Interconnected
In 2022, the connection we as a network company have with society at large became more visible than ever. The war in Ukraine had a major impact on the accessibility and affordability of energy. The gas price – and with it, the price of electricity – rose steeply as a result of the great uncertainty surrounding the supply of gas from Russia. Supply problems all over the world were exacerbated by disrupted supply chains, resulting in material shortages. Climate change also had a significant impact. Protracted periods of heat and drought in Europe led to a fall in energy production. These developments had a major impact on the energy supply to consumers, businesses and public bodies, and therefore on our work. The unquestioning belief in the availability of energy had not come under such pressure for decades.
It led to an even more urgent wish amongst our customers to become more sustainable. In recent years, we have seen demand for capacity on the power grid soar as a consequence of the energy transition. It increased even further this year. There is huge demand for large batteries and industrial e-boilers. Consumers are increasingly choosing to insulate their homes and install solar panels and heat pumps to reduce their energy bills. Customers are switching to sustainable energy at a rapid rate and this creates an enormous demand for power. Energy is at the forefront of everyone’s mind.
We invested €1,228 million in 2022
In 2022, we invested a total of €1,228 million, mostly in expanding and strengthening the power grid. This enabled us once again to complete an even bigger work package than in previous years. In one year, we laid 2,457 kilometres (2021: 2,271) of electricity cables and gas pipelines (+8%).
Safety in our work is a prerequisite
A short circuit occurred on the high-voltage line in Lelystad at the beginning of September, which started a fire and caused the conductors to become detached. Over 300,000 customers were without power. Luckily, no one was injured, but the incident had a major impact on colleagues and local residents. We are making sure that we learn from what happened in Flevoland for our own safety and that of our customers. It is our responsibility to make sure that everyone finishes their working day safely. We have taken a number of important steps to do so, based on a clear Safety Vision. This sets out how we are improving safety in the organisation, including personal safety. At year-end 2022, we reached rung 3 on the Safety Ladder for the organisation as a whole. There were more accidents (2022: 88, two of which with serious injuries) than in the previous year (2021: 69).
A safe working environment includes personal safety. We aim to create a safe working environment in which everyone feels supported and comfortable – a relevant theme this year. In the Central Employee Barometer for 2022, we attained a high score for personal safety, but there are sadly teams and departments where personal safety and leadership are points requiring attention. Various initiatives, such as the award-winning initiative Met Andere Ogen (Different Perspectives), help employees to work together to create an inclusive organisation.
The energy transition is both a technical and a social change
Despite the considerable expansion of our networks, we were unable to satisfy all of our customers’ ambitions and wishes immediately in 2022. The maximum capacity of the network was reached in increasing numbers of places, which caused difficulties for expansion and sustainability plans. We find this concerning. We are aware that we are disappointing our customers in such situations and we regret this. Demand for electricity is still increasing faster than the speed at which we can upgrade or expand the network.
It became even more evident in 2022 that the energy transition is not just a technical change. It is also a social change: a process full of mutual dependencies between the various factors and players in the energy system. Sometimes this is easier said than done. As the Netherlands speeds up on the road to sustainability, it is important that all the parties with roles in the system plot a new course, for example in terms of spatial considerations. As the greening of the Netherlands speeds up, there is increasing realisation that the necessary infrastructure cannot always be realized. We see, for example, that additional space is needed in new area developments in existing neighbourhoods and industrial areas for our substations, transformer substations and cables, but that such space is not directly available. We are in continual dialogue with municipalities to find out where the underground and above-ground infrastructure can be located, based on new home development and company expansion plans. We call this ‘energy planning’ and it is something we are working hard on to ensure that what ought to be developed is also spatially possible and feasible, both nationally and regionally. By looking at this issue together at an early stage, we can organise materials and labour in good time. It also helps us tremendously if municipalities include the necessary infrastructure in their plans from the start and make clear-cut choices in such matters.
We are working with our customers and stakeholders on making the energy system more flexible
The increasing share of solar and wind power is rapidly changing the energy system from a demand-driven system to a supply-driven one. Energy is also increasingly being sustainably produced and used locally. At certain times, this creates energy surpluses and at others, energy shortages. The system will have to be designed with this in mind. In 2022, we worked with the market on a more flexible energy system, in which customers examine how they can align their energy demand with the supply, through storage or buffering for example, and we consider how we as a network operator can facilitate this. We sped up the development of non-firm contracts, for example, which enable our customers to use more energy at times when the network is less burdened. In line with new regulations in Leeuwarden, we used congestion management for the first time, which enables more customers to be admitted to the network. And at Schiphol Trade Park, we enabled our customers to align their energy consumption with that of other users, making better use of the total capacity. These and other examples demonstrate both that the flexible system can work and that it requires scaling up. This is the next step, to be taken in conjunction with customers and market players.
The labour market issue also requires collaboration between the various parties in our sector
Despite an increasingly tight labour market for technicians, we successfully managed to recruit more technicians in 2022, hiring a total of 387 technicians. We developed our View of the Labour Market & Education to set a course for our ambitions in the labour market and the field of education. The ‘100 Good Reasons’ campaign aimed at technical target groups was launched in August 2022 to increase our recruiting efforts. Furthermore, in 2022 employees were invited to introduce new technicians and IT specialists to Alliander through our internal referral programme. We introduced a modernised training programme called 'Gericht Opleiden’ (Targeted Training) to train mechanics, foremen and technicians more quickly, and in the summer we opened a unique training centre in the Anklaar electrical substation.
Based on our View of the Labour Market & Education, we started intensifying our collaboration with secondary vocational colleges, universities of applied sciences and academic universities. We were also actively involved in developing the Technology Action Plan, the national strategy for recruiting more technicians. This is an initiative by the employers’ association WENB, the employers’ organisation FME, Bouwend Nederland, Techniek Nederland, MetaalUnie and the employers’ organisation VNO-NCW. It contains details of a broad package of measures aimed at recruiting and getting more people interested in technical jobs, enhancing technical education, attracting new target groups, promoting labour migration for technical jobs and increasing labour productivity by means of innovations. One example is the deployment of the Arbeidsmatchplatform (Labot matching platform), a digital platform that facilitates joint recruitment at a national level on the basis of competencies and skills.
Financing
Clearly, by engaging with all the parties in the energy system we can arrive at new solutions and perspectives. It is important to maintain that close contact even when we have an unwelcome message to deliver or cannot immediately meet demand, such as when our tariffs rose due to the increase in our purchase prices. In this case, we informed our customers earlier than normal as we realised that this would have a major impact.
We are in consultation with our regulator, the Netherlands Authority for Consumers and Markets (ACM), about the planned and necessary amendments to legislation and regulations. We are also in a dialogue with the Dutch government about the financing of the energy transition, since expanding and upgrading our power grids in the coming years will require billions of euros of investments. In conjunction with Stedin and Enexis and our shareholders, we have been in talks with the Dutch Ministries of Finance and of Economic Affairs & Climate Policy since the summer of 2021 about a possible future role for the State in strengthening the regional network operators’ capital requirements. This led to a Framework Agreement in November setting out the conditions under which a capital contribution and thus State holdings in the regional network companies would be possible.
Interconnected
We are building the energy system for the future for everyone and interconnected with everyone, including our supply chain partners and all our 7,700 plus colleagues at Alliander. Together, we are working hard to make changes to processes and the corporate culture to give us the clout and agility that will enable us to fulfil our task in society. In a year full of challenges and changes, we have always been able to count on everyone’s professionalism and dynamism, reflecting the intrinsic motivation and enormous commitment of our colleagues. Together, we make sure that the lights stay on, that homes are heated and that businesses can carry on operating. We are proud of those achievements and warmly thank all our colleagues for their efforts.
Alliander Management Board, 6 March 2023
Left to right: Maarten Otto (CEO), Marlies Visser (COO), Walter Bien (CFO), Daan Schut (CTO)