TenneT made record grid investments of almost €8bn in 2023 as its looks to expand, strengthen and modernise critical onshore and offshore electricity infrastructure.
According to the company’s results for 2023, the €7.7bn total is 70% higher than in 2022. Broken down by country, €2.9bn was invested in the Netherlands and €4.8bn in Germany.
The sharp increase in investments in 2023 is due to higher investments in onshore and offshore grid expansions, such as the 2GW Programme. TenneT’s 10-year investment plan for the period 2024-33 adds up to €160bn.
In addition, the grid operator saw underlying EBIT of €1.8bn, up 50.2% year on year.
However, revenues decreased by €0.6bn to €9.2bn, driven by the decline in ancillary service costs.
These originate in lower market prices for costs incurred by TenneT, to compensate for grid losses, to maintain the energy balance in the grid, and to pay for alternative electricity routes in case of congested or unavailable grid sections.
The Dutch state provided €1.6bn to cover the country’s grid funding requirements and a loan facility of €25bn, safeguarding planned investments in the Netherlands and Germany for 2024 and 2025 and bridging the time to completion of the sale of TenneT Germany.
TenneT chief executive Manon van Beek said: “Increasing electrification continues to drive a strongly growing demand for transmission and connection capacity. TenneT is doing all it can to increase grid capacity by placing great emphasis on speed and delivery of our growing investment portfolio translated into hundreds of projects.
“Our focus is primarily on build, build, build. In doing so, we must ensure realism and transparency in feasibility, delivery, and affordability. This will have an impact on timing and execution. TenneT’s investments in in the grid are not just about affordability today; they are about long-term affordability and energy security for households and a competitive industry.”
He added: “As we strive together to create a climate neutral and affordable energy system by 2045, the road towards the green energy future that we all desire is not straight, smooth, or clearly signposted. However, it is a journey TenneT is fully prepared for and, although there is a need for realism, our plans show the required grid expansion to reach climate neutrality can be achieved in time to meet our national and Europe’s climate goals and to ensure energy security and competitiveness.”
TenneT chief financial officer Arina Freitag said: “To achieve a futureproof energy system for a competitive and climate neutral economy halfway through this century, we must sustain investment momentum. Balancing economic efficiency, sustainability and a high level of grid availability expected by our end-customers in the Netherlands and Germany, requires a massive grid expansion.”