TenneT Holding B.V.
Integrated
Annual Report
2023
Energising today
and tomorrow
Key figures 2023
99.99993% Target: 99.99962%
Onshore grid availability
Grid availability
80%*
Internal Engagement Index
7.8**
Reputation survey
33%
Environmental impact
% Greened of our carbon footprint (location-based)
1,709 Target: 1,386
Healthy financial operations
Adjusted underlying EBIT group (in EUR million)***
4.5 Target: 4.3
Safe workforce
TRIR group (including contractors)
32% 11%
Target: 30%
1
Target: 10%
2
Diverse workforce
1
% female inflow of total inflow
2
% non-Dutch / non-German hires
5.8% Target: 4.2%
Satisfied capital providers
ROIC group (%)***
7,730 Target: 6,278
Future proof grid
Investments (in EUR million)
12.2 GW Target: 11.5 GW by 2023, 43.1 GW by ~2030
Offshore grid connection capacity
Offshore capacity in operation (in GW)
NL 3.9, DE 3.4
Healthy workforce
Absentee rate the Netherlands and Germany
11.6% Target: 8.5%
Safeguarded capital
structure
Adjusted FFO/Net debt (%)***
* The latest employee survey was performed in 2021. In 2023, we decided to update the way we monitor this and will report accordingly in our next annual report.
** Our reputation survey is executed every 2 years. The most recent survey was performed in 2022.
*** Reference is made to the chapter ‘Safeguard sustainable financial performance’.
Overarching indicators
Secure supply today and tomorrow
Drive the energy transition
Energise our people and organisation
Safeguard our fi nancial health
2
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
Key figures 2023
99.99993% Target: 99.99962%
Onshore grid availability
Grid availability
80%*
Internal Engagement Index
7.8**
Reputation survey
33%
Environmental impact
% Greened of our carbon footprint (location-based)
1,709 Target: 1,386
Healthy financial operations
Adjusted underlying EBIT group (in EUR million)***
4.5 Target: 4.3
Safe workforce
TRIR group (including contractors)
32% 11%
Target: 30%
1
Target: 10%
2
Diverse workforce
1
% female inflow of total inflow
2
% non-Dutch / non-German hires
5.8% Target: 4.2%
Satisfied capital providers
ROIC group (%)***
7,730 Target: 6,278
Future proof grid
Investments (in EUR million)
12.2 GW Target: 11.5 GW by 2023, 43.1 GW by ~2030
Offshore grid connection capacity
Offshore capacity in operation (in GW)
NL 3.9, DE 3.4
Healthy workforce
Absentee rate the Netherlands and Germany
11.6% Target: 8.5%
Safeguarded capital
structure
Adjusted FFO/Net debt (%)***
* The latest employee survey was performed in 2021. In 2023, we decided to update the way we monitor this and will report accordingly in our next annual report.
** Our reputation survey is executed every 2 years. The most recent survey was performed in 2022.
*** Reference is made to the chapter ‘Safeguard sustainable financial performance’.
Overarching indicators
Secure supply today and tomorrow
Drive the energy transition
Energise our people and organisation
Safeguard our fi nancial health
* These sections reflect the director's report as mentioned by Part 9 of Book 2 of the Dutch Civil Code.
** These sections reflect the Other Information as required by Part 9 of Book 2 of the Dutch Civil Code.
Subject of this page
In this
year’s
report
At a glance 2023 4
Letter from the board 6
Energising today and tomorrow 6
Future Forward: a potential sale
of TenneT Germany 10
About TenneT* 12
Profile 12
How we create value 21
The supply chain of TenneT 24
Our performance 2023* 30
Deliver a high security of supply 30
Ensure critical infrastructure for society 38
Create a safe and inspiring workplace 49
Create value to transition to a climate-neutral economy 56
Safeguard sustainable financial performance 67
Solve societal challenges with stakeholders and through
partnerships 74
Statements of the Executive Board 81
The Executive Board 82
Supervisory Board Report 83
Remuneration policy 90
Board remuneration 92
Corporate governance* 98
Corporate governance structure 98
Compliance and Integrity 101
Corporate risk management and Internal control 102
Risk appetite 103
Key risks and opportunities 105
Financial statements 111
Consolidated financial statements 112
Notes to the consolidated financial statements 119
Company financial statements 186
Other information 192
Profit appropriation** 192
Independent auditor’s report** 193
Limited assurance report of the independent auditor 202
About this report 205
EU Taxonomy disclosures* 213
Glossary 220
SWOT Analysis 226
Key figures: five-year summary 227
Company addresses** 228
Colophon 229
Disclaimer 229
Disclaimer PDF print – Statement – This copy of the Integrated Annual Report of TenneT Holding B.V. for the year 2023 is not in the ESEF-format as
specified by the European Commission in Regulatory Technical Standard on ESEF (Regulation (EU) 2019/815). The ESEF reporting package is available at
https://www.tennet.eu/company/investor-relations/financial-reports/ In case of any discrepancies between this ‘printed version’ and the ESEF reporting
package, the ESEF reporting package prevails.
Integrated Annual Report 2023 - TenneT Holding B.V.
3
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
At a glance 2023
Three offshore grid
connections ready 
The Dutch grid connections for
offshore wind farm Hollandse
Kust (noord) and Hollandse Kust
(west Alpha) are offi cially ready for
commissioning. In Germany, TenneT
has commissioned the 900MW
DolWin6 offshore grid connection,
bringing the total transmission capacity
in the North Sea to 12.2 GW in total.
Announcement of LionLink
TenneT and National Grid Ventures
announced plans for a fi rst-of-its-
kind electricity link that will connect
offshore wind energy between
the Netherlands and the UK.
LionLink could connect Dutch
wind farms to the electricity grids
of both countries via a subsea
high voltagecable, called a multi-
purpose, orhybrid,
interconnector.
Building the green
powerhouse in Europe
TenneT awarded framework agreements
regarding our 2GW project, which includes
building onshore and offshore converter
stations as well as transport and
installation of the offshore platforms.
The aim is to deliver the fi rst fourteen
2 GW offshore grid connection systems
until 2031, six to Germany and eight
to the Netherlands.
Work begins on key
North-South DC
connections SuedLink
andSuedOstLink
After an extensive planning and
approval phase, the construction of
SuedLink and SuedOstLink,
two key projects inGermany’s
energytransition, has started.
Solid
fi nancing position
In June 2023, the Dutch state
has provided EUR 1.6 billion to cover
the funding requirements of the Dutch
part of TenneT. TenneT and the Dutch
state have made arrangements in 2024
regarding a temporary shareholder loan
facility of EUR 25 billion, safeguarding
our planned investments in the
Netherlands and Germany
for 2024 and 2025.
At a glance 2023
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
4
At a glance 2023
Three offshore grid
connections ready 
The Dutch grid connections for
offshore wind farm Hollandse
Kust (noord) and Hollandse Kust
(west Alpha) are offi cially ready for
commissioning. In Germany, TenneT
has commissioned the 900MW
DolWin6 offshore grid connection,
bringing the total transmission capacity
in the North Sea to 12.2 GW in total.
Announcement of LionLink
TenneT and National Grid Ventures
announced plans for a fi rst-of-its-
kind electricity link that will connect
offshore wind energy between
the Netherlands and the UK.
LionLink could connect Dutch
wind farms to the electricity grids
of both countries via a subsea
high voltagecable, called a multi-
purpose, orhybrid,
interconnector.
Building the green
powerhouse in Europe
TenneT awarded framework agreements
regarding our 2GW project, which includes
building onshore and offshore converter
stations as well as transport and
installation of the offshore platforms.
The aim is to deliver the fi rst fourteen
2 GW offshore grid connection systems
until 2031, six to Germany and eight
to the Netherlands.
Work begins on key
North-South DC
connections SuedLink
andSuedOstLink
After an extensive planning and
approval phase, the construction of
SuedLink and SuedOstLink,
two key projects inGermany’s
energytransition, has started.
Solid
fi nancing position
In June 2023, the Dutch state
has provided EUR 1.6 billion to cover
the funding requirements of the Dutch
part of TenneT. TenneT and the Dutch
state have made arrangements in 2024
regarding a temporary shareholder loan
facility of EUR 25 billion, safeguarding
our planned investments in the
Netherlands and Germany
for 2024 and 2025.
Maarten Camps and
Kuldip Singh join
Supervisory Board ofTenneT
With effect from 1 September 2023,
Maarten Camps and Kuldip Singh
were appointed by caretaker Finance
Minister Sigrid Kaag as members of
TenneT's Supervisory Board. Both were
nominated by the Supervisory Board
of TenneT Holding B.V. Laetitia Griffi th’s
appointment term as Supervisory
Board member ends after more than
eight years.
New electricity highway
connections in operation
TenneT has completed the
approximately 140 kilometres
long Westküstenleitung from
Brunsbüttel via Heide to the
Danish border. Furthermore,
we completed Ganderkesee-
St.Hülfe and commissioned a
new40 kilometre high-voltage
connection between Eemshaven and
high-voltage substation Vierverlaten.
Announcement
Target Grid
TenneT has announced
its Target Grid, TenneT’s
vision of an integrated,
onshore and offshore,
cross-border electricity
grid, which is crucial to
the climate-neutral energy
system in 2045.
1,402 new employees
In 2023, TenneT attracted
1,402 new employees with different
nationalities and backgrounds of which
32% are female, growing to a workforce of
over 8,300. The growth of the company's
workforce is necessary, as the energy
transition signifi cantly impacts our
people’s workload. The war on talent is
persistent, also at our contractors
and suppliers.
Clean and
emission-free future
Emphasising CO
2
reduction, TenneT
targets powering all its contracted
factories with green electricity by 2030 via
Power Purchase Agreements (PPAs). In 2023,
TenneT engaged with a polyethylene (PE) supplier
for cable manufacturers. Their focus includes
three CO
2
-reducing approaches: mechanical
recycling, scaling a pilot plant for chemical
recycling, and exploring challenges in
supplying biobased feedstock.
Grid congestion in
theNetherlands requires
far-reaching measures
The ever-increasing pace
of demand for additional
transmission and connection
capacity is exceeding the
speed at which grid operators
can expand the electricity grid.
Grid operators signal that the
access to the electricity grid
will come under further pressure.
Together with stakeholders and
thegovernment action and
far-reaching measures were
announced to avoid congestions.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
5
Energising today and tomorrow
The year 2023 has shown us that international, societal, economic and political stability is
under pressure. Running an organisation in ambiguous times is the new normal. The war in
Ukraine, the Israeli-Palestinian conflict, the economic downturns and rising cost of living
created widespread uncertainty. For TenneT, as we strive to create a reliable carbon-neutral
energy system in 2045, it proved to be a year with many dimensions. It is clear that the
roadmap towards sustainable prosperity is not linear nor clearly signposted. However, it’s a
journey TenneT is prepared for and, although there’s a need for realism, we have concrete
plans based on a vision of the energy system in 2045 for the required grid expansion in
Germany and the Netherlands. Focus on execution is key to achieve national and European
climate goals.
Reliable, affordable and sustainable
As we work towards these targets, TenneT continued
to fulfil its responsibility for grid availability, reaching
99.99993% in 2023. Looking at 2024 and beyond, a
supply-secure and independent electricity system that is
affordable, reliable and sustainable, remains the ultimate
balance to achieve. This requires strong leadership, a
collaborative mindset and a consistent energy policy that
enables the whole energy sector to grow and make the
needed investments. Affordability, as part of the energy
trilemma, is gaining importance and center of the societal
debate on energy transition. TenneT also attaches great
importance to the affordability of the future energy system,
which translates, for example, into forward-looking and
smart strategies such as Target Grid that allows a
programmatic approach, standards and more efficiencies in
the expansion of the grid.
Safety needs our energy
Especially in these times of steeply growing investments,
working safely and always feeling safe to address
colleagues and partners and to be addressed on safety are
paramount company values. Safe operations and safety for
the environment in which we work, and all stakeholders
involved in our many projects are number one at TenneT.
Realising the necessary expansions to our grids as soon as
possible can never compromise safety. Although we have
made good strides in 2023, safety continues to require 100
percent attention. TenneT's Total Recordable Incident Rate
(TRIR) is stagnating and does not match our ambition of
Letter from the board
Letter
from the
board
Executive Board (fltr): Tim Meyerjürgens, Chief Operating Officer - Manon van Beek, Chief Executive Officer,
Arina Freitag, Chief Financial Officer - Maarten Abbenhuis, Chief Operating Officer
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
6
achieving 'Zero Harm' among all our employees and all our
contractors and subcontractors. Our clear life-saving rules
were too often violated, leading to high-risk incidents. Since
our efforts are aimed at achieving a situation where people
always adhere to the Life-Saving Rules, we will put more
emphasis on better and faster root cause analyses to learn
and improve from reported violations of the Life-Saving
Rules.
Our vision in action
To achieve an electricity grid that enables a reliable climate-
neutral energy system in 2045, we need to work, think and
act differently. The task before us is feasible, but it will not
be achieved by working in the same way as we have done
before, by identifying short-term bottle necks in the system
and solving them step by step or project by project. Our
Target Grid 2045 strategy, which TenneT launched in April
2023, gives us a clear, common goal: an electricity grid that
must be ready by 2045 for an energy secure and
independent electricity system. Based on internationally
agreed scenario’s and using a back-casting approach we
already know most of what must happen. It also allows us
to start the crucial preparations now – there’s no time to
lose. In line with wider European politicy plans, Target Grid
envisages the North Sea as the primary source of energy
using offshore wind as the green powerhouse for the
Netherlands, Germany and other European countries.
One of the key innovations needed to realise this offshore
energy ambition is hybrid interconnection. Together, these
interconnectors form a meshed high voltage direct current
(HVDC) infrastructure that can connect offshore wind farms
to energy markets in multiple countries. This approach will
strengthen security of supply and European energy
independence, and make the future energy system more
resilient, efficient and affordable. TenneT’s world-first 2GW
standard for HVDC offshore connections is a crucial
innovation that enables this, allowing larger wind farms to
be connected to the grid with fewer platforms.
Letter
from the
board
Over the past year, constructive discussions have taken
place between TenneT and KfW, acting on behalf of the
German state, with close involvement of the German
state and the Dutch state as TenneT’s sole shareholder.
To the date of this letter, no agreement has been
reachedyet on the potential sale of German activities.
TenneT and KfW continue their discussions in the
coming period, however it is not certain that a deal will
be reached. In 2024, TenneT and the Dutch state have
made arrangements regarding a temporary shareholder
loan facility of EUR 25 billion, safeguarding our planned
investments in the Netherlands and Germany for 2024
and 2025. The loan facility, which will be granted at
market conditions, is subject to a customary
parliamentary approval process, which is currently in
progress. Further reference is made to the section
“FutureForward:a potential sale of TenneT Germany”.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
7
The first 2GW platforms to be installed in the period until
2031 will be hybrid ready: this means that they are already
designed as a hub to be connected to the meshed offshore
HVDC grid of the future. Target Grid and our 2GW Program
are examples of exponential, unconventional, future-ready
thinking. This is a shift from linear to non-linear thinking,
planning and developing, which no longer fits the huge task
that we, together with society, need to accomplish. Our
next challenge and task is to standardise this way of
thinking and working in everything we do.
“More speed is needed
to expand the
electricity grid.”
Focus on executing our projects
We invested EUR 7.7 billion in 2023 and this was more than
we planned for, mainly due to investments regarding the
2GW Program. Our focus on our promise to speed up our
construction pipeline, on land and at sea, is bearing fruit,
with significant progress in 2023. After years of preparations
in Germany, we started constructing the two crucial
north-south HVDC corridors, SuedLink and SuedOstLink –
each over five hundreds of kilometres long. During the year,
we also completed the 140 kilometre long
Westküstenleitung, the 61 kilometre long high-voltage
connection Ganderkesee - St. Hülfe and, in the
Netherlands, we completed a 40 kilometre electricity
highway between Eemshaven and Groningen. Our work is
also accelerating offshore. TenneT completed new grid
connection systems for large offshore wind farms,
Hollandse Kust (noord) and Hollandse Kust (west Alpha)
(both 700 MW) and DolWin6 (900 MW). Research into the
feasibility of two new submarine interconnectors, one
between the Netherlands and the United Kingdom
(LionLink), and the other from Germany to Norway, were
announced. These interconnections are particularly
significant as they will have a hybrid function, connected to
offshore wind farms along the way. This is the tangible start
of a European HVDC grid, part of Target Grid.
The hugely accelerated electrification of society is a
positive sign of the energy transition, but it also leads to
long waiting times to be connected, especially at our
regional 110-150 kV grids in the Netherlands. Unfortunately,
this will remain a critical situation for the time being.
Through the National Grid Congestion Action Plan (LAN),
grid operators and government are working closely together
to solve grid congestion through a combination of faster
permitting and construction, better utilisation of existing
infrastructure and by relying on parties to make contracted
flexibility available to others.
Due to persistent numerous bottlenecks in the German
onshore electricity grid, power from large wind farms in the
North Sea must increasingly be scaled back. More speed is
therefore needed to expand the electricity grid, for example
by building electricity highways.
Looking ahead the European energy transition is unfolding
at pace. We anticipate our investments to add up to
approximately EUR 160 billion in the coming ten years and
will reach at least EUR 10 billion in 2024. For the period until
2045, TenneT plans to construct over 4,800 kilometres of
new grid connections on land and at sea in Germany, and
2,500 kilometres in the Netherlands. This requires hundreds
of new transformers and dozens of new high-voltage
substations. As we build an integrated offshore grid, our
current onshore grid will also expand significantly. Space to
develop energy infrastructure should be reserved by
regional and national governments as soon as possible.
Offshore wind is a key electricity source in Europe’s
decarbonisation plans. The first Offshore Network
Development Plan in the North Seas envisages 320 GW of
installed wind power by 2050 in the North Seas Energy
Cooperation (NSEC) countries and host country, the United
Kingdom. TenneT's share of this is envisaged at
approximately 70 GW in the Netherlands and roughly
between 30 and 40 GW in Germany. TenneT alone is
committed to connecting over 40 GW of offshore wind in
the Netherlands and Germany.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
8
Working together by definition
The unprecedented long-term framework agreements
that TenneT signed with key suppliers in 2023 to develop
HVDC infrastructure are a prime example of intense and
far-reaching cooperation. These agreements entail grid
connection systems (cables, converter stations) for our
offshore 2GW Program, and power transformers and
compensation coils to build and modernise substations
on land. With these agreements worth tens of billions of
euros, new economies of scale and technical
standardisations can be achieved.
These are also examples of exponential, unconventional
thinking and acting. With these, TenneT secures capacity
with suppliers and ensures timely delivery of crucial
components. The framework contracts provide our
suppliers with the certainty and predictability they need to
invest in the additional resources needed. This long-term
certainty is also critical for TenneT, as we compete in an
energy market tightened by a shortage of suppliers, talent
and resources.
Close to society and our people
To achieve the energy transition, we want to take all
stakeholders with us on this journey: governments on
various levels, suppliers, NGO’s, industries and all citizens.
This year more than ever before we have noticed that
citizens are mostly supportive of the need for climate action,
but when TenneT becomes active in their local area, we
encounter more resistance. Of course, we understand that
our large projects can have a significant impact on the living
environment. But we also cannot escape the reality that we
need to expand our electricity grids to maintain security of
supply and facilitate sustainable growth for society. We face
increasing negotiations with provinces, local residents and
time-consuming legal procedures.
This also presents a task for TenneT. To improve mutual
understanding, ensure timely decision-making and create
support for our work, we have significantly increased our
communication and cooperation efforts with local and
regional stakeholders. In 2023, we held well over 1,000
meetings with our stakeholders.
Our great thanks go to all our stakeholders for working
together in 2023: very good and open cooperation where
possible, critical where necessary and always with the
energy transition in sight. Our firm belief that we will only get
there, if we all get there is starting to gain traction. We
wholeheartedly thank all our partners and our 8,336 internal
and external employees of more than 70 different
nationalities for their courage, connection and ownership
that led to our achievements in 2023 that we can be proud
of. They really energise today and tomorrow and work
tirelessly to maximise the utilisation of our existing assets,
increase our grid capacity and develop a reliable climate-
neutral energy system by 2045 that supports a prosperous
future for people and businesses.
A wholehearted thank you!
On behalf of TenneT's Executive Board,
Manon van Beek (CEO)
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
9
Future Forward: a potential sale
of TenneT Germany
For already 25 years, TenneT has built, maintained and operated the high-voltage electricity
grid with the highest level of grid availability, while fulfilling our legal investment obligations to
prepare the grid for a climate-neutral energy system.
In 2010, TenneT further boosted the integration of the
European electricity market by combining Dutch and
German activities and becoming the first ever cross-border
TSO. Since, TenneT has become one of the largest
investors in offshore wind connections and taking a leading
role in the European energy transition. At the same time, the
political developments and rapid acceleration of the energy
transition in the last few years require an extraordinary
amount of capital investments, e.g. to fund grid expansion
projects or new offshore grid connection systems. These
capital investments are partly covered by (green) debt
financing and partly by shareholder equity. In addition to
this, both the German and Dutch governments have
indicated their preference to control, own and fund, (only)
their own national electricity infrastructure. Acknowledging
this, TenneT has started to explore different scenarios that
would answer to both needs.
Start of negotiations and conditions
In February 2023, TenneT started to explore the potential
sale of German activities to the German state. This sale
would not only secure the national funding for the extensive
investment programme in both countries, but also create
two strong national players that could continue to work
together to drive forward the energy transition. Over the
past year, constructive discussions have taken place
between TenneT and KfW, acting on behalf of the German
state, with close involvement of the German state and the
Dutch state as TenneT's sole shareholder. The Dutch
government supports the sale of German activities,
provided that 1) the continuity of business is guaranteed;
2) key synergy benefits are preserved; and 3) it is on a
market-based price that reflects the value of the company.
Current status and reporting implications
To the date of this report, no agreement has been reached
yet on the potential sale of German activities. TenneT and
KfW continue their discussions in the coming period,
however it is not certain that a deal will be reached. TenneT
considers that it is highly probable that a transaction will be
concluded in 2024. In the consolidated financial statements
the IFRS 5 ‘Assets held for sale’ standard is applied, which
implies that the German activities are no longer continued
per 31 December 2023. Next to the financial statements,
the Integrated Annual Report is not affected.
Until a final decision is made, TenneT continues to operate
as one integrated company. Our unique growth agenda as a
TSO, to meetDutch and German national andEurope’s
climate targets, is an indication of the substantial work that
still needs to be done.
Loan facility
While the negotiations on the sale of TenneT Germany
continue, so does our work regarding large-scale grid
expansions onshore and offshore. To realise our planned
investments, we need to have funds readily available.
For this, TenneT and the Dutch state have made
arrangements in 2024 regarding a temporary shareholder
loan facility of EUR 25 billion, safeguarding our planned
investments in the Netherlands and Germany for 2024 and
2025. The loan facility, which will be granted at market
conditions, is subject to a customary parliamentary approval
process, which is currently in progress.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
10
In May 2023, TenneT secured a sustainability-linked term
loan facility with a consortium of banks of EUR 8 billion with a
term of 2.5 years. In addition, in June 2023, the Dutch state
provided EUR 1.6 billion to cover funding requirements for
TenneT’s investments in the Netherlands. This contribution
and loan facilities enable us to continue doing our work, while
continuing the negotiations on the potential sale.
Disentanglement of the organisation
To prepare for a potential disentanglement of our
organisation, in May 2023 TenneT has started to identify
what changes are required on an organisational level.
Always taking into account both the Dutch and German
perspective, we worked together in workstreams to identify
potential risks in case of a split and prepare for a future in
which we would operate as two national entities. These
preparations are necessary to ensure a smooth transition
later on, but in no way interfere with the execution of our
investment agenda on full speed.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
11
About
TenneT
Profile
With over 25,000 kilometres of high-voltage connections both onshore and offshore,
our role as a Transmission System Operator (TSO) is to ensure a secure supply of
electricity to over 43 million end-users, in the Netherlands and a large part of
Germany, and to create the infrastructure needed to secure supply today and
tomorrow.
Our core tasks
Our primary tasks are to provide power transmission
services, system services and facilitation of the electricity
market. These tasks follow from our role as grid operator
under the Dutch and German energy laws, the
‘Elektriciteitswet’ (E-wet) and the German
‘Energiewirtschaftsgesetz’ (EnWG).
Transmitting electricity
Power transmission services mean that our role is to
transmit electricity via our electricity grid. This is the
backbone of the electricity supply system. We transmit
electricity from where it is generated by other parties, either
on land or at sea or imported from other markets. Electricity
is transmitted to our customers via our high voltage grid,
being 110 kV and higher in the Netherlands and 220 kV and
higher in Germany. As electricity is often generated far away
from where it is used, we need to transmit it over large
distances without incurring major losses on the way. To
achieve this, we transmit electricity at very high voltages.
System services
System services refers to our role in carefully managing the
balance between the supply and demand of electricity and
to keep the frequency at a constant level (50 Hertz). To do
this, we have control centres in the Netherlands and in
Germany, where supply and demand are monitored and
controlled 24 hours a day, seven days a week providing
security of supply.
Market facilitation
In addition, we ensure that European electricity markets are
set up in an efficient manner, enabling a liquid market where
consumers can rely on security of supply at an affordable
price. To this end, we build and operate for instance
interconnections (such as NorNed, NordLink, BritNed and
the COBRAcable), to create possibilities to import and
export electricity. We also work together with other
European TSOs and electricity markets to guarantee grid
reliability and to balance supply and demand across borders
and markets.
About TenneT*
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
12
Driving the energy transition
The energy system is increasingly dependent on renewable
sources. But renewables are, by nature, intermittent – the
sun does not always shine and the wind does not always
blow. This calls for a change in the system. TenneT, together
with its stakeholders, is working to adress these challenges,
for example with the battery-storage of electricity to
safeguard the balance between supply and demand in the
future. We build grids that integrate new energy sources
and unlock flexibility, both onshore and offshore.
Our role in Europe
By 2050, Europe aims to become the world's first climate-
neutral continent. TenneT, along with European
governments and other energy parties, are key to making
this ambition a reality. In the transition to a climate-neutral
continent, the transition of the electricity system is an
important element to ensure that society has a sustainable
supply of energy. Governments in the areas we serve have
formulated ambitions to support Europe’s climate targets,
with the German government aiming for climate neutrality in
2045 and the Dutch government in 2050.
As a key player in the energy market, we strive to share our
insights to integrate and switch to more renewable energy
sources to power society, while aiming to ensure that we
are able to keep the lights on at all times. We are making
sure that both offshore and onshore electricity can be
integrated into the grid properly, for example by reinforcing,
renewing and greatly expanding our network. To reach
these goals, we launched our Target Grid vision, the picture
of our electricity grid, needed to operate a climate-neutral
energy system in 2045. More information on this can be
found on page 18.
TenneT is one of Europe’s largest investors in national and
cross-border electricity transmission capacity on land and
at sea, bringing together the Northwest European energy
markets and efficiently unlocking large-scale renewable
electricity sources. We collaborate with a wide range of
partners in the energy market to develop and apply new,
smart technologies and to contribute to the energy
transition in the future.
Key developments in the environment we
operate in
The urgency and complexity of tackling climate change
means that TenneT operates in a challenging context that is
continuously developing. We see the following
developments that affect us:
Climate change and the energy transition
Climate change is one of the most urgent and complex
societal challenges of our times, of which many scientists
explain the increased occurrence of weather extremes as
being caused by climate change. To mitigate the most
adverse impacts of climate change, governments are
stepping up their climate ambitions to build a net zero
economy by 2050. To accommodate this, we are
redesigning the current energy system and how we operate
it, planning ahead and building a climate-neutral energy
system. Changing weather and climate patterns, such as
storms, floods and droughts, can also affect our
transmission system, which needs to be more resilient to a
variety of different external circumstances.
Scarcity of resources
A key development and challenge we foresee as we drive
the energy transition is the availability of key resources, such
as raw materials, manufactured components and qualified
staff. In the market, there is an increased demand related to
the energy transition, which could lead to a shortage of
materials, most notably aluminium, copper and steel, as
well as manufactured products, such as components for
HVDC (high-voltage direct current) systems. There are some
expectations that at the end of this decade, the supply of
scarce resources is not able to meet demand. That is why
we are investing in long-term contracts with our partners to
safeguard our needs for materials. We are also collaborating
with them to achieve our circular ambition. As regards the
scarcity of human capital, difficulties in the labour market
are visible in many more sectors in the recent years. A
shortage of available staff at all levels is becoming more
challenging, and this has an impact on TenneT as we strive
to fulfil our critical investments for the energy transition. In
general, scarcity of resources may cause project delays and
rising costs and in the broader context sustainability goals.
Higher costs of materials and energy
In 2023, the economies in the areas we serve and the
markets where we procure our goods and services have
been affected by rising costs of resources and services.
This has a significant effect on the cost of our investment
projects. On the wholesale energy market, we faced high
electricity prices. In general, high energy prices have an
effect on the costs of ancillary services such as redispatch
(as we compensate producers of electricity for curtailed
generation or infeed) and grid losses.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
13
Speeding up the demand for capacity leads to
congestion
In the Netherlands, the ever-increasing pace of demand for
additional transmission and connection capacity is
exceeding the speed at which we, and our colleague grid
operators, can expand the electricity grid. Although work on
the grid is advancing in all regions, the billions of euros in
investments we are making, alongside additional measures,
are still not enough to meet demand, at such short and
often immediate notice. Grid operators signal that the
Netherlands is entering the next phase, where access to the
electricity grid will come under further pressure leading to
pressure on both sustainability goals and economic
development. This calls for a serious acceleration of
electricity grid expansion. In addition, grid operators and the
government are taking additional measures to keep the
electricity grid accessible and reliable. Examples include
mandating smart charging stations, controllable heat
pumps, and mandatorily unloading the grid at peak times.
The changing energy system also requires different
behaviour from end-users, for example by using the grid
more when the supply of energy is high.
Also in Germany, we noticed that due to persistent
numerous bottlenecks in the onshore electricity grid, power
from large wind farms in the North Sea must increasingly be
scaled back. More speed is therefore needed to expand the
electricity grid, for example by building electricity highways.
Our stakeholders
To deliver on our promise and ambitions, we believe that it
is essential to work together with stakeholders and through
partnerships: we only get there if we all get there. Through
our activities as a TSO, we are already continuously
interacting with the world around us. Our activities could not
take place without the often intensive co-operation with
other key players, inside and outside the energy sector. We
aim to build and maintain good relationships with our
stakeholders and co-operate with them in partnerships to
deliver on our strategic objectives.
We determined our stakeholder landscape by identifying the
most important stakeholder groups, based on their
influence on us and our influence on them. We also
engaged with these stakeholder groups to gather their
views on the Sustainable Development Goals (SDGs) that
relate most to us as an organisation and the topics related
to the impact we as TenneT have on the world around us.
To monitor the way we are perceived and how we are
performing, we perform a reputation survey among our key
stakeholders every two years. The most recent survey was
completed in 2022 and resulted in a score of 7.8, which
was classified as ‘strong’ and is higher than the average of
companies included in this survey (7.4).
Engaging with our stakeholders is crucial in achieving our
strategic goals and serving our role in society. We value the
engagement with local communities in our service areas
and specifically in the areas where our assets are located,
now and in the future. In 2023 we invested in our
stakeholder management on regional and local level, as the
energy transition starts there.
This will help us to build and maintain the critical
infrastructure required to facilitate the energy transition. It
remains crucial to engage with local communities, but also
with NGOs and politicians at the earliest stage of a project
to address their concerns and gain their understanding. As
we expand our network, we must do so responsibly, by
engaging with them and gaining acceptance with local
communities.
Podcast with stakeholders
We are actively engaged in conversations
with stakeholders in our own podcast. You can
listen back via tennet.eu/podcast (Dutch)
or tennet-energiedialog.eu (German).
Dutch German
Strategic goals
Energise our people
and organisation
Secure supply today
and tomorrow
Drive the energy
transition
Safeguard our
fi nancial health
With an inclusive and safe
environment where people
enjoy coming to work. We will
evolve our leadership model to
empower, inspire and create
growth opportunities, so
everyone can perform at their
best and work as one team.
By maintaining the grid to
meet reliability targets and
operating it effectively. We will
design solutions to balance
electricity supply and demand
in the future, while meeting
societal objectives and realising
our infrastructure projects as
promised.
As a green grid operator and
thought leader, developing
innovative solutions and playing
a key role in the energy data
world.
By ensuring a regulatory
framework to support our
strategy and by delivering a
return in line with what our
capital providers expect, as
well as by raising the necessary
external fi nancing.
• Provide a great and safe
place to work for up to
10,000 internal and external
employees striving for Zero
Harm.
• Deliver at least EUR 10 billion
per year in projects while
securing our supply chain.
• Secure healthy asset base
with suffi cient transmission
and connection capacity.
• Maintain 99.99% reliability.
• Realise at least 5 signifi cant
energy system innovations.
• Deliver robust design Target
Grid 2045 including accepted
North Sea grid design.
