as many as in 2022. Although we are proud of this result, we also realise that we really need to take further steps in order to meet the estimated challenge by 2030 (around 6,000 units in total). The same applies to the number of cable kilometres. This year, we installed 892 kilometres of cable, over 20% more than in 2022. However, the total challenge until 2030 is around 12,000 kilometres. In this area, too, we should therefore remain fully committed to building faster.

Cooperation with contractors

By working even more closely with contractors and outsourcing a part of our work to these contractors, we can work more effectively and thus faster. We call this ‘shifting work in the chain’. In 2023, agreements on this way of working were detailed and documented in so-called ‘infra contracts’, so that these can be started early in 2024. These contracts prepare us for the future. The pricing structure has been simplified in order to reduce the administrative burden. We made detailed working agreements with the relevant contractors beforehand, so that there will be no ambiguity on this point during the project execution phase. Finally, this long-term relationship will enable both Stedin and the contractors to invest in staff, innovation, process improvement and efficiency, so that we can do even more work together. The contracts were awarded partly on the basis of contractor performance in reducing CO₂emissions and fostering biodiversity.

We concluded these long-term contracts with contractors in partnership with drinking water companies (Evides, Oasen, Vitens and Dunea). These infra contracts provide for the performance of both solo work (purely focused on the electricity and/or gas grid) and joint work with the water companies (therefore including work on the drinking water pipelines), which is known as ‘multidisciplinary working’ (see box). 

Retention of employees

We are convinced that (work) experience and (work) enjoyment are essential for working effectively and safely. We have therefore invested in retaining our employees, among other things by offering transparent and logical opportunities for advancement and career paths for critical positions. We have also ensured that our employees stay fit and healthy, and have increased the capacity of our technical training courses. In addition, we have developed a successful programme for lateral entrants and offer Participation Act jobs within Stedin. You can read more about this in the ‘Our employees’ section.

Smart and innovative working

In order to build faster, we look beyond the (current) standard solutions and technologies. We are keenly embracing digital innovation and new technologies. At Stedin, we use a technology radar to monitor new trends. We distinguish between technologies that can be explored, tested and scaled up. 

Artificial Intelligence

Artificial Intelligence (AI) is an important development which already has a lot of impact, but which we are expecting much more of. Various departments within Stedin are specifically focused on exploring opportunities and testing and scaling up AI-related cases. Work in 2023 included using AI to increase employee effectiveness, better serve customers, automate the grid design, speed up the return process with image recognition, and generate predictive models for transmission and timely asset replacement. We have set up a Community of Practice to make employees aware of AI-related opportunities and risks and to increase their knowledge and skills. The final text of the European AI Act is expected to be published in the first quarter of 2024. This will provide us with frameworks for the use of AI. We will test our AI activities against these frameworks and adjust our policies where necessary. Until then, our AI activities must comply with the privacy and security guidelines we have drawn up an organisation.

Hololens

Digital tools for (operational) employees are becoming increasingly important as well. One such tool is the Hololens. The Hololens is a mixed reality headset that combines real-life images with virtual 3D images. This headset enables employees to monitor work remotely in a safe way, which means that the four-eyes principle remains guaranteed. With the right processes, this can save a lot of time. The Hololens can also be used to get an impression of how a station yet to be built will fit into the surrounding area. This may speed up coordination with municipalities and local residents and the planning permission process. Several pilots were conducted with the Hololens in 2023, and successful pilots will be scaled up further in 2024. 

Drones and ground radars

With increased activity below ground, insight into subterranean infrastructure is becoming an increasingly important theme. Here, too, new tools and technologies may play a key role. For example, we are using drones and ground radars (in combination with AI models) to detect cables and pipelines below covered surfaces. We are testing whether we can use so-called LIDAR lidar technology for open trench works to take quickly perform detailed measurements for the positioning and visualisation of our cables and pipelines. In 2023, a pilot was conducted in cooperation with the municipality of The Hague to test these various technologies. In 2024, we will examine how we can add such technologies to existing tools and processes.