Our mission, strategy and value creation
As a grid operator, we have an essential role and a major responsibility. We are driven by our desire to ensure that all of the Netherlands and a large part of Germany have a reliable, sustainable, secure and affordable electricity supply. This is part of our mission.
Security of supply
Security of supply is our biggest concern. We consider it is more reliable for our grid to be linked to the North West European (NWE) network, than having a stand-alone grid. Encouraging this integration of the European market, and facilitating its evolution, is a core part of our vision. This is particularly important as more and more renewable energy flows into the grid. It makes the market more complicated to manage and design, requiring more innovation and cross-border collaboration.
To succeed in our mission, we developed a strategy which runs until 2020. This is also the strategy we will report on in this Annual Report. At the time of publication, we are working on a recalibration of our current strategy for the coming years. Our business has reached a point where we need to pivot and embark on a new dimension of development and innovation. We arrive at this juncture in our 20th year – an ideal moment to take stock, re-energise and challenge ourselves to scale new heights. In the Annual Report 2019 we will go into more detail on what this will entail for TenneT.
Our overarching objective in 2018 is to deliver value for our stakeholders and we aim to realise this through four strategic goals:
This report is structured following these strategic goals. To help us realise these goals and fulfil our mission, we have set seven strategic priorities.
Enhance the flexibility and resilience of our transmission grid to ensure security of supply
To manage the rapid rise of renewable energy sources, improve our ability to balance power, ensure continuous voltage control and relieve grid congestion, we apply market-based solutions that improve supply and demand flexibility. We will also use software and possibly hardware solutions, such as developing storage technology.
Advance the use of data and analytics
To gain insight into the renewables feeding into the grid and improve our forecasting to ensure security of supply, we are collecting and enriching electricity and electricity-related data, which will also help us drive market integration.
Drive integration of the NWE electricity market
We work closely with other TSOs on various topics, including market design, market coupling and regional security centres, to drive the further integration of the NWE electricity market.
Anticipate and address what society wants and needs through dialogue and innovation
We actively engage with society and respond to society's needs and concerns with innovative developments such as transmitting electricity underground and dynamic line rating.
Maintain access to capital markets and equity capital
The size of our investment programme requires ongoing financing and, given the timing and regulatory uncertainties, it also requires flexible access to equity.
Pursue operational excellence
We optimise the efficiency of our capital expenditures (capex) and operational expenditures (opex) through smart investment solutions and keeping operating costs low.
Pursue organisational excellence
We do this by creating a performance culture, organisational flexibility and best-in-class safety performance.
To see whether we are on the right track with our strategy, we started with the project: 'Make Strategy Work'. The goal of this project is to develop a KPI framework for our strategic priorities and strengthen the KPI governance and monitoring. This way we are able to make qualitative improvements and reduce undesired spending when it comes to less or non-effective strategic efforts. The KPI framework is still being developed and will be further implemented in 2019.
TenneT plays a vital role in society. Our work makes a fundamental difference to the people living and working in the areas we serve and involves a wide range of stakeholders. These include our shareholder, local communities, our employees, regulators, investors, NGOs, politicians, the media, customers, suppliers and other European TSOs.
Because we operate in a stakeholder arena with many different, sometimes conflicting, interests at play, it is important to maintain a relationship with stakeholder groups and see where and how we can deliver value. Creating acceptance and understanding for what we do within the highly complex and relevant energy sector is therefore important to us. We need to properly understand each party’s expectations and be able to update them on our activities, inform them of our plans and address their concerns as best and as early as we can. As our range of stakeholders is very diverse, we need to consider each group’s questions, concerns and needs separately. This diversity requires a proactive and coordinated approach to stakeholder management and communication – which we take seriously.
Our culture plays an important role in our activities. As such, we strive to hold ourselves to the values of quality and integrity.
Quality requires the highest standards of safety in everything we do.
Integrity means being open, honest and respectful in the way we serve society, particularly local communities, partners and employees.
The TenneT brand is built on our brand values, a commitment to be responsible, engaged and connected. This is our promise to the outside world, describing how we serve our stakeholders and how we want them to see us.
Measuring and monitoring
To know if we are on the right track and whether we should continue or maybe change the way we work, we measure and monitor our performance, and the perception thereof, on a regular basis. We test opinions and sentiments by conducting stakeholder satisfaction surveys – with employees and customers – and we also monitor and analyse our media exposure, and make a real-time analysis of social media.
Value creation model
Our stakeholders play a central role in our long-term value creation. The interactive value creation model summarises the input we use and the added value we create for our stakeholders through our key activities. Furthermore, all the elements in our interactive value creation model are linked to the respective sections of this report which provide further details on each element.