• Raise adequate amount of
equity to assure our strong
credit ratings of at least A3/A-.
• Achieve regulatory returns.
• Reduce the OPEX defi cit.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
14
Our strategy
TenneT has a clear purpose: to connect everyone with a
brighter energy future. We strive to secure the supply of
electricity for the people living in the areas we serve, while
enabling the changing energy landscape with all its
challenges, day in and day out. The way we achieve this is
not driven by just our own views on how to achieve our
purpose. We are a key and inter-linked player in the energy
landscape, working closely with other important
stakeholders to drive the energy transition and ensure a
greener and brighter energy future in the best and most
efficient manner.
To ensure we are able to fulfil our purpose, we have
developed our current TenneT strategy, based on four
strategic pillars, with goals for 2025.
This is focused on ensuring we are able to secure supply of
electricity today and tomorrow by preparing our grid for a
future and climate-neutral energy system, while also
maintaining our financial health and considering the care for
our current and future employees and others working for
and with us.
Our strategy drives us to realise a climate-neutral, affordable
and reliable future electricity grid and enables us to act as a
key player in Europe’s energy transition, contributing to the
mitigation of climate change and to the United Nations
Sustainable Development Goals.
Our vision for the future electricity grid was launched in
2023. Our Target Grid 2045 strategy sets out how this
system will look and which strategic actions are required to
get there. Our 2025 strategic goals are our first milestones
towards this end-picture. More on Target Grid is included on
the next page.
Strategic goals
Energise our people
and organisation
Secure supply today
and tomorrow
Drive the energy
transition
Safeguard our
fi nancial health
With an inclusive and safe
environment where people
enjoy coming to work. We will
evolve our leadership model to
empower, inspire and create
growth opportunities, so
everyone can perform at their
best and work as one team.
By maintaining the grid to
meet reliability targets and
operating it effectively. We will
design solutions to balance
electricity supply and demand
in the future, while meeting
societal objectives and realising
our infrastructure projects as
promised.
As a green grid operator and
thought leader, developing
innovative solutions and playing
a key role in the energy data
world.
By ensuring a regulatory
framework to support our
strategy and by delivering a
return in line with what our
capital providers expect, as
well as by raising the necessary
external fi nancing.
• Provide a great and safe
place to work for up to
10,000 internal and external
employees striving for Zero
Harm.
• Deliver at least EUR 10 billion
per year in projects while
securing our supply chain.
• Secure healthy asset base
with suffi cient transmission
and connection capacity.
• Maintain 99.99% reliability.
• Realise at least 5 signifi cant
energy system innovations.
• Deliver robust design Target
Grid 2045 including accepted
North Sea grid design.
• Raise adequate amount of
equity to assure our strong
credit ratings of at least A3/A-.
• Achieve regulatory returns.
• Reduce the OPEX defi cit.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
15
Listening to our stakeholders
At TenneT, we consider a good relationship and dialogue with our stakeholders to be essential.
The energy transition cannot be tackled alone and requires close cooperation. In our reputation
survey, we explicitly ask stakeholders every two years how they view us, also to learn from
them and to improve ourselves. Stakeholder statements sometimes ask for this as well. Here
are a few statements stakeholders made about TenneT in 2023.
“We are shocked and full of disbelief. The city is disproportionately
affected by this situation. New businesses or companies that move, can
already no longer be connected to the electricity grid. And now that
residential construction isalso affected, Almere has a very big problem.
This is anunacceptable situation.”
Our response
It is a difficult situation that congestion arises and businesses and homes have to wait longer
for a grid connection. At the moment, this is the inconvenient truth. We are doing everything
possible to keep as many parties connected as possible, even with unorthodox measures.
This also requires cooperation with local stakeholders, for example so that the infrastructure
can be built more quickly and users can avoid the electricity grid at busy times. A national
action programme has also been created for this purpose. We will stay in close dialogue with
local stakeholders to work on this.
More information in our chapter ‘Deliver a high security of supply’
Councillor Alexander Sprong (Almere) after announcements thatthegrid congestion
affects the development of the city for alonger period.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
16
“We support the objective of distributing electricity generated from renewable sources,
but when it comes to building the necessary infrastructure, local concerns must not be
ignored. Weare extremely concerned that the planned 380 kV overhead line will
significantly impair these visual axes and thus severely disrupt the visual integrity of
the World Heritage Site.”
Our response
When preparing new infrastructure, we deal with many stakeholders in the area where new infra structure is
to be built. This often raises questions about whether the link is necessary and why it should be built here.
We understand these questions. We carefully prepare the expansion of infrastructure and analyse all
possibilities. TenneT spends a lot of time and attention considering the usefulness and necessity of new
connections and alsothe spatial integration, which we aim to do in dialogue with local stakeholders. In 2023,
we held more than 1,500 meetings with stakeholders, including residents, municipalities and provinces.
More information in our chapter ‘Ensure critical infrastructure for society’
Mayor of Hanseatic City of Lübeck is concerned about the development of new 380 kV
overhead line.
“I find TenneT less transparent when drawing up infrastructural
explorations: the fundamental assumptions in the scenarios are made
too much in the ivory tower. Stakeholders are not properly involved in
the future planning process. Notonly TenneT, but this applies to the
entire TSO and DSO sector.”
Our response
TenneT likes to look far ahead because our projects have a long lead time. For this,
wehave several studies we are working on. We also see that the future is not always
easy to predict. Stakeholder input is also increasingly important here. That is why
welaunched Target Grid in 2023, in which (in dialogue with stakeholders) we develop
the final picture for our grid to be realised by 2045. And based on this final picture,
weare already starting preparations and involving stakeholders closely in this process.
For more information, see Target Grid
Stakeholder in our Reputation Survey.
Listening to our stakeholders
At TenneT, we consider a good relationship and dialogue with our stakeholders to be essential.
The energy transition cannot be tackled alone and requires close cooperation. In our reputation
survey, we explicitly ask stakeholders every two years how they view us, also to learn from
them and to improve ourselves. Stakeholder statements sometimes ask for this as well. Here
are a few statements stakeholders made about TenneT in 2023.
“We are shocked and full of disbelief. The city is disproportionately
affected by this situation. New businesses or companies that move, can
already no longer be connected to the electricity grid. And now that
residential construction isalso affected, Almere has a very big problem.
This is anunacceptable situation.”
Our response
It is a difficult situation that congestion arises and businesses and homes have to wait longer
for a grid connection. At the moment, this is the inconvenient truth. We are doing everything
possible to keep as many parties connected as possible, even with unorthodox measures.
This also requires cooperation with local stakeholders, for example so that the infrastructure
can be built more quickly and users can avoid the electricity grid at busy times. A national
action programme has also been created for this purpose. We will stay in close dialogue with
local stakeholders to work on this.
More information in our chapter ‘Deliver a high security of supply’
Councillor Alexander Sprong (Almere) after announcements thatthegrid congestion
affects the development of the city for alonger period.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
17
Our balancing act
Sustainable
Affordable
Reliable
Our purpose, promise and principles
Our principles Our purpose
To connect
everyone with
a brighter energy
future
Our promise
Lighting
the way ahead
together
The Target Grid 2045 maps out a future, integrated
offshore and onshore grid that is capable of meeting
society's growing electricity demand, ensuring that the
high-voltage grid grows in step with the realisation of a
more sustainable electricity system. Target Grid is our
strategy to ensure our grid is ready in time to serve a
climate-neutral energy system based on electricity from
renewable sources for all.
The goals are clear and sharp: the European Union wants
to be the first climate-neutral continent in 2050. Germany
aims to be ready even earlier, in 2045. By 2030, the EU
demands 55% lower CO
2
emissions. This may sound like
a long way away, but when it comes to building high-
voltage connections, 2050 is like next month, 2040 next
week, and 2030 tomorrow.
The essence of Target Grid is to look further ahead and
to prepare for this. By using a backcasting approach,
we focus on the actions and steps needed to achieve our
vision of the future grid. This long-range view offers a
number of advantages:
It increases the chance of being able to
realise future projects on time, as
we can initiate the most
time-consuming
preparation steps (for
instance spatial
planning
procedures)
before the
necessity of a
project is
formally
established.
It enables TenneT to build in a more future-proof manner,
by aligning with expected national plans for development
beyond the vision period of our usual investment planning
It helps us clearly identify the expected impact on the
network of certain long-term political choices, allowing us
to engage with society about these choices early.
To get a concrete picture of what is required to achieve our
Target Grid, we assume the highest degree of electrification
in the energy system. After all, it is better to prepare for the
highest electricity demand and possibly have to scale
down later, than to prepare for too little and have to scale
up later (with a higher probability of being too late).
The first version of Target Grid 2045, presented in April
2023, looked at the 220/380 kV alternating current (AC)
grid and the direct current (DC) connections needed to
unlock wind farms in the North Sea. Based on the insights
from this first version, a vision map was developed of
what the Dutch and German electricity grids might look
like in 2045, the 'Target Grid Map'. This served as a
starting point for a public discussion on the envisioned AC
and DC grid expansions and the underlying choices.
The Target Grid Map includes the existing grid, plus the
projects we include in our Dutch Investment Plan (IP) and
projects that are part of the German Netzentwicklungsplan
(NEP). Specifically, it emerged that early consideration
should be given to large-scale electricity corridors both on
land and at sea and connected via hubs to each other and
neighbouring countries.
Currently, TenneT is further developing the Target Grid
2045 strategy to ensure the potential benefits of this
forward-looking mode of operation can be realised in
practice. Target Grid is a dynamic strategy, which is
described in a living document. A more detailed
elaboration of the future picture - incorporating more
technical, operational and market-design aspects and
also adding the 110/150 kV grid sections - will be included
in updated versions of Target Grid.
Up-to-date information on Target Grid can be found on:
www.tennet.eu/target-grid
Target Grid 2045
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
18
How we bring our strategy to life
In translating our strategy to policies and the decisions and
actions that help us achieve our ambitions, we have careful
considerations. We consider what we call the three
elements of ‘the balancing act’. With this, we evaluate the
effect of our decisions on reliability, sustainability and
affordability. An example of the balancing act is when we are
planning and designing new projects to expand or reinforce
the electricity grid to ensure a secure supply of electricity,
now and in the future.
We make use of raw materials, such as copper and mineral
oil, as these are critical to the functioning of our assets and
as such, the reliability of our grid.
As these are also naturally scarce resources that come with a
negative environmental impact, we aim to increase our
circular use of these products. We aim to make more
sustainable choices by looking for alternatives, such as
aluminium instead of copper. The qualities of resources
differ, which can affect their performance in our network.
This can make the choice to switch materials more
challenging. And at the same time, we also take into
account the costs associated with these choices, as a
choice that benefits reliability or sustainability might also
come with a cost. We strive to find the right balance
between all three elements.
Our balancing act
Sustainable
Affordable
Reliable
Our purpose, promise and principles
Our principles Our purpose
To connect
everyone with
a brighter energy
future
Our promise
Lighting
the way ahead
together
The way all our employees are expected to act in achieving
our strategic goals is described in our TenneT principles,
which provides guidance to how we aim to create societal
value.
• Ownership.We are accountable for our words, actions
and decisions.
• Connection.The energy transition is a challenge that
requires new ideas, new technologies and new
behaviours that build on the strong foundations we have
laid. It also requires co-operation on all different levels as
we do not have all the answers ourselves.This is why we
work actively with other parties.
• Courage.We are honest, open and clear about what we
think. We dare to make bold decisions, take ambitious
initiatives and are willing to learn from our mistakes.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
19
Employees Suppliers
Customers
Shareholders
and capital
providers
Regulators
Energy market
participants
Governments
and policy-
makers
NGOs
Sustainable
Affordable
Reliable
Stakeholders
Outcome & Impact
Our inputs
Our outputs
Our outputs
How we create value
Our balancing act
To connect everyone with a brighter energy future
• Our societal fi nancial impact
on anaverage household in
our service area.
• Equivalent number of house-
holds that in theory would
have been able to receive
100% green electricity
• Societal impact due to
availability of our grid
• Avoided CO
2
emissions
Extensive knowledge
of and experience
with operating the
systemand integrating
energymarkets
Deliver a high security
of supply,
see page 30
Cables, lines,
stations, offi ces and
interconnectors
Ensure critical
infrastructure for
society,
see page 38
Our skilled and
motivatedemployees
Create a safe and
inspiring workplace,
see page 49
Energy, natural
environment
and materials to
build, maintain and
operateourgrid
Create value to
transition to a climate
neutral economy,
see page 56
Regulatory revenue,
(Green)Financing
Safeguard sustainable
fi nancial performance,
see page 67
Strategic partnerships
and our engagement
with (project)
stakeholders
Solve societal
challenges with
stakeholders and
through partnerships
How we operate
Enable the core activities
Operate
the
electricity
grid
Enable
the energy
market
Designing
the energy
system
Build the
electricity
grid
Maintain
the
electricity
grid
Our strategy
Our purpose
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
20
How we create value
TenneT plays an important role within the electricity supply
chain and supports and enables the livelihoods of people in
the areas we serve. The way we create value is represented
visually on the previouspage, using the concept of value
creation as described by the International Integrated
Reporting Council (IIRC), which together with the
Sustainability Accounting Standards Board (SASB) formed
the Value Reporting Foundation.
By means of the six capitals defined by this framework
(financial, manufactured, intellectual, human, social &
relationship and natural) we describe our input, output,
outcome and impact. This model is the basis of our
Integrated Annual Report. As a company that is deeply
rooted in society, the engagement and interdependencies
with our stakeholders are at the basis of how we are able to
create value. In addition, our inputs, through which we
create impact for society, are influenced by the way we add
value through our strategy and organisation, driven by our
purpose and our principles. All of these have been
described earlier in this chapter. Moreover, while conducting
our core activities as a TSO, our decisions are always
influenced by the balancing act of reliability, affordability and
sustainability.
Moreinformation on the specific inputs, our related
outputs,outcomes and impacts are disclosed in ‘Our
performance in 2023’, in each of the respective chapters.
The way we aim to create long-term value is defined
alongside the six outputs from our value creation model,
which is described in the visual on the previouspage.
Deliver a high security of supply
Our core task is to secure the supply of electricity, today
and tomorrow. And with this, we support the daily lives and
activities of people and businesses in the areas we serve. In
today’s fast changing and more volatile energy system,
securing supply is increasingly challenging. TenneT aims to
create value for society through its decades of experience in
operating our grid, together with a vision of how the future
grid and electricity markets should be designed. This
expertise and knowledge are our intellectual capital.
Ensure critical infrastructure for society
Electricity plays a vital role in the lives of our stakeholders
and society as a whole. TenneT designs, builds and
maintains the high-voltage onshore and offshore grid that is
needed to secure supply of electricity. Our produced capital
relates to the components of our grid, such as our cables,
substations, pylons and interconnectors. We realise the
critical infrastructure that supports today’s electricity needs
as well as enabling the energy system of the future.
Create a safe and inspiring workplace
We consider our people to be our most important asset, as
they enable us to deliver on our strategic ambitions and
create value for society. To this end, we aim to offer a safe,
sustainable and inclusive place to work for all our
employees. Our programmes and actions focus on creating
an inclusive and energising environment where people can
thrive.
Create value to transition to a climate-neutral economy
As a company at the centre of the energy sector, we want
to drive the energy transition and contribute to achieving the
climate targets of the Netherlands, Germany and the
European Union. We do this by contributing to a sustainable
energy system, where we are able to connect everyone in
our service area to green electricity. Simultaneously, we
strive to reduce the environmental impact of our operations.
This is related to our carbon emissions, our impact on the
natural environment and the materials we need to build,
operate and maintain our grid.
Safeguard sustainable financial performance
In order to create long-term value, we are focused
onmaintaining our financial health.Our main sources of
financing are our regulatory revenue and externally raised
capital. Tosafeguard our financial health, we aim to optimise
our financing costs and deliver a return oncapital that
meets the expectations of our capital providers. In addition
it is essential to maintain strong creditandenvironmental,
social and governance (ESG) ratings.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
21
Strategic
pillar
Capital
• Stakeholder engagement
• Compliance
Page 2 • Internal engagement index
• Reputation survey
Chapter Topics in
materiality matrix
Key KPI’s Performance
2023 2022
Targets SDG
80* 80*
7.8** 7.8
-
-
Overarching
Page 65 1,709 mio 1,162 mio
5.8% 4.9%
11.6% 11.1%
1,386 mio
4.2%
8.5%
• Financial health • Adjusted underlying EBIT***
• ROIC ***
• Adjusted FFO/Net debt ***
Safeguard
our fi nancial
health
Connectivity table
Page 28
Page 24
99.99993% 99.99963%
7.7 bln 4.5 bln
99.99962%
6.3 bln
• Secure supply today
and tomorrow
• Responsible supply
chain practices
• (Cyber) security
• Connectivity of our grid
• Grid availability
• Investments
Secure supply
today and
tomorrow
Page 36
Page 54
Page 72
33% 35%
12.2 GW 9.9 GW
-
11.5 GW
by 2023
43.1 GW
by ~2030
• TenneT’s own
environmental impact
• Stakeholder engagement
• Strategic partnerships
• Driving the energy
transition
• CO
2
footprint greened
• Offshore grid connection
capacity
Drive
the energy
transition
Page 47 NL 3.9 NL 3.7
DE 3.4 DE 4.1
32% 33%
11% 9%
4.5 4.9
30%
10%
4.3
• Creating a sustainable
workplace
• Safety
• Absentee rate
• % female infl ow
• % non-Dutch /
non-German infl ow
• Total Recordable
Incident Rate
Energise our
people and
organisation
* The latest employee survey was performed in 2021. In 2023, we decided to update the way we monitor this and will report accordingly in our next annual report.
** Our reputation survey is executed every 2 years. The most recent survey was performed in 2022.
*** Reference is made to the chapter ‘Safeguard sustainable financial performance’.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
22
Solve societal challenges with stakeholders and
through partnerships
We are convinced that collaboration with stakeholders and
strong partnerships with suppliers, customers and other
parties are essential to building the future energy system
and securing supply today and tomorrow. By combining
experience and knowledge from different organisations
inside and outside the energy sector, we achieve our
strategic objectives.
More informationregarding our societal impactscan be
found in the section ‘Sustainable Development Goals and
TenneT’ and in the chapters ‘Deliver a high security of supply’,
‘Create value to transition to a climate-neutral economy’
and ‘Safeguard sustainable financial performance’.
How we create and measure societal impact
The combination of the results of our activities based on
(amongst others) our strategy, how we operate and our
principles (our outputs) also enables us to create short,
medium and long-term societal effects (our outcomes and
impacts). Our aim is to reduce our negative and increase
our positive outputs, outcomes and impact, such as
reducing our own carbon footprint and helping to increase
avoided emissions by connecting more and more renewable
energy sources to our grid. With the role and scale we have
as a company, we are aware that we are able to create
these societal impacts, both negative and positive. We
believe that these impacts are not the result of one output
or capital and therefore choose to connect them to all and
to the sustainable development goals we contribute the
most to. We feel that these are our most material societal
impacts to report on.
Disclosing an organisation’s impacts is a relatively new area
of reporting.Measuring these impacts is therefore a journey,
and we continue to refine our methodology. Insights gained
with respect to these impacts help us see the extent to
which we are meeting our strategic goals and the extent to
which we are able to fulfil our purpose to connect everyone
with a brighter energy future. Reporting on the equivalent
number of households that in theory can receive 100%
green electricity as a consequence of our work provides us
with this information.
Our aim is to disclose the outcomes and impacts which we
create on a societal level as a European TSO. This provides
insights from a broader perspective on how the people
living in the areas we serve experience the positive or
negative impact we create and have on them. By focusing
on these impacts, we believe that we provide more
meaningful insights for stakeholders. All of our impact
indicators are also included in The Sustainable Development
Goalssection in this report.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
23
The supply chain of TenneT
Our core task is to provide a secure supply of electricity to
the more than43 million end-users in our service area. This
task should not be viewed in isolation, as it is part of a wider
logistics system with other stakeholders that contribute to
the electricity system. Our supply chain entails all parties
that are, either upstream or downstream, involved in the
supply, manufacturing, construction or deconstruction of
materials and products used for our grid. It also includes
parties that are, either on the demand or the supply side,
involved with the production, exchange or consumption of
electricity. In the visual below, our main supply chain
partners are represented.
With our work, we have an inevitable impact on the natural
environment and stakeholders in our supply chain. For
example, the safety of our contractors and subcontractors
is affected by the way we manage safety and depends on
the quality of our safety procedures. And with the
construction of new assets, nitrogen is emitted which
impacts nature and local communities. As a result, TenneT,
its suppliers and its contractors are impacted by the
nitrogen impasse that occurred in the past year in the
Netherlands. Due to project delays, end-users cannot
always be connected to the grid in the time they prefer.
These impacts on the supply chain are part of our
responsibility too.
As an example, a part of our supply chain includes the
contractors working on grid construction or maintenance
projects in the Netherlands and Germany. Another
significant group are the suppliers involved with
manufacturing important components for our grid, such as
transformers. These suppliers are often located outside the
Netherlands and Germany, such as Spain, Turkey,
Singapore or India. These companies also subcontract local
partners, who in turn may hire other contractors or
suppliers. This is what we refer to as tier-2 or tier-3
contractors and suppliers.
Considering the speed and magnitude of the energy
transition, and the challenges in achieving a future-proof
electricity grid in time, it is essential that we work closely
together with our supply chain partners. Moreover, due to
the shortage of resources (such as technical talent, raw
materials and components) it is important that we build
long-lasting relationships with suppliers. This helps us to
secure our supply chain needs, now and in the future, to
achieve our strategic goals. It also provides our suppliers
with the security to plan ahead and efficiently prepare for the
future, for example by recruiting enough new talents intime.
We believe that solid and sustainable relationships with our
supply chain partners, built on trust and co-operation, are
essential to achieve the energy transition. This is why we
have been working for several years with the integrated
Supply Chain Management (iSCM) programme. This aims to
reduce the supply chain risks, such as potential shortages
in availability of resources and price volatility. By building
long-term partnerships with our main suppliers, we can
work together and plan ahead, learn from each other and
improve processes.
It is also important to work together with our partners to
ensure and contribute to responsible supply chain
practices. We do not want any of our suppliers to be
involved, directly or indirectly, in conduct that does not
meetour policies and quality standards. This can relate
toproduct specifications and sustainability-related topics,
such as environmental performance or human rights.
Aspart of our due diligence process, we visit suppliers
tochallenge them on these topics and discuss potential
improvements in the ways they manage them. It is our
policy not to accept suppliers who fail to meet our standards.
In 2023, we performed 34supplier visits. 28suppliers met
our standards, or were given the opportunity to take corrective
actions to meet our standards. 4suppliers were not approved
and 2suppliers are still awaiting the results of our visit.
2GW Program: balancing between sustainability, reliability
and affordability
An example of how we cooperate with our supply chain
partners is the 2GW Program, in whichwe work together
closely with a selected group of suppliers and contractors
on a number of different projects. For TenneT, working on
the energy transition means finding a balance between
sustainability, reliability and affordability.
The transition to a climate-neutral energy system requires
substantial adjustments and expansion of the grid. With
innovative solutions, TenneT is looking for the most optimal
way to tackle this. With the 2GW Program we are opening
up the North Sea as an energy source by means of an
offshore electricity grid. Our new approach will allow more
electricity to be transported to land simultaneously. This can
be done by designing smarter and using fewer cables and
platforms than before. This will save us time, raw materials
and money. The 2GW Program forms the basis for next-
generation offshore grid connection systems. For more
information, please go to ‘Ensure a critical infrastructure
forsociety’.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
24
Integrated Annual Report 2023 - TenneT Holding B.V.
Responsible supply chain practices include all social and
environmental impacts throughout our supply chain. Human
rights are a part of this, and a key focus area of TenneT’s CSR
strategy. Considering that our construction sites and supply
chain are globalised, we consider this an essential part of our
sustainability strategy. In 2023, we further developed this as
part of the social pillar of our sustainability strategy.
After publishing a Human Rights Commitment in 2022,
subscribing to international guidelines such as the ‘OECD
Guidelines for Multinational Enterprises’ and the ‘UN
Guiding Principles on Business and Human Rights’, we
followed through with more actions in 2023. We completed
a country level risk assessment of our supply chain
identifying the impact our supply chain has on the rights of
people. To confirm the risks, we engaged with stakeholders
(including our value chain workers) through engagement
lunches and audits in selected high-risk locations. The
findings were integrated into our human rights roadmap and
strategy. With this roadmap, we elucidate the steps TenneT
will take to execute a robust due diligence process. As due
diligence is an ongoing process, we strive to update our
commitment and roadmap based on the experience
andlearnings.
The most salient human rights, i.e. the set of rights that we
impact the most, relate to human rights in the supply chain,
with our contractors and suppliers. Labour rights, including
forced labour, decent wages, collective bargaining,
occupational health and safety, working hours and social
rights are among the most salient rights for TenneT.
To mitigate our negative impact on these rights, we have
included a set of requirements to our suppliers and
contractors which includes setting up a robust due diligence
process, tracking and monitoring and stakeholder
engagement. Our 2GW Program is an example of where we
implemented these requirements with respect to human
rights. To achieve progress, working together with others is an
important way of addressing potential human rights concerns
in partnerships or coalitions. Another way of how we aim to
achieve progress is, working together with others is an
important way of addressing potential human rights concerns
in partnerships or coalitions. It is also our aim to develop these
partnerships as a measure to mitigate risks and increase our
leverage to push for remedies when an impact occurs.
As part of our due diligence, we have integrated the topic of
human rights in our Supplier Code of Conduct and made it
part of our supplier visits (see section ‘TenneT & its supply
chain’). Our grievance mechanism, referred to as the Speak
Up Portal, is publicly available in three languages (Dutch,
German and English). The grievances are followed up by
our Compliance & Integrity department. In line with supply
chain legislation (Lieferkettenschutzgesetz or 'LkSG') in
Germany, we have an appointed Human Rights Officer who
monitors our impact on human rights.
In 2023, there were no human rights violations reported.
"Our human rights commitment: Respect and promote
human rights by delivering on our strategic roadmap for
our own operations and that of our extended supply
chain whilst collaborating across sectors to drive
positive change."
Human rights atTenneT
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
25
TenneT in the supply chain
Maintaining the
energy balance
Transmitting
electricity
Facilitating
the market
DSOs
Construction
Safety is very important
when working with heavy
machinery andhigh
voltage equipment when
building and maintaining
our grid
Our core activities
By creating efficient
markets that support
our task to transmit
electricity to our
customers, we
aim to make our
gridfuture proof
Generation / Infeed
grid
Renewables
Onshore, we aim to
create more capacity to
enable more renewables
to be connected directly
to our grid, DSOs or new
technologies that enable
flexible solutions
Powerplants
Conventional power
plants are still in the
mix, but are increasingly
being phased out by
governments
Recruitment and retention ofemployees
To achieve our strategic objectives we need to
hire and retain the right and sufficient employees.
Atthe same time, our supply chain partners also
need sufficient personnel to help us deliver on
the energy transition.
Import
We import electricity
to balance our grid
which can also save
societal costs
Renewables
More offshore wind
farms are connected
to our grid
Offshore Onshore
Raw material extraction
and production of materials
Finding sufficient and the
right resources remains
achallenge, todeliver a
greener energy system and in
away where we reduce our
impact on the planet
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
26
TenneT in the supply chain
Maintaining the
energy balance
Transmitting
electricity
Facilitating
the market
DSOs
Construction
Safety is very important
when working with heavy
machinery andhigh
voltage equipment when
building and maintaining
our grid
Our core activities
By creating efficient
markets that support
our task to transmit
electricity to our
customers, we
aim to make our
gridfuture proof
Generation / Infeed
grid
Renewables
Onshore, we aim to
create more capacity to
enable more renewables
to be connected directly
to our grid, DSOs or new
technologies that enable
flexible solutions
Powerplants
Conventional power
plants are still in the
mix, but are increasingly
being phased out by
governments
Recruitment and retention ofemployees
To achieve our strategic objectives we need to
hire and retain the right and sufficient employees.
Atthe same time, our supply chain partners also
need sufficient personnel to help us deliver on
the energy transition.
Import
We import electricity
to balance our grid
which can also save
societal costs
Renewables
More offshore wind
farms are connected
to our grid
Offshore Onshore
Raw material extraction
and production of materials
Finding sufficient and the
right resources remains
achallenge, todeliver a
greener energy system and in
away where we reduce our
impact on the planet
DSOs
Maintaining the
energy balance
Export
We transport electricity
to other areas if this
helpsthem secure supply
in a consistent or more
cost-efficient way
Prosumers
In a society that is becoming
more and more electrified,
we supply households with
electricity together with the
DSOs and work with them
for the system-serving and
grid-serving integration of
flexible prosumers
Large industries
More and more large
industries are greening
theirprocesses which
results in a higher electricity
demand. As a partner for
industries, we therefore
play an important role in the
transition to a climate-neutral
economy
Consumption
Facilitating
the market
Decommissioning
In our projects, we strive to re-use
our materials as much as possible
or dispose of theminaproper way
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
27
The Sustainable Development Goals (SDGs) are a set of 17 global objectives established by
the United Nations to tackle pressing issues by 2030. They encompass diverse challenges,
from poverty eradication and quality education to climate action and gender equality.
They serve as a universal roadmap for governments, businesses, and communities to work
together, promoting sustainability, equality, and a better future for all. TenneT wholeheartedly
supports all global goals, while – considering our main business – we are specifically
committed to three main SDGs.
The Sustainable Development Goals
Good
health and
well-being
Gender
equality
Clean water
and sanitation
Affordable
and clean
energy
Decent work
and economic
growth
Industry,
innovation
and infra-
structure
Reduced
inequalities
Sustainable
cities and
communities
Partnership
for the goals
No
poverty
Zero
hunger
Quality
education
Responsible
consumption
and production
Life
below water
Life
on land
Peace, justice
and strong
institutions
Good
health and
well-being
Gender
equality
Clean water
and sanitation
Affordable
and clean
energy
Affordable
and clean
energy
Decent work
and economic
growth
Reduced
inequalities
Sustainable
cities and
communities
Climate
action
Climate
action
Climate
action
Climate
action
Partnership
for the goals
No
poverty
Zero
hunger
Quality
education
Responsible
consumption
and production
Life
below water
Life
on land
Peace, justice
and strong
institutions
Industry,
innovation
and infra-
structure
The UN
Sustainable
Development
Goals
and TenneT
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
28
The Sustainable Development Goals (SDGs) are a set of 17 global objectives established by
the United Nations to tackle pressing issues by 2030. They encompass diverse challenges,
from poverty eradication and quality education to climate action and gender equality.
They serve as a universal roadmap for governments, businesses, and communities to work
together, promoting sustainability, equality, and a better future for all. TenneT wholeheartedly
supports all global goals, while – considering our main business – we are specifically
committed to three main SDGs.
The Sustainable Development Goals
Good
health and
well-being
Gender
equality
Clean water
and sanitation
Affordable
and clean
energy
Decent work
and economic
growth
Industry,
innovation
and infra-
structure
Reduced
inequalities
Sustainable
cities and
communities
Partnership
for the goals
No
poverty
Zero
hunger
Quality
education
Responsible
consumption
and production
Life
below water
Life
on land
Peace, justice
and strong
institutions
Good
health and
well-being
Gender
equality
Clean water
and sanitation
Affordable
and clean
energy
Affordable
and clean
energy
Decent work
and economic
growth
Reduced
inequalities
Sustainable
cities and
communities
Climate
action
Climate
action
Climate
action
Climate
action
Partnership
for the goals
No
poverty
Zero
hunger
Quality
education
Responsible
consumption
and production
Life
below water
Life
on land
Peace, justice
and strong
institutions
Industry,
innovation
and infra-
structure
The UN
Sustainable
Development
Goals
and TenneT
Given our core activities, SDG 7 is where we can have a profound infl uence.
For target 7.1, we have developed an impact indicator that quantifi es the fi nancial
impact we have on the average electricity bill of households in the Netherlands
and Germany. For target 7.2, we track our impact by measuring the gigawatts of
renewable energy connected to our grid. Our efforts are evident in the offshore
wind capacity connected, aligning with the renewable energy ambitions of the
governments in our service areas.
Ensure access to affordable, reliable, sustainable and modern energy for all
7.1 By 2030, ensure universal access to affordable, reliable and modern energy services
7.2 By 2030, increase substantially the share of renewable energy in the global energy mix
Target KPI Contribution
2023 2022
7.1
Societal fi nancial
impact on households
in our serving area
DE: 4.3%
NL: 8.7%
DE: 4.8%
NL: 9.1%
7.2
Equivalent number
of households that
in theory would have
been able to receive
100% green electricity
14.3 million 14.1 million
SDG 9 (and specifi cally target 9.1) is another key area where our operations make
a substantial contribution. Our impact is measured through an indicator of how
the availability of our grid has a quantifi able value for society (through electricity
delivered). Additionally, our role in creating interconnections—17 to date—facilitates
effi cient electricity trade, ultimately lowering costs for end-users. This fosters
market development and aligns with the goal of building resilient infrastructure and
promoting inclusive and sustainable industrialisation and innovation.
