CEO’s foreword

2023 was the first year in which we pursued our Construction, Utilisation, Management strategy. It has become a real buzzword within Stedin. Everybody is talking about it. The strategy is clear, highlights priorities and simplifies process control. However, unforeseen events in practice – such as the acceleration of the energy transition, geopolitical developments and scarcity of materials and technicians – do not make our task any easier. Although we made great progress in scaling up, we were unable to prevent an increase in congestion last year. Consumers and businesses are switching to renewable energy in their droves, which the current electricity grid cannot handle. Further acceleration of the expansion and optimal utilisation of the existing electricity grid are therefore our top priorities. In addition, we need to look at the total energy system. Sustainable gases may ease the pressure on the electricity grid because they can be distributed (or supplied) via the existing gas grid.

We invested € 832 million in expanding our grid capacity and maintaining the quality of our grids, which represents an increase of over 15% compared to the previous year. This was not an easy task, because some processes turned out to be more complex or took longer than anticipated. In order to accelerate construction, we spoke with nearly all municipalities in our service area about their sustainability plans and planning permission procedures. We launched multiple projects simultaneously and intensified our cooperation with other parties. In this context, we concluded new long-term contracts with our contractors, which include agreements for even better cooperation.

Despite all our efforts to accelerate, it will take years before the necessary extra capacity is available. Therefore, in 2023 we also continued working on solutions to better utilise the existing grid. For example, by better predicting customer demand and by offering flex contracts. Flexible use of renewable energy will require greater awareness, as well as more focused choices. Of all the capacity we are adding to the grid until 2030, 25% will go to charging points in some areas. If we limit charging during the evening peak hours, more capacity will become available and we will be able to connect more homes. At Stedin, we are facing a challenge which we cannot resolve on our own. This is the joint responsibility of grid managers, politicians, the business sector and the public. We are proud that in December our shareholders unanimously approved the admission of the central government as a shareholder of Stedin Group. This is an excellent result after a long and intensive process in which I did have the odd sleepless night, wondering whether we would manage to pull it off. We badly need the additional capital contributed by the State in order to keep investing in the expansions and reinforcements of the electricity grid.

We recalibrated our ESG strategy in 2023. Although we were already focused on social and governance aspects and performed our work as sustainably as possible - with the lowest possible CO₂emissions - this new strategy should make a further contribution to a comprehensive approach to sustainability. Stedin has a strong drive to do what is right for the customer, preferably as soon as possible. However, this should never come at the expense of safety. In 2023, we managed to find an increasingly better balance in this area. For instance, by challenging each other even more about safe working practices. The fact that we do this makes me feel proud. Proud of all our staff members, both in the field and in the office. Because we can only achieve further acceleration if we work together.

On behalf of the Board of Management,

Koen Bogers