Collaboration between Enexis, municipalities and contractors is crucial for accelerating the energy transition

In the first half of 2024 Enexis spent € 654 million on its grids, an increase of 18%. This has resulted, among other things, in 1,020 megawatt newly built transmission capacity for customers. This equals twice the total capacity of the city Eindhoven. The introduction of flex contracts with large-volume business customers, enabled Enexis in this period to connect more customers to its grids. Despite these efforts, the demand for transport capacity continues to grow faster than Enexis can build. Enexis is not only being confronted with the maximum capacity of its grids, but also the available physical space to build and the shortage of technical employees form an increasing challenge. This means that customers have to wait longer for a connection. This is set out in Enexis’ interim report, which was published today.

Pressure on the low-voltage grid is increasing

To be able to continue to serve as many customers as possible, we are pushing the limits of our grid. We strive to make maximum use of our grids. The downside of this is that the likelihood of an overload of our electricity grid is increasing, resulting in more power outages. The average electricity outage time amounted to 12.8 minutes in the first half of 2024 (first half of 2023: 11.2 minutes). With a reliability of 99,995%, our grid remains one of the most reliable grids in the world. In the first half of 2024, we also saw increasing pressure on the low-voltage grids in residential areas. Due to the unabated growth of solar panels, we see a structural increase in voltage problems at households. Especially in the spring and the early summer, so much electricity is being produced that this leads to a grid overload and power outages in more and more locations. We need to take emergency measures more and more often to avoid outages. For instance, sometimes on sunny or windy days, solar parks and wind farms have to be switched off to avoid a grid overload.

District approach

We aim to solve the problems on the low-voltage grid in the long term by expanding or upgrading the electricity grid district for district using the district approach. To this end, the first municipalities have signed collaboration agreements with Enexis. Han Slootweg, COO of Enexis: “Enexis, in collaboration with municipalities and contractors’ partners, will renovate the electricity grid district by district. Over the next three years Enexis plans to install more than 6,800 kilometres of cables and about 4,100 transformers for the largest renovation of our electricity grid ever. To achieve this, we must work closely with municipalities on spatial planning. Enexis will start with the districts where the urgency is the highest and where we can start working quickly with our contractors.” Recently, Enexis published an initial planning of the district approach to provide customers with clarity on when their district will be addressed. During the renovation, Enexis aims to minimize inconvenience and ensure the continuity of energy supply.

Spatial integration of infrastructure

The renovation of the electricity grid demands a lot of space both under and above ground. This is a formidable task in a time in which there are already many other spatial challenges for municipalities and provinces. Spatial integration problems result in delays in the building of infrastructure. Consequently, a proactive approach together with municipalities is essential to accelerate this process. By working together in locating land, streamlining permit procedures, and adapting regulations, we can overcome these obstacles. Enexis aims to sign collaboration agreements with as many municipalities as possible in the coming months to make agreements on the necessary measures.

Capital expenditures continue to grow

Capital expenditures increased further in the first half of 2024, mainly as a result of expansion and upgrading of the electricity grid. Due to these strong investments, the cash flow from operational
activities and investments is € 286 million negative in the first half year of 2024 (2023: €240 million negative). To finance investments, we issued the fourth green bond of €500 million in May 2024. With the proceeds of this bond, we can continue to invest in the urgently required expansion and upgrading of our grid. Enexis’ credit ratings are very strong. The long-term credit rating at Standard & Poor's was revised in the beginning of 2024 from A+ with a positive outlook to AA- with a stable outlook. Our credit rating at Moody’ has remained unchanged (Aa3 with a stable outlook).

Net profit over the first half of 2024 amounted to € 122 million. This is €107 million higher than in the same period last year. The purchasing costs in connection with grid losses rose significantly in the first half of 2023 due to the strong increase in energy prices. These higher costs were not fully recouped in the tariffs in 2023. The tariffs are now more in balance with the costs in 2024, also due to the new method decisions that the Netherlands Authority for Consumers & Markets (ACM) published on 23 December 2023 following the decision of the Trade and Industry Appeals Tribunal (CBb).