Build a resilient infrastructure, promote inclusive and sustainable
industrialisation and foster innovation
9.1 Develop quality, reliable, sustainable and resilient infrastructure, including regional and transborder infrastructure, to support
economic development and human well-being, with a focus on affordable and equitable access for all.
Target KPI Contribution
2023 2022
9.1
Societal value of the
availability of our grid
> GDP
of the
Netherlands
> GDP
of the
Netherlands
Other SDGs
In the execution of our activities, we also have an impact on other SDGs. We
contribute to SDG 5 and SDG 8 when we look at policies relating to our people
(including our contractors) and SDG 12, SDG 14 and SDG 15, with respect to the
choices we make that affect our planet. SDG 12 for instance, relates to our circularity
ambitions, which also has an effect on climate change. Reducing the use of virgin
materials, such as copper, will also have a positive climate effect, as it avoids
emissions in the extraction phase. That is why we track several KPIs related to the
targets supporting these goals, but the effect on these other SDGs is less signifi cant
than the ones related to the SDGs above.
Target KPI Contribution
2023 2022
5.5
% of female board
members
45.5% 55.6%
8.8
Total Recordable
InjuryRate
4.5 4.9
12.2
% circular infl ow *
% circular outfl ow *
36%
75-90%
14.2/
15.4
Net zero impact
onnature
T.B.D.
Climate action
13.2.2 Integrate climate change measures into national policies, strategies and planning
Target KPI Contribution
2023 2022
13.2.2
Total greenhouse gas
emissions (gross)
3,293,444
tonnes CO
2
2,547,312
tonnes CO
2
7.2
Total avoided
emissions
18.0 mio
tonnes
17.2 mio
tonnes
Current predictions indicate that governments and organisations need to step up to
help mitigate the effects of climate change to meet the 1.5 degrees scenario from the
Paris Agreement. As a cross-border TSO and a key player in the energy transition, we
can help mitigate the effects of climate change by contributing to a climate neutral
future energy system. That is why we have identifi ed SDG 13 ‘Climate Action’ as the
main sustainability objective we contribute to. At the same time, our business choices
and conduct also impact the planet. This is why we measure our greenhouse gas
emissions (GHG) against Science Based Targets Initiative-approved targets. Next to
this, we also report the amount of avoided emissions, which due to our activities, we
have been able to avoid on an annual basis. This is how we measure our positive and
negative contribution regarding SDG target 13.2.2.
* In 2023, we developed a new methodology for measuring our contribution to circularity.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
29
Our
performance
2023
Deliver a high security of supply
Our role as transmission system operator (TSO) is to deliver a high grid availability,
while securing electricity transmission to more than 43 million end-users in the
Netherlands and a large part of Germany. We are committed to this critical task today
and tomorrow, as well as during a period of major change in energy supply mix and
high volatility in energy markets.
A secure and stable supply of electricity is an essential
component of modern, developed economies. It powers
economic growth, fuels industrial activity and technological
innovation, supports essential infrastructure and public
services, and underpins national security and international
competitiveness.
TenneT has a reliable record of providing a stable and
secure supply of electricity, with an onshore service level as
high as 99.99993%. To keep the lights on at all times, we
design, build, maintain and operate our high-voltage grid,
transmitting electricity from where it is produced – which
includes an increasingly high proportion of renewables – to
where it is consumed. Our grid spans over 25,000
kilometres of high-voltage connections, both onshore and
offshore, across borders, above (via overhead lines) and
below ground (via underground cables).
To secure the supply of electricity, now and in the future,
requires fundamental adjustments to the way we design
and operate the grid, for example through new
developments in electricity storage and demand-side
response. The goal of a sustainable energy future depends
on the development of this new energy system. As such,
through our critical work and infrastructure, we directly
contribute to Europe’s ambition to be the world’s first
climate-neutral continent by 2050.
At the same time as building the energy system of the
future, we need to ensure our existing grid can cope with
the rapid growth of renewable energy sources and the
fast-rising demand for electricity as society progresses in
the energy transition. Ongoing grid reinforcement,
maintenance, and system operations developments are
critical for this, particularly when it comes to relieving the
growing congestion we see in our grid.
As such, TenneT faces an ongoing balancing act: securing
the supply of electricity today and tomorrow, including
relieving the pressure on the existing grid as it comes under
more pressure, as well as driving the energy transition and
doing so at an acceptable cost for society.
Our performance 2023*
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
30
Secure supply today
During 2023, our people worked hard to ensure a secure
supply of electricity in our service areas, with as a result a
high availability of 99.99993% for our onshore grid and
97.91% for our offshore grid. During 2023, TenneT
implemented additional measures to prevent power
outages, in a commitment agreed with the Dutch Authority
for Consumers and Markets (ACM). Structural measures,
such as improved security procedures, are designed to
prevent future outages as much as possible.
Still, there were a few instances where we unfortunately
experienced an outage, for example at our Breukelen
substation in Q1 2023. This interruption occurred as a line
was damaged and affected around 35,000 customers. Our
colleagues worked hard to quickly resolve this matter and
this outage was resolved after 12 minutes. Despite these
outages, we are proud of the grid availability our people
managed to secure.
After the energy crisis in 2022, the markets found more
stability in 2023 and the pressure on energy system
adequacy eased. Concerns that the war in Ukraine would
impact energy system stability in winter 2022/23 were
thereby mitigated.
However, although security of supply was less affected by
geopolitical tensions and energy market disruption in 2023,
after the winter period, grid congestion, particularly in the
Netherlands, persisted this year and became more severe.
Tackling congestion in the Netherlands
As Europe strives to achieve its 2030 and 2050 climate
targets, the increasing production of electricity from
renewable energy sources, as well as the increasing
electrification from industry, is so high that grid operators,
including TenneT, cannot always provide sufficient capacity
at the desired pace. On very windy or sunny days, too
much renewable infeed can create congestion as there is
insufficient transmission capacity to carry the amount of
electricity being generated. In this case, we have to take
operational measure to safeguard the grid. New customers
will have to be placed in a queue until the grid is reinforced.
Similarly, on the demand side, congestion problems can
occur when electricity cannot be transported to the demand
location. This is why TSOs and DSOs have to put new
customers on a waiting list until the necessary grid
enforcements are ready.
In 2022-2023, the exponential growth in new grid
connection requests from customers, as well as the growth
in capacity of existing connections, was a particular cause
of congestion.Customer requests are either for new grid
connections – such as wind farms, solar parks, electric
vehicle charging stations and battery storage facilities – or
from customers that wish to enlarge their connection
capacity, such as factories that are electrifying their
production processes. Sometimes, customers (for various
reasons) submit multiple grid connection applications, while
only needing one connection, or request more capacity than
they actually need.
Onshore grid
availability
Offshore grid
availability
Our performance in 2023
Performance Target Status Trend
99.99993%
NL: 99.99993%, DE: 99.99999%
2022: 99.99963%
2021: 99.99999%
99.99962%
Despite some outages we had, we were
proud that our people were able to further
improve our onshore grid availability.
Performance Target Status Trend
97.90%
NL: 99.01% DE: 97.37%
2022: 94.08%
2021: 94.09%
95.07%
As we experienced fewer outages this
year with our offshore assets, we also
saw an improvement of our offshore grid
availability this year, in comparison to
last year.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
31
Although TenneT anticipated higher electricity demand and
has been rapidly expanding and strengthening its grids for
over 13 years, grid congestion has still been partly
unavoidable. In 2023, TenneT had to announce additional
grid congestion areas, in almost all provinces in the
Netherlands. We see this issue also becoming more severe
for the DSOs, like Stedin, Alliander and Enexis.
To increase the transmission capacity in these areas and
relieve and avoid congestion our main task is to expand and
reinforce the grid. Over the next ten years, we are investing
several billions in our onshore grid every year.But as these
works often take several years to complete, we look for
more short-term measures too. Congestion management
studies, together with regional DSOs, help to identify
additional available transmission capacity and measures
to be taken to relieve congestion.
TenneT is increasingly working with local stakeholders,
including government and municipalities, and DSOs to
make targeted choices that relieve congestion where it
is most necessary and use the existing grid capacity as
efficiently as possible.
An example of this collaborative approach can be seen in
a taskforce TenneT joined in 2021 with the Municipality of
Amsterdam, Port of Amsterdam, and grid operator Liander.
The task force has called for an integrated plan for all
Amsterdam energy projects, with multidisciplinary
collaboration and standardised processes to allow for faster
completion of electricity infrastructure.
In cooperation with existing customers, we are also working
on a measure called "rush hour avoidance’’, whereby
customers are compensated for reducing their electricity
production or consumption at peak times. A study into how
many companies may be interested in this scheme was
published in late 2023. The Dutch government may
incentivise more customers to provide flexibility in this way,
with new legislation being introduced that would require
companies with demand exceeding 1MW to explain how
they can participate in congestion management.
Another temporary solution to decrease the impact of
congestion was adopted by ACM in 2023. This is designed
to allow system operators to prioritise projects that solve or
limit congestion in the grid, thereby deviating from the
first-come-first-served principle. In addition, ACM aims to
allow grid operators to give grid connection priority to
projects with a social function, such as housing, security
services, healthcare or schools.
Securing supply tomorrow
To support Europe’s net zero climate targets, we have
launched our Target Grid 2045 strategy, with the objective
of having a future-proof electricity grid in place by 2045.
This will be capable of supporting a sustainable economy,
with a reliable and secure supply of green electricity for all
users, from consumers to industry.
Flexibility is critical to meeting these challenges, not only
related to more effective and efficient use of our assets, but
also to boost our system operations and improve market
design. There are three focus areas that will be essential for
securing supply in the future by facilitating flexibility in
demand and supply: grid reinforcement, developing system
operations and market integration.
Flexibility
Flexibility is how TSOs refer to using on-demand energy
sources to keep the grid secure and in balance at all times.
At times of grid congestion, a TSO uses flexible power
sources to activate redispatch. When there is not enough
generation contributing to dynamic voltage control, flexible
power sources are activated to compensate, such as
synchronous generators. As such, flexibility installed in the
system is essential for keeping the lights on 24 hours a day,
365 days a year.
For this reason, TSOs are looking fornew, diverse and
reliable sources of flexibility. Solutions to store electricity in
energy carriers, like battery energy storage systems and
hydrogen, are animportant area of focus, as are sources of
distributed energy storage, such as electric vehicles and
home batteries.
The increasing installation of mega-battery systems is a
particularly promising source of flexibility, with estimates
projecting that 9 GW of battery capacity will be needed (in
strategic locations) in the Netherlands by 2030.This is
equivalent to nine gas-power plants. InTarget Grid we even
anticipate 150 GW batteries to be connected to the German
part of our grid and approximately 60 GW battery capacity
in the Dutch part of our grid to be connected by 2050.
As connection applications for new battery facilities total
more capacity than is needed, or are too concentrated in a
certain location and thereby add to grid congestion, TenneT
is working to advise on where they should be best located.
For example near wind- or solar parks as well as where
existing high voltage stations are already located.Location
is an important factor, as it can increase or relieve pressure
on the transmission system, making it critical for both
security of supply and affordability.A map on our website
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
32
shows exactly in which province in the Netherlands we
expect what battery capacity is needed for system stability
by 2030. In this way, we hope that mega-batteries can
become an important source of flexible power, planned in a
way that reduces congestion and supports the electrical
system across the country.
Our three focus areas
Flexibility
Grid
reinforcement
Market
integration
Developing
system
operations
Grid reinforcement
The future energy system requires substantially more
transmission capacity from the electricity grid, to enable the
transmission of higher volumes of renewable power, over
longer distances, and to accommodate for the electrification
of society. Addionally, the increased system dynamics and
need for flexibility in the future energy system require the
strengthening and modernisation of the grid. This is the aim
of grid reinforcement.
With many of our assets dating back to the previous
century, and designed to serve a traditional energy system,
substantial work is underway in the Netherlands and
Germany to deliver these grid reinforcements (see also the
chapter “Ensure a critical infrastructure for society”).
A good example can be seen in the North Holland province,
where we plan to expand our high-voltage grid, with the
construction of a new 380 kV connection. This is urgently
needed as North Holland is seeing a tremendous increase
in electrification in the past years, and is also strategically
important for connections to new wind farms in the
North Sea.
In Germany, one of the main aims of the Westküstenleitung
project is to strengthen the local grid for increasing amounts
of renewables.
Construction and modernisation of substations also play an
important role in grid reinforcement. In particular, we need
new high-performance transformers to enable the
integration of renewable energies via the distribution grid
into the transmission grid. We are investing in new operating
equipment that helps to stabilise the grid in the context of
high renewable in-feed, including plans for new STATic
synchronous COMpensators (STATCOMs). These devices
help to regulate voltage at the point of connection to the
power grid.
Due to the high infeed of renewable energy sources, TenneT
is experiencing periods with high voltage levels. To provide
reactive power compensation and keep the system voltage
within limits, TenneT recently signed a EUR 1.9 billion
framework agreement, with Siemens Energy, Hitachi Energy,
GE Grid and Royal SMIT to supply 110 compensation coils
and 160 power transformers for use in the Netherlands and
Germany.
Market integration
Market integration is key to creating a single and
interconnected European electricity market. Having realised
17 interconnectors with grids from other TSOs, and also
with our offshore portfolio, TenneT is ideally positioned to
play a leading role in this development.
The creation of an integrated electricity grid in the North Sea
is key to this European market. In 2023, important steps
were taken towards this as TenneT joined the German
Federal Ministry for Economic Affairs and Climate Action,
along with other TSOs to present initial plans about the
North Sea electricity grid.
The build-out of offshore hubs, configured with hybrid
interconnectors into a meshed DC overlay grid, could
eventually form the backbone of a North Sea renewable
energy powerhouse for Europe. By connecting offshore
wind farms and creating an interlinked offshore and onshore
high-voltage grid we aim to ensure reduce greenhouse gas
emissions, greater security of supply, increased spatial
efficiency, and considerably reduced costs.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
33
In 2023, TenneT and National Grid Ventures took an
important first step towards an integrated North Sea
gridwith the announcement of a project to develop a
multi-purpose interconnector between the UK and the
Netherlands. Called LionLink, the project is referred to as
ahybrid interconnector because it will connect the two
countries via a Dutch offshore wind farm. With a capacity of
2 GW, LionLink will support decarbonisation and energy
independence, and strengthen British, Dutch and European
security of supply. The hybrid interconnector would be the
first of its kind for the UK and the Netherlands. TenneT
anticipates that over time more hybrid interconnectors such
as this will link more North Sea wind farms and more North
Sea countries.
Market design
In March 2023, the European Commission published a
legislative proposal to reform the design of the European
electricity market. In the targeted regulation, the EU aims at
boosting renewable energy investments, improving
protection for EU consumers and enhancing the
competitiveness of EU industry. As the reform will lead to
amendments of the Electricity Regulation, the Electricity
Directive, and REMIT regulation, the legislative changes will
impact the whole energy sector, including the activities of
TenneT and other TSOs. TenneT is actively contributing to
the process through extensive stakeholder dialogue and
providing feedback to the German and Dutch ministries of
Economic Affairs on a regular basis. Changes will come into
force in 2024, with changes expected to include reducing
the cross-zonal gate closure time of the intraday market and
improvements to the forward market.
In Germany, TenneT is actively contributing to the Climate-
Neutral Electricity System Platform. This was designed to
bring together stakeholders from politics, science, business
and civil society in order to develop concrete proposals for
an enhanced market design. TenneT is involved in working
groups to build a future-proof vision of market design,
focused on the funding of renewable energies in the
long-term, the funding of controllable capacities, the
expansion of flexibility options and incentives for investment.
Incentives for investments in new hydrogen and gas power
plants are being further developed in the new power plan
strategy (Kraftwerksstrategie) launched by the German
Ministry of Economic Affairs and Climate Action.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
34
Developing system operations
As well as grid reinforcement and facilitating the electricity
markets, we must also invest in newconcepts for operating
the grid, to operate a more dynamic system and making
more efficientandoptimised use of our system through
new, including digital, solutions.
An important development to make our system operations
resilient for years to come is the Control Room of the Future
(CROF) programme. The CROF has the ambition to develop
methodologies, processes and tools in order to guarantee
excellence at system operations, including improved
forecasts, dynamic security assessment, inertia monitoring,
and topology optimisation. This essential project also helps
us increase grid utilisation and automation, by making
TenneT’s grid control centres future-proof and equipped to
manage our increasingly data-driven grid.
In 2023, an important first step was taken in the CROF
project with the go-live of the first part of our new EMS/
Scada system which we use to maintain balance in the grid.
This replaces the old end-of-life EMS/Scada system.
We are working with other stakeholders in projects under
the CROF umbrella. An example of this is an exploration into
how artificial intelligence (AI) applications can enable and
improve the tools. Another project under CROF is the
creation of a “digital twin’’ of our grid infrastructure, allowing
us to replicate the real-world system and its behaviour,
including stability analysis of the grid with a high penetration
of renewable energy sources.
To this end, our Control Room of the Future project plays a
critical role. With this, we are making TenneT’s grid control
centres future-proof and equipped to manage our
increasingly data-driven grid. The project will also help us to
increase grid utilisation and automation (for more
information see ‘’Solve societal challenges with
stakeholders and through partnerships’’).
Also in 2023, we took important steps in the Allocation 2.0
Programme. This aims to improve our electricity allocation
system to facilitate a more future-proof energy market.
Together with sector parties we work together to have more
accurate, measured and timely data about the energy
market.
System resilience
Our transmission grid is a critical infrastructure and the
backbone of economic and social activity. As as such, it
requires maximum protection from risks and threats. This
protection is not only essential to guarantee national
security, but also to maintain the grid availability levels that
our end-users expect from us.
Risks and threats can occur both gradually or suddenly, and
derive from internal or external factors. Our ability to react
and adapt to them is our organisational resilience. This
resilience is not built through a single management system,
but arises through the interaction of various management
disciplines. TenneT considers information security, business
continuity and crisis management as cornerstones that
together create resilience.
Information security
European grid operators increasingly face security threats,
particularly in the realm of physical threats and
cybersecurity.This year, TenneT was involved in a data hack
with one of our suppliers.This again stressed the need for
constant vigilance and protection of our critical infrastructure
(including our IT and OT networks). With an increasingly
digitalised transmission grid, the risks of cyber threats
grows proportionally. Therefore, digital security and risk
management is a key aspect of every new project.
We work together with authorities on security and fulfil all
legal requirements. In Germany, TenneT is certified
according tothe BNetzA IT security catalogue, based on
the ISO 27001 security standard. We also apply this
standard in the Netherlands to further develop our
management system on security.
Business continuity
In addition to security threats we also takeother factorsinto
account to ensure system resilience, including risks related
to climate-related events and other environmental
conditions. TenneT cooperates with relevant stakeholders,
including governmental institutions and DSOs, to assess the
risks and potential impact of climate-related events on our
assets. Such risks are also taken into account when
designing new assets. More information about managing
climate-related events can be found on page 109.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
35
Crisis management
We also prepare ourselves for situations where existing
emergency measures are no longer sufficient. In those
situations our crisis management organisation must decide
on appropriate measures on an ad-hoc basis. To ensure our
capability to manage this, we staff, onboard and extensively
train our crisis management organisation throughout the
year, and ensure the facilities needed to enable our crisis
management personnel. We also exchange our knowledge
and contribute to crisis exercises in our sector and on
national and international level.
Together, these three elements are the foundations for how
we ensure system resilience and the security of our system
in general.
What could prevent us from reaching our goals?
Increasing congestion in areas of our high-voltage grid, and
therefore limitations for connecting customers, is a growing
risk to security of supply – particularly in the Netherlands,
but also increasingly in Germany.
TenneT’s inability in some areas to connect customers to
our grid in a timely manner, as is legally required, could not
only result in disappointed customers but also in, for
instance, damages and negative publications.One of the
mitigation actions we take is to connect customers based
on prioritisation instead of a first come first serve basis, as
this would lead to a more efficient way of working and could
help reduce the lead time with several months.
Another important risk regarding security of supply is asset
or system failure, causing power losses. Power loss or
interruption could also result from inadequate, delayed or
unperformed maintenance of our assets, or an unbalanced
prioritisation between new projects and maintenance. In this
regard, optimisation of outage planning is key, alongside
risk-based maintenance scoping and improved training.
Ancillary services options are another factor that could
affect our plans. Our ability to execute ancillary services
could be affected by limited availability of interconnected
power in Europe or significant increases in traded power
prices. Developing international market platforms with other
TSOs and market parties will help to overcome this
challenge.
As we are responsible for critical infrastructure, we are alert
to the risk of cyber threats, resulting in unavailability of
critical IT and OT systems, data loss, hardware failure and
compliance risks. Equally important is the physical
protection of our assets against sabotage, theft or hardware
failure. By proactive compliance management, our security
monitoring and monitoring of our incident response
capabilities, we mitigate these risks where possible.
Major project delays are an ongoing risk. These can be
caused by, for example, scope changes, delayed permitting
procedures, environmental restrictions (such as with NO
x
emissions), scarce resources and issues with recruiting
suitable staff. Project delays could lead to penalty
payments, higher project costs and reputational damage to
TenneT. Increased standardised engineering and sourcing
concepts – as is done with the 2GW Program – help to
mitigate these risks, as does close collaboration with all
project stakeholders and dialogue with regulators, ministries
and government agencies as well as with TSOs and other
market parties.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
36
Strengthening and
expanding the grid
is paramount
“ That the biggest bottleneck in the energy transition is the overcrowded electricity grid is no
longer news. For us, strengthening and expanding the grid is paramount. What can we do to
accelerate those plans? More than ever, we need to join hands. Over the past year, we have had
frequent discussions about this. That is good. If you know each other and thus each other's
interests, you can take the right steps together. We like to think along with you. Also about
pragmatic solutions to make better use of the grids. In the end, we all have the same goal in
mind: speeding up the transition!”
Cora van Nieuwenhuizen
President Energie Nederland
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
37
Ensure critical infrastructure for society
To secure supply now and in the future, we need to design, build, maintain and
operate our critical infrastructure on land and at sea. TenneT is one of Europe’s largest
investors in national and cross-border electricity transmission capacity, providing the
grid that serves society’s growing need for electricity while also enabling the transition
towards a climate-neutral energy system.
Introduction
The assets we build and maintain onshore and offshore
form the critical infrastructure needed to power society,
enabling economic and industrial growth and keeping
essential services running. As we transition from a
conventional and fossil fuel-based electricity system to a
greener energy landscape, it is essential to invest in our grid
to make it future-proof. Unlike the traditional energy system,
where conveniently located conventional power plants
generate electricity on demand, the energy system of the
future will require us to balance numerous sources of
renewable energy that have a more volatile and intermittent
nature, carried over longer distances, while also delivering
the reliable security of supply that society expects.
To meet these challenges and ensure we have a secure
supply of electricity now and in the future, we need to
strengthen, maintain and extend our energy infrastructure,
while also designing a grid that can support society’s future
energy needs. That is why we develop, on a biennial basis,
our investment plans in the Netherlands and
Netentwicklungsplan in Germany. In 2023 we published
these investment plans. In Germany, we published them
together with the other German TSOs and in the
Netherlands, we shared our plans for the onshore and
offshore grid investments.We notice that in both investment
plans, the required investments are steeply increasing, and
we concluded that we, next to come up with plans to
execute the projects, we needed a different way of thinking.
That is why we developed our Target Grid to provide a clear
vision and map on how this future CO
2
free energy system
should look like and what requirements it needs to meet to
enable us and others in the energy landscape to work
towards this goal in a (cost-) efficient manner.
In this way, electricity grids play an important role in
achieving Europe’s ambition to be the world’s first climate-
neutral continent by 2050. TenneT is using the experience
and expertise we have gained in the past decades to build
towards this future energy system.
Our Target Grid 2045 strategy, which we presented in 2023,
sets out our vision for the electricity grid we will need to
have in place in 2045, and the approach for how we will get
there. The objective is to have in 2045 an electricity grid that
can support a sustainable economy, with a secure supply of
green electricity to power consumers and industry. The first
version of Target Grid, including the associated grid map for
2045, was presented to the Dutch Minister for Economic
Affairs & Climate Policy, Rob Jetten in April.
With Target Grid, TenneT is proposing a DC grid onshore
and offshore, served by DC electricity superhighways and
energy hubs, alongside a significantly improved existing AC
grid. This combination of energy hubs – connected by DC
green energy superhighways – will ensure that renewable
electricity can be transported over long distances from
theNorth Sea to consumers and industry, and that the
electricity grid remains reliable. We believe that our
traditional way of acting does not longer hold – it is a way
ofworking that isn’t futureproof. Strong partnerships with
our important stakeholders are crucial to achieve the 2025
and 2030 targets and ultimately deliver our Target Grid.
As we are delivering more and more projects to drive the
energy transition and shift into the next gear with concepts
like the 2GW Program to contribute to Target Grid 2045,
weare also impacted by challenges we need to overcome
today. An example of this is the nitrogen impasse in the
Netherlands which effects our projects for instance.
Furthermore, building and maintaining our assets also has
adverse impacts.Our work to maintain, expand and
strengthen our grid also affects local communities where
our assets are planned and built, raising concerns around
construction works or electromagnetic fields, for instance.
In addition, we face challenges with respect to the supply
chain, with careful action required to overcome resource
scarcity.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
38
As such, we work in a highly challenging environment – on
the one hand striving to provide the critical infrastructure in
time that will help to achieve Europe’s goal to become the
first climate-neutral continent. In a landscape where there is
an increasing demand of customers that want to be
connected, maintaining an ageing electricity grid that is
expected to secure supply and at the same time also is
expanded as it needs to be future-proof. Where we also
carefully consider affordable costs of our activities.
Furthermore, we are engaging in stakeholder dialogue that
addresses potential societal opposition to our work when it
impacts nature, local communities, and economic
constraints. In addition, we also face challenges with
respect in the supply chain, related to resource scarcity.
This can become a limiting factor, if we don’t act properly.
This is why our decisions are always influenced by the
balancing act of reliability, affordability, and sustainability.
Despite the challenges we face in realising our assets, we
were determined in 2023 to continue full speed ahead with
our investment portfolio. In this context, we made strong
progress on our projects, as our investments significantly
increased from EUR 4.5 billion in 2022 to nearly
EUR 7.7billion in 2023.
This step-up compared to previous years reflects our
determination to press ahead with our critical work to drive
the energy transition and ensure the improved availability of
electricity for our customers.
We reached major project milestones during the year, both
onshore and offshore (see sections to follow) and heavily
invested in essential maintenance work. This progress was
hard to achieve, given the challenges of the current
landscape we operate in.
However, we are encouraged by growing political support
for our work, as the urgency of delivering the energy
transition in time for Europe’s climate goals has the attention
of regulators and policy-makers. An example of this relates
to stronger cooperation in the Netherlands with local energy
boards and municipalities. In Germany, the introduction of
new laws aim to speed up the permitting phase of our
projects, which can often account for 70% of the time it
takes to realise new infrastructure. Legal changes in
Germany regarding permitting and licensing are expected to
shorten the delivery of future long-distance DC green
energy corridor projects for the energy transition by around
two years.
Finalising the applications for all permits for our long-
distance DC green energy corridors in Germany – SuedLink
and SuedOstLink – in late 2023 was an important milestone
in this regard. On both projects we started construction
works.
However, with grid congestion and outstanding customer
connection requests remaining an issue of great concern in
the Netherlands, as well as restrictions imposed on our
work due to limits on nitrogen emissions, we are aware that
there are many challenges still to overcome. Much more
needs to be done to strengthen and expand the grid for the
growing electricity demands of society and the increasing
share of renewables in the energy mix.
Maintenance
To be able to secure supply today and tomorrow, it is
essential we not only expand our grid onshore and offshore,
but that we also maintain our existing assets. Ongoing and
extensive maintenance with the aim to extend the lifetime of
our assets, ensures these deliver a full lifetime of service.
Ultimately, the essence of maintenance is to keep
equipment in a state where it can continue to perform its
intended function.
Future proof grid
Investments
inEUR million
Our performance in 2023
Performance Target Status Trend
7,730
NL: 2,948
DE: 4,779
Non-regulated: 3
2023
7,730
2022
4,493
2021
3,969
6,278
In 2023, we achieved our target
for grid investment, while staying
on track for critical infrastructure
projects.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
39
In the multiple asset complexity of an electricity grid,
maintenance also has the critical importance of reducing
unplanned outages and thereby contributing to our critical
task of security of supply. Furthermore, in a well-maintained
grid where equipment is performing its intended function,
there is the possibility for redundancy and therefore the
opportunity to work on new projects. In this sense,
maintenance provides an essential base foundation from
which we can perform our daily activities, while also
expanding and modernising the grid for tomorrow.
TenneT faces challenges in managing grid capacity in the
context of the increasing infeed of renewable energy. An
example of this relates to grid expansion and maintenance
work without compromising security of supply. TenneT
acknowledged this challenge and has done an extensive
analysis. This showed that next to needing to optimise the
work done in given planned outage timeslots, we also need
to consider far-reaching measures (e.g. the earlier piloted
‘live working’, structural working in shifts, change regulation
on allowed risks to be taken, etc ). TenneT has established
a cross-unit vision and strategy to address this challenge
and to turn it into an opportunity.
An important area of focus has been to accelerate the
replacement of end-of-lifetime assets, which is contributing
to improved grid availability and fewer unplanned outages.
The maintenance team has also increased its output
through efficiency-increasing measures, such as combining
outage windows, integrating work to maximise use of
resources, and using digital tools to improve planning.
Another priority has been to focus on further improving
efficiency in our maintenance work, maximise the output
given limited resources. These efforts are particularly
important as the demand and electricity load on our
network continues to grow, reducing the possibility for
outage windows and so constraining opportunities for
maintenance. Addressing constraints on outage windows
will be an important focus for the maintenance team as it
continues to find ways to increase its output. To this end,
we have introduced a new Outage Window Optimisation
Project, designed to increase outage capabilities in the
network, without sacrificing the pace of our work.
Standardisation of equipment and assets is also helping to
accelerate the speed and efficiency of maintenance, making
it easier and more efficient to fit and maintain assets that
share common design and components. The modules can
also be tested and configured in a controlled environment
before installation.
We are following this ‘plug and play’ approach with our Bay
Replacement programme, for example,which is currently
concluding the proof-of-concept phase before going to full
scale roll-out. The modular approach makes it faster and
easier to replace substations in busy urban areas, such as
in Alphen aan de Rijn, where the old 150 kV station was
replaced by a new gas-insulated switchgear station.
Onshore
With the rapid electrification of society, the share of electricity
in the energy mix is expected to grow from 20% today to
40-60% in 2050. To meet this increased demand, while also
accommodating the growing in-feed of offshore wind power,
we need to expand, strengthen and modernise our onshore
grid. In fact, expanding and increasing the capacity of the
onshore grid is just as important for the decarbonisation of
our energy system as offshore grid development, because
high-capacity connections are needed to transmit the green
electricity onshore to end-users.
Investment in our onshore grid is also particularly urgent in
the current context of growing grid congestion, as seen in
several regions of the Netherlands (see chapter ‘Deliver
a high security of supply’). To mitigate this, extensive work
is underway to strengthen the capacity of our existing
network, with new connections, extensions, and upgrades
to our network.
An example of this is our Better Use of Existing 380 kV
programme (‘Beter Benutten’), in which we are increasing
the capacity of parts of the national 380 kV electricity
transmission network. Better use means there is no new
line, but that the capacity of an existing connection is
expanded. This is done by replacing the existing conductors
with new conductors. Greater capacity was most needed on
the Lelystad-Ens and Diemen-Lelystad connections, making
these the first to be adjusted. Other projectsrelated to this
programme that are planned to be commissioned over the
next few years, consist of the sections between Ens and
Zwolle and between Eindhoven and Maasbracht. With this
work, we are aiming to build towards our vision of how the
future setup of the electricity grid in the Netherlands should
look like. We aim to upgrade the 380 kV ring in the
Netherlands and create new transmission corridors
where needed.
In Germany, we have a different approach, as electricity
needs to be transmitted over greater distances. There, we
are building an onshore meshed grid, where our DC (direct
current) projects such as, SuedLink and SuedOstLink have
a key role.The development of these long-distance DC
corridors is an important part of our onshore strategy.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
40
They will be a key factor in alleviating pressure on the
onshore network, particularly in Germany where they will
carry wind energy from the north to end-users in the south.
These high-power long-distance DC connections will be an
important part of our Target Grid 2045 strategy.
Progress on important onshore projects was made in 2023
in Germany and the Netherlands. The commissioning of a
61 km 380 kV partly underground connection from
Ganderkesee to St. Hülfe marked the completion this large
onshore project in Germany. Also, the completion in
September of the 140 km Westküstenleitung (West
Coastline) in Schleswig-Holstein between Brunsbüttel and
the border with Denmark sees the addition of another major
additional onshore north-south connection.
