Connectivity table

Construction, Optimisation and Management

R: Cyber attack causing damage to society and business operations - Insufficient connection and transmission capacity - Impact of accidents related to Stedin Group - Lack of sufficient number of
people with the required competences - Availability of materials

In order to give everyone access to the grid, we focus on expanding our electricity grid. In this way, we meet the growing demand for grid capacity. Another of our core tasks is to distribute natural gas safely and reliably.
Preparing for projects often takes a long time, including obtaining zoning plan changes and the processes to acquire land holdings and associated permits. To accelerate construction, therefore, we also focus on speeding up these procedures and reach agreements on this with municipalities.

Investment is the number of euros we invest annually.
Insight into progress in partnership agreements with municipalities is provided by the percentage of municipalities with which the joint challenge has been experienced and formal distribution grid partnership agreements have been discussed. The KPI Irrevocable zoning plans shows the increase in the number of zoning plans for transmission grid expansions with a spatial component that became irrevocable in the year.
The percentage execution of grid-driven scope E and G concerns the extent to which scheduled work (capacity expansions and/or replacement investments) has been achieved.

Construction

R: Insufficient connection and transmission capacity - Availability of materials - Increased likelihood of surge in replacement of obsolete assets - High activity in outdoor space and below ground - Lack of sufficient number of people with the required competences / O: Application of new energy carriers - Make comprehensive assessment in relation to investments between electricity, gas or future energy sources.

Electricity consumption at peak times is rising very steeply as a result of the energy transition and adherence to the agreements in the Dutch Climate Agreement. Not all parts of the electricity grid are ready yet to absorb that temporary increase. To ensure grid reliability in the future and thus anticipate or mitigate congestion, we are adding additional capacity to enable expansions and reinforcements in our grid.

The KPI Additional capacity in MVA refers to the net amount of grid capacity in megavolt-ampere added on top of the total capacity in the reporting year, live and accounted for in the project administration.

Construction

R: Insufficient connection and transmission capacity - Availability of materials - Increased likelihood of surge in replacement of obsolete assets - High activity in outdoor space and below ground - Lack of sufficient number of people with the required competences / O: Application of new energy carriers - Make comprehensive assessment in relation to investments between electricity, gas or future energy sources.

Electricity consumption at peak times is rising very steeply as a result of the energy transition and adherence to the agreements in the Dutch Climate Agreement. Not all parts of the electricity grid are ready yet to absorb that temporary increase. To safeguard the reliability of the grids into the future, it is essential that we invest in expanding and reinforcing our grids. An MV substation, or distribution station, is one of the most important links in the public power supply. It distributes the required electrical power and thus feeds low-voltage distribution networks, which distribute power to customers.

The metric Additional MV substations refers to the additional number of medium-voltage substations constructed, commissioned and managed in GIS and is calculated by the sum of newly constructed and commissioned medium-voltage substations per year.

GIS is the Stedin Geographic Information System. This system captures all technical information geographically tied to a specific location.

Construction

R: Insufficient connection and transmission capacity - Availability of materials - Increased likelihood of surge in replacement of obsolete assets - High activity in outdoor space and below ground - Lack of sufficient number of people with the required competences / O: Application of new energy carriers - Make comprehensive assessment in relation to investments between electricity, gas or future energy sources.

Electricity consumption at peak times is rising very steeply as a result of the energy transition and adherence to the agreements in the Dutch Climate Agreement. Not all parts of the electricity grid are ready yet to absorb that temporary increase. To safeguard the reliability of the grids into the future, it is essential that we invest in expanding and reinforcing our grids, which we are doing through activities such as installing and replacing cables.

The number of additional kilometres of cable laid refers to the additional number of kilometres of cable in the electricity distribution network realised this year and processed in GIS. This concerns both new construction and replacement, for low-voltage, medium-voltage and high-voltage, and can include both live and non-live cables. If several phases or wires are present side by side, they are counted here as one length, this being the route.

GIS is the Stedin Geographic Information System. This system captures all technical information geographically tied to a specific location.

Management

R: Cyberattack causing damage to society and business operations - Impact of accidents related to Stedin Group

We continuously work on the reliability and safety of our grids. Supply security and preventing and reducing the number of failures and downtime are central to this. To contribute to supply reliability, Stedin has a professional and legal duty to maintain its assets. Stedin’s policy on grid design, construction and operation is based on the Gas Act, applicable standards and past corrective and preventive maintenance results.

