(PRESS RELEASE) ARNHEM, Netherlands, 16-Mar-2022 — /EuropaWire/ — TenneT, a Dutch-German transmission system operator (TSO), has announced that a record EUR 4 billion have been invested in the expansion and maintenance of its grids in support of the European energy transition.
The unjustifiable attack on the Ukraine teaches us that European cooperation and alignment is now more important than ever. This conflict will undoubtedly be an important additional driver to accelerate a sustainable energy system. Meeting current climate objectives requires fundamental changes to the planning, operation and configuration of the whole electricity system. TenneT is also intensifying the smart use of its grids. Looking ahead, the steep increase in the production of renewable electricity and the electrification of our society means TenneT will increase its output towards a minimum annual investment level of EUR 6 billion by 2025. Because a secure and reliable high-voltage grid is one of the decisive factors in driving the energy transition, TenneT is developing and building a grid that’s ready for a fossil-free energy system by 2045: the Target Grid. TenneT managed to maintain a very high grid availability of 99.99999% overall. At the same time, TenneT is fully aware of the congestion issues on the Dutch grid and the restrictions on new customers currently seeking connection to the electricity grid. Together with its stakeholders, TenneT is working hard to address this.
TenneT is already delivering critical projects to drive the energy transition in Europe. For example, commercial operations of the NordLink cable began in 2021, connecting Germany and Norway through a 623-kilometre subsea cable. When electricity prices in Germany are high, due to limited wind or sun, consumers benefit from lower-priced hydroelectric power from Norway. This ‘green link’ can supply more than 3.6 million German households with renewable electricity.
Manon van Beek, CEO of TenneT: “Even as we work at speed to build and maintain our grid for a fossil-free future, demand for grid capacity in the here and now is also growing fast. Linear growth alone cannot solve this squeeze, and we are looking at many ways to make smarter use of our existing grid as well as investing much time and effort into so-called system thinking. The latter involves holistic solutions and systemic planning for the entire energy system and is a real leap forward for the energy transition. To this end, we are focusing on faster project delivery, proactive planning, and innovative solutions. In this context, I would like to thank the many experts and partners who dedicated themselves to developing the Target Grid and the Wind Power Booster.”
Green and sustainable financing
TenneT’s large-scale investment programme requires broad, sustainable and timely access to financing with a good balance between equity and debt to maintain our solid credit ratings. To that end, the company is very pleased that the Dutch government announced EUR 4.25 billion of equity capital for the activities in the Netherlands. For TenneT’s equity capital requirements in Germany the options are still being explored. TenneT is confident that a solution will be reached in 2022 in coordination with its shareholder, the Ministry of Finance. The (social) benefits of TenneT as an integrated cross-border company are central to finding a solution.
Arina Freitag, CFO of TenneT: “This decade will require record investments in the energy transition in Germany, the Netherlands and Europe. It is the only way to achieve the ambitious goals and timetables on the path to climate neutrality. To get this done, it is of critical importance that the regulatory framework clearly favours innovation and digitalization in the energy industry. TenneT, as a transmission system operator that connects the large energy potential of the North Sea to industrial centres is committed to play a pivotal role in achieving our governments’ climate ambitions.”
Last June, TenneT issued its largest (EUR 1.8 billion) and first-ever green triple tranche Euro bond transaction, reinforcing TenneT’s top-three status as a corporate issuer of sustainable, green debt financing in Europe, with currently over EUR 13 billion of green debt issued across different debt formats. During 2021, access to the debt financing markets remained exceptionally good.
|Key underlying financial figures
(in millions of euros)
|Earnings before interes and taxes (EBIT)||834||910|
|EBIT, excluding special items||801||796|
|Investments in fixed assets||3,969||3,412|
|Net interest-bearing debt||15,584||14,004|
Frameworks for green growth
In the coming years, the focus will remain on speeding up the implementation of the project portfolio and working on smart solutions to address congestion issues. Harnessing flexibility for the grid is crucial and TenneT is working on options such as demand-side response, hydrogen conversion for storage and decentralised flexibility provided by household appliances and electric vehicles. Recruiting technical talent is also a priority. TenneT aims to continue growing its workforce and sees targeted investments in technology education necessary to address the ongoing scarcity in this area. By working closely with secondary and higher vocational educational institutions TenneT attracts and educates young people for the energy infrastructure sector.
To deliver what is needed, TenneT requires streamlined and modern planning and approval procedures, as well as political support for our grid reinforcements and expansion at all levels. In addition, regulations and legislation suited to transforming the energy system must be in place: forward-looking regulation fostering innovation is instrumental to speeding up progress. Market parties are waiting for frameworks that encourage them to invest heavily in renewables, flexible electricity supply and demand as well as other grid innovations. Collaboration and collective responsibility will determine the success of the energy transition.
Eefje Van Gorp
+31 026 373 26 00
SOURCE: TenneT Holding B.V.