On the SuedLink project, work commenced in September
2023 with the start of the construction of a 5,200 meter
tunnel under the Elbe River. And on the SuedOstLink
project, we started construction of the converter in Isar and
the first cable sections in 2023.
In the Netherlands, the recent delivery of the Noord-West
380 kV project, replacing a previous 220 kV connection
between Eemshaven and Vierverlaten is helping to provide
much-needed additional transport capacity in the
Netherlands.
As well as performing line upgrades, we are also working to
meet the need for more capacity with more substations,
focusing on boosting regional hubs where customers are
demanding the most connections. This includes the
replacement of our Oosterhout substation in the southern
part of the Netherlands.
Offshore
The North Sea has a potential for up to 300 GW of installed
wind capacity – enough to cover the green energy needs of
its bordering countries and to make a significant
contribution to Europe’s 2050 climate targets. The urgency
of energy security has also accelerated Europe’s ambitions
for the North Sea as a future green energy powerhouse for
Europe, bringing countries together to develop shared
plans, as seen with the Ostend Declaration of April 2023.
This followed a previous convention in Esbjerg, where the
signatory governments of Belgium, Germany, Denmark, and
the Netherlands agreed to quadruple their offshore capacity
by 2030 to at least 65 GW. The Ostend Declaration further
crystallised this commitment as also the energy ministers
ofFrance, Ireland, Luxembourg, Norway, and the
UnitedKingdom set ambitious targets for offshore wind
of120 GW by 2030. TenneT alone is committed to
connecting 40 GW of offshore wind in the Netherlands and
Germany by 2030.
In November 2023, the governments of North Sea countries
and the European Commissioner for Energy, Kadri Simsom
worked together in the North Sea Energy Cooperation, with
the Netherlands as the chair in 2023, More detailed plans
were agreed upon to support the aim of realising more than
300 GW of installed wind capacity in the North Sea in 2050.
As a result of this meeting, an action agenda was agreed
upon and handed over to the new chair for 2024, Denmark.
Our Target Grid 2045 vision is aligned with this massive
investment plan for the North Sea. An interconnected DC
overlay grid, linking multiple offshore wind farms from
different countries, and connecting with onshore DC grids, is
envisioned as the backbone of the North Sea powerhouse.
The meshing of the DC grid at sea and on land, the
interconnection of multiple offshore wind farms from different
countries, and the integration of hydrogen electrolysis, will
mean lower costs for customers, better utilisation of the
electricity supply, and a more robust system.
To realise our Target Grid vision, and in the face of
increasing competition for scarce resources, we are working
hard to ensure we can deliver on our promise. That is why
our 2GW Program has led the way in creating a
standardised approach to developing offshore grid
connection systems. This will also be crucial to achieving
the goal of a North Sea Powerhouse. A milestone in this
journey was reached in April 2023, when TenneT and four
partners officially signed framework agreements to build
fourteen 2 GW HVDC offshore interconnections between
2028 and 2031 in Germany and the Netherlands, with a
contract value of more than EUR 30 billion plus EUR 10
billion for the corresponding cables. Eight of the offshore
links are in the Netherlands and six in Germany. This is
Europe's largest ever tender for energy transition
infrastructure.
As the 2GW Program is based on standardised technology
that can be shared with other suppliers and offshore TSOs,
it sets a blueprint that will stimulate economies of scale and
greatly accelerate European progress to achieving offshore
energy targets.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
41
2GW Program:
balancing between
sustainability, reliability
and affordability
With the increasing speed and pressure of the energy
transition, our traditional ways of thinking and working are
not sufficient anymore.
The 2GW Program is a prime example of this and a core element of our strategy
toachieve the future energy grid in time. In this innovative project we have,
together with our supply chain partners, developed a new 2 GW standard
offshore grid connection. By doubling the transmission capacity, compared to the
currently existing systems, we will have to build fewer platforms to transmit the
same amount of electricity. Thisapproach, will strongly reducethe workload,
save time, money, and resources in the process and create solutions together
with our suppliers by planning ahead. It is therefore also key in our efforts to
maintain affordability of the energy transition and not add to unnecessary societal
costs. In line with political climate targets to produce 300 GW offshore wind
energy onthe North Sea, TenneT will deliver 14 grid connection systems
by 2031. The2GW Program is hub-ready, as part of our Target Grid vision.
Furthermore, ithas a nature-inclusive design, which implies environmentally
friendly measures are integrated in the offshore grid design, as a basic condition.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
42
2GW Program:
balancing between
sustainability, reliability
and affordability
With the increasing speed and pressure of the energy
transition, our traditional ways of thinking and working are
not sufficient anymore.
The 2GW Program is a prime example of this and a core element of our strategy
toachieve the future energy grid in time. In this innovative project we have,
together with our supply chain partners, developed a new 2 GW standard
offshore grid connection. By doubling the transmission capacity, compared to the
currently existing systems, we will have to build fewer platforms to transmit the
same amount of electricity. Thisapproach, will strongly reducethe workload,
save time, money, and resources in the process and create solutions together
with our suppliers by planning ahead. It is therefore also key in our efforts to
maintain affordability of the energy transition and not add to unnecessary societal
costs. In line with political climate targets to produce 300 GW offshore wind
energy onthe North Sea, TenneT will deliver 14 grid connection systems
by 2031. The2GW Program is hub-ready, as part of our Target Grid vision.
Furthermore, ithas a nature-inclusive design, which implies environmentally
friendly measures are integrated in the offshore grid design, as a basic condition.
The Netherlands
Project Commissioning
1
IJmuiden Ver Beta 2030
2
IJmuiden Ver Alpha 2029
3
IJmuiden Ver Gamma 2029
4
Nederwiek 1 2030
5
Nederwiek 2 2030
6
Nederwiek 3 2031
7
Doordewind 1 2031
8
Doordewind 2 2031
Germany
Project Commissioning
9
BalWin3 2031
10
BalWin4 2029
11
LanWin1 2030
12
LanWin2 2030
13
LanWin4 2031
14
LanWin5 2031
Legenda
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
43
Other new offshore initiatives in 2023, were the
announcement of LionLink (see 'Deliver a High Security of
Supply') and the Delta Rhine Corridor (DRC). Where
regarding LionLink, the opportunity is being investigated for
offshore wind electricity from the North Sea transmitted via
Nederwiek 3 between the UK shore and the Netherlands
and for the DRC the aim is to create the opportunity to
transmit electricity from the North Sea directly into the
Dutch – German border region. These examples further
demonstrate how our Target Grid 2045 is beginning to take
shape, as we create and integrate a network of high-
capacity offshore and onshore DC connections.
As part of our earlier commitments to realise offshore grid
connection systems, we were pleased that we were able to
commission three projects this year. In the Netherlands, we
completed the Hollandse Kust (noord) project, our fifth and
final 700 MW connection from the 2023 Dutch Offshore
Wind Energy Roadmap. Furthermore, we were able to
commission Hollandse Kust (west Alpha) in December
2023. In Germany, we were able to complete the DolWin6
project, delivering this 900 MW grid connection system. All
three projects were completed on time and within budget,
withHollandse Kust (west Alpha) even three months ahead
of planning.
What could prevent us from reaching our goals?
The horizons of our work are long, requiring us to plan our
work years – often decades – in advance. In this respect,
uncertainties in assumptions, or errors in grid planning,
pose risks to our progress as they could lead to an
inadequate provision of grid extension projects. TenneT
needs accurate assumptions for capacity, spatial planning
(e.g. for gas power plants or electrolysers) or technology
and innovation to accurately meet the demands and
timescales of the energy transition.
For example, to plan the infrastructure required to realise
the DC overlay grid and DC hub concept requires
innovations in technology to provide equipment that have
not yet been developed. We rely on a small number of
specific suppliers to realise critical new technology for these
concept-related projects to be executed as planned.
In-depth studies and research by TenneT and her partners
help us to mitigate against these risks and plan accurately
for the future.
As we rely on the availability, resources and know-how of
key partners to work with us on our critical infrastructure
projects, we also face a risk if such partners experience
business instability or financial difficulties. Partners who face
liquidity issues resulting from unforeseen market disruptions,
geopolitical constraints, operational interruptions, could
become unavailable for work with TenneT, thereby delaying
our critical project work. We also enter into long-term
partnerships, with volume commitments, that encourage
supplier investment and support business stability. To
further protect the continuation of our work, we also ensure
a diversification of contractors and perform regular credit
checks and use of bank guarantees.
Further market risks can be posed by economic factors
beyond our control, such as inflation, price fluctuations and
resource scarcity. The strong increase in demand from
TenneT and other TSOs contributes to a sellers’ market
environment, exposing TenneT to risks of abuse of market
position, budget over-runs and disproportionate cost
increases. Diversification of supply contracts helps protect
TenneT against such risks, as well as the use of index-
based price adjustment clauses in contracts to reflect
market developments.
2021 2022 2023 by ~2030
20.8
22.3
43.1 43.1
4.2
8.0
2.8
1.4
7.1
7.1
12.2
11.5
9.9 9.9
8.5
9.2
Netherlands Germany Target
TenneT’s offshore targets
* 1GW of older offshore wind farms in the Netherlands use a private
connection to the onshore grid.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
44
In a tightly regulated sector, TenneT relies on a predictable
and stable legal and regulatory environment to plan our
critical infrastructure investments and safeguard our
financial health. In this regard, unpredictable changes to
legislation and regulation pose challenges to our critical
infrastructure investments. TenneT closely monitors
information on legal changes and keeps the organisation
fully informed of anticipated developments on regulatory
and legal issues affecting our work.
During 2023, the nitrogen impasse in the Netherlands led to
some major delays in projects toexpand the electricity grid.
In TenneT’s case, more than 13 projects are experiencing
immediate delays (half of them by more than six months)
and in the absence of a structural solution, almost 100
projects could face delays in the longer term. This could
have a negative impact for existing and new end-users, as
the investments are also meant to fix and prevent
congestion on our Dutch grid. Grid operators in the
Netherlands urged the government to develop solutions,
like using the new European directive RED III which can
speed up the permitting process for energy projects and
furthermore to prioritise grid expansion projects in the
nitrogen space allocation.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
45
Grid Map 2023
Hollandse
Kust (noord)
Westküsten-
leitung
Noord West
380 kV
DolWin5 /
DolWin6
SuedOst-
Link
In Germany and the Netherlands, onshore and offshore, we have been working hard to
make progress on our projects to secure supply today and tomorrow and drive the energy
transition. In our Grid map 2023, we highlight a selection of these projects.
Interconnectors
17
2022: 17
2021: 17
Substations
483
2022: 478
2021: 475
Completed offshore
connections
19
2022: 16
2021: 14
Circuit length
(kilometers)
25,435
2022: 25,009
2021: 24,518
Pylons
(approximately)
27,900
2022: 27,600
2021: 27,500
Ganderkesee-
St.Hülfe
Zuid West
(West) 380 kV
SuedLink
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
46
Grid Map 2023
Hollandse
Kust (noord)
Westküsten-
leitung
Noord West
380 kV
DolWin5 /
DolWin6
SuedOst-
Link
In Germany and the Netherlands, onshore and offshore, we have been working hard to
make progress on our projects to secure supply today and tomorrow and drive the energy
transition. In our Grid map 2023, we highlight a selection of these projects.
Interconnectors
17
2022: 17
2021: 17
Substations
483
2022: 478
2021: 475
Completed offshore
connections
19
2022: 16
2021: 14
Circuit length
(kilometers)
25,435
2022: 25,009
2021: 24,518
Pylons
(approximately)
27,900
2022: 27,600
2021: 27,500
Ganderkesee-
St.Hülfe
Zuid West
(West) 380 kV
SuedLink
Investment approval process
Pre-project
Study on alternatives
Planning
& Licensing
Technical specifi cations
& spatial planning
Planning
& Licensing
Final permits
& detailed design
Construction
& commissioning
Construction
& commissioning
Construction
& commissioning
Closing
Status 2022
Status 2023
Status 2022
Status 2023
Status 2022
Status 2023
Status 2022
Status 2023
Status 2022
Status 2023
Status 2022
Status 2023
Status 2022
Status 2023
Status 2022
Status 2023
Status 2022
Status 2023
Zuid West (West) 380 kV
In 2023, two of the four circuits (the two existing circuits) of the section between Borssele –
Willem Annapolder have been commissioned. For section two (Willem Annapolder – Rilland) a
solution for the quality issues related to the foundations has been found and work has commenced
regarding the repairs. With this a signifi cant hurdle has been taken to be able to commission this
section in the 2
nd
quarter of 2025 and without any 380 kV planned outages.
Hollandse Kust (noord)
Hollandse Kust (noord) is a 700 MW alternating current offshore grid connection.
The connection connects to the high-voltage substation at Wijk aan Zee and was
commissioned in 2023. With this the so-called ‘roadmap 2023’ was completed.
Noord West 380 kV
The project Eemshaven – Vierverlaten 380 has been completed in 2023 in line with
planning. Shortly after completion the last works have started to fi nalize substation
Vierverlaten and to decommission the old 220kV track between Robbenplaat
and Vierverlaten.
DolWin5
A major milestone in 2023: After three years of construction, the offshore platform left
the shipyard in Singapore in October and reached Haugesund (Norway) end of December.
The fi nal technical equipment will now be installed before transport and installation follow
in this summer.
DolWin6
DolWin6 was offi cially handed over to TenneT in mid-September 2023 after several weeks of
trial operation by the general contractor Siemens, which was responsible for the construction
of the converter stations on land and at sea. The cables were already accepted by Nexans in
December 2022, so the full grid connection is in operation.
Ganderkesee - St. Hülfe
Ganderkesee - St. Hülfe closes a signifi cant gap in the north-south transport of renewable
energy. In August 2023, the transmission line was successfully put into operation. In future,
3.3 gigawatts of green electricity can be transported here, allowing the project to stabilise the
regional and national electricity grid and saves signifi cant redispatch costs.
Westküstenleitung
The approximately 140-kilometer-long west coast line from Brunsbüttel to the Danish border
went into operation on time in September 2023. The line collects electricity from renewable
energies in Schleswig-Holstein in order to transport it towards the south of Germany. From
2025, the border-connection will also ensure improved electricity exchange with Denmark.
SuedLink
Good progress was made on the project in 2023. The planning approval documents
were submitted to the regulator for all planning sections. With the start of construction
at the Elbecrossing in the third quarter, the organisation is now heading into the
construction phase.
SuedOstLink
After the fi rst section D3b was successfully submitted to the regulator at the end
of 2022. The planning approval documents for all sections were submitted by the
4
th
quarter. Construction also has started in December, and will continue to go
“full speed ahead” in 2024.
Integrated Annual Report 2022 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
47
We need speed
when it comes to
grid expansion
“ Several major successes were achieved in grid expansion in 2023. The important construction of the
SuedLink to supply the south of Germany with climate-friendly renewable electricity and thus reduce
curtailment costs finally began. Secondly, TenneT reached an exemplary agreement for the transmission
and construction of the necessary power lines in dialogue with farmers. This new German speed is needed
in expanding our grid. With the new Lower Saxony Climate Protection Act and the Energy Transition Task
Force in Lower Saxony, as well as by increasing the number of staff in the approval authorities, we are
accelerating the necessary grid expansion, the planned expansion of renewable energies and storage, and
streamlining and digitalising procedures. In this way, we will achieve the climate targets together, create
security of supply and good grids. Thank you for the excellent cooperation!”
Christian Meyer
Niedersächsischer Ministerfür Umwelt,
Energie und Klimaschutz
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
48
We need speed
when it comes to
grid expansion
“ Several major successes were achieved in grid expansion in 2023. The important construction of the
SuedLink to supply the south of Germany with climate-friendly renewable electricity and thus reduce
curtailment costs finally began. Secondly, TenneT reached an exemplary agreement for the transmission
and construction of the necessary power lines in dialogue with farmers. This new German speed is needed
in expanding our grid. With the new Lower Saxony Climate Protection Act and the Energy Transition Task
Force in Lower Saxony, as well as by increasing the number of staff in the approval authorities, we are
accelerating the necessary grid expansion, the planned expansion of renewable energies and storage, and
streamlining and digitalising procedures. In this way, we will achieve the climate targets together, create
security of supply and good grids. Thank you for the excellent cooperation!”
Christian Meyer
Niedersächsischer Ministerfür Umwelt,
Energie und Klimaschutz
Create a safe and inspiring workplace
As a company that powers society, we rely on our colleagues to help us fulfil this
critical task. Our people are our most important asset and we are committed to their
safety as well as providing an environment in which they can thrive.
Introduction
At TenneT, we build, maintain and operate critical
infrastructure that powers society today, and support our
journey towards a renewable energy future. However, these
are not TenneT’s most important assets – our people are.
They are our key strength, and it is their combined effort,
teamwork and commitment that helps us achieve these
crucial goals for society.
To realise our rapidly expanding portfolio of investments and
build an energy system that can support a decarbonised
economy, we need to ensure we provide a safe working
environment for the people working for and with us. This is
a key priority in our work, reflected in 2023 with the
introduction of a new centralised Health Safety and
Environment (HSE) structure (See ‘Safety’ below).
With safety as a pre-requisite for everything our people do
in their work for TenneT, we work to ensure that we recruit
and retain the talent we need to meet our growth objectives.
To this end, it is essential that TenneT is an employer of
choice in an increasingly competitive labour market,
especially for technical talent.
While we have a net growth target of 850 FTEs every year,
we need to recruit more people to account for outflow of
employees, internal movements and parttime workers. To
realise Target Grid, we anticipate that we will need to
accommodate up to 10,000 internal and external
employees by 2025.
Due to a shortage of technically-skilled talents, other
companies in the energy supply chain also need to improve
their recruitment efforts. OtherTSOs, engineering firms,
subcontractors, equipment manufacturers, consultants and
a host of other specialists are also seeking to grow their
workforce in a tight, candidate-driven market. As many of
these employers are also helping to realise the energy
transition and directly or indirectly working with TenneT in
the supply chain, it is therefore also in our interests for them
to attract the people they need.
In this tight market, it is essential that TenneT offers an
inspiring place to work, where our people grow
professionally and personally, feel safe and supported to be
their authentic selves. This is why our strategic pillar
‘energise our people and organisation’ is so important.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
49
Currently at TenneT, our workforce comprises
6,937employees, working in the Netherlands (2,805) and
Germany (4,132). In addition, we have 1,399valued
colleagues who are externally contracted to us, such as our
contractors on site or colleagues working on a project
basis. To deliver on the ambitious targets needed to achieve
Europe’s climate goals, we continued to grow, adding more
than 884 additional FTEsto our workforce in 2023,
compared to 735in 2022. This was slightly above our target
of 850 additional FTEs for the year.
Our ability to attract new people shows TenneT is
maintaining its position as an attractive employer. Despite
the tight labour market with many parties competing for the
same talents, we still have managed to fill almost all open
positions. The effort and improvements were possible due
to a new Applicant Tracking Tool and process adjustments
and the joint efforts between hiring managers and the Talent
Acquisition team.
However, maintaining a net inflow of FTEs became harder in
2023 as more external contract workers left TenneT due to
legislative restrictions on interim contracts, particularly in the
Netherlands. Current law limits the term of interim contracts.
As many of these contracts are coming to an end, we are
seeing a larger attrition level than normal. Recruitment is
also more challenging as an increasing number of
employees make internal moves to new positions, requiring
vacant positions to be filled.
As regards safety, we have taken substantial efforts
throughout the last two years. We saw an decrease with the
Total Recordable Injury Rate (TRIR) to 4.5, compared to a
4.9 rate in 2022, and did not meet our target. Following the
fatal incidents that tragically occurred in 2022, we saw none
in thecourse of 2023.
We also track our absentee rate on a quarterly basis, as a
measure to track the health of our workforce. In Germany,
Safe workforce
TRIR
(including contractors)
Diverse workforce
* % female infl ow of
total infl ow
** % non-Dutch /
non-German hires
Healthy workforce
2
Absentee rate
Netherlands / Germany
Our performance in 2023
Performance Target Status Trend
4.5
NL: 2.3
DE: 6.1
2023
4.5
2022
4.9
1
2021
5.8
4.3
A positive development is that 2023 was a
record-year of investments without fatalities
and severe incidents. However, as we did not
meet our TRIR target in 2023, we need to
continue working hard to perform better and
reach our Zero Harm ambition.
Performance Target Status Trend
32%*
11%**
NL: 26%
DE: 35%
2022: 33%, 2021: 31%
NL: 11%
DE: 11%
2022: 9%, 2021: 9%
2023: 30%
2023: 10%
In relation to a diverse workforce, we saw a
steady infl ow of non-Dutch / non-German
employees, and met our target with regards
to female infl ow.
Performance Status Trend
NL 3.9
DE 3.4
2022: NL 3.7, DE 4.1
2021: NL 3.1, DE 2.6
In the Netherlands, absenteeism increased in
comparison to last year. Especially long-term
absenteeism was on the rise, which is partly
explained by a rise in mental health issues.
1
In 2023, we concluded that the collected hours were more than our scope is. This has impact on the calculation of the ratio. The impact on the 2023
TRIR is projected on the 2022 TRIR. This resulted in a 2022 TRIR of 4.9 instead of 4.4, while the target was 4.5.
2
Please note that we present the absentee rate between both countries separately as they are not fully comparable. For more information refer
toourReporting Guidance document.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
50
we recorded an absentee rate of 3.4(4.1 in 2022) and in
the Netherlands a rate of 3.9(3.7 in 2022). While we see a
decreasing trend in short-term absenteeism with our
employees, long-term absenteeism is increasing. This trend,
particularly in the Netherlands, was partly explained by a
rise in mental health issues among employees during
2023and we will continue to monitor it closely (more on this
in the section Health & Safety).
To ensure we grow as a diverse and inclusive organisation,
we track the diversity of our workforce. With 11% of new
employees being both non-Dutch and non-German, we met
our targets. We also see developments in other areas of
being an inclusive and diverse workforce. This includes, but
is not limited to, areas such as gender diversity. In 2023, our
female inflow accounted for 32% of new employees, slightly
above our target of 30%.
Bring out the best in our people in an inclusive
and safe environment
Health & Safety
The nature of our work carries risks, often involving working
at height with high-voltage assets and with heavy lifting
equipment and materials, onshore and offshore. Despite
this, we must deliver a secure and stable renewable energy
supply for society in a safe and responsible way. We want
all people working for TenneT to come home safe every day
and aim for zero harm in the workplace.
As the scale and speed of our work increases, we are
exposed to more safety risk. However, our Zero Harm
commitment means we need to double down on safety so
that our risk doesn’t grow in proportion with our output.
In 2023 we introduced a new organisational approach to
safety, following a detailed analysis of our occupational
health and safety procedures by the consultancy agency
DNV. Based on this study, it was decided to build a more
centralised, uniform and systematically applied approach to
safety across all sites and locations where TenneT’s
employees and subcontractors work – whether it is offshore
in Germany or on a construction site in the Netherlands.
The clear aim is to have more structure and company-wide
standardisation, ensuring everyone working for TenneT and
our subcontractors speak the same safety language,
executing their work in line with a set of safety protocols.
As a result, it was decided to centralise all of TenneT’s
safety management into a new Health Safety and
Environment (HSE) organisation, headed by a dedicated
HSE director. Around 130 people have been moved into this
new unit.Established in July, the HSE unit’s first task has
been to create a new Safety Management System.A crucial
part of the new system is continuous improvement,
meaning that any safety incident is analysed and learned
from, with suitable system improvements identified and
implemented.
The HSE team is also working to embed the TenneT safety
approach with our sub-contractors, not only through regular
meetings with leaders from our partners, but also
embedding our safety requirements into our contracts, with
follow-up meetings to ensure compliance.
In addition, a new system for embedding our Life-Saving
Rules (LSRs) has been developed. These rules recognise
the reality that a safety incident is often not an independent
occurrence, but in most cases an accumulation of small
decisions. LSRs are designed to stop those wrong
decisions being taken.
At TenneT we also recognise that safety is not always
physical – we must also care for the psychological safety of
our employees. This is particularly important as in 2023 we
saw an increase in long-term absenteeism, with mental
health issues rising. Although this is a trend shared by many
companies following the pandemic, we aim to fully
understand the underlying causes of this trend and to
ensure we address them. As such, psychological safety at
work is an explicit aspect of our internal safety programmes
and training, including the Safety Leadership Programme
"Safety needs our energy". We are determined to ensure we
provide our people with a safe environment where they feel
confident to share their experiences with their team and
manager so that suitable measures can be put in place to
protect their psychological safety. This is a commitment that
extends from our senior leadership team to team managers.
To get a better understanding of the workload and work-
related stress of our employees, we also started to research
the psychosocial workload (PSA) in 2023, in the
Netherlands and in a pilot project in Germany. Results show
that many of our colleagues experience a high workload
and work-related stress, as well as that mental health
problems contributing to nearly 50% of absenteeism.
Acknowledging this, we will take measures to address the
root causes, including leadership trainings and focussing
more on mental health in our vitality programme.
Inclusion, diversity and equity (ID&E)
At TenneT we believe that a wide diversity of people, with
different backgrounds, cultures and perspectives are
essential for everything we do and thereby for overcoming
the challenges of the energy transition. We want everyone
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
51
at TenneT to feel welcome and accepted. We strongly feel
that inclusion is a prerequisite for diversity to thrive, as
diverse candidates will be more encouraged to join and
grow in a company with an inclusive environment and
culture. In addition to this, equity involves ensuring access
to equal opportunities by aiming to eliminate structural and
historical boundaries and inequalities which prevent the
access to equal opportunities.
ID&E requires long-term efforts as unconscious and
conscious biases need attention to take good decisions in
recruiting, promoting and developing our employees. This is
a constant learning process, where our employees are the
most important inputgivers.
We are seeing the results of our efforts with an increasingly
international employee base. In 2023, we have more than
70different nationalities represented among our diverse
employee population and 11% of our new hires were not of
either Dutch or German nationality. We have also
collaborated with the Refugee Talent Hub for several years,
with the aim of hiring diverse technical talents who have
come to the Netherlands or Germany as refugees from
other countries. As well as temporary ‘work experience’
places, several of these newcomers have also become
permanent employees with TenneT.
Diversity is visible in TenneT from entry level to the most
senior members of our team. For example, our trainee
groups are a diverse mix of participants from both the
Netherlands and Germany, and other countries, with
different educational backgrounds. To foster diverse thinking
and knowledge, our trainees are encouraged to work
cross-border during one of their assignments.
In preparation for upcoming legislation, such as the
Corporate Sustainability Reporting Directive and the
DutchCorporate Governance Code, we investigated (via
benchmarking with external parties and internal expert
interviews) what steps to take for a renewed commitment to
Inclusion, Diversity & Equity. An Inclusion, Diversity & Equity
policy has been approved by the Executive Board and
Supervisory Board in November.This policy aims to outline
what ID&E responsibility means for TenneT and what
commitments it will make across different ID&E areas.
As part of this policy, we have set several mid- and
long-term targets to ensure inclusion, diversity, and equity
within TenneT. For example, we aim to achieve 40% female
representation for all senior leader positions (all Directors
reporting to the Executive Board) by 2025. In 2023, 38%
of these positions were filled by women. Next to this, we
want to maintain an equal balance in our Executive and
Supervisory Board by 2030, and have set a target of 12%
non-Dutch / non-German inflow of new hires by 2026. To
deliver on these targets, we will audit some of our internal
human resource processes (such as recruitment) to ensure
its alignment with this policy. To realise our diversity targets,
our aim is to change by design: for leader positions, we aim
that the slate of candidates includes at least one female
candidate. In case a female candidate turns out not to be
the best match, she will be considered for future leader-
vacancies. In addition, we will revisit this group of leaders
early 2024 to determine how diversity can be improved by
design faster when building two national champions. Also
for the Supervisory Board, TenneT continuously strives to
maintain the desired gender balance in future appointments
and in the meantime the company is mindful of other forms
of diversity to include. Furthermore, we will crystallise which
steps and actions, such as implementation of corporate
talent management for key positions, need to be taken in
2024, to meet our ID&E targets. We will also monitor our
progress towards these targets closely from next year.
We strive for equal pay for equal work. This is why in 2021,
TenneT began its first investigation into a gender salary gap.
The first results of this assessment indicate that a gender
salary gap might exist in both the Netherlands and in
Germany. Data limitations and historical factors create
challenges for us to exactly determine all factors that have
led to this situation, but we aim to take measures to address,
close and prevent gender pay gaps where they occur.
We are pursuing several initiatives to strengthen a women-
friendly workplace at all times. We implemented a reporting
system to monitor equal application of rewards, benefits
and career opportunities. We have invested to secure
female safety gear (Personal Safety Equipment) and we
have embedded an improved reporting channel for unequal
treatment, including sexism and harassment.
Part of our efforts on ID&E relate to promoting gender
diversity in the energy sector. Attracting more female talents
is a strategic objective and essential if we are to recruit
enough people to deliver on our strategic ambitions. In
2023, we held an open day as part of Girls’ Day in March,
inviting girls between 10 and 15 to come to our Information
Centre to learn about the energy transition and how we
ensure every home has a secure and stable supply of
electricity. Initiatives like this encourage and inspire more
girls and young women to study technical sciences and
consider a career in our fast-growing sector.
Future-proof our organisation by recruiting the
best talent
To reach our net growth target of 850 additional FTEs, we
need to bring a lot more people into the organisation every
year to carry out our investment projects. Recruitment
remains a key challenge for TenneT, especially as we are
seeking talent alongside other employers in our sector.
As such, we have to be smart in our recruiting, and ensure
the strategy covers being an employer of choice, creating
an environment where people thrive, grow and stay for a
long time.
For example, we are using a new competency-based
approach, meaning hiring people for their individual talent,
interests and skills rather than solely for their experience.
With the start in 2023, we are already starting to see the
fruits of this new approach, suchas being able to hire good
candidates without a specific position currently but who we
know will be a goodfit for TenneT.
Diversity at TenneT
6,937
DE 4,132
NL 2,805
Internal
employees
External
employees
1%
16%
33%
25%
18%
7%
Nationalities
DE 64
NL 45
73
27%
DE 28%
NL 25%
73%
DE 72%
NL 75%
11%
DE 11%
NL 12%
Non-German / non-Dutch
employees newly hired
DE NL
1,399
Internal employees NL DE Total
● Under 20 years
0% 1% 1%
● 20-30 years
9% 21% 16%
● 30-40 years
25% 39% 33%
● 40-50 years
30% 22% 25%
● 50-60 years
26% 13% 18%
● Over 60 years
10% 4% 7%
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
52
Future-proof our organisation by recruiting the
best talent
To reach our net growth target of 850 additional FTEs, we
need to bring a lot more people into the organisation every
year to carry out our investment projects. Recruitment
remains a key challenge for TenneT, especially as we are
seeking talent alongside other employers in our sector.
As such, we have to be smart in our recruiting, and ensure
the strategy covers being an employer of choice, creating
an environment where people thrive, grow and stay for a
long time.
For example, we are using a new competency-based
approach, meaning hiring people for their individual talent,
interests and skills rather than solely for their experience.
With the start in 2023, we are already starting to see the
fruits of this new approach, suchas being able to hire good
candidates without a specific position currently but who we
know will be a goodfit for TenneT.
We are also engaging with talent earlier in their career and
striving to remain in contact with them through “talent
pools’’ in which we identify future potential recruits. To this
end, education, and partnerships with academic institutions
(such as the TU Delft, TU Eindhoven, Universities of
Erlangen and Bayreuth, or RWTH Aachen), play an
important role in our recruitment efforts. Another example of
this approach is the Power Minor, a course on high-voltage
power which we have been working on with the universities
of applied sciences of The Hague, Amsterdam, Arnhem and
Nijmegen.
Organise for our people to perform at their best
and to work as one company
To meet the challenges ahead, and fulfil our strategic
objectives, it is essential that everyone at TenneT feels able
to perform at their best. The TenneT work culture and
practices need to facilitate this. We invest in programmes
and ongoing initiatives to protect our employees’ physical
and mental health, which in turn also helps to prevent
unforeseen absenteeism and illness.
For our employees to perform at their best and contribute to
the TenneT strategy, they need to feel well-informed and
engaged. To better understand this,we introduced the first
Pulse Check, a quarterly employee survey, in October 2023.
First results show that the vast majority of our employees
feel highly motivated to support TenneT achieve its strategic
goals. However, they also indicate that clear communication
andfaster internal processes would benefit company
success. The results were discussed more in detail between
the Executive Board and Senior Leadership Team. We will
continue to conduct these employee surveys on a quarterly
basis, to be able to compare results over time.
Our long-standing Always Energy programme is an
important way in which we help our people perform at their
best by focusing on their health and wellbeing. This is an
internal vitality programme, featuring workshops, training
and events to ensure our people are energised and
engaged, with a focus on: physical energy; mental and
emotional energy; social energy and purpose/meaning. In
2023, we further raised awareness of Always Energy, and
used the findings from employee studies about employees’
physical and mental wellbeing to create a programme that
is better tailored to our employees’ needs. We see a strong
Always Energy programme as a valuable and positive way
to improve employees’ wellbeing and address low
engagement due to physical or mental healthissues.
Diversity at TenneT
6,937
DE 4,132
NL 2,805
Internal
employees
External
employees
1%
16%
33%
25%
18%
7%
Nationalities
DE 64
NL 45
73
27%
DE 28%
NL 25%
73%
DE 72%
NL 75%
11%
DE 11%
NL 12%
Non-German / non-Dutch
employees newly hired
DE NL
1,399
Internal employees NL DE Total
● Under 20 years
0% 1% 1%
● 20-30 years
9% 21% 16%
● 30-40 years
25% 39% 33%
● 40-50 years
30% 22% 25%
● 50-60 years
26% 13% 18%
● Over 60 years
10% 4% 7%
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
53
Furthermore, as a large employer with a diverse and
international workforce, it is essential that we recognise the
workplace, and attitudes to working norms, are changing.
We are aware of new ways of working and the shifting
expectations of jobseekers, to support their wellbeing,
psychological safety and motivation. In this respect, 2023
was characterised by a structural shift towards hybrid
working. Following the pandemic, when homeworking
became the norm, we have adapted to set up a more
structural response to changed working patterns. We have
accommodated the growing demand for remote working,
while also putting in place clear expectations for time spent
in the office, for regular face-to-face team collaboration. In
this way, a post-pandemic working trend has been
managed into a new model of hybrid working across the
organisation. This suits the needs of our people while also
ensuring everyone at TenneT works together as a
productive and energised team. This will stay an area of
attention to ensure we follow TenneT’s needs and
accommodate our employees' wishes
What could prevent us from reaching our goals?
To realise our fast-growing investment portfolio and to
achieve the goals of the energy transition, we need a net
growth of 850 FTEs every year. However, we face ongoing
difficulties to hire the required resources for our planned
operations and projects due to very tight labour market
conditions. At the same time, we see a higher number of
our workforce leaving the company, as well as more of our
employees reaching retirement age. The companies we
partner with and rely on to realise our projects – such as
international engineering and energy contractors – face the
same challenges in recruitment and retention. The potential
sale of our German activities to the German state, with the
possibility of an organisational split, could have an adverse
effect on recruitment and retention.
To mitigate these issues, we are prioritising recruitment
efforts for the most mission-critical positions and
collaborating closely with hiring managers to speed up the
recruitment process and attract the right candidates. We
are also focusing on improved workforce planning to predict
where we need additional personnel most urgently.
The mental wellbeing and psychological safety of our
employees is becoming a growing challenge, as our
workload and (as a consequence) levels of personal stress,
increase. We see growing long-term absenteeism resulting
from mental health difficulties. To address these issues, we
have undertaken a mental health survey and increased the
involvement of company doctors in the treatment and
follow-up of mental health problems. Increased training and
coaching – such as e-learning on psychological safety – is
also being increased as part of our Safety Needs our Energy
programme.
As TenneT works in an intrinsically high-risk sector – with
many of our people working at height, or on busy
construction sites, with heavy and high-voltage equipment
offshore and onshore – safety is of primary importance in
everything we do. We are acutely aware that safety
incidents and major occupational or industrial accidents
(such as fire, explosion, helicopter crash, vessel collision,
structural failure or release of toxic substances) could result
in fatalities, severely impact the environment, damage our
critical infrastructure and harm our reputation.
During 2023, TenneT increased its investment in safety, with
the introduction of a new centralised HSE organisation. As
part of our new HSE approach, including new safety
management procedures and Executive Board-approved
safety directives, we are stepping up our safety measures
across TenneT. Safe work plans, workplace inspections,
training and instruction, incident investigation and follow-up,
are all part of the new safety culture.
Vacancies at TenneT
We are continuously looking for new colleagues.
Check our Dutch and German vacancy websites
forall jobs.
Dutch German
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
54
Support
security of supply
in Ukraine
“ To support security of supply in Ukraine, we are supporting our colleagues TSO Ukrenergo
and DSO DTEK with technical equipment. The assistance is provided under the leadership of
the Ukraine Support Task Force (USTF), which is part of non-governmental organisation ‘Energy
Community’. We are donating technical equipment that has already been used but is still in
a very good condition, such as emergency generators, high voltage equipment and a mobile
switchgear. With this, we hope to provide humanitarian support.”
Andreas Stach
TenneT
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
55
Create value to transition to a climate-neutral economy
As a key player in the energy transition, we are working to connect society to green
electricity by developing a reliable, affordable and future-proof grid. The main impact
we have as a company is driving the energy transition to support Europe’s goal to
become the first climate-neutral continent by 2050. We aim to do this by leading as a
green and responsible grid operator. We strive to reduce the environmental impact of
our operations and minimise our carbon emissions, our impact on the natural
environment and the materials we need to build, operate and maintain our grid.
Introduction
The world’s dependency on natural resources is reaching its
limit. The combined threat of climate change, the impact it
has on the environment and resource scarcity requires us to
transition to alternative ways of doing our business to
continue to provide value for society, without damage to our
climate or our natural environment.
As a European TSO, TenneT creates value for society by
developing the assets, knowledge and innovations to build
a reliable and affordable future-proof grid that supports the
EU’s net zero ambitions. We are pleased that with the
realisation of our investments in a future-proof energy
system, we are enabling progress in the energy transition
and helping mitigate climate change. Around 50% of the
electricity consumption in Germany and the Netherlands
came from renewable sources in 2023.
However, as we expand and reinforce our grid, we are
conscious that we also have a negative impact on the
natural environment. Procuring and producing the materials
needed to build our assets on land and at sea, operating
the assets to ensure a reliable energy system and effectively
managing the emissions which result from our own
operations all have an impact on the environment amongst
other things. And as the energy transition is a global
challenge involving a wide arrayof other parties from the
energy sector and associated supply chain, our sector’s
demand on resources and impact on nature is growing all
the time.
At the same time, the expectations from our stakeholders
– such as governments in the areas we serve – are
increasing, demanding more effort to combat climate
change and limit the environmental impacts on the world
around us.
As well as contributing to societal objectives by driving the
energy transition, TenneT can create additional value by
leading as a green and responsible grid operator. We have
set firm emission reduction goals for 2030 and are working
hard to reduce emissions throughout our supply chain (see
‘Climate’ section below). We have also introduced a new
circularity strategy, improving the sustainable impact we can
have with the use of our scarce resources, such as copper
(see ‘Circularity’ section). These and other efforts to protect
the environment are becoming more embedded in the
design of our assets.
Through our nature, climate and circularity ambitions, we
aim to shape what we believe is necessaryfor a responsible
growth path, while supporting Europe’s goal to become the
first climate-neutral continent in 2050.
Climate
We follow a threefold approach with regard to our impact on
climate:
• We aim to reduce our direct and indirect emissions.
• We green the emissions from our own operations as a
TSO where reduction measures don’t apply.
• As a last resort, we seek compensation for the emissions
which we absolutely cannot reduce or green.
In line with the Science Based Targets initiative, which we
committed to in 2021, we are determined to contribute to
the goals of the Paris Agreement. The targets we set in
2021 include ambitious emission-reduction goals for 2030
(measured against a 2019 baseline) which aim to cut our
direct emissions in scope 1 and indirect emissions in scope
2 by 95% and our indirect emissions (scope 3) from
purchased goods and services and capital goods in our
supply chain by 30%. These targets have been determined
in addition to our 2025 climate-reduction targets. The
majority of scope 1 and 2 emissions are from grid losses –
the electricity lost during transmission across our network
– and from emissions from the insulating gas SF
6
, energy
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
56
use at our offices and our stations, and the vehicles we own
and operate. During 2023 we also made significant
progress in our efforts to measure and address our scope 3
emissions, which are the indirect emissions that arise in our
supply chain, as a result of what we purchase and contract.
This means we are including scope 3 emissions in our
reporting for the first time.
The largest impact that TenneT has in terms of climate
action is to enable the switch from a fossil fuel-driven
economy to a climate-neutral economy by connecting
renewable energy sources and transmitting the produced
electricity. We define our key impact metric in this area as
the equivalent number of households that in theory would
have been able to receive 100% green electricity. It is
important to realise that the majority of the electricity
consumption comes from industry.We estimate that by the
end of 2023 we enabled the theoretical equivalent of more
than 14.3million households to receive green electricity
(14.1in 2022). These climate figures are not just achieved
by our own operations, but also by our partners in the value
chain, such as electricity generation companies and
distribution system operators (DSOs). By working together,
we were able to help avoid 18.0 million tonnes of CO
2
in
2023, compared to 17.2 million tonnes in2022.
Scope 1 (Direct own emissions)
SF
6
TenneT needs to use special insulating and fire-
extinguishing protection for our high-voltage stations and
distribution systems. Sulphur hexafluoride (SF
6
) is widely
used by TSOs as a highly effective insulating gas in
switching installations. However, it is also a greenhouse gas,
with one unit equivalent to over 23,500 units of CO
2
. We
conduct permanent monitoring of our assets to detect leaks
and swiftly report them to the appropriate internal reporting
mechanisms. While SF
6
leakages currently only account for
around 1% of our carbon footprint, we still aim to mitigate
Climate
Nature
Circularity
Our performance in 2023
Performance Target Status Trend
CO
2
footprint of our grid
losses, substations, offi ces
and mobility (net emission
intonnes of CO
2
)
Climate neutral
in2025
1
A slight decrease of our gross carbon footprint
as a result of less SF
6
leakages and less grid
losses compared to 2022. Partnerships are in
place to further develop SF
6
free alternatives.
Our Net carbon footprint remains at the same
level as prior year, as a result of the inability to
fully green German grid losses. This remains
the main challenge to meet our 2025 target.
Performance Target Status Trend
• Potential recovery
of assets
• Circular infl ow
• Circular outfl ow
Increase the potential
recovery of our
assets and make our
materials infl ow and
outfl ow more circular
In 2023, we developed our fi rst Circular
Economy strategy, as a more integrated
approach was deemed suitable. While we are
effectively increasing our efforts to improve our
circular performance, data availability remains
a major challenge.
Performance Target Status Trend
• (Net) impact on nature
• Environmental incidents
Net zero impact
on nature in
2025
We recorded more environmental incidents
and just a slightly better performance on
oil leakages in 2023.To limit our negative
impact, active steps such as installation of
bird diverters on our overhead lines and
replacement strategy for our most leakage
prone cable circuits have been executed. Our
positive nature measures are being scaled up.
1
To be fully climate neutral (SF
6
emissions, grid losses, energy use offices, stations and mobility of our employees) in 2025.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
57
its impact as much as possible. We are working to find
sustainable alternatives to SF
6
that provide similar safety
properties without harmful emissions.
In doing so, we use our internal carbon price of EUR 150
per tonne to evaluate alternatives to SF
6
in our tenders. By
2025, we aim for a third of TenneT’s switchgear - those that
use a significant amount of the gas – to be SF
6
-free,
followed by another third in 2030. In this regard, we made
good progress in 2023 on this, with61%of the assets
installed this year was SF
6
-free regarding our 110/150 kV
assets and 23% of the 220/380 kV assets installed in 2023.
Since alternatives to SF
6
are a key bottleneck as mentioned
above in line with our long-term strategy, we invest in joint
partnerships and market stimulation through innovative
partnerships. One such partnership is the research and
development of a hybrid GIS SF
6
-free solution.In Germany,
we have ordered the world's first completely SF
6
-free 420
kV gas-insulated metal-clad switchgear (GIS), which is
being developed and to be builtat the Erzhausen substation
(Lower Saxony) by 2024 and is part of the Wahle-Mecklar
AC grid expansion project.
Our 380 kV station Maasbracht in the Netherlands is one
of TenneT’s largest. When the time came for the station
to undergo renovation, two suppliers were selected to
provide an SF
6
-free solution in the gas-insulated lines (GILs).
By using a natural alternative to SF
6
, the 'global warming
potential' (GWP) of the insulation gas in the GILs is
significantly lower compared to over 23,500 for SF
6
.
As TenneT gradually switches to using natural gases for
insulation in new electrical switchgear, moving to
alternatives for SF
6
has its own challenges since the majority
of currently available alternatives still have a significant
global warming potential. Though this is lower than that of
SF
6
, it still contains a fluronitrile compound.
As TenneT, our long-term strategy is to use gases for
installations which have insulating properties with a Global
Warming Potential (GWP) less than 1, when at least two
market parties are able to offer this.New regulations such
as those related to the Fluoriated (F-) gas and per- and
polyfluoroalkyl substances (PFAS) also influence our
decisions in making our long-term strategy a reality. The use
of PFAS in solid, liquid, and gaseous components of grid
equipment is determined by manufacturers to ensure the
Carbon footprint information
2023 (gross) 2023 Total 2023 (net) 2023 Total
DE NL DE NL
Scope 1 GHG emissions
Total Scope 1 GHG emissions (tCO
2
eq) 22,982 14,130
Sulfurhexafluoride (SF
6
) leakages 1,957 12,737 14,694 1,957 12,737 12,873*
Lease vehicles 3,743 3,152 6,895 3,743 3,152 1,346*
Gas consumption 809 583 1,392 0 0 0
Scope 2 GHG emissions
Total Scope 2 GHG emissions (tCO
2
eq) location based 2,569,478 1,501,971
Grid losses 1,749,522 719,030 2,468,552 1,501,971 0 1.501,971
Electricity use stations 86,874 9,101 95,974 0 0 0
Electricity use offices 1,518 3,433 4,951 0 0 0
Total Scope 2 GHG emissions (tCO
2
eq) market based 3,588,715 2.307,310
Grid losses 2,768,759 719,030 3,487,789 2,307,310 0 2.307,310
Electricity use stations 86,874 9,101 95,974 0 0 0
Electricity use offices 1,518 3,433 4,951 0 0 0
Significant scope 3 GHG emissions
Total Significant scope 3 GHG emissions 700,984 700,984
Business travelling 2,791 2,650 5,541 2,791 2,650 5,441
Offshore transport 5,543 5,543
Purchased goods and capital goods 690,000 690,000
Total GHG emissions location based 3,293,444 2,224,545
Total GHG emissions market based 4,312,681 3,029,884
Target 2030 Scope 1 and scope 2: 95% reduction, scope 3: 30% reduction compared to base year 2019
% Greened of our carbon footprint location based 33%
% Greened of our carbon footprint market based 30%
* part of our emissions are compensated with CO
2
certificates
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
58
needed requirements for its performance and reliability.
TenneT is committed to protecting the public and workforce
wherever risks stemming from PFAS are identified. We have
emphasised this to the concerned authoritative body.
The pressure to find alternatives to SF
6
is becoming more
acute, as our project portfolio increases and we face
restricted available outage time and space needed to
perform maintenance and replacement work. Our delivery of
alternatives must match the speed of the energy transition
without losing focus on safety and reliability.
Gas consumption
Gas usage for heating our offices and stations is also part of
our scope 1 emissions. To ensure we are meeting our 2025
climate neutral goals regarding our offices and stations, we
have greened our gas consumption via guarantees of origin
and (/or) green gas contracts or compensated them.
Lease vehicles
The mobility of our employees, whether travelling to and
from the office or out in the field, is part of our CO
2
emissions and is an area we are addressing with carbon-
reducing policies. For example, we aim for a fully electric
lease car fleet by 2025, replacing the current use of hybrids.
This year, we made progress on this as per December 2023
around 43% of our current fleet was electric compared to
approximately 39% at the beginning of the year.
Scope 2 (Indirect emissions from generation of
purchased energy)
To align with the criteria set by the Science Based Targets
initiative, as of this year we will make use of the so-called
‘market-based approach’, which means that our emissions
are based on the emission factor per contracted source.
Grid losses
As we transport electricity, in growing amounts even,
through our network, it’s unavoidable that some of it will be
lost. Known as grid losses, these are measured as the
difference between the electricity fed into the grid and the
electricity delivered. Grid losses depend, among other
things, on the current, voltage and the distance that
electricity is transmitted. We cannot prevent grid losses
from occurring; they are an inevitable part of electricity
transmission over high distances. Currently, grid losses
account for around 75% of TenneT’s carbon footprint
(scope 1, 2 and 3, based on a location-based approach.
When applying a market-based approach, this would be
around 80%).
A MWh lost can no longer be used to power an electric
vehicle or to keep the lights on. The emissions related to
that MWh fall within TenneT’s scope of responsibility. The
impact of our grid losses on the environment has always
been determined by the local electricity grid mix: the
average emissions per MWh are considered to be the
environmental impact of that grid loss. When all purchased
electricity related to these grid losses would have been
purchased from climate-neutral electricity sources, that
would mitigate our carbon impact from grid losses as well.
As we are bound by law to purchase against the lowest
possible price at a certain moment in time, this is not
possible to mitigate during the year when grid losses occur.
That is why purchasing guarantees of origin equal to the
amount of electricity lost is our way of greening our grid
losses. We are currently limited by German regulation in
purchasing guarantees of origin (GoO), which is why we
procure GoO’s corresponding to a monetary limit of the
German grid losses at a group level. For 2023, we will green
100% of grid losses in the Netherlands and 14% of the grid
losses in Germany. This relates to the location-based
calculation of our scope 2 emissions. When applying the
market-based approach, this would be approximately 17%.
Over the past years, TenneT has been actively pushing the
debate on greening of grid losses in Germany. This has
resulted in more awareness, but so far no policy change
yet. That makes that the greening of grid losses on the
German side comes fully to the account of TenneT and
TenneT has decided (already for many years) to do this in
a balanced way – with a budget cap. Since we foresee no
policy change in 2025, it is likely we will not meet our own
climate-neutral ambition in 2025.
Every year, specific tenders are drafted to procure the
certificates corresponding to the estimated volume of our
grid losses. The final step for greening of grid losses is the
cancellation of the certificates. These certificates are then
cancelled in that year to attribute it to the volume of grid
losses greened. These cancelled guarantees of origin are
then accounted for in our carbon footprint calculations and
reported. However, when comparing the cancelled
certificates with the actual energy consumption it became
clear that lesser certificates were cancelled for the year
2019. The certificates were bought but not cancelled.
Ourintention in 2019 was to green our grid losses.
Unintentionally, we failed to cancel the certificates and in line
with our sustainability ambition and to meet our stakeholder
expectations, we took a step to correct this despite a
significant increase in costs.We will purchase and cancel
the certificates in accordance to the corresponding volume
of 2019.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
59
Electricity use in stations and offices
Similar to gas usage, the electricity use in our offices and
substations has an impact on our carbon footprint which we
mitigate by purchasing green electricity. For our substations,
we use solar panels, insulation measures and LED lighting
where possible. We have installed solar panels on our land
stations at Hollandse Kust (noord) and also intend to install
them for the land stations used in our 2GW Program. We
will use the generated electricity for our own consumption.
We have also installed solar panels on some of our
substations in Germany.
Scope 3 (Indirect emissions in TenneT's value chain)
Purchased goods and services / capital goods and services
Alongside the emissions that are emitted as a result of our
owned and operated controlled resources, we also report
the emissions that are emitted in our value chain – scope 3
emissions. As part of the Science Based Targets we
formulated, our biggest scope 3 impact is from the
purchased and capital goods and services related to our
projects. To gain sufficient and accurate insights and take
action to reduce these emissions, we need to work together
with our supply chain partners. In 2023, we were able to
gain preliminary insights into our scope 3 emissions related
to purchased goods and capital goods and services. Based
on these calculations we estimate that these are around
690 kilotonnes of CO
2
equivalents – approximately 27% of
our total CO
2
emissions. Due to the increase of our project
portfolio in the upcoming years, we expect the share of our
scope 3 emissions to rise to even more than 50% of our
total CO
2
emissions.
To better understand and address the scope 3 carbon
emissions arising from our supply chain, we are working on
a ‘Decarbonising the Supply Chain’ project. We aim to gain
more insight into the carbon footprint of our purchased and
capital goods and services. Life cycle assessments (LCAs)
provide insights into the life cycles of our assets, revealing
the biggest carbon emission contributors along our supply
chains.
Our first findings specifically indicate that the biggest
contribution to our scope 3 emissions lies in the upstream
production of materials, such as steel, copper, aluminium,
concrete and plastics. The transport of assets to our project
sites and the installation of these assets also play a
significant role. Based on these insights, we have started
this year in twelve asset categories, which were identified to
be among the strongest contributors to our scope 3
emissions, to develop and implement sustainable sourcing
strategies together with our partners. Switching material
supply to low-carbon alternatives, incentivising suppliers to
increase the use of green energy in production, transport
and installation and identifying possibilities to increase
circularity in our supply chains are examples of potential
measures identified in these sustainable sourcing strategies.
We are increasingly considering sustainability to a greater
extent in our supply chain. Next to LCAs, we use tools such
as the Environmental Cost Indicator (ECI) to incentivise our
suppliers to measure and reduce the environmental impact
of the products and services we buy from them. By giving
the environmental saving a monetary value through the ECI,
we can also gather more data on our environmental
impacts, as suppliers are encouraged to provide more
transparency on their product lifecycle emissions in our
tendering process. Furthermore, we have offshore
framework agreements in place that require all our suppliers
to submit a sustainability management plan to show how
they understand and manage their carbon footprint.
We can expect scope 3 emissions to become a greater
challenge as our project portfolio increases, and quickly. We
have set targets to reduce our emissions in this scope by
30% by 2030, but TenneT projects take a long time to
develop and often include multi-year contracts, such as our
2GW project framework agreements. In order to reach our
targets in the stated timeframe, we need to think ahead and
make choices now that will support them in the future.
Mobility as a result of our own activities
With respect to the smaller sources of scope 3 emissions,
we continue to improve our policies on mobility, motivating
employees to make more environmentally friendly choices in
the way they travel for work. We integrate our Mobility
Vision with our hybrid and flexible working, so that
employees can choose the means to do their job in the best
way possible.
A partnership with the German rail operator Deutsche Bahn
is one of the green mobility initiatives we have taken,
encouraging employees to travel by train for climate-neutral
journeys, as well as a bike-leasing scheme for our
employees in the Netherlands and Germany.
As we grow our operations, with more employees and more
projects, we want to avoid our emissions also going up.
That is why we set absolute carbon emission (science
based) targets. With a growing project portfolio and a
growing workforce, this is not an easy challenge. However,
we believe this approach will enable us to make better
choices.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
60
As a result, we were able to green 33% of our overall
carbon footprint. If we would have used the same scope as
last year (as in 2023, we updated the scope of our carbon
footprint regarding our purchased and capital goods and
services in scope 3), we would have greened 41% of our
overall carbon footprint. This would have been an increase
of 6% compared to prior year (35% in 2022), but we record
the same percentage this year due to this scope change.
Please note that these percentages are based on a
location-based calculation. When using a market based
approach, this would be respectively 30% and 36%.
TenneT’s sustainable Revolving Credit Facility: linking
climate performance to finance
To make progress against our climate ambitions even
morevisible, we have linked our financing costs to our
climate performance. Secure access to finance is essential
to ensure that we maintain the pace of our investment
portfolio. An example of this is our EUR 3.3 billion
sustainable Revolving Credit Facility (RCF), which is linked
to sustainability performance indicators and targets.
Inpractice this means that, depending on the realisation
ofour climate-related KPIs, a discount is applied to the
interest margin of the RCF. This is related to the green
percentage of energy use of our stations (100% in 2023
vs100% in 2022) and our offices (100% in 2023 vs 100%
Nature measures
Around our offshore platforms
and cables
Around our lines- and cable
connections
Around our high-voltage
substations
Offshore
wind farm
Wind farm
Offshore
platform
TenneT
offshore grid
TenneT
onshore grid
High
voltage
substation
High
voltage
grid
Converter
station
Sea cable
Cable
connections
• Facilitating species population 1
• Ecological cablecrossings 2
• Articial reefs
• Measures regarding sound
pollution for marine life
• Measures to avoid bird collisions,
such as ‘varkenskrullen’
• Coastal breeding zone protocol
• Nest boxes on pylons 5
• Ringing birds for research 6
• Vegetation management, such
as ower lines
• Maintain insect populations by
(sinus) mowing management
• Lower environmental impact due
to alternatives for insecticides
• From Gravel to Green 3 and
creating Green corridors
• Improve biodiversity with fauna
eco-measurements e.g. insect
hotels, bird boxes. 4
• Green roofs on our substations
1 2 3 4 5 6
in2022). It is also linked to the net carbon impact of mobility
per employee against the total number of employees (1.0 in
2023 compared to 1.4 in 2022) and the net carbon footprint
of leaked SF
6
gas divided by theoretical CO
2
impact of
banked SF
6
(0.11% in 2023 compared to 0.15% in 2022).
To reduce our CO
2
footprint, we compensated for a part of
our leaked SF
6
and mobility through carbon offsets of
renewable energy and solar cooktop projects in India. Also,
we have agreed upon targets to realise a reduction of our
scope 1 and scope 2 emissions compared to the base year
of 2019, which was a 26%* reduction when comparing
2023 with 2019 (based on a location-based approach).
Nature
While our work driving the energy transition contributes to a
long-term positive impact on reducing carbon emissions
and harm to nature from climate change, TenneT’s activities
also have a negative impact, as we build, maintain and
operate our assets in the natural environment. By leading as
a green grid operator, we aim to reduce our negative
impacts - such as on biodiversity and the possible
environmental impact related to building, maintaining and
operating our assets (e.g. oil leakages) – while maximising
our positive impacts. TenneT’s goal is to reduce our net
impact on nature to zero.
* not assured
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
61
To make progress on our biodiversity ambitions, we include
details on nature commitments in our investment plans.
Currently, for each proposed investment, a ‘Commitment to
Nature’ paragraph details a description of the anticipated
impact on nature, the measures to mitigate, and the
opportunities for positive impacts. In 2023, 100% of our
investment plans contained such a section.
To take action to reduce our impacts on nature, we carefully
track the number of environmental incidents, such as
leakages of SF
6
gas, oil leakages from our assets, and other
occurrences. In 2023, we recorded 190 environmental
incidents (compared to 97 in 2022).As the amount of
investments and the activities needed to drive the energy
transition increases, the number of instances that this could
happen also increases. However stillthis increase of
environmental incidents is something that we are displeased
with.We notice that a key driver for this increase relates to
bentonite releases in our offshore activities. Bentonite is a
type of natural sodium clay. The fact that we see
improvements in the reporting of these incidents is a
positive step. Next to this, we recorded 2,698 litres of oil
leaked from cables in 2023, which is a slight decrease
compared to the 2,762 litres reported in 2022. For both the
environmental incidents as well as the oil leakages from
cables, we consider every incident that occurs one too
many and we are aiming to learn from theroot causes of
these incidents. An example of this is that we are aiming to
optimise our average repair time for oil leakages from
cables.We are monitoring how many days on average this
takes to repair and aim to reduce this on a daily basis.
Since the introduction of this metric, we primarily focused
on the Dutch oil cables as this required the most of our
attention and in Germany we predominantly do not make
use of these types of cables. We do have these types of
cables in Germany as well, which was confirmed in 2023.
Based on our current insights, this is significantly a smaller
amount of cables than in the Netherlands (approximately 6
kilometres of cable). We are currently updating our reporting
to have them appropriately included in this metric. As these
types of cables have oil pressure meters which are
connected to our systems, we are not aware of any oil
leakages from cables from our German activities. In 2023,
we began oil pressure sensoring to gain more and quicker
insights into potential oil leakages to reduce our negative
impact. We launched apilot for two 150 kV lines in Area
West, which provides real time data on the status of
our assets.
We also launched an inspiration guide for nature-inclusive
building. Its purpose is to provide a toolbox to make
nature-inclusive building the standard approach.
The impact we have or aim to create relates to where our
assets are located when building, maintaining or operating
them. This is mainly around our offshore platforms and
cables, around our high-voltage substations and around our
lines and cable connections. Taking into account the
biodiversity around these areas is an important part of our
sustainability ambitions.
Biodiversity measures around our onshore assets
Examples of how we make our policies regarding the
biodiversity around our assets on land actionable are by
working together with other infrastructure parties in the
Netherlands to increase biodiversity in collective areas
through the ‘main ecological infrastructure’. Furthermore,
we also embed these focus areas in policies on how we
should carry out our maintenance and construction work, to
ensure that we comply with nature conservation laws.
TenneT promotes sustainability at substations by applying
green measures. Gravel areas near substations will be
transformed into green spaces, provided our operations can
continue.The revised Programme of Requirements (PoR)
allows for alternative gravel solutions with grass and flower
mixtures based on soil types. Some results so far include
our Vijfhuizen and Meeden stations for instance.
Considering our direct impact on nature and wildlife, we try
to reduce danger to bird life (and damage to our assets) by
working with the right partners to identify high-risk bird
spots and to implement preventive and animal-friendly bird
barrier measures. We also work to protect nature in the
immediate vicinity ofour assets. Examples include making
our lines better visible for birds by hanging up plastic curls
(so-called 'varkenskrullen). Also, on the Maasvlakte in
theNetherlands, TenneT has started a pilot project to
keepbreeding gulls away from critical parts of the high-
voltagesubstation. Lasers will be tested over the next few
years tosee if the birds will permanently avoid the high-
voltageinstallations for breeding purposes. If the pilot is
successful,it is expected that the lasers will be used on a
larger scale atour high-voltage facilities.
Watch our pilot on the Maasvlakte on vimeo.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
62
Some species ofnesting birds,such as peregrine falcons
and kestrels, often nest in and around our assets. These can
be found breeding at our facilities in Krimpen, Maasvlakte,
Diemen and Vijfhuizen. To protect the birds and our assets,
we are taking measures to prevent new nests in the
installations before the start of the next breeding season.
Furthermore, regarding our our 150kV overhead line
trajectory between Dodewaard and Ede, close to
Wageningen, TenneT conducted a pilot with drones to hang
wire markers for birds - a first in the Netherlands.
Usually, TenneT works with helicopters or cranes and
climbers are used to install wire markings. Using a drone
is both more environmentally friendly and cost-efficient,
as it does not require heavy machinery on land or
helicopters to fly.
Biodiversity measures around our offshore assets
Examples of how we address this around our offshore
assets are related to the concept of 'Nature-Inclusive
Design’ (NID). Here, projects are part of TenneT's efforts to
reduce the environmental impact of expanding the offshore
grid. Several projects have already integrated eco-friendly
designs and ecological measures, such as fish enclosures
and ecological landscaping measures.
An example of how we apply Nature Inclusive Design,
relates to the Hollandse Kust (zuid) project. For this project,
where we realised this offshore grid connection system, we
have laid cables from the platform to the coast near the
Maasvlakte. To protect the cables at crossings with oil or
gas pipelines, for example, a protective top layer of stone
was laid over the cables. The first results of our marine life
survey around these sea cable crossings found a source of
biodiversity around these crossings with about 48 different
species.This research will be continued to analyse the
differences between different types of stones and their
effect on biodiversity. Another example relates to another
offshore grid connection system, Hollandse Kust (west
Alpha). Together with one of our contractors, we placed
artificial reefs near this asset.
Circularity
TenneT depends on large amounts of different materials to
operate, reinforce and expand our grid to facilitate the
energy transition. The extraction, refining, use and disposal
of these materials is one of the key drivers of the negative
environmental and societal impacts we have as a TSO.
Additionally, increasing global use of these materials, as well
as recent crises and geopolitical tensions, have led to
increased scarcity of and competition for these materials.
This has resulted in considerable risks for our business
through supply chain disruptions, increasing material prices
and price volatility as well as longer delivery lead times.
Shifting from a linear to a circular use of materials is
therefore of vital importance for us to connect everyone with
a brighter energy future and to lead as a green grid
operator. We believe that the shift to a circular economy is
possible and that TenneT can make a significant
contribution by increasing circularity within our activities and
by promoting circularity with our partners.
To address this ambition in a targeted way, we developed
our first Circular Economy Strategy in 2023. With this
strategy, we want to take the next steps in our journey
towards a circular way of working and update our previous
approach. Through a broad involvement of different
business units, we have developed a common
understanding of circularity for TenneT, a mission statement,
a circular economy framework as well as targeted KPIs to
measure our performance. Our mission is to optimise the
use of materials and reduce our dependency on virgin
materials. We want to do so by embedding circular design,
circular procurement and circular recovery in our activities
and by focusing on a number of key materials and assets.
We start implementing this strategy by measuring and
increasing the circularity of our copper inflow, as well as the
circularity of our material outflow.
To measure and improve the circularity of our material
inflow, we are increasingly implementing circularity
requirements in our tenders and our procurement
strategies. One important stepwe have implemented over
the years is to request our suppliers to fill out 'raw material
passports' and conduct LCAs for their products. These give
information about the quantities and sources of materials, to
what extent they can be recovered at end-of-life, and their
resulting environmental impact.
As well as improving insights, sustainability criteria can also
stimulate innovation. For example, our use of the
Environmental Cost Indicator in tenders provides an
incentive for our suppliers to find ways to increase the
circularity of their products. For instance, a response from
one of our tenders has opened the way for us to have
power transformers using 100% recycled copper in the
future. To completely close and even shrink the materials
loop, we’re investigating how copper from obsolete TenneT
transformers could be used to create new ones. In 2023 we
had a total copper inflow of around 5,100 tonnes,
36% being circular.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
63
As we expand our grid with material-intensive assets such
as cables, transformers, substations, offshore platforms,
steel towers and overhead lines, the competition for
materials increases. As such, all players in the energy
industry need to think of how they can achieve their energy
transition goals, by optimising their use of materials,
stimulating circularity, and minimising waste.
Many of the impacts described in this chapter are a part of
our most material impacts. This is where we will also report
more extensively on, in light of meeting the Corporate
Sustainability Reporting Directive (CSRD) requirements.
TenneT will need to comply to this legislation as of 2024.
Anexample of this is how we have started to further
improve our internal waste reporting processes throughout
the different parts of the organisation. We have laid out clear
definitions, requirements and processes for waste reporting
and are currently investigating possibilities to further
digitalise waste management and reporting processes.
Thiswill ultimately enable us to measure and increase the
circularity of our material outflow in a much more effective
and targeted way. In 2023, 75 - 90% of our material outflow
was recovered. More information on our progress in
complying with upcoming CSRD legislation can be found in
the ‘About this report’ section.
What could prevent us from reaching our goals?
As our activities and operations grow in the coming years,
itisexpected that our impact on carbon emissions will grow
simultaneously. While we try to reduce our footprint, it
remains a challenge to balance our growth with a lower
footprint.
Grid losses are a major contributor to our carbon emissions
– accounting for 75%. Unfortunately, the nature of power
transmission makes grid losses inevitable. By using more
aluminium instead of copper as a conductor in our power
lines, we can reduce our usage of resources that are
scarcer than others. However, this has the effect of higher
grid losses as aluminium is a less effective conductor.
Furthermore, as our network grows onshore and offshore
and by using more long-distance high-voltage connections,
grid losses could grow proportionally higher. With the right
technology developing the grid of the future, we will strive to
reduce our carbon emissions.
Regarding SF
6
leakages, which currently accounts for less
than 1% of our climate footprint, we are working hard to
reduce our use of this insulating gas. Therefore, we continue
to work with our partners in both Germany and the
Netherlands to find and implement sustainable solutions.
We are also taking technical measures to prevent or reduce
the loss and leakage of other environmentally harmful
contaminants, such as oil and other gases and liquids.
Mitigation measures such as extra containment beneath
transformers and oil-water dividers can help reduce the risk
of harm to biodiversity around our operations. We also
perform regular monitoring of our asset condition, through
maintenance and procedural control.
Resource circularity will become increasingly important in
the years ahead. The scarcity of materials and the reduced
usage of oil puts pressure on alternative resources. To this
end, we are changing our tender procedure to include
stricter circularity requirements, for example by asking
suppliers to provide evidence of the percentage of their
materials that are recyclable and recycled with ‘raw material
passports’. We are also intensifying our use of LCAs, which
allow us to calculate the lifetime environmental impact of
products used in each project over their lifetime.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
64
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
65
With this pilot,
a solution to the
nitrogen constraints
is coming into sight
“ The key to making construction sites more sustainable lies in solving the logistical problem of
sustainably charging heavy equipment on site. Thanks to the unique controlled horizontal drilling
pilot that Van Gelder carried out for and with TenneT near a Natura-2000 area in Brabant, we are
a step further in solving this puzzle. Not only was this pilot the first time a fully electric 235-tonne
drilling rig was deployed in the Netherlands. It was also the first time that the electricity required
for drilling was generated sustainably. With this pilot project, a solution to the nitrogen constraints
in the expansion of energy infrastructure is really coming into sight.”
Henri van der Kamp
Managing director Van Gelder Group
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
66
Safeguard sustainable financial performance
The urgency of the energy transition is increasing as European governments strive to
achieve 2030 and 2050 climate targets. However, the cost of decarbonising the
energy system is also rising, intensifying the debate about affordability. As one of the
largest investors in the energy transition in Europe, TenneT is creating long-term value
for society, while also safeguarding our financial health and delivering a return on
capital that meets the expectations of our capital providers.
Introduction
As a leading electricity transmission system operator in
Europe, TenneT is deeply rooted in society. We serve people
in the areas where we operate by securing supply of
electricity while at the same time supporting the societal
needs of decarbonisation and helping to realise the energy
transition at an acceptable cost.
In order to provide long-term services, safeguarding our
financial health is of paramount importance. Designing,
building, maintaining, and operating a future-proof grid
comes at a cost which businesses and ultimately end-
consumers carry via the payment of grid fees and levies in
their respective energy bills.
TenneT takes its responsibility to society very serious.
The choices we make have a financial impact and are
therefore considered carefully when we balance affordability
with reliability and sustainability. Securing supply today
and tomorrow, especially at the high level of availability our
end-users expect in the Netherlands and in Germany,
requires substantial investments.
To support a renewables-based future energy system, we
must expand and renew the onshore and offshore grid,
while also maintaining our existing assets and taking
measures to balance the grid, among others, through the
procurement and use of ancillary services.
Over the past two years, in the wake of the energy crisis
when gas prices soared following Russia’s invasion of
Ukraine, the cost of the energy transition has increased. In
addition to higher infrastructural costs, society also faces
the higher transitional cost of congestion management as
the energy system becomes increasingly electrified. This is
partly caused by the move towards net zero and partly by a
desire to strengthen energy security in the European
member states.
As a result, the affordability of the energy transition is
becoming a widely debated political topic.
Although Europe’s political climate targets seem far away, in
terms of grid development, they are close on the horizon. To
build a futureproof energy system that can support a
sustainable economy by 2045, we need to maintain the
momentum of our investments.
With carefully managed energy system planning, the
investments set out in our Target Grid 2045 give economies
more time to adjust to green investment and the energy
transition and will create a future-proof backbone for a fully
decarbonised energy system. As such, TenneT’s
investments in reinforcing, expanding and modernising the
grid are not just about affordability today. They are about
long-term affordability and security of supply for society in
the future.
Financial solidity of our company is a prerequisite to be able
to invest in the energy transition. Therefore, our mission to
safeguard our financial health remains unchanged. We do
this by delivering a return in line with what our capital
providers expect, as well as by raising the required external
financing. The latter is supported by our financial policy to
maintain a senior unsecured credit rating of at least A3/A-.
TenneT does not seek short-term profits; in principle, we
invest for periods of several decades. However, we do aim
for adequate and sustainable returns on our investments, as
this ensures to sustainably maintain and operate our grid
and enables us to make the necessary investments in the
energy transition going forward.
In 2023 TenneT implemented SAP S4/HANA as new
enterprise resource planning system after a preparation by
many colleagues over the past two years. While TenneT
initially experienced sometechnical implementation issues,
the system run reliably and relatively stable at year-end
2023 and enabled us to prepare the financial close with it
for the first time.The first components of a new application
for managing German levies were also put into operation.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
67
This application will be used to manage the electricity
revenue cap in Germany for which TenneT is one of four
trustees assigned by energy law.The aforementioned
implementations were challenging,yet successful and had
an impact on internal control and changed processes.
Underlying revenues and EBIT
Underlying revenue decreased by EUR 618 million to
EUR 9,222 million.
The lower costs forancillary services in 2023 compared to
2022 resulted in lower underlying revenues, since those
costs will be settled through future tariffs, or are directly
offset by auction receipts.This decrease in revenues is
partly offset by the increased regulatory
reimbursementsdue to rising interest rates. Furthermore,
revenue increased due to ongoing investments, resulting in
a growing regulatory asset base and higher onshore and
offshore revenues.
The underlying operating result (EBIT) increased by
EUR 607 million to EUR 1,817 million. The increase of EBIT
is partly caused by higher compensation in tariffs as a result
of increased regulatory reimbursement due to higher interest
rates. Higher interest rates are vice versa resulting in
increased finance expenses which are not part of EBIT.
Other factors driving higher EBIT in 2023 were the strongly
grown investment volumes which led to an increase in the
reimbursement of capital costs as well as higher results
from our non-regulated joint venture, BritNed.
Another significant factor was The Trade and Industry
Appeals Tribunal (‘College van Beroep voor het
bedrijfsleven’) court ruling on Transmission System Operator
Method Decision, issued in July 2023. This granted a higher
revenue entitlement for TenneT for the current regulatory
period, resulting in an aperiodic one-off effect in the 2023
results (see ‘Contribute to achieve a reliable and predictable
regulatory framework which supports our financial strategy’).
*
Refer to note 3 of the financial statements.
Underlying EBIT group*
EUR million
Underlying EBIT group Special items CAPEX reimbursement Special items OPEX performance
Special items energy & capacity Adjusted underlying EBIT groupSpecial items non-regulated
1,817
2023
-88
7 -18
-9
1,709
1,210
2022
-29
-10
-15
6
1,162
Our performance in 2023
1
Reference is made to next page.
2
Reference is made to Note 19 of the financial statements.
³ Adjusted from 9.7% to 11.1% due to changed definition of debt.
Healthy fi nancial
operations
Adjusted underlying
EBIT group
1
(EUR million)
Satisfi ed capital
providers
ROIC group (%)
Safeguarded
capital structure
2
Adjusted FFO/Net
debt group
1
Performance Target Status Trend
1,709
2023
1,709
2022
1,162
2021
801
1,386
Adjusted underlying EBIT group is
higher than target and 2022, mainly due
to higher interest rates that increase
our cost of capital reimbursement,
increased asset base and an increase of
the non-regulated results.
Performance Target Status Trend
5.8%
2023
5.9
2022
4.9
2021
4.2
4.2%
The ROIC group is above target and
2022, mainly due to higher EBIT.
Performance Target Status Trend
11.6%
2023
11.6
2022
11.1
3
2021
10.5
8.5%
FFO to net debt increased compared
to 2022 mainly due to the increased
result for the year.
To be updated
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
68
For the TSO Netherlands segment, EBIT amounted
toEUR548 million (2022: EUR 312 million) and for the TSO
Germany segment to EUR 1,141 million (2022: EUR 791
million) during this period. Forour non-regulated businesses
EBIT amounted in2023 to EUR 128 million (2022: EUR 107
million).
The adjusted underlying EBIT increased from
EUR 1,162 million in 2022 to EUR 1,709 million in 2023.
Ancillary servicescosts
Ancillary services are the costs TenneT must incur, in
particular, to compensate for grid losses, to maintain the
energy balance in the grid, and to pay for alternative routes
for the electricity when grid sections are congested or
unavailable due to grid expansions. As ancillary services
require TenneT to procure electricity, these costs are directly
affected by electricity market prices. From 2021 to 2022,
Europe suffered a double supply shock, both in gas and
electricity generation. In 2021, gas prices rose due to a
combination of factors, including an increase in global
demand for energy as the world economy recovered from
the COVID-19 pandemic and unfavourable weather
hampering renewable and hydro generation. In 2022, the
Russian invasion of Ukraine further led to a significant
increase in energy prices, leading to higher costs for
consumers and businesses alike, including TenneT.
*
Refer to note 3 of the financial statements.
Underlying EBIT group*
EUR million
Underlying EBIT group Special items CAPEX reimbursement Special items OPEX performance
Special items energy & capacity Adjusted underlying EBIT groupSpecial items non-regulated
1,817
2023
-88
7 -18
-9
1,709
1,210
2022
-29
-10
-15
6
1,162
Our performance in 2023
1
Reference is made to next page.
2
Reference is made to Note 19 of the financial statements.
³ Adjusted from 9.7% to 11.1% due to changed definition of debt.
Healthy fi nancial
operations
Adjusted underlying
EBIT group
1
(EUR million)
Satisfi ed capital
providers
ROIC group (%)
Safeguarded
capital structure
2
Adjusted FFO/Net
debt group
1
Performance Target Status Trend
1,709
2023
1,709
2022
1,162
2021
801
1,386
Adjusted underlying EBIT group is
higher than target and 2022, mainly due
to higher interest rates that increase
our cost of capital reimbursement,
increased asset base and an increase of
the non-regulated results.
Performance Target Status Trend
5.8%
2023
5.9
2022
4.9
2021
4.2
4.2%
The ROIC group is above target and
2022, mainly due to higher EBIT.
Performance Target Status Trend
11.6%
2023
11.6
2022
11.1
3
2021
10.5
8.5%
FFO to net debt increased compared
to 2022 mainly due to the increased
result for the year.
To be updated
Following mild weather, societal savings of fossil fuels, a
diversification of gas supplies including LNG to Europe, and
increased solar and wind output energy prices dropped
significantly and the energy markets became less volatile in
2023. As such, our ancillary services costs decreased from
EUR 6,439 million in 2022, to EUR 5,065 million in 2023.
IFRS results
As mentioned in the section Future Forward, the German
activities are no longer continued per 31 December 2023.
In this section are however, the IFRS results including the
German activities, as also disclosed in note 3 of the
consolidated financial statements, ‘Segment information’.
Underlying financial information is based onInternational
Financial Reporting Standards (IFRS) as adopted by the
European Union, plus the principle of recognising regulatory
assets and liabilities for all of our regulated activities.
This implies that amounts resulting from past events, and
which are allowed to be received or are required to be
returned through future tariffs, are recorded as an asset or
liability, respectively.
TenneT’s Executive Board believes that the presentation of
underlying financial information provides additional relevant
insight in the actual financial position, financial performance,
and as such economic reality. By comparison, the
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
69
consolidated financial statements are prepared based on
IFRS. Based on prevailing opinion on IFRS, it is not allowed
to recognise amounts to be received or are required to be
returned through future tariffs.
Our IFRS revenue increased by EUR 999 million to EUR
9,298 million. IFRS revenues mainly increased due to
increased reimbursement of expected costs for ancillary
services costs andhigher regulatory tariffs. IFRS EBIT
increased mainly due the increased revenues,
decreasedactual costs for ancillary services and increased
result of our non-regulated joint venture BritNed, compared
to 2022.
Investments and raising the necessary funding
In order to maintain our A-/A3 credit ratings and to realise
our investment portfolio, TenneT’s financial policy is to
realise a ratio of long-term average funds from operations
(FFO)/Net debt (based on adjusted ‘underlying’ financial
information) of at least 8.5% (with individual years of at least
8.0%). This is in line with the (most strict) requirement to
maintain an A-/A3 credit rating as formulated by the
international rating agencies S&P and Moody’s. TenneT’s
large investment programme will put pressure on the FFO/
Net debt ratio. Therefore, TenneT is exploring together with
its shareholder the Dutch state a potential sale of its
German operations to KfW/German State. A second
parameter we focus on is ensuring that our regulated
returns on invested capital (ROIC) are higher than our
weighted average cost of capital (WACC). Both of these
aims were met in 2023.
Theinvestments significantly increased to EUR 7.7 billion,
whichis mainly related to our 2GW Program, where
framework agreements and contracts were awarded to
create fourteen 2GW connections. This is the largest
investment in a single year in the European energy
transition. During 2023 we also met other key milestones in
our investment programme, such as the completion of the
Hollandse Kust (noord)and Hollandse Kust (west Alpha)
grid connections. In Germany, 2023 saw the completion of
DolWin6, the West Coast Line and the start of construction
of SuedLink.
To realise investments such as these and build a grid that is
future-proof, it is essential that TenneT maintains a broad
and sustainable access to financing readily available and at
the right cost.
Part of those funds come from equity and the majority from
borrowings. In June 2023 TenneT received a contribution
from our Shareholder of EUR 1.6 billion. Given the
conditions precedent, the contribution is classified as
current financial liability instead of equity.
As regards debt, TenneT secured a sustainability-linked
term facility loan agreement of EUR 8 billion with a tenor
of2.5 years, also in May 2023. The facilityis the largest
sustainability-linked term loan ever. The facility was undrawn
as of 31 December 2023. In 2024, TenneT and the Dutch
state have made arrangements regarding a temporary
shareholder loan facility of EUR 25 billion, safeguarding our
planned investments in the Netherlands and Germany for
2024 and 2025. The loan facility, which will be granted at
market conditions, is subject to a customary parliamentary
approval process, which is currently in progress.
Our financial strategy is focused on maintaining our credit
rating at a minimum of A-/A3 and generating returns on
investment in accordance with our risk profile. Our A- credit
rating from S&P and our A3 rating from Moody’s were again
confirmed this year. Also, our ESG evaluations were
reaffirmed by external rating agencies. For example, S&P
again classified us as ‘strong’ with a score of 86/100 and
Sustainalytics indicated that TenneT is classified as a ‘low
risk’ company, which indicates our exposure to industry-
specific ESG risks and the manner in which these risks
are managed.
The adjusted FFO/Net debt ratio increased from 11.1% as
of 31 December 2022 to 11.6% as of 31 December 2023.
The increase is mainly caused by the increased result for the
year. In the integrated annual report 2022, TenneT has
reported the FFO/Net debt ratio including (adjusted net
debt) and excluding regulatory receivables (net debt), like ‘to
be settled in tariffs’. As of 2023, TenneT only reports the
FFO/Net debt ratio including ‘to be settled in tariffs’
because this is the ratio TenneT steers on. The comparative
figures have been adjusted accordingly and the FFO/Net
debt ratio increased from 9.6% to 11.1%.
Contribute to achieve a reliable and predictable
regulatory framework which supports our
financial strategy
Stable, reliable, transparent and predictable regulation plays
a critical role in our investments and operations, helping to
enable security of supply, while also fostering and
incentivising innovation and progress. Regulation also
provides the framework we need to attract equity and debt
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
70
capital for future investments in grid expansion, replacement
and maintenance. On top of that, regulation also serves to
maintain affordability of grid fees and energy prices towards
industrial customers and end-consumers.
As the nature of our business and the scale of the energy
challenge require us to think decades ahead to determine
how and where to invest, we need to rely on a regulatory
framework with a long-term focus. While regulatory periods
are established for much shorter timeframes of typically five
years or less, the underlying methodologies should provide
a stable long-term regulatory framework in both the
Netherlands and Germany. Grid operators need this solid
regulatory foundation to earn a risk-adjusted rate of return
on their investments, plus operational and ancillary costs.
Developments in Europe
From a European perspective, the European Network of
Transmission System Operators for Electricity (ENTSO-E)
organised the high-level grid forum: ‘Future of our Grids
– Accelerating Europe’s Energy Transition’. This event was
organised at the request of the European Commission (EC),
recognising the crucial importance of electricity grids for the
energy transition. The forum provided a platform for TenneT
to convey regulatory viewpoints in the context of innovations
and investments required for the energy transition, as well
as the need for TSOs to receive a proper return on equity. In
the EC’s new Electricity Market Design package, it is
explicitly stated that grid tariffs should be used to boost an
optimised use of the grid, as they are seen as incentives for
innovation and the use of flexibilities. The EC agreed on the
need for a broader choice of investment instruments
together.
Despite the satisfactory result, TenneT has an overarching
regulatory challenge given the backward-looking approach
of the incentive regulation in times of massive growth.
Following general price trends and partly very tight markets,
TenneT, like many other companies is facing rising OPEX
(e.g. higher maintenance, personnel and IT-costs) in the its
current regulatory period. In order to keep OPEX growth at
an efficient level, cost development has to be in sync with
the allowed revenues for OPEX. If and when this can
temporarily not be reached, adequate countermeasures will
be evaluated and launched to achieve at least a balanced
OPEX result in the long-term.
The Netherlands
As part of the Action Plan Net congestion (LAN), the TenneT
tariff revision (time of use) to support flexibility was endorsed
by market parties, the Dutch Ministry of Economic Affairs &
Climate Policy and the ACM. This means TenneT will
implement a revised tariff structure with more incentives for
users to apply grid-friendly behaviour.
TenneT’s tariffs increase on average by 125% for Extra-High
Voltage (EHV) and 80% for High Voltage (HV) in 2024. This
increase was foreseen by TenneT and communicated well in
advance to market parties, the Ministry of Economic Affairs
& Climate Policy and the ACM in May 2023. TenneT’s early
and clear communication was well received by market
parties.
In the Netherlands, the ACM concluded that TenneT has
successfully complied with its commitments to make
improvements designed to prevent power outages as much
as possible. The ACM required TenneT to do this following
an investigation into a power outage in the city of Eindhoven
in 2018. As such the case is legally closed. The ACM
however indicated that they wish to continue the dialogue
on this topic on a semi-annually basis and asked TenneT to
bring forward actions to further improve on security settings
in our stations.
During 2023, TenneT appealed against the 7
th
Method
Decision for the regulatory period 2022-2026 in the
Netherlands, which had a significant financial impact.
Appeals resulted in the ACM’s benchmark scores for
measuring efficiency being lifted to 100% and revisions
made to the determination of weighted average cost of
capital (WACC).
Germany
TenneT and the other German TSOs presented the
provisional offshore grid levy 2024 to the BNetzA in
October. Considering preliminary planned/actual cost
deviations of former years, TenneT will include EUR 1.7
billion for the 2024 offshore grid levy which is consistent
with 2023. After several statement letters, TenneT reached a
final result which is mutually satisfactory for both TenneT
and the regulator.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
71
The final 2024 revenue cap for onshore has decreased by
EUR -3.4 billion (-44%) to EUR 4.4 billion compared to the
final 2023 revenue cap. The decrease is due to lower
expected costs for congestion management (EUR -3.9
billion). Nevertheless, the costs for ancillary services remain
at a high level, as a consequence of high congestion
managements costs following the Russian war against
Ukraine and rising energy cost.
In light of this development, the TSOs have been in
discussion with the Ministry of Economic Affairs and Climate
Action (BMWK) and the BNetzA with regard to a grant for
the grid fees 2024. This follows an agreement made in 2022
that the German government would compensate for the
higher grid fees that TenneT and other TSOs said they must
charge in 2023 to reflect escalating wholesale power prices
and ancillary services costs, such as redispatch. With grid
fees accounting for around 4.3% of domestic energy bills
and around 0.9% for industrial customers, the government’s
compensation helps to absorb the TSOs’ cost increases.
What could prevent us from reaching our goals?
TenneT is the key driver of the energy transition, with
investments increasing to at least EUR 10 billion per year in
maintaining, operating and modernising the electricity grid in
the areas we serve. With the growth of our asset base and
our organisation, also our operating costs are increasing.
Furthermore our operating costs are increasing, due to
external factors such as inflation and market scarcities.
Exceeding the regulatory reimbursement of our operating
costs results into a lower EBIT. Although partially inevitable
due to our rapid growth in combination with a set
reimbursement per regulatory period, we aim to reduce this
OPEX gap as much as possible. We closely monitor our key
OPEX drivers and set budgets balancing growth and
potential for cost reductions as well as efficiencies.
Furthermore, we are conducting cost analysis of the
separation of our business in Germany, if implemented.
As the financial health of TenneT relies on our ability to
attract the financing we need to realise our investments,
and thereby fulfil our societal role, we need to balance the
risks associated with our ability to raise additional equity
while keeping our credit rating stable. The possible sale of
TenneT’s German operation to the German state is a
possible action to mitigate this risk.
Designing, building, maintaining, and operating a
futureproof grid comes at a cost which households and
companies and power plants for their electricity
consumption contribute to via the payment of grid fees.
Having assessed our impact on the electricity invoice
(retail of electricity; taxes, charges and levies; grid fees) of
an average household in the Netherlands and in Germany,
our share in Germany was around 4.3% in 2023 (2022:
4.8%). The impact with respect to the electricity bill on
households in the Netherlands is estimated to be
approximately 8.7% in 2023 (2022: 9.1%). The share in
Germany is decreased compared to 2022 due to the
federal grant to reduce the grid fees. In the Netherlands
the share decreased as a result of the fact that the other
items of the electricity bill increased more than our part.
In December 2023 it has been decided that the four
German TSOs will not receive another federal grant for
2024. Due to the ruling by the Federal Constitutional
Court on 15 November 2023 regarding the second
supplementary budget for 2021, the Economic
Stabilisation Fund (ESF) was also indirectly classified
as unconstitutional and is therefore no longer available
as a source of refinancing for the 2024 grant. As a
consequence, the nationally unified TSOs are now forced
to adjust the grid fees for 2024, resulting in more than a
doubling compared to 2023.
The share of TenneT’s impact on household electricity
bills will increase in the Netherlands and in Germany in
the coming years, as the costs for the energy transition
rise amid increasingly ambitious climate goals.
Grid fees and our impact on
household electricity bills
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
72
Thinking
beyondnational
borders. For a
secure and stable
electricity supply
Klaus Müller
President of the Bundesnetzagentur
(Federal Network Agency), Germany
“ Energy generation is changing. Just twenty years ago, wind and hydro power hardly played a role.
Today, renewables account for about half of all Germany's electricity generation. Our electricity
grids are more stable than ever. Since 2006, when generation was still dominated by fossil fuel,
interruptions to our electricity supply have almost halved. Our future supply of energy must be
secure, affordable and, above all, climate-friendly. That is the goal – not only in Germany, but in
the whole of Europe. How to reach this goal is largely undisputed, too: carry on expanding
renewable energy and the networks to transport the energy at a fast pace. To do this, we need low
barriers and swift approval procedures. Building infrastructure means thinking well ahead into the
future. And thinking beyond national borders. We are all connected to one other by power lines
and cables and our policies should connect us all as well. The dialogue between our countries in
Europe needs to be even closer in future, as security and stability depend on us creating networks
together. The Bundesnetzagentur is doing everything it can to drive expansion forward, with the
energy sector, policymakers and consumers firmly in its sights.”
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
73
Solve societal challenges with stakeholders and through
partnerships
As a key player in the energy transition, TenneT is working in partnerships with a wide
range of stakeholders and organisations with the aim to find the best solutions that will
achieve a green and futureproof energy system. These partnerships are not only
needed to harness the technologies and sustainable solutions required for the Target
Grid 2045, but also to secure the people and financing we need to get there.
Introduction
The ambition for Europe to be the world's first climate-
neutral continent by 2050, and to lower carbon emissions
by 55% in 2030, has consequences for the whole of
society. TenneT is among many players in the sectors of
energy, engineering, finance, technology, academia, politics
and beyond which are tasked with making this ambition a
reality. TenneT’s role is to design and build an electricity grid
that is climate-neutral and can meet the future needs of a
decarbonised economy, while maintaining a high security of
supply and remaining financially healthy.
It's a huge task, and one that we are moving ahead with at
full speed to achieve. The EU’s dates for decarbonation may
seem far away, but when it comes to planning, developing
and building the needed high-voltage electricity
infrastructure (onshore and offshore), 2030 is already
tomorrow, 2040 is next week, 2050 is next month. In
Germany, the government plans to reach net zero even
earlier, by 2045.
This is why we take 2045 as the date by when we need to
operate a future-proof, reliable and cost-efficient grid that
can support a full sustainable energy system. This is the
basis of our Target Grid 2045 strategy, giving us a clear
roadmap of the infrastructure we will need to have in place
by 2045, and the approach for how we will get there. This is
not just about growing our infrastructure – the Target Grid
2045 will require smart solutions, innovative technology and
the power of multiple partnerships. No single player can
achieve the goals of the energy transition alone – that is why
we work together with many stakeholders, collaborating
across all of our strategic pillars.
This includes partnerships that will help to ensure security of
supply, as the future grid that will rely on renewable energy
sources that are by nature more volatile and intermittent,
with innovations needed to maintain balance between
electricity supply and demand and to provide new sources
of flexibility. We also seek partnerships that drive the energy
transition, as we need to build a grid that is reliable,
affordable and sustainable for society, with TenneT leading
as a green grid operator. More partnerships are required to
ensure TenneT has enough people to achieve our fast-
growing investment portfolio, improving our ability to recruit
and retain increasingly scarce talent in a competitive market
and to ensure our people are energised and motivated. And
finally, we need to work with other important stakeholders to
safeguard TenneT’s financial health, as we cannot achieve
our objectives without raising the necessary external
financing and delivering a return in line with what our capital
providers expect.
Our performance in 2023
To accelerate our plans for Target Grid 2045, while also
improving the performance of our existing grid, finding the
right solutions and the right partners to cooperate with are
an important part of TenneT’s strategy, with a large number
promising and successful projects underway and planned.
We enter into partnerships to address key challenges
TenneT faces in building, maintaining and operating a
futureproof grid. These include working with governments
and local authorities to tackle grid congestion. We also work
closely with suppliers of new DC technology, as their
innovations will allow us to build an integrated onshore and
offshore renewables-based grid. We also face the challenge
of driving the energy transition while minimising our negative
impacts on the environment. For this, we partner with other
infrastructure players on measures to protect nature and we
co-ordinate with suppliers to find new emission-free
solutions for our construction work.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
74
Our partnerships with academic institutions and long-term
framework agreements with suppliers help to ensure we
have the talent we need to deliver on our goals, not only
within TenneT but also in our supply chain. And to meet the
challenges of affordability in the context of the rising cost of
the energy transition, we work closely with regulators,
relationship banks and investors to ensure we can work in a
sustainable regulatory framework and we have access to
the financing we need.
Partnerships to secure supply, today and tomorrow
In 2023, we were able to secure supply 99.99993% of the
time. This level of grid availability is not a given – it is the
result of the hard work of many colleagues and other
partners every day. To ensure we are able to secure supply
in the future as well, requires thinking and planning ahead,
which we have brought together in the concept of the
Target Grid 2045 strategy.
Society is already experiencing the effects of the energy
transition on the electricity grid, as rapidly increasing
demand for electricity and the higher in-feed of renewables
places more demand on electricity transmission. To make
sure we can facilitate this demand, and connect the growing
in-feed of renewables, we need to expand, strengthen and
modernise our onshore and offshore grid, providing a green
energy backbone for a more sustainable Europe.
We already see some of the effects of when we are unable
to succeed, with congestion in many regions of the
Netherlands in 2023. Also in Germany, the situation could
become more challenging if we do not maintain, strengthen
and extend our grid to facilitate a higher infeed of renewables
and connect this to where the electricity is consumed.
In this context, we are active in partnerships with many
different stakeholders to tackle congestion in areas of our
grid. Our work with the Energy Boards in the Netherlands, is
an example of the partnerships we have with governments
and other parties such as DSOs to address congestion in
specific areas.
We also tackle grid congestion with partnerships that boost
grid utilisation, helping us to maximise the use of our
existing assets. This reduces the need to constantly expand
our grid, and thereby benefits society by allowing us to drive
the energy transition faster, with improved affordability and
security of supply.
Examples of important partnerships in 2023 that help us
address this challenge include our Open Innovation
Programme, which is focused on solutions to optimise grid
usage, thereby helping us to connect more customers to
the transmission and distribution grids. As a result of this
programme, a partnership with N-SIDE was formed that
pitched a solution related to the challenge on how to make
optimal use of the transport capacity and connection points
to the electricity grid.
As well as overcoming the challenge of congestion, we also
use partnerships to ensure our grid is future proof to secure
supply today and tomorrow. In this respect, our
partnerships are focused on grid expansion, market
facilitation, system operations developments and flexibility.
As our Target Grid 2045 strategy also envisions a meshed
onshore and offshore DC grid, linked by high-voltage DC
(HVDC) corridors, and multi-terminal DC hubs, we need
partnerships that help us overcome technological
challenges, as many of the solutions needed to realise this
vision do not yet exist.
A good example of a partnership that is focused on the
development of this new HVDC technology, and thereby
helps to enable the development of our 2045 Target Grid, is
our InterOPERA programme. The InterOPERA consortium
brings together a team of HVDC manufacturers, TSOs,
sector associations and a technical university. This
collaboration is designed to ensure that the HVDC
technologies used in the future meshed onshore and
offshore DC grid use standardised and inter-operable
technologies that can be supplied by multiple vendors (as
opposed to closed, proprietary systems). This will help
TenneT to tender and procure its first multi-vendor HVDC
system (and its building blocks) ensuring interoperability by
design, while limiting technical risks.
To tackle the challenge of a future grid that is more
dependent on renewable sources and securing supply not
only today but also tomorrow, especially that of an
increasing share of offshore wind generation, an important
partnership is our FUTURESYSTEM project.Here,
together with the Technical University of Delft, TenneT is
investigating the risk of an unstable electricity system. The
project findings will form the basis for new operational
principles for both offshore and onshore multi-energy hubs.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
75
Another important development to make our system
operations resilient for years to come is our Control Room
of the Future (CROF) programme.With this, we are
making TenneT’s grid control centres future-proof and
equipped to manage our increasingly data-driven grid.
The project will also help us to increase grid utilisation and
automation. The CROF programme includes projects where
TenneT is partnering up with external stakeholders to enable
the acceleration of energy transition and tackle the social
challenges. An example of this relates to Power Grid Boost,
where TenneT focusses on mid-term long-term congestion
management. Here, we are working together with other
stakeholders such as educational institutes and several
other Dutch DSOs.
In the end, we need flexibility to ensure we can balance
supply and demand of electricity in a changing energy
landscape. The concept of flexibility relates to how TSOs
make use of energy sources to call for the required capacity
when needed and switch off capacity when there is access.
This is necessary to balance the grid at all times. An
important topic in this is to have data available for society to
enable them to make the right choices at the right time to
support us in this by using excess electricity when this is the
case. That is why we are working in partnerships with other
stakeholders like TSOs and others like technology
companies to provide these insights and data.
Examples of these are to the Nationaal Energie Dashboard
in the Netherlands and the CO
2
-Monitor in Germany.
We also started the energy data-X in Q4 2023, which is
focused on secure and sovereign data exchange amongst
energy partners. In addition, new developments on the
Equigy partnership, a crowd balancing platform which
enables consumers to contribute to balancing the grid
via smaller flexibility devices such as home batteries and
electric vehicles. Through this partnership, 2 gigawatts were
made available this year to make use of in the aFFR
capacity.
Next to this, German heat pumps were also enabled to be
connected to this platform. These partnerships help us to
balance the grid in a more volatile and intermittent electricity
system addition, new developments on the Equigy
partnership, a crowd balancing platform which enables
consumers to contribute to balancing the grid via smaller
flexibility devices such as home batteries and electric
vehicles. Through this partnership, 2 gigawatts were made
available this year to make use of in the aFFR capacity. Next
to this, German heat pumps were also enabled to be
connected to this platform. These partnerships help us to
balance the grid in a more volatile and intermittent
electricity system.
Partnerships to drive the energy transition
As a TSO, we face the ongoing challenge of ensuring we
make progress in driving the energy transition, while also
minimising our negative impacts on the environment. As we
work towards Target Grid 2045, we want to build a grid that
will ensure reliable, affordable and sustainable access for
society. That is why we try to lead as a green grid operator,
contributing to a future greener energy system. To be able
to meet the milestones in Target Grid 2045, we need to
focus on the requirements of a future and greener energy
landscape and work together with stakeholders and in
partnerships to make progress. In the case of the nitrogen
challenge in the Netherlands, we need to work with partners
to address key challenges that are stopping our work.
Examples of collaborations that support our aim to lead as a
green grid operator include our work with Van Gelder, as we
pilot our first emission-free drilling for underground cable
installation, at a site near Breda. The drilling rig was powered
by green electricity, with no nitrogen or CO
2
emissions. In
October, our CEO Manon van Beek signed the covenant
‘Schoon en Emissieloos Bouwen’ (Clean and Emission-Free
Construction) on behalf of TenneT to partner up with other
(construction) partners in this initiative. Innovative solutions
like this could provide solutions to help us overcome the
nitrogen impasse in the Netherlands, which is a challenge as
we strive to realise our projects on time. Our participation in
the Groene Netten (Green Nets) collaboration, between
eight major infrastructure players in the Netherlands, is also
helping to ensure a sustainable transition to a climate-neutral
economy. The partners, including Gasunie, KPN, ProRail,
Dutch DSOs and Rijkswaterstaat are working together on
projects that advance important sustainability issues, such
as circularity and biodiversity.
Another challenge to our efforts to minimise our impact on
the environment is the use of SF
6
insulating gas in our
switching installations. As a harmful greenhouse gas, we
realise the need to replace SF
6
gas with more sustainable
alternatives that provide similar safety properties without
harmful emissions. We are working closely with industry
partners to explore and test SF
6
alternatives in our assets,
for example with our new Hybrid Gas Insulated Switchgear
partnership. Here, we are working with Siemens and
Hitachi-ABBto provide a SF
6
-free solution in the gas-
insulated lines (see ‘Create value to transition to a climate-
neutral economy’.)
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
76
In addition, we also aim to collaborate with our suppliers
and contractors to reduce emissions upstream in our supply
chain. That is why we are working on our ‘Decarbonising
the supply chain’ project. An example of how we are
working together with the entire industry is in a new
international Joint Industry Project, to develop common
standards for measuring and evaluating sustainability in
power transformers. The aim is to develop a standard so
that there is transparent comparability. Only in this way is a
fair benchmark possible in the industry regarding the
approach, measurement and comparison of sustainability in
our assets.More on the project ‘Decarbonising the supply
chain’ is described in the chapter ‘Create value to transition
to a climate-neutral economy’.
In the end, the main impact we have on the planet by
driving the energy transition and realising a Target Grid is by
avoiding carbon emissions and facilitating a climate-neutral
economy. We need new technologies and concepts to
rethink the way we currently look at energy generation,
transmission and consumption. One of the ways we are
working on this relates to our partnership with Dutch DSOs
and the gas grid operator Gasunie (as part of a working
group organised with Netbeheer Nederland) to conduct
studies on the optimal energy infrastructure required in the
Netherlands between 2030 and 2050. The revised
Integrale Infrastructuurverkenning 2030-2050 (II3050)
was published in 2023, providing insight into what is
needed for the transition to a sustainable energy supply,
through a fundamental redesign of the energy system and
extensive stakeholder co-operation.
Partnerships to energise our people & create a
sustainable workplace
Due to the growing ambitions to accelerate the energy
transition, TenneT’s workload is rapidly increasing. We
currently need to grow by around 850 FTE each year,
eventually aiming to be able to accommodate a workforce
of up to 10,000 internal and external employees by 2025.
However, we’re doing so in a challenging labour market,
with a scarcity of new talent due to intense competition for
personnel. As the energy transition is a global endeavour,
we are one of many employers – not only other TSOs, but
also other energy companies and contractors – who all
need to scale up to deliver new projects. In this regard,
TenneT does not only need to ensure it can recruit and
retain the people it needs, but that our suppliers in the wider
supply chain also have the personnel to deliver the work we
need to achieve the Target Grid 2045.
To remain a competitive employer and attract new talent,
our aim is to be an energising and sustainable workplace.
This also relates to our efforts to create an inclusive and
diverse workplace where people from all types of different
backgrounds can thrive. These challenges require different
ways of thinking, new collaborations and partnerships.
In the first place, it requires creating a safe and inspiring
workplace where our people feel energised. This is what our
people and leadership aim to do day in and day out. We
also try to facilitate this in other ways, for instance via
supporting and working together with the Johan Cruyff
foundation. Here we provide means by giving back to
society and enabling underprivileged children to do sports
and exercise. At the same time, we offer our colleagues the
ability to participate in sports events, such as the annual
Johan Cruyff run, which are amongst other events part of
our internal vitality programme, 'Always Energy'. More
information on this is included in the 'Create a safe and
inspiring workplace’ chapter.
Next to this, it requires attracting sufficient talent to deliver
on the energy transition and being able to realise the target
grid.Academic partnerships are a good way to educate,
inspire and engage with new talent, not only supporting
institutions to attract more young people into technical and
engineering courses, but also forging pathways for that
talent to grow their skills and careers at TenneT. We have
academic partnerships with a wide range of academic and
research centres, such asthe University of Erlangen and
Bayreuth, RWTH Aachen, TU Delft and TU Eindhoven. We
are also working with the HAN University of Applied
Sciences in Arnhem, with which we have extended our
collaboration for another four years. To foster more specific
education and qualifications tailored to our sector, we have
also helped introduce the Power Minor, through
collaboration with the universities of applied sciences of The
Hague, Amsterdam, Arnhem and Nijmegen.
To grow, our workforce must also become more diverse,
with inclusion as a pre-requisite for employee wellbeing. To
this end, our ongoing work with initiatives like the Refugee
Talent Hub is playing an important role in attracting new
talent and reflecting our Inclusion and Diversity commitment.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
77
And finally, partnerships play an important part in ensuring
we have the right and sufficient resources and capacity
available within the wider energy supply chain, as this is
essential for us to drive the energy transition and realise the
Target Grid. Our cooperation with key suppliers in the 2GW
Program shows this in action, as the multi-year, large-scale
contracts awarded for this work will help to attract more
people into our sector with greater job security.
Partnerships to safeguard our financial health
In our journey to realise our Target Grid 2045 and enable
carbon-neutral energy for society, we need to stay financially
secure and healthy. Maintaining a stable regulatory
framework and ensuring favourable conditions for raising
external financing are essential for us to maintain our
investments that drive the energy transition. These
investments are expected to increase to EUR 160 billion in
the coming ten years. This means working together with
stakeholders that can provide us the option to finance future
projects, and doing so with better conditions that help us
deliver on our strategic ambitions and maintain affordability
for society.
An important element in ensuring that we are able to
safeguard our financial health is to work together with our
stakeholders to contribute toa reliable and predictable
regulatory framework that supports our financial health. That
is why weengage in dialogues with our regulators and other
market parties to discuss our strategy, the role of regulation
and our need for financing to drive the energy transition. In
2023, for example, we engaged with the European Network
of Transmission System Operators (ENTSO-E) in a high-level
grid forum: “Future of our Grids – Accelerating Europe's
Energy Transition”. At this event, organised at the request
ofthe European Commission TenneT communicated
regulatory points of view regarding effective and cost-
efficient solutions and the need for a proper return on equity
for TSOs in a future energy system. The shortage of
qualified human resources for TSOs, industrial partners and
governmental authorities, was another major point of
discussion. The EC agreed on the need for a broader
choice of investment instruments together.
To finance the expansion of offshore grid connections,
TenneT co-operates with external co-investors such as
KfW-IPEX, Copenhagen Infrastructure Partners (CIP) and
Chubu Electric Power. Via separate legal entities the
co-investors contribute equity and receive financial
participation rights in return. Their contribution helps
toensure adequate financial ratios. Furthermore, their
participation strengthens TenneT’s interest in a reliable and
stable regulatory framework as co-investors interests have
been communicated to policymakers and regulators.
To secure a solid financing and ensure that we can drive the
energy transition in an affordable way, we maintain strong
relationships with our shareholder, the Dutch state, and with
the banks that participate in TenneT’s Revolving Credit Facility
(RCF) – ABN AMRO, BNP Paribas, Commerzbank, Deutsche
Bank, HSBC, ING, NatWest, Rabobank, Santander, UniCredit
and SMBC. The term facility agreement of EUR 8 billion,
secured during 2023, wascrucial for our financing needs, as
we did not raise funds through a Green Bond issue this year.
The fact that the majority ofour relationship banks also
participated in this term facility agreement, show the strength
of our long-term relationships. Through these partnerships,
we are able to secure our financing (see Safeguard
sustainable financial performance chapter).
What could prevent us from reaching our goals?
To be able to drive the energy transition and deliver on our
purpose, for instance to achieve the Target Grid, societal
acceptance is essential in keeping pace. Building new
assets has an impact on the local communities who live in
close proximity to our assets. For instance, one could look
into the decision TenneT has to make between building
overhead lines versus underground cabling. While the
acceptance by local communities is higher for using
underground cabling due to less visible impact on the
landscape and perceived as additional safety (i.e. regarding
high voltage lines and electromagnetic fields), this might
impact not only the reliability but also affordability. It is more
difficult to maintain an underground cable than an overhead
line and hence it is more costly too.
Due to the current growing electrification predominantly in
the Netherlands (i.e. Gelderland, Flevoland, Utrecht or
Rotterdam), we face the increasing risk of congestion. For
certain areas, the number of requests to be connected to
our grid is significantly higher than we can cater for within
reasonable time, or our local grid capacity is used to its
maximum capacity such that there is no additional
bandwidth left to connect new customers. Not being able to
connect these customers, either large companies or
consumers in general could result into negative media
exposure and reputational damage. TenneT is currently
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
78
improving the approach how to connect new customers
most efficiently, while balancing the issue of congestion
management. One of the mitigation strategies is to step
away from the 'first come first serve' principle, and instead
take into account overall system effectiveness and efficiency.
Societal acceptance of the climate ambition is not only
affected by the political landscape, but also by the speed of
delivery and the financial cost of it. A high ambition to
deliver on a green society, which a focus on electrification,
could result into higher-than-average costs to realise these
projects. Cost of materials and services are increasing due
to unavailability, the conflict on our continent is still ongoing
and with other conflicts in the world also, the energy price
has not lowered to the price level before the year 2022.
These higher costs related to the green ambition and
delivering under these circumstances are in the end paid by
society and could lead to lower acceptance by lower-
income households and therefore affect our reputation.
Furthermore, a changing political environment can create
uncertainty and slow our progress towards our ambition.
Political change can also affect changing rules, regulations,
or the regulatory environment in general. While this could be
seen as a risk, it could also become an opportunity for us. It
could be a catalyst when legislation and regulation are
supportive of innovation, working together on (cross-border)
partnerships and incentivising solutions for future challenges.
From all perspectives it is clear that our linear way of acting
does no longer hold – it is a way of working that is simply
unsustainable on the long run. Strong partnerships with our
important stakeholders are crucial to achieve the 2025 and
2030 targets and ultimately deliver our Target Grid. Getting
there will involve collaboration and negotiation but the
destination of a clean energy future is sharedby all. We aim
to ensure we are a partner of choice to help solve these
important societal challenges, to drive progress and to be
part of the solution.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
79
Certainty about
availability of green
power is crucial
“ The transition to a sustainable economy is literally and figuratively leading to "system stress".
Chemical companies, large and small, with far-reaching plans for sustainability, faced the
limitations of the power grid. Both now and in the future. Certainty about availability and
affordability of green power, among other things, is crucial for confidence that sustainability can
be achieved in the Netherlands. In this, I am happy with TenneT as a partner that is willing to take
responsibility for its own ever-changing role in a rapidly changing and demanding energy system.”
Nienke Homan, chairperson VNCI
(Royal Association of the Dutch Chemical Industry)
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
80
Statements of the Executive Board
The Executive Board is responsible for designing and operating TenneT's risk
management and internal control system, and for reviewing its effectiveness.
Statement of responsibility
The Executive Board is responsible for designing and
operating TenneT's risk management and internal control
system, and for reviewing its effectiveness.
The risk management and internal control system consists
of the following elements:
• The enterprise risk management system aimed to
identify, analyse, define mitigating measures and monitor
the development of risks relevant to TenneT;
• The internal control framework aimed to manage and
control critical processes, including control self-
assessments to document the effectiveness of control
processes;
• Business plans and quarterly reports with information on
financial and non-financial objectives and their
achievement;
• Internal audits of key processes andfollow-up on audit
findings with relevant management;
• Actions based on recommendations made in the external
auditor’s management letter;
• An upwardly cascading internal Letter of Representation
(LOR) process, resulting in a company-wide LOR signed
by the Executive Board;
• A compliance management system that enables TenneT
to demonstrate itscompliance with relevant laws- and
regulations, industry codes and standards, as well as its
commitment to good corporate governance, best
practices, ethics and stakeholder expectations among
others risk of internal fraud, bribery or corruption.
The Executive Board periodically reviews and analyses the
strategic, operational, financial and compliance risks to
which TenneT is exposed. It also regularly assesses the
design and effectiveness of the risk management and
internal control system. The results of these assessments
are shared with the Audit, Risk & Compliance Committee,
acting as a committee of Supervisory Board, the
Supervisory Board itself and the external auditor.
The risk management and internal control system does not
provide absolute assurance that all corporate objectives will
be fully achieved, nor does it give full assurance that
material errors, losses, fraud or violations of laws and
regulations will not occur in the operational processes and/
or the financial reporting.
Taking the above into account, the Executive Board is of
the opinion that TenneT’s risk management and internal
control system provides reasonable assurance that
TenneT’s financial reporting does not contain any errors of
material significance and that the risk management and
internal control system has operated effectively in the year
under review.
In control statement
We confirm that, to the best of our knowledge, the financial
statements for the period 1 January to 31 December2023
have been prepared in accordance with IFRS as adopted by
the EU, and with Part 9 of Book 2 of the Dutch Civil Code;
that the disclosures in the financial statements are a true
and fair view of TenneT's assets, liabilities, financial position
and results as a whole; and that the disclosures in the
Integrated Annual Report give a true and fair review of
TenneT's financial performance, results and position,
together with a description of the most significant risks and
uncertainties the company faces. Furthermore,we confirm
that to the best of our knowledge, the Group has adequate
resources to remain in operation during the next 12 months
and consequently the financial statements have been
prepared on a going concern basis.
Arnhem, 4 March 2024
M.J.J. van Beek
T.C. Meyerjürgens
M.C. Abbenhuis
A.C.H. Freitag
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
81
Supervisory
Board
Report
The Executive Board
Member Executive Board / Chief Operating Officer
50, Dutch (m)
Initial appointment:
1 January 2021
Expiry first term:
31 December 2024
Other positions qualitate qua:
· Member Board TenneT
TSOB.V.
· Member Board TenneT
TSOGmbH
· Member Board Netbeheer
Nederland
Other positions:
· Supervisory Board member
ofRoyal Swinkels Family
Brewers N.V.
Member Executive Board / ChiefFinancial Officer
53, German (f)
Initial appointment:
1 January 2022
Expiry first term:
31 December 2025
Other positions qualitate qua:
· Member Board TenneT
TSO B.V.
· Member Board TenneT
TSO GmbH
· Member of the Board of
TenneT Offshore GmbH
· Member Supervisory Board
ofGreenneT
·
Member Board FlexcessGmbH
Chair Executive Board / ChiefExecutive Officer
53, Dutch (f)
Initial appointment:
1 September 2018
Expiry second term:
31 August 2026
Other positions qualitate qua:
· Chair Aufsichtsrat TenneT TSO
GmbH
· Member Board TenneT
Verwaltungs GmbH
· General Member Board of
German-Dutch Chamber of
Commerce DNHK
· Council of the Thinktank Agora
Energiewende
Other positions:
· Chair Board Refugee Talent
Hub Foundation
· Member Supervisory Board
ofthe Delft University
ofTechnology
Maarten Abbenhuis Arina Freitag
Tim MeyerjürgensManon van Beek
Member Executive Board / ChiefOperating Officer
48, German (m)
Initial appointment:
1 March 2019
Expiry first term:
29 February 2024*
Other positions qualitate qua:
· Member Board TenneT
TSOB.V.
· Member Board TenneT
TSOGmbH
· Member Board TenneT
Verwaltungs GmbH
· Member Board TenneT
Offshore GmbH
· Chair Supervisory Board
ofGreenneT
· Member Executive Board WAB
(Wind Energy Association
Bremerhaven)
· Member Advisory Board
Offshore Wind Energy MBA
· Member Board of Trustees
German Offshore Wind
Energy Foundation
· Member Advisory Board
Federal Association of
WindFarmsOffshore
· Member Board of Directors
FGH (Forschungsgemeinschaft
fürElektrische Anlagen und
Stromwirtschaft e. V.)
·
Member Board of Trustees FGE
(Forschungsgesellschaft
Energie e. V.)
· Member of the German
National Committee of CIGRE
· Member Board of Directors
FfE (Forschungsstelle für
Energiewirtschaft e.V.)
· Member Board of Directors
ofVBEW (Verband der
Bayerischen Energie und
Wasserwirtschaft)
* Tim Meyerjürgens is reappointed for a second term till 29 February 2028
The Executive Board
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
82
Supervisory
Board
Report
Supervisory Board Report
The Supervisory Board (“SB”) looks back on a year of working intensively together with the
Executive Board (“EB") on the exploration and negotiation of the potential sale of TenneT’s
German activities to the German state, known as project Ampere. While these negotiations
and the preparations for this potential split continue, the SB is proud of TenneT’s
achievements over 2023: good safety results, another 99.99993% for security of supply and
a significant increase of grid investments compared to 2022. Another good step forward in
the energy transition!
1. Supervisory Boardreflections on 2023
Maintaining the balance between safety, security of supply
and affordability of the electricity system is a huge task. The
energy transition requires TenneT to implement innovative
measures to increase its project delivery speed while also
ensuring that work should be executed with everyone going
home safely at the end of the day. At the same time, a
scarcity of the materials and talent required to carry out
TenneT’s tasks leads to pressure on the feasibility of timely
delivery and to increasing cost levels within the entire supply
chain. Standardisation and innovative measures have been
developed to mitigate potential impact on security of supply
caused by the infeed of more and more weather-dependent
renewables. These dilemmas have been discussed in the
SB in general as well as for specific investment proposals.
The SB fully supports the mitigating measures taken.
Amongst these measures are careful stakeholder
management, different ways in recruiting talent and entering
into long-term partnership contracts with TenneT’s suppliers
to stimulate their expansion of capacity. These measures
will contribute to acceleration of the projects that TenneT
needs to realise because of its societal responsibility.
Measures to remain a customer of choice and an employer
of choice and measures to relieve the congestion on the
grid where possible (by advancing grid expansions, increase
of congestion management and decrease/ postponing of
capacity requests) have also been discussed regularly.
Project Ampere, the potential sale of TenneT Germany to
the German state, has been an important topic for TenneT
and thus for the SB. As the Transmission System Operator
for the Netherlands, and a significant part of Germany,
TenneT owns and operates over 25,000 kilometres of
high-voltage lines and cables. The SB acknowledges the
political reality that both the Dutch and German government
prefer to fund, control and own their national electricity grid.
Intensive dialogues took place with the EB on a possible full
sale of TenneT’s German activities. The SB carefully
assessed whether a sale would be in the best interest of
TenneT Holding B.V., taking into account relevant boundary
conditions and the interests of all stakeholders. Supported
by an own external advisor, the SB discussed the EB's
assessment of the various scenarios and why the scenario
of a full sale of TenneT Germany was tentatively identified by
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
83
the EB as the preferred scenario given the size of the
investment agenda, financing needs and political realities.
After the announcement of this preferred route on
10February 2023, negotiations with the German state
began and the SB remained informed and involved on a
regular basis.
Project Tango, the preparation for a complete split in all
leadership and organisational aspects if a transaction is
concluded, has also been closely monitored by the SB
andchallenged where necessary.
Throughout the year, the topic of a potential (perceived)
conflicts of interest of EB and SB members was carefully
monitored throughout the process and addressed at the
start of every meeting, thereby also looking beyond the
transaction, as a transaction may have impact on future
positions / personal career developments.
The SB highly appreciates the efforts of the EB and involved
TenneT employees regarding both projects Ampere and
Tango – which they did alongside safeguarding TenneT’s
core business: driving the energy transition.
2. Supervisory Boardcomposition
In 2022, the SB decided to expand from five to six SB
members because of the increased amount and complexity
of the supervisory tasks.
The SB is very pleased that Edna Schöne, Essimari Kairisto
and Stijn van Els were all reappointed for their second
terms, from 1 May 2023 to 30 April 2027. The core
competences of Edna Schöne, Essimari Kairisto and Stijn
van Els pursuant to their international knowledge and
various experiences and reference frameworks are
noticeable in each committee meeting and SB meeting,
leading to good countervailing power sparring opportunities
for the EB. The SB agreed to a ‘roof tile construction’ where
these three SB members will not all leave at the same time,
to ensure continuity within the SB.
The second term of Laetitia Griffith ended on 30 June 2023.
Laetitia has been reappointed until 31 March 2024 or until a
good handover can be ensured. With the appointments of
Maarten Camps and Kuldip Singh from 1 September 2023,
this has been ensured. As a result, Laetitia Griffith agreed
with the SB to step down as per 31 December 2023.
Maarten Camps has been appointed on the SB’s so-called
governmental profile and Kuldip Singh on the IT security
and digitisation profile. Both SB members are
complementary to the other SB members in terms of
expertise, experience and competencies and fit well within
the SB from a personality perspective. The SB welcomes
Kuldip Singh and Maarten Camps wholeheartedly to the
SB.
The SB thanks Laetitia Griffith for her greatly appreciated
contribution to the RAC, which she has chaired, and her
active and valuable participation in the SB on other matters,
including her role as vice-chair (in which she be succeeded
by Essimari Kairisto in 2024). The SB also appreciates
Laetitia’s commitment to the Works Council, as one of the
two SB members appointed with an enhanced
recommendation right by the Works Council. Kuldip Singh
will succeed her in this role. Stijn van Els is the other SB
member who holds this position.
2.1 Introduction programme
Maarten Camps and Kuldip Singh had an intensive, three
day introductory programme on various TenneT locations.
Focus points in these training sessions were safety, the
various aspects of security of supply, affordability of the
electricity system, feasibility of the investment portfolio,
sustainability and CSRD reporting, political context of
TenneT’s activities and the projects Ampere and Tango.
Aworking visit to the largest Dutch land station and offshore
landing location in Wijk aan Zee as well as personal
introductions to various Directors also formed an integral
part of the programme.
2.2 Ancillary positions and potentially (perceived)
conflicts of interest
Pursuant to the appointment of Kuldip Singh and Maarten
Camps, the topic of SB ancillary positions in connection
with potentially perceived conflicts of interest has been
discussed. It was concluded that there are currently no
potential conflicts of interest at hand. This is a topic that is
carefully considered before each SB meeting by the
company secretary and discussed at each SB meeting by
the SB members themselves. Where necessary, potentially
conflicted SB members are not granted access to the
relevant documentation and the SB dialogue, which is
minuted. An overview of the (ancillary) functions of the SB
members is included in this Supervisory Board report.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
84
2.3 Diversity
In 2023, the composition of the SB in terms of gender
balance was three female and four male SB members, so
43/57%. As per 1 January 2024, when Laetitia Griffith’s
term will have expired, the female/ male ratio will be two
female SB members against four male SB members so a
ratio of 33/67%.
In terms of cultural background, the SB consisted of three
members with a non-exclusively Dutch or German cultural
background: Edna Schöne brings a Swedish cultural
background, Essimari Kairisto a Finnish one and Kuldip
Singh an Indian background. In addition, all SB members
have working experience in both Germany and the
Netherlands. Less visible, but as important, is a pluralism in
of opinions - something the SB is proud of and cherishes.
3. Executive Board
3.1 Composition
With a CEO, CFO and two COOs, the EB was at full
strength and speed throughout 2023 with a well-
coordinated and collaborative team.
The SB is pleased with the reappointment of Tim
Meyerjürgens as statutory director of TenneT Holding B.V.
for a second term of four years from 29 February 2024 to
29 February 2028. Tim’s knowledge, capabilities and his
more than 25 years of experience at (the predecessors of)
TenneT, both onshore and offshore, are highly appreciated,
so is his dedication to a good safety performance culture.
This also applies to the way Tim acts in the SB by
contributing to the dialogue or by providing
counterarguments where needed or useful.
The composition of the EB in terms of gender balance
consists of two female and two male EB members, so 50/
50%. The EB has two Dutch (CEO Manon van Beek and
COO Maarten Abbenhuis) EB members and two German
(CFO Arina Freitag and COO Tim Meyerjürgens).
Next to gender and nationality, the EB as a whole is diverse
and complementary in terms of expertise, experience,
competencies and personality. The SB is pleased to see
that the EB really works together as a strong team.
3.2 EBperformance
The Remuneration and Appointment Committee (“RAC”)
conducted the performance dialogues with the (i) the CEO
on the functioning of the entire EB and (ii) with each of the
four individual EB members.
The EB performance dialogues for 2022 were conducted in
Q2 2023, thus also considering performance in the first half
year of 2023. The performance dialogues were held against
EB targets related to the corporate objectives for TenneT’s
four strategic pillars:
1. energise TenneT’s people and organisation
2. secure of supply today and tomorrow;
3. drive the energy transition;
4. safeguard TenneT’s financial health.
The performance on the targets was discussed in
conjunction with mitigating measures where necessary.
Individual performance and further leadership development
were discussed with the EB members. The overall
conclusion was that the EB functions very well together: it
speaks with one voice; the tone is open and transparent,
the EB visibly enjoys working together. Where needed,
contradiction is shared constructively. In the way the EB
acted the SB clearly saw that driving the energy transition is
its guiding principle.
4. Set-up SBmeetings
The SB conducted 16 extra SB meetings to discuss
Ampere, alongside 12 regular SB meetings during which the
topics Ampere and Tango were on the agenda. In total, the
SB convened 28 times in 2023.
Each SB meeting was started by an ‘SB-only’ part in which
the SB can speak and align on the most important agenda
items without the EB and company secretary present. After
the opening of meeting a compliance moment follows in
which it is verified whether there are any topics on the
agenda that may lead to potentially (perceived) conflicts of
interest.
The SB has four committees that help guide SB decision-
making: the Audit, risk and compliance committee, the
Strategic investment committee, the Remuneration and
appointment committee and the (temporary) SB Ampere
committee. For each committee meeting, the
documentation is shared with the entire SB. In each SB
meeting the feedback of the prior committee meetings is
shared by the chairs of the committees. After each SB
meeting there is another possibility for the SB-only to reflect
alone.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
85
Most SB and committee meetings took place virtually,
except for the SB meeting on 16 November and the SB and
EB working visit to the city of Münster on 20 and 21
September 2023. The theme of the meeting was German-
Dutch cooperation. The first part of the visit was to the
Friedenssaal Münster’s town hall, hosted by the mayor,
followed by a tour and presentation of the German-Dutch
military corps in Münster. Parallels and lessons learned
between defence cooperation and cross-country
collaboration in the energy transition were discussed. This
offsite was also a good opportunity for the SB to connect
on a personal level as well.
4.1 SBAmpere Committee
The SB established a separate (temporary) committee (the
‘SB Ampere Committee’) to prepare discussions in the full
SB on the subject of a potential full sale of TenneT Germany
to the German state. Ab van der Touw chairs this
committee, Essimari Kairisto is a member. During the year
23 meetings of the SB Ampere committee took place. In
addition, written updates were provided in weeks where
there was nothing to discuss. Key items of these
discussions were the status of the negotiations, the draft
transaction term sheet and the cooperation agreement
regarding offshore development.
4.2 Audit, risk and compliance committee
The audit, risk and compliance committee (ARCC) consists
of Essimari Kairisto (chair), Ab van der Touw, Edna Schöne
and – as from 1 September 2023 – Kuldip Singh as
incoming member, succeeding Edna Schöne on 1 January
2024.
The ARCC discussed the quarterly results and the financial
reporting (IAR 2022 and the Half-Year Results 2023) and the
related documentation by the external auditor. The two
half-yearly legal reports were also discussed. Further topics
that the ARCC focused on in 2023 were: the follow-up of
open IT audit findings, the functioning of the OneERP
system, the preparation for CSRD reporting and the yearly
alternating tax topic (this year: wage tax). These topics will
also be closely monitored in 2024. The operation of the
internal audit function was also evaluated.
The chair of the SB and the chair of the ARCC met with the
Ministry of Finance in their yearly meeting to prepare for the
General Shareholder Meeting.
The ARCC met five times in 2023 in the presence of the
CEO and CFO, TenneT’s Director audit, risk- and control
and compliance and integrity (“ARC”) and the external
auditor Deloitte (the lead audit partner).
4.3 Strategic investment committee
The strategic investment committee (SIC) consists of Stijn
van Els (chair), Essimari Kairisto, Edna Schöne and – per 1
September 2023 – Maarten Camps as incoming member,
succeeding Essimari Kairisto on 1 January 2024.
The SIC discussed the quarterly reports on safety and
investments. Further focus is on the Dutch Investment Plan
(IP), the German Netzentwicklungsplan (NEP) and in relation
thereto, the German TSO landscape.
TenneT’s procurement strategy was discussed regularly in
2023 including the progress on the 2GW Program. The
challenges of the energy transition were discussed in
general on project, programme and portfolio level. Cost
increases in the current suppliers markets versus regulatory
developments were noted and monitored. The SIC explored
– and appreciated TenneT’s efforts to accelerate the energy
transition and ensure its affordability by (i) creating synergies
during execution of projects, (ii) applying innovative solutions
where possible and (iii) being transparent on cost
consequences and non-feasibility of certain execution
methods desired by third parties.
The SIC prepared more than 80 investment proposals for
SB approval. The SB approval threshold is EUR 50 million,
leading to a high number of investment proposals needing
SB approval. The SB ensures this is being carefully done,
both for smaller - and for the large investments. Because
TenneT’s investment portfolio and project values have
grown exponentially since these thresholds were set, the SB
supports requesting the shareholder to raise these approval
thresholds in 2024.
The November SIC meeting was attended by the lead audit
partner from Deloitte to observe the controls exercised by
the SIC: good controls were confirmed.
The SIC convened five times in 2023 in the presence of the
COO’s.
4.4 Remuneration and appointment committee
The remuneration and appointment committee (RAC)
consists of Laetitia Griffith (chair), Ab van der Touw and Stijn
van Els.
The RAC focused on the searches for, and the
appointments of, the two new SB members, as well as on
Tim’s Meyerjürgens reappointment as EB member.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
86
The RAC prepared for the SB the EB performance
dialogues on the functioning of the EB as whole and the
functioning and leadership development of the individual EB
members, which were held with the RAC.
In the yearly management team review, the performance of
the Senior Leadership Team members is discussed, as well
as talent management and succession planning.
Laetitia Griffith handed over the chair of the RAC to Edna
Schöne, who chairs the RAC from 1 January 2024.
The chair of the SB and the chair of the RAC met with the
Ministry of Finance in their yearly meeting on the EB and SB
functioning, EB and SB appointments and reappointments,
EB and SB composition and the cooperation with the
shareholder.
The RAC convened sixtimes in 2023 in the presence of the
CEO and the Director of the People business unit.
4.5 Dutch Works Council
The SB members with enhanced recommendation rights
met with the Dutch Works Council four times. Topics
discussed were amongst others Ampere, SB
reappointments and SB searches, Tim Meyerjürgens’
reappointment, the collective labour agreement negotiations
and result, growth of the organisation and the workload
within TenneT.
5. 2023 Audit by the external auditor
The 2023 audit that was conducted by the external auditor
was discussed in the ARCC and in the SB. The main
findings from the auditor Deloitte were related to TenneT’s IT
environment. Deloitte noted as one of the main issues the
high number of IT audit findings. While many of these issues
had been closed, the auditor also noted that new IT findings
were identified – although these are partly related to a
growing IT environment. Another topic discussed was the
topic of ‘useful life of assets’: Deloitte’s analysis on onshore
assets in Germany and the Netherlands as well as for
offshore assets in Germany was still in progress. Meanwhile,
the analysis has been completed and has resulted in an
extension of the useful lives of assets with the consequence
of a lower depreciation as of 1 January 2024. Further details
are explained in the financial statements.
The SB will keep closely monitoring the timely resolving of IT
audit findings.
6. Integrated reporting and audit
The SB discussed the financial statements for the financial
year 2022 as part of the Integrated Annual Report 2022.
This dialogue was prepared by the ARCC, and the
respective meeting was preceded by the regular meeting
between the ARCC and external auditor without EB
members nor the company secretary being present to
ensure an open dialogue on matters related to the IAR.
As part of the annual, half-year and quarterly performance
cycle, the SB reviewed the 2022 Integrated Annual Report,
the Half-Year Report as well as the internal quarterly reports.
Furthermore, it discussed the independent auditor’s reports,
results from internal risk and control assessments, the
Integrated Performance Plan 2024-2026 and approved the
2024 budget and Financing Plan 2024.
In preparation for the upcoming Corporate Sustainability
Reporting Directive, the EB and the SB discussed and
approved the material impacts identified as an outcome of
the so-called double materiality analysis (financial or impact
materiality). The outcome of the double materiality analysis
are the following material topics
1. Safe working environment
2. Security of supply
3. Financial health
4. Climate change
5. Resource use and circularity
6. Responsible Supply Chain Practices
7. Delivering the energy transition
TenneT is currently preparing to report in line with the
European Sustainability Reporting Standards (ESRS) which
will be applicable for TenneT in the financial year 2024.
7. Financial statements
In 2023, the SB examined the Integrated Annual Report
2022, the financial statements 2022, the Green Finance
Report 2022, the independent auditor’s report, the
assurance report of the independent auditor related to
non-financial information, the interim report/management
letter and the audit results report issued by TenneT’s
external auditor. The ARCC prepared and advised on these
documents. As a result, the SB endorsed the documents
and recommended that the General Shareholder Meeting
adopt the financial statements. The SB recommended the
General Shareholder Meeting to discharge the EB members
from liability for its management of the company in 2022
and release the SB from liability for its supervision over the
year 2022, both of which took place.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
87
8. Inclusion and Diversity
The SB approved TenneT’s new policy that promotes
inclusivity, diversity and equity (which means that people
may need to be treated differently to provide an equality of
opportunity).
Diversity means to include different perspectives,
experiences, cultural backgrounds and characteristics
among TenneT’s employees to contribute to TenneT’s
results, for instance by challenging established ways of
thinking and interacting with different perspectives. TenneT’s
targets for inclusion, diversity and equity will be reviewed on
a quarterly basis and annually for the year ahead. Diversity
has been discussed in the RAC and SB in relation to the
management team review for all Directors and the leaders
reporting to the Directors. Diversity has also been an
important element in the search criteria for the two new
SBmembers.
The RAC noted that both the target for female hires (30%)
and the target for international inflow (10%) has been met.
The RAC and SB will keep monitoring diverse hiring as well
as encouraging and living an inclusive culture. These targets
have been monitored by the RAC and will keep continue to
be so. The SB highly valued initiatives that provide a
(temporary or permanent) workplace for refugee talent. The
RAC also appreciated the way TenneT once again managed
to attract and onboard 884 additional FTEin 2023.
The yearly meeting between the SB, EB and the Dutch
Works Council about a healthy, engaged, growing and
diverse workforce has been rescheduled to early 2024.
9. Strategy
TenneT’s strategy in action is based upon its four strategic
pillars of Energise our people and organisation, Secure
supply today and tomorrow, Drive the energy transition and
Safeguard TenneT’s financial health. The SB was updated
every quarter on TenneT’s strategy in action in the quarterly
integrated performance report. Progress on these four
pillars is reported upon in the Integrated Annual Report.
Where in 2023 the strategic focus has been notably on
project Ampere and the preparations for a potential split of
the organisation in case of a transaction with the German
state, the SB will remain actively involved in TenneT’s
strategy calibrations and in the re-evaluation that is planned
for 2024.
10. SB Self-Evaluation
On 1 December 2023, the SB conducted its yearly self-
evaluation – internally this time, because an externally
guided self-evaluation took place in 2022. The evaluation of
the SB work is overall very positive. This relates amongst
others to the diverse composition of the SB, the
constructive dialogue culture (no dominant speakers), the
interactions with the EB and the efficiency of having a
separate committee for Ampere. The SB workload was
deemed very high. The SB wishes to strengthen the focus
of the SB documentation and dialogues even further on
critical topics and further empower the committees.
In 2024 TenneT will revisit the governance rules for its
investment proposals so that less investment proposals will
have to be approved by the SB (or the shareholder).
11. Updated Corporate Governance Code
Based on the updated Corporate Governance Code the
rules governing the SB have been updated.
12. Permanent Education
The SB had in total four Permanent Education sessions in
2023 on the topics of energy system of the future (Target
Grid) in connection to the implications of Esbjerg
declaration, on safety, on security and on regulatory
developments in the Netherlands, Germany and on a
European level.
Appreciation
Finally, the SB would like to express its great appreciation
for the way everyone at TenneT, along with all partners
contributed to the impressive results over 2023 in a safe
way: thank you very much!
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
88
Competencies
A.F. van der
Touw (chair)
L.J. Griffith
(vice-chair)
E.M. Kairisto A.C.C. van Els E. Schöne K. Singh
M.R.P.M.
Camps
General management ■ ■ ■ ■ ■ ■ ■
Financial management ● ● ■ ● ● ■ ●
Capital market/ investor relations ● ● ■ ● ● ◆ ●
Technology ■ ◆ ◆ ■ ◆ ■ ◆
IT ● ● ● ■ ● ■ ◆
Risk management ■ ■ ■ ■ ■ ● ●
Project management (large
infrastructure projects) ■ ● ■ ■ ■ ◆ ◆
Human resources ■ ■ ■ ■ ■ ● ■
Marketing/Public Affairs/ Brand image ■ ■ ● ■ ■ ■ ●
Regulation ● ● ● ● ■ ● ●
Public sector/State owned
companies ■ ● ● ● ■ ● ■
Political/managerial experience and
network the Netherlands ■ ■ ◆ ● ◆ ● ■
Political/managerial experience and
network Germany ■ ◆ ■ ■ ■ ● ■
International background/experience ■ ● ■ ■ ● ■ ■
Legal ● ■ ● ● ■ ◆ ●
Experience in energy-, industrial and/
or financial sector ■ ■ ■ ■ ■ ■ ●
Knowledge of Dutch Corporate
Governance Code ■ ■ ● ● ● ■ ●
Corporate Social Responsibility/
Environmental, Social and
Governance ■ ■ ■ ■ ■ ■ ●
■ = High● = Medium◆ = Low
Capabilities matrix Supervisory Board
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
89
Remuneration policy
TenneT's remuneration policy mainly aims to offer remuneration at a level that will
attract and retain qualified and capable statutory directors (including those who come
from within the organisation), being Executive Board members. This also applies to
Supervisory Board members. The remuneration policy meets the best-practice
provisions on remuneration as defined in the Dutch Corporate Governance Code
2022. Since all of the shares in TenneT Holding B.V. are held by the Dutch state,
TenneT’s remuneration policy falls within the scope of the 2022 State Participations
Policy (‘Nota Deelnemingenbeleid Rijksoverheid 2022’, published 1 July 2022).
TenneT’s remuneration policy has been approved by the
Shareholder and is effective asof January 2020. It is also in
line with the 2022 State Participations Policy. The most
important elements of the remuneration policy are described
below.
Employment market reference group
Remuneration for the statutory board members of TenneT
has been set using a benchmark, a comparison
withorganisations competing in the same business
andemployment markets as TenneT. These organisations
include:
• International transmission system operators (TSOs);
• Operators of infrastructure;
• Installation/engineering companies;
• Building companies;
• Financial institutions.
The outcome of this benchmark showed a higher
remuneration level than TenneT’s current level of
remuneration, which has been set by the Shareholder in line
with the remuneration policy as of January 2020and
the2022 State Participations Policy andincludes equal pay,
regardless of gender or nationality.
The Supervisory Board reviews the remuneration policy for
statutory board members once every four years and is
planned for 2024. The Supervisory Board may resolve to do
this as well in case of important policy changes, changes in
Shareholder structure or ownership and changes in the
labour market. Such changes will be aligned with and
submitted to the Shareholder for approval.
Remuneration norm
The moment the Supervisory Board appoints a new
statutory director it applies the remuneration policy as
approved by the Shareholder. For 2023, this fixed
remuneration is capped at the top as described above,
excluding pension and other allowances and was set at
EUR437,132for TenneT's Chief Executive Officer (CEO).
The fixed remuneration of the other Executive Board
members (CFO and both COO’s) has been capped at 90%
of the remuneration of the CEO.The Supervisory Board
applies the principle of equal pay to the remuneration policy
for the statutory directors.
If, in the opinion of the Supervisory Board, the
maximumremuneration as required by the Shareholder
leads to unacceptable risks to the organisation because no
suitable candidates can be found to fulfil the role of
statutory director, the Supervisory Board shall consult the
Shareholder.
The Supervisory Board decides on the annual increase in
salary. If the remuneration of a statutory director has
reached its maximum, further increases will be limited to the
structural increments as agreed upon in the collective labour
agreement which is applicable to all employees of TenneT
TSO B.V. including Ms. Freitag and Mr. Meyerjürgens. Whilst
being based in Germany, both have a Dutch labour
agreement with TenneT.
Service agreement and compensation for early
termination
In principle, with effect from 2017, employment contracts
– with the exception of internal appointments – are
concluded for a fixed term of four years. In the event that
the employment contract is terminated prior to the expiry
date, TenneT pays a maximum of one year's salary as a
termination compensation, unless the statutory director
resigns voluntarily or the termination is the result of his or
her actions. As an exception to our policy, agreed with the
Shareholder, Ms. Freitag will also receive this termination
compensation if she will not be employed for a second term
at the initiative of TenneT.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
90
Pensions
The retirement age of statutory directors is based on the
statutory pension age for Dutch contractsfor statutory
directors based in the Netherlands. The retirement age of
statutory directors based in Germany is based on the
statutory pension age as applicable in Germany. Statutory
directors participate in the regular pension scheme of the
country in which they are covered for social insurance.
The Netherlands based statutory directors participate in a
pension arrangement as defined in the collective labour
agreement and as applicable for all employees in the
Netherlands. Theemployer and employee contribution for
the statutory directors follow the same rules as applicable to
all other employees. Dutch pension regulations define the
pensionable salary up to thefiscal maximum of
EUR128,810(gross pension, 2023).
The statutory directors based in the Netherlands receive the
same compensation as TenneTemployees with an income
above the fiscal maximum pension salary. The
compensation is based on the fiscally allowed age-
dependent premium percentages upto fiscal maximum
pension salary.
German based statutory directors participate in the regular
pension scheme ('Beitragsplan') or any other pension
scheme that such statutory director may have already been
entitled to.
In Germany TenneT currently has two pension schemes. For
employees starting after 1 April 2008 Pension scheme 2008
is applicable. Mr. Meyerjürgens joined TenneT’s TSO GmbH
predecessor E.ON Netz GmbH on 1 March 2003. At that
time a company pension based on the pension scheme
2001 was provided to him. Mr. Meyerjürgens kept
participating in his pension scheme.For Ms. Freitag the
Pension scheme 2008 is applicable. Further reference is
made to note 24 of the consolidated financial statements.
Other allowances and secondary benefits
The total remuneration package for statutory board
members includes an allowance for necessary out-of-
pocket expenses, the use of a lease car (of a type
comparable tothose provided to statutory board members
of similar organisations) including possible private use,
accident and directors’ andofficers’ liability insurance, and
thirty days paid leave per annum.Sign-on bonuses and
recruitment incentive payments are not applicable for
statutory board members.
Secondary benefits also include a nominal contribution
towards health insurance premiums and the choice of other
flexible individualised benefits, such as converting holiday
allowance into extra leave hours. Most of these benefits are
applicable to all TenneT employees, working under the
Dutch collective labour agreement. The company doesnot
extend any loans, loan guarantees or advances against
future earnings to any statutory board members.
Taxes
TenneT and the Dutch Tax Authorities reached a tax
settlement on the allocation of wage and income taxes to
the Netherlands and Germany. TenneT shall fully indemnify,
hold harmless and compensate statutory directors against
all claims, demands, actions, suits, damages, liabilities,
losses, settlements, judgments, costs and expenses
(including but not limited to reasonable attorney’s fees and
costs), which arise out of or relate to any act or omission of
TenneT in relation to the double taxation claim. As a result
statutory board members will neither have any disadvantage
of the international allocation of their remuneration, nor will
there be a gain advantage from the advancing arrangement
with TenneT, since it will be settled afterwards.
Three tax disclosures for former Board Members have been
filed to the German Tax Authorities and have been settled in
2023.
In 2022, a Mutual Agreement Procedure was requested on
behalf of Ms. Van Beek, Mr. Jager (as former statutory
board members) and Mr. Voorhorst (as former statutory
board members ) between the competent Dutch and
German authorities based on Article 25 of the bilateral tax
treaty concluded between the Netherlands and Germany
(2012) for the tax years 2018 and 2019. This request to
remedy double taxation has been formally brought forward
to the competent Dutch and German tax authorities and
parties are awaiting a decision by the competent authorities.
(Re-)Appointment of Executive Board
membersand Supervisory Board members
TenneT naturally adheres to the (re)appointment process of
both Executive Boardand Supervisory Boardmembers.
Both Executive Boardas well as Supervisory
Boardmembers are appointed for a term of four years and
can be re-appointed for a second term of four years. In
well-motivated cases, Executive Boardand Supervisory
Board members may subsequently be reappointed twice for
a third respectively fourth term of two years. So the total
maximum period for both Executive Board and Supervisory
Board members is 12 years.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
91
Board remuneration
This section specifies the current remuneration for statutory directors as well as
members of the Supervisory Board.
During 2023, the Executive Board of TenneT was composed of the following statutory board members:
Position Date of first appointment End of 1
st
term End of 2
nd
term
M.J.J. van Beek CEO 1 September 2018 31 August 2022 31 August 2026
A.C.H. Freitag CFO 1 January 2022 31 December 2025
M.C. Abbenhuis COO 1 January 2021 31 December 2024
T.C. Meyerjürgens
1)
COO 1 March 2020 29 February 2024 29 February 2028
1)
As of 1 March 2019, Mr. Meyerjürgens has been appointed as director; as of 1 March 2020, Mr. Meyerjürgens has been appointed as statutory director.
Ms. Van Beek and Ms. Freitag areemployed by the company for the duration of a fixed-term. Mr. Abbenhuis and Mr.
Meyerjürgens both have open-ended underlying employment contracts.
Remuneration of the statutory directors
Total remuneration
2023 (in EUR thousand)
Fixed
remunera-
tion
Gross
Pension
Net pension
Total
pension
Other
allowance
1)
Total
remunera-
tion
Current board members
M.J.J. van Beek 437 25 45 70 33 540
A.C.H. Freitag 394 31 - 31 45 470
M.C. Abbenhuis 394 24 39 63 21 478
T.C. Meyerjürgens 394 110 - 110 35 539
Total remuneration current board members 1,619 190 84 274 134 2,027
1)
The column ‘Other allowance’ includes certain perquisites provided to statutory directors in 2023, such as life-cycle allowance, an employer contribution
to the Dutch statutory health insurance and an one-off payment as part of the Collective Labour Agreement. The costs shown in this column are
excluding the annual employer contributions to the Dutch and German social security. For all EB membersthe 2023 employer social contributions
amounted to EUR ten thousand.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
92
2022 (in EUR thousand)
Fixed
remunera-
tion
Gross
Pension
Net pension
Total
pension
Other
allowance
1)
Total
remunera-
tion
Current board members
M.J.J. van Beek 423 35 46 81 19 523
A.C.H. Freitag 367 90 - 90 49 506
M.C. Abbenhuis 381 31 29 60 25 466
T.C. Meyerjürgens 380 178 - 178 38 596
Total remuneration current board members 1,551 334 75 409 131 2,091
Former board members
O. Jager
2)
- - - - 15 15
Total 1,551 334 75 409 146 2,106
1)
The column ‘Other allowance’ includes certain perquisites provided to statutory directors in 2022, such as life-cycle allowance, an employer contribution
to the Dutch statutory health insurance and an one-off payment as part of the Collective Labour Agreement. The costs shown in this column are
excluding the annual employer contributions to the Dutch and German social security. For Manon van Beek and Maarten Abbenhuis the 2022 employer
social contributions amounted to EUR 9 thousand. For Arina Freitag the 2022 employer social security contributions amounted to EUR 10 thousand and
for Tim Meyerjürgens to EUR 9 thousand.
2)
Consists of education costs.
Fixed remuneration
In accordance with the indexation foremployees as
determined by the Collective Labour Agreement for TenneT,
the salaries of all statutory directors have been increased by
EUR 270 gross per month and 6% as of September 2023,
with the 6% also being applied to the EUR 270 gross per
month, in line with the Collective Labour Agreement
(hereafter: CLA). Furthermore, in light of the CLA, all
statutory directors have received, like all employees of
TenneT in the Netherlands and Germany, a one off
compensation for the high inflation of EUR 1,000. The
Supervisory Board sets and evaluates performance targets
for each statutory director on an annual basis.
Pension cost
The pensions of all Dutch statutory board members are
administered by the ABP Pension Fund. The pension
accrual is based on an average pay system up to the fiscal
maximum (gross pension). With respect to the fixed
remuneration exceeding the fiscal maximum, the Dutch
statutory board members mayparticipate in a net pension
system.
As explained in the remuneration policy the pension of the
German statutory directors is based on actuarial
calculations in line with IAS19. The amount is equal to the
yearly service costs.
Other allowances and secondary benefits
All statutory directors have a company car available to
them. The value of theprivate useis part of the Other
allowances as shown in the table. The company does not
reimburse its statutory directors for any personal income tax
consequence resulting from the privateuse of leased cars.
For Dutch statutory directors the secondary benefits
asshown in the remuneration table, include acontribution
tohealth insurance and a budget for flexibleterms of
employment. Each statutory director received an allowance
fornecessary out-of-pocket expenses, of EUR2,196 a year.
This allowance is not included in the remuneration table as it
is a compensation of expenses incurred and hence not
considered a remuneration component.
The total remuneration paid to the statutory directors is
reconciled to and further disclosed innote 5 of the
consolidated financial statements.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
93
Remuneration ratio
The remuneration ratio CEO to employees is measured by
comparing the total remuneration , including fixed salary,
pension benefits and other allowances of the CEO with the
mediantotal remuneration, including fixed and variable
variation, pension benefits and other allowances of all other
employees. The remuneration ratio CEO to senior
management is measured by comparing the total
remuneration, including fixed salary, pension benefits and
other allowances of the CEO with the mediantotal
remuneration, including fixed and variable variation, pension
benefits and other allowances of the Senior Leadership
Team (SLT). The SLT consists of 20 directors, all direct
reports to the EB.
The remuneration ratio of the highest paid employee to
employees is measured by comparing the annual total
compensation, with the median of all other employees. As
of this reporting year the remuneration CEO paid employee
to average of all other employees is a new ratio calculation.
Based on Dutch Corporate Governance Code 2022 it is
also required to disclose current year's ratio and five
previous years. That and the fact that the calculation base
changed makes up for the fact that the remuneration ratio
differ to what was reported in the IAR of 2018 and 2019.
The cost components for these years have been
reassessed.
Employees with a parttime employment contract are not
recalculated to one fulltime equivalent. The same is applied
toemployees joining TenneT during the course of the year,
their remuneration is not recalculated to twelve months.
2023 2022 2021 2020 2019 2018
Remuneration ratio CEO to median of employees 5.6 5.9 5.8 6.2 4.7 7.0
Remuneration ratio CEO to average of employees 5.5 5.7 5.7 6.2 4.6 6.9
Remuneration ratio highest paid employee to median
of employees
1)
5.6 6.8 7.0 7.0 4.7 7.0
Remuneration ratio CEO to median of SLT 1.7 1.5 1.9 1.8 1.7 2.5
1)
In the years 2018, 2019 and 2023 the CEO is the highest paid individual. Mr. Meyerjürgens is in the years 2020 till 2022 the highest paid individual,
dueto pension entitlements.
Remuneration of the Supervisory Board
The remuneration policy for the Supervisory Board defines
the remuneration for the different roles and committees of
the Supervisory Board. During 2023 each Supervisory
Board member was serving on one, two or three of a total
of four committees.
The roles and responsibilities of members of the Supervisory
Board were as follows:
Supervisory
Board
Audit, Risk and
Compliance Committee
Remuneration and
Appointments
Committee
Strategic
Investments
Committee
Ampere
Committee
3)
A.F. van der Touw
Chair Member Member Chair
L.J. Griffith
1)
2)
Vice-chair Chair
E. Kairisto
Member Chair Member Member
A.C.C. van Els Member Member Chair
K. Singh (as of 1 September 2023) Member Member
M.R.P.M. Camps (as of 1 September 2023) Member Member
E. Schöne Member Member Member
1)
Mrs. Griffith is also member of the Aufsichtsrat of TenneT TSO GmbH.
2)
The appointment term of Laetitia Griffith lapsed per 31 December 2023. Mrs. Griffith handed over the Vice-Chair of the SB to Mrs E. Kairisto and the
Chair of the RAC to Mrs. E. Schöne.
3)
Temporary committee to prepare decision making on the topics of Ampere and TenneT's disentanglement (project "Tango").
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
94
The Shareholder allows to an annual indexation of the
Supervisory Board remuneration following TenneT's
Collective Labour Agreement, from 1 January 2015
onwards. As a result, Supervisory Board member
remuneration increased by EUR 270 gross per month and
6% as of September 2023, with the 6% also being applied
to the EUR 270 gross per month, in line with the Collective
Labour Agreement. The committee remuneration increased
by 6% as of September 2023.
Following this increase, Supervisory Board member
remuneration was as follows:
(EUR)
Chair 34,254 per annum
Vice-chair 27,789 per annum
Member 24,916 per annum
Audit, Risk and Compliance Committee 7,967 per annum
Remuneration and Appointment Committee 6,268 per annum
Strategic Investment Committee 6,268 per annum
Ampere Committee
1)
6,268 per annum
1)
Temporary committee to prepare decision making on the topics of Ampere and TenneT's disentanglement (project "Tango").
The total remuneration received by the Supervisory Board in
their capacity as TenneT Holding B.V. Supervisory Board
members during 2023 was as follows:
2023 2022
(in EUR thousand)
Fixed
remuneration
Committee
fee
Total
Fixed
remuneration
Committee
fee
Total
A.F. van der Touw 34 21 55 33 14 47
L.J. Griffith 28 6 34 26 6 32
E. Kairisto 25 21 46 23 14 37
A.C.C. van Els
25 13 38 23 13 36
E.M Schöne 25 14 39 23 14 37
K. Singh
9 3 12 - - -
M.R.P.M. Camps 9 2 11 - - -
Total 155 80 235 128 61 189
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
95
The Supervisory Board
Vice-Chair Supervisory Board
Chair Remuneration & Appointment Committee
58, Dutch (f)
Initial appointment:
1 July 2015
Expiry last term:
31 December 2023
Principal position:
Former State Councillor in the
Advisory Division of the Dutch
Council of State
Other positions:
· Member of the Aufsichtsrat
TenneT TSO GmbH
· Chair Supervisory Board
Nederlands Filmfonds
· Member of the Supervisory
Board of Gassan
Diamonds B.V.
· Chair Board Stichting
Nederlands Vioolconcours
· Chair of the Supervisory Board
of Save the Children
theNetherlands
· Member of the Electoral
Council
· Chair Supervisory Board
Metropole Orkests
· Member of the Supervisory
Board of the Kadaster
· Member of the Foundation
Assurance KLM
· Member Supervisory Board
Coca Cola Europacific
Partners Nederland B.V.
· Member of the Board
Koninklijke Verzamelingen
Member Supervisory Board
Member Strategic Investments Committee
Member Audit, Risk & Compliance Committee
52, German (f)
Initial appointment:
1 May 2019
Expiry second term:
30 April 2027
Principal position:
· Member Executive Board
EulerHermes AG
Other positions:
· Member of the Board
‘Lateinamerikaverein’
· Member of the Executive
Committee ‘Ostausschuss
der deutschen Wirtschaft’
· Member of the Executive
Committee International
Chamber of Commerce
Germany
· Member of the Unternehmens-
beirat KfW Ipex
· Member of the Board
LAVFE-Foundation
Chair Supervisory Board
Chair SB Ampere Committee
Member Audit, Risk & Compliance Committee
Member Remuneration & Appointments Committee
68, Dutch (m)
Initial appointment:
1 June 2019
Expiry second term:
31 May 2026
Principal position:
· Former CEO Siemens
Nederland
(until 1 April 2018)
Other positions:
· Member Board
Deutsch-Niederländische
Handelskammer
· Chair Supervisory Board
Universiteit Leiden
· Chair Fonds Slachtofferhulp
· Chair Supervisory Board N.V.
NIBA
· Member Board GAK Foundation
· (External) member
Ondernemingskamer
Gerechtshof ’s Gravenhage
· Chair Advisory Council Ministry
of Defence
· Chair Board Platform voor
Techniek Talent
· Chair Supervisory Board Van
Leeuwen Buizen Groep B.V.
· Chair Advisory Committee
Nederlands Indië Monument
· Chair Supervisory Board Van
Dorp installaties B.V.
· Chair Advisory Council Dutch
Ministry of Infrastructure
(til 1 January 2024)
Member Supervisory Board
Chair Audit, Risk & Compliance Committee
Member Strategic Investments Committee
Member Ampere Committee
57, German and Finnish (f)
Initial appointment:
1 May 2019
Expiry second term:
30 April 2027
Principal position:
· Former CFO Hochtief
Solutions AG
Other positions:
· Member Supervisory Board
Fortum Oyj
· Member Supervisory Board
Applus+ Services SA
· Member Supervisory Board
Freudenberg SE
· Chair ‘Deutsch-Finnische-
Gesellschaft e.V.’
· Member Supervisory Board
Iveco Group N.V.
· Chair Board of Trustees
Deutsch Finnische
Gesellschaft
· Member Supervisory Board
Fugro N.V.
Laetitia Griffith
Edna Schöne
Ab van der Touw
Essimari Kairisto
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
96
The Supervisory Board
Vice-Chair Supervisory Board
Chair Remuneration & Appointment Committee
58, Dutch (f)
Initial appointment:
1 July 2015
Expiry last term:
31 December 2023
Principal position:
Former State Councillor in the
Advisory Division of the Dutch
Council of State
Other positions:
· Member of the Aufsichtsrat
TenneT TSO GmbH
· Chair Supervisory Board
Nederlands Filmfonds
· Member of the Supervisory
Board of Gassan
Diamonds B.V.
· Chair Board Stichting
Nederlands Vioolconcours
· Chair of the Supervisory Board
of Save the Children
theNetherlands
· Member of the Electoral
Council
· Chair Supervisory Board
Metropole Orkests
· Member of the Supervisory
Board of the Kadaster
· Member of the Foundation
Assurance KLM
· Member Supervisory Board
Coca Cola Europacific
Partners Nederland B.V.
· Member of the Board
Koninklijke Verzamelingen
Member Supervisory Board
Member Strategic Investments Committee
Member Audit, Risk & Compliance Committee
52, German (f)
Initial appointment:
1 May 2019
Expiry second term:
30 April 2027
Principal position:
· Member Executive Board
EulerHermes AG
Other positions:
· Member of the Board
‘Lateinamerikaverein’
· Member of the Executive
Committee ‘Ostausschuss
der deutschen Wirtschaft’
· Member of the Executive
Committee International
Chamber of Commerce
Germany
· Member of the Unternehmens-
beirat KfW Ipex
· Member of the Board
LAVFE-Foundation
Chair Supervisory Board
Chair SB Ampere Committee
Member Audit, Risk & Compliance Committee
Member Remuneration & Appointments Committee
68, Dutch (m)
Initial appointment:
1 June 2019
Expiry second term:
31 May 2026
Principal position:
· Former CEO Siemens
Nederland
(until 1 April 2018)
Other positions:
· Member Board
Deutsch-Niederländische
Handelskammer
· Chair Supervisory Board
Universiteit Leiden
· Chair Fonds Slachtofferhulp
· Chair Supervisory Board N.V.
NIBA
· Member Board GAK Foundation
· (External) member
Ondernemingskamer
Gerechtshof ’s Gravenhage
· Chair Advisory Council Ministry
of Defence
· Chair Board Platform voor
Techniek Talent
· Chair Supervisory Board Van
Leeuwen Buizen Groep B.V.
· Chair Advisory Committee
Nederlands Indië Monument
· Chair Supervisory Board Van
Dorp installaties B.V.
· Chair Advisory Council Dutch
Ministry of Infrastructure
(til 1 January 2024)
Member Supervisory Board
Chair Audit, Risk & Compliance Committee
Member Strategic Investments Committee
Member Ampere Committee
57, German and Finnish (f)
Initial appointment:
1 May 2019
Expiry second term:
30 April 2027
Principal position:
· Former CFO Hochtief
Solutions AG
Other positions:
· Member Supervisory Board
Fortum Oyj
· Member Supervisory Board
Applus+ Services SA
· Member Supervisory Board
Freudenberg SE
· Chair ‘Deutsch-Finnische-
Gesellschaft e.V.’
· Member Supervisory Board
Iveco Group N.V.
· Chair Board of Trustees
Deutsch Finnische
Gesellschaft
· Member Supervisory Board
Fugro N.V.
Laetitia Griffith
Edna Schöne
Ab van der Touw
Essimari Kairisto
Member of the Supervisory Board
Member of the Strategic Investment Committee
59, Dutch
Initial appointment:
1 September 2023
Expiry first term:
31 August 2027
Principal position:
· Chair UWV, Social Security
and Public Employment
Agency of the Netherlands
Other positions:
· Member of the Supervisory
Board at the Reading and
Writing Foundation
· Member of the Supervisory
Board at the Jinc Continuity
Foundation
· Member of the Supervisory
Board of Jinc
· Member of the Advisory Board
Stichting GAK
Member of the Supervisory Board
Member of the Audit, Risk and Compliance Committee
50, Dutch
Initial appointment:
1 September 2023
Expiry first term:
31 August 2027
Principal position:
· Former Global Head Digital &
Business Transformation
Customer Solutions at
E.ON Group
Other positions:
· Member of the Supervisory
Board at KPMG
· Chair of the Supervisory Board
at Whiffle
· Member of the Supervisory
Board at ROM InWest, Chair
of the Audit Committee
· Vice Chair of the Supervisory
Board and Chair
Remuneration Committee at
lnnosportlab Sport & Beweeg
· Chair of the Supervisory Board
of Kyndryl Nederland B.V.
· Member of the Advisory Board
Wickey Holding B.V.
· Lecturer at Governance
University
Member Supervisory Board
Chair Strategic Investments Committee
Member Remuneration &Appointments Committee
59, Dutch (m)
Initial appointment:
1 May 2019
Expiry second term:
30 April 2027
Principal position:
· CEO of HyCC B.V. (the
Hydrogen Chemistry
Company)
· Former CEO Shell Germany
Other positions:
· Chair Supervisory Board IDA
Foundation
· Chair Supervisory Board EVOS
B.V.
· Member Advisory Council
Dutch Ministry of Infrastructure
Maarten Camps
Stijn van Els
Kuldip Singh
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
97
Corporate
governance
As a transmission system operator, TenneT plays an important role in society.
Webelieve in having a solid governance structure, effective oversight and a
transparent accountability to all stakeholders. To that end, we comply with the
DutchCorporate Governance Code (hereafter: the Code), insofar as it is applicable.
Corporate governance structure
TenneT’s corporate governance structure comprises the
Executive Board, the Supervisory Board and the General
Meeting of Shareholders. Additionally, our internal Audit,
Risk & Internal Control and Compliance & Integrity unit and
external auditor play an important role in this structure.
Executive Board
The Executive Board of TenneT Holding B.V. has four
statutory directors. The Executive Board members have
joint authority to represent the company. Each board
member also holds limited individual power of attorney.
Three members of the Executive Board of TenneT Holding
B.V. are managing directors of TenneT TSO B.V., three
members of the Executive Board are managing directors of
TenneT TSO GmbH, and one of these three members is
managing director of TenneT Offshore GmbH.One member
of the Executive Board is chair of the Aufsichtsrat of TenneT
TSO GmbH