Mission, vision and strategy
Working together to create an environment filled with new energy. That is our mission. Together, we are working to ensure a sustainable energy supply for today and tomorrow. We believe that we can make the energy transition possible by focusing on our core tasks for (future) grid management and delivering an excellent service for our customers. We have identified three strategic spearheads: improved grid management, facilitating the energy transition and sustainable business operations.
We are working day and night on a future-proof grid. We are investing in the infrastructure that is needed to connect solar and wind farms as well as to transmit the electricity that is generated; to heat districts when they switch to a heat grid or a heat supply with hybrid heat pumps in combination with sustainable gases, or when they go fully electric with heat pumps; and to enable the increasing numbers of electric cars to charge or discharge their batteries. We are investing in smarter technology for our electricity grid to give us greater insight into the energy flowing through the grid and to help us rectify faults more quickly. This insight also improves our capacity to predict and manage, so the voltage quality is maintained. Smarter also means using the existing infrastructure differently; for instance, by using the gas grids for sustainable gases such as hydrogen. This process will help to ensure that the transition remains affordable.
Workload is increasing, technical staff is scarce
The changes are creating a different focus among our range of activities and our workload is increasing. Not only is the number of new connections and grid reinforcements rising, we also need to take account of and anticipate various scenarios as well as the impact of changes on our grids. Grid managers have a greater role to play in making data accessible and there is heightened demand for substantial input from Stedin in discussions on energy policy.
We invested substantial sums in our Strategic Personnel Plan this year. Within this plan, we developed a series of future scenarios to obtain a better understanding of developments in the nature and scope of work. These scenarios help us to prepare in good time. In this way, our in-house training school is able to provide timely training or retraining for staff. Our labour market campaign further develops our reputation as an appealing employer, so we can continue to attract people with the right skills and talents.
Quality of services
Customers have freedom of choice in their sustainable energy supply, which complicates the picture. Anyone wanting to construct new facilities or set up a connection is free to do so, even if the available capacity of the grid is limited at that spot. It is essential to look and plan ahead together in order to ensure that sufficient grid capacity remains available. Planning for solar farms is currently the most pressing challenge. The pace of solar farm construction outstrips the rate at which grid capacity can be increased, a process that can often take several years, since the grid manager has to go through licensing procedures as well as build and connect new infrastructure (e.g. stations). It is therefore essential that grid managers are informed in good time about any new solar farms that are planned, which requires greater coordination and guidance by the authorities. For this reason, we engage with customers as well as local and regional parties, looking ahead together. We are actively involved in the Regional Energy Strategies (RES) within the areas that we serve and provide an analysis of the impact on grid infrastructure for each RES.
Cooperation with partners in the energy supply chain and a multi-disciplinary way of working are also good ways of utilising our resources more efficiently. Furthermore, this process leads to improved services; a street only needs to be dug up once, for example, preventing additional inconvenience. Among other parties, we work with water companies in this approach. This collaboration enables us to save millions upfront by simply coordinating our work to ensure that we carry it out at the same time and at the same place. There is still a great deal of potential in further avoiding replicating activities.
We are increasing our investments in order to fulfil our role in the energy transition and ensure the ongoing reliability of our energy grid. At the same time, we are keen on keeping customers' energy bills affordable and on being capable as an organisation of continuing to finance these investments, which presents a challenge. The emphasis is therefore on efficient working practices and saving costs. We are making significant advances in this regard. Stedin Group has already implemented a variety of different measures. In 2018, a five-year efficiency programme was launched with the aim of reducing operating expenses by approximately 150 million euros. Savings of roughly 60 million euros had already been achieved by the end of 2019. In addition to substantial savings in our operating expenses, a comprehensive review of our investments was also undertaken. Stedin imposed an additional savings target of 125 million euros for this purpose, which represents the maximum feasible level of internal measures achievable by Stedin Group. We are also in dialogue with our shareholders about our long-term financing.