The ‘Execution of planned maintenance’ percentages for Electricity and Gas are calculated by dividing the sum of jobs carried out (based on work orders) by the number of planned jobs. For Electricity, this concerns planned maintenance and inspection work on the LV and MV boxes. For Gas, we carry out maintenance and inspection activities such as pressure checks, visual and functional inspections and cathodic protection for various types of stations.

Optimisation

R: Insufficient connection and transmission capacity

It is now well established that there is a considerable shortage on the electricity grid. Congestion management means that grid managers resolve this shortage to some extent by compensating producers and consumers of electricity, if necessary, if they help to reduce the load on the grid. For example, by temporarily reducing feed-in to the grid. The Netherlands Authority for Consumers and Markets (ACM) points out that congestion management is a temporary measure that can be deployed during the period when a grid manager is working to reinforce the electricity grid. According to the ACM, congestion management also contributes to the energy transition by creating more space on the electricity grid, allowing more wind and solar farms to be connected to the grid. Companies and Stedin set out how and at what times they can contribute to temporarily easing the pressure on the grid in flexible contracts. This allows us to manage congestion.

The KPI Capacity covered by flexible contracts shows the total capacity in MW for which Stedin has an operational flexible contract with customers for consumption and/or feed-in at year-end.
This KPI is calculated by adding up the total flexible capacity covered by flexible contracts, cumulatively in MW. Contracts relate to consumption and/or feed-in and can have the following forms:
- Static CBC (Capacity Limiting Contract), in which fixed agreements are reached on time windows in which a limit applies;
- Dynamic CBC, in which notice is given a day in advance whether a limit applies;
- Capacity Management Contract (CSC), in which notice is given a day in advance whether a limit and/or active use applies;
- Redispatch, in which feed-in or consumption change on the day itself, with balance maintenance (up regulation/down regulation elsewhere)
- Non Firm Agreement (NFA), in which the party in question only receives capacity if we advise there is sufficient capacity.

Construction, Optimisation and Management

R: Insufficient connection and transmission capacity; Sharp rise in voltage bottlenecks in low-voltage grids; Services on core tasks insufficiently compliant

We want to have proper insight into the current load and voltage quality of our grid.
We are therefore committed to the roll-out, development and testing of third-generation digitalisation in medium-voltage stations: the ‘DA3 boxes’. This digital metering device helps us obtain better insight into the load, voltage quality and environmental conditions (including humidity and temperature) of medium-voltage stations.

Digitally metered MV substations refers to the number of medium voltage substations equipped with a digital
metering device that is connected to and communicates with the central environment. From 2024, progress will be expressed as a percentage.

Optimisation

R: Insufficient connection and transmission capacity; High activity in outdoor space and underground; Sharp rise in voltage bottlenecks in low-voltage grids
O: Application of new energy carriers

To facilitate the energy transition, we need smart grids that provide insight into the status of the grid, we are expanding our grid capacity, we are constructing stations and we are installing cables. Consumption and feed-in take place and we are entering into flexible contracts to be able to absorb peaks. Due to the major social impact of congestion (huge pressure on the grid), preventing and eliminating congestion is one of the main topics of discussion within Stedin and its stakeholders.

The number of congestion areas refers to the total number of areas where Stedin has issued an advance warning of consumption or feed-in congestion, including the areas where TenneT has given notification of congestion.
Congestion areas shows the number of congestion areas and is the sum of congestion areas where Stedin has issued an advance warning of congestion and grid reinforcements have not yet been completed (and a solution has therefore not yet been reported for the congestion area). The process is in line with Article 9.9(1) of the Electricity Grid Code. If TenneT has given notification of congestion in areas where Stedin also supplies electricity, Article 9.9(2) of the Electricity Grid Code applies.
Up-to-date information on congestion areas is provided on Stedin’s website in accordance with Article 9.8 of the Electricity Grid Code.

Management

R: Cyberattack causing damage to society and business operations - Increased likelihood of surge to replace obsolete assets - Services on core tasks insufficiently compliant / O: Enable future-proof grid management by means of data-driven forecasts and decision-making.

Customer demand is constantly changing and electricity consumption is rising very steeply as a result of the energy transition and adherence to the agreements in the Dutch Climate Agreement. Not all parts of the electricity grid are ready yet to absorb that increase. We work continuously on the reliability of our grids. Supply security and preventing and reducing the number of failures and downtime are central to this. We refer to this as ‘supply reliability’. Stedin has a statutory transmission duty to provide transmission at the most efficient cost. This obligation is set out in the Electricity Act 1998 (Elektriciteitswet 1998), with a quality factor in the regulated compensation method for Electricity ensuring a focus on minimising downtime.

The metric E and G supply reliability shows the availability of the electricity (LV and MV) and gas transmission network as a percentage, where:
E supply reliability = 100% - (([SAIDI Electricity (mv/lv)] / total minutes in 1 year) * 100%)
G supply reliability = 100% - (([SAIDI Gas] / total seconds in 1 year) * 100%), where we include our plannable - class 2 - outages (in contrast to the sector-wide scope set by Netbeheer Nederland).

SAIDI Electricity, the system average interruption duration index, is the average time in minutes the customer is without power for medium-voltage and low-voltage electricity. SAIDI Gas is the average time in seconds that the customer has no gas.

Management

R: Impact of accidents related to Stedin Group

We continuously work on the reliability and safety of our grids. Due to the potentially major social impact and increased attention from the State Supervision of Mines, phasing out the number of asbestos cement and grey cast iron pipes (Brittle Gas Pipes) in our grid is highly relevant. In addition, the removal of brittle pipelines will help reduce CO₂ emissions.

Replacement of brittle gas pipes shows the number of kilometres of grey cast iron and asbestos cement gas pipes removed or replaced this year.
Replacement of brittle gas pipes refers to removed brittle pipes in kilometres and is calculated by the number of kilometres of brittle pipes (material: grey cast iron and asbestos cement) removed between 1 January and 31 December and accounted for in the project administration.

Other objectives

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As Stedin is a regional grid manager and customers cannot choose another party (monopolist), we want to be a reliable partner for our customers. The quality of our service and customer satisfaction is therefore important and after every personal customer contact, we ask the customer about their experience of this service.

The key indicator ‘Customer convenience - Consumers’ is a satisfaction score (in %) that measures the extent to which low-use customers rate their contact with Stedin as being easy (excluding Zeeland). This score is based on the Customer Effort Score (CES), which measures the ease/difficulty of a customer experience. The KPI ‘Customer convenience - Consumers’ is customer convenience measured for two types of customer contact, namely customer contact regarding (1) smart meters and (2) connections. The total score is calculated by dividing the number of ‘easy’ and ‘very easy’ scores by the total number of responses.
Zeeland customers will be included in this measurement from 2024.

Other objectives - Services

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As Stedin is a regional grid manager and customers cannot choose another party (monopolist), we want to be a reliable partner for our customers. The quality of our service and customer satisfaction is therefore important and after every personal customer contact, we ask the customer about their experience of this service.

‘Customer convenience - Maintenance’ is the convenience experienced by customers in doing business with Stedin for the product ‘meter cupboard problems’. See above for a more detailed explanation and information on the calculation of ‘Customer convenience - Consumers’.
The lead time for connections for low-use consumers refers to the percentage of low-use connections completed within 18 weeks or on the customer’s preferred date.

Other objectives

R: Cyberattack causing damage to society and business operations - Availability and quality of data insufficient - IT/OT landscape insufficiently prepared for the future / O: Utilise new energy carriers - Perform comprehensive assessment for allocating investments between electricity, gas or future energy sources - Position Stedin as a highly relevant partner in the energy transition.

To facilitate the energy transition, we need smart grids that provide insight into the status of the grid. Together with customer demand, these data provide important information to arrive at good predictions of where bottlenecks might arise in our grid in the future. At the same time, we are working with partners on innovative solutions that can accelerate the energy transition. Insight into consumption and improved ability to match energy consumption and supply are of key importance for the energy transition. This data can be obtained thanks to smart meters. If we provide accurate meter data to parties such as energy suppliers, they will be able to make better estimates of the development of energy needs. This helps us prevent grid congestion.

The KPI Smart Meter Data reflects the timely and complete provision of smart meter data and is calculated as follows:

For 1-month average: requests answered with metering data in the month/total valid requests in this month *100%

For 12 months: the monthly average of the 12 monthly averages added together and then divided by 12

This data excludes meters where remote read-out has been switched off at the request of the customer.

Other goals - Sustainability

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We are making progress towards climate-neutral business operations in 2030. We concentrate our efforts on those areas in which our impact is greatest: CO₂ and particulate matter emissions, use of raw materials and the restoration of biodiversity. At the same time, we also have a social responsibility in the supply chain, to which end we are in continuous dialogue with our suppliers on those same topics. This results in sustainable and responsible products and services.

The reduction in CO₂ emissions compared to 2018 excluding gas network losses refers to the percentage reduction in CO₂ emissions from Stedin operations in tonnes compared to 2018 excluding gas network losses.

CO₂ equivalent emissions refers to total CO₂ emissions from scope 1, 2 and 3 CO₂ emissions (in tonnes). See the chapter on ESG performance for a description of scopes 1, 2 and 3 and what they include at Stedin.

To calculate these CO₂ emissions, values that fall within the scope are multiplied by their respective CO₂ emission factor. Actual values are used wherever possible (e.g. litres of fuel, gas consumption, electricity consumption, business and commuting kilometres and kilos of SF₆ injected). These values are supplemented by the following estimates, among others:

Vehicle fleet - fuel consumption (litres and kWh) has been estimated for around 45% of our vehicle fleet. The latest available monthly data was used for this purpose.

Electricity network losses - estimate is based on the average actual network losses over 2020 up to and including 2022.

Gas network losses - estimate is based on the average actual network losses over 2018 up to and including 2020 in accordance with the calculation method imposed by the ACM.

Purchasing - the estimate of CO₂ equivalent of purchased materials and services is based on payments to related suppliers in euros, which are converted to CO₂ equivalent using a CO₂ emission factor.

Other goals - Sustainability

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We are making progress towards climate-neutral business operations in 2030. We concentrate our efforts on those areas in which our impact is greatest: CO₂ and particulate matter emissions, use of raw materials and the restoration of biodiversity. At the same time, we also have a social responsibility in the supply chain, to which end we are in continuous dialogue with our suppliers on those same topics. Electricity network losses are one of the major contributors to CO₂ emissions from our operations. We cannot influence these directly, which is why we green these emissions through (Guarantees of Origin (GOs) and/or Power Purchase Agreements (PPAs).

The % greening of electricity looks at the % relative to budgeted amount of electricity network losses. The percentage is calculated by dividing the total amount of purchased Dutch and European Guarantees for the relevant year. The calculation uses the budgeted amount of network losses as it takes an average of two years to know the actual amount of network losses.
The budgeted amount of network losses to be greened is estimated based on historical data from allocation and reconciliation results. If after two years it emerges that the actual volumes deviate from the budgeted volume to the extent that they have a significant impact on the KPI, the figure is adjusted and the deviation explained. Because a buffer is maintained when purchasing GOs / PPAs, this has historically not been the case.

Financially healthy

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Stedin has a public task. We treat our social capital prudently and intelligently. A financially healthy Stedin Group has the necessary strength to facilitate the energy transition. Maintaining a credit rating (S&P ‘Issuer Credit Rating’) of A- remains an essential starting point of our financial policy. FFO/Net debt is a key ratio that is factored into this assessment.

The FFO/Net ratio is calculated in accordance with the Standard & Poor’s (S&P) method. Funds From Operations (FFO) divided by net debt. The FFO is comprised of the EBITDA (see above), adjusted for interest and taxes paid, costs related to the perpetual subordinated bond loan (50%) and capitalised interest. The net debt is the sum of current and non-current interest-bearing debt (including lease liabilities) plus the perpetual subordinated bond loan (50%) and pension liabilities, minus
unrestricted cash and cash equivalents.
Solvency is calculated by dividing equity (plus profit or loss for the period minus the
expected dividend distributions for the current financial year) by the balance sheet total, adjusted for the expected dividend distribution, long-term portion of connection contributions received in advance and free cash and cash equivalents.

Construction

R: Lack of sufficient number of people with the competences

To facilitate the energy transition, we need smart grids that provide insight into the status of the grid, we are expanding our grid capacity, we are constructing stations and we are installing cables. Consumption and feed-in take place and we are entering into flexible contracts to be able to absorb peaks. This is where we need a massive expansion of our workforce. Alongside grid capacity, workforce is one of the biggest risks we face in achieving our goals.

Total workforce is the number of internal and external employees at year-end and is measured in FTEs at year-end.

Other objectives

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Contributing to an inclusive society is part of our sustainability strategy. Stedin is committed to working for equal opportunities and long-term employability for all. We want our workforce to reflect today’s society, to feel welcome and be treated equally, regardless of personal characteristics such as age, sex, religious beliefs, sexual orientation, social background, family status, level of education or disability.

The % Participation Act jobs refers to the percentage of employees expressed in % FTE (based on 25.5 hours) employed by Stedin Group who belong to the target group for the job arrangement under the Participation Act. The Participation Act was introduced in 2015, with the aim of getting more people with an occupational disability into work with regular employers.
The target group for the jobs arrangement under the Participation Act includes those in receipt of benefit under the Disablement Assistance Act for Handicapped Young Persons (Wajong), beneficiaries under the Sheltered Employment Act (WSW), those leaving special secondary education and practical training, and others who are able to earn the statutory minimum wage thanks to the jobs arrangement.
The percentage is calculated by dividing the total number of filled Participation Act jobs by the number of internal FTEs at year-end and the result x 100%.

Preconditions

R: Unavailability of enough people with the required technical competences; Focus on cultural values and conduct is insufficiently effective

Stedin aims to be an attractive employer that treats its employees with due care, stimulates their development and offers everyone equal opportunities. Important aspects are: availability of enough technical and other staff, capacity for change, educating, training and developing employees and a vital, inclusive organisation. The large labour market shortages are causing high staff turnover and pose a major challenge to the realisation of the grid expansions needed for the energy transition. Stedin’s strategy involves the cultural values ‘Inspired’, ‘Committed’ and ‘Forward'. The Employee Motivation Survey including the measurement of the cultural value ‘Forward’, provides Stedin with an opportunity to measure its employees’ motivation to contribute to Stedin’s goals, and take action accordingly. Questions related to the ‘Cultural Value Forward’ asked in this survey concern 1. clarity about team goals, 2. clarity about expected results, 3. manager discusses performance, 4. we finish what we start, 5. manager sets a good example.

The KPI Employee Promoter Score (eNPS) refers to the percentage of employees who would recommend Stedin as an employer minus the percentage of employees who would not recommend Stedin as an employer. The eNPS is a score on a range of -100 and +100. For example, if 34% answer positive, 55% neutral and 11% negative, this results in a score of 23.

The KPI ‘Cultural Value Forward’ rates Stedin’s cultural value ‘Forward’ based on an annual employee survey. Employees are asked once a year to complete a survey with closed questions on various topics scored on a scale of 1-10. A question score is calculated for each question. ‘Cultural Value Forward’ is calculated by dividing the sum of all question scores for the topic ‘Forward’ by the number of questions within this topic.

Preconditions

R: cyberattack causing damage to society and business operations/impact of accidents related to Stedin Group

Working on the energy infrastructure involves risks, which is why safety remains a priority and why Stedin Group invests in knowledge, professional competence, safety measures and a good safety culture. We are taking effective steps to address these safety and security aspects, and with them the continuity of the energy supply. This way, we ensure the safety of our customers, employees, contractors and hired staff. We measure this technical safety according to the LTIR (Lost Time Injury Rate) and the RIF (Recordable Incident Frequency).

The KPI LTIR (Lost Time Injury Rate) concerns the number of fatal workplace accidents and lost-time incidents per 1,000,000 hours worked over the past 12 months. The LTIR is calculated by dividing the total number of fatal accidents and lost-time incidents by the product of the average number of internal and external FTE and standard productive hours per year (1600). Lost time occurs when an employee has to completely stop work on a calendar day following the incident.

The KPI RIF (Recordable Incident Frequency) concerns the number of fatal accidents and workplace incidents leading to lost-time injuries,
and with substitute work or medical treatment being required, per 200,000 hours worked.

Work carried out by and accidents of third parties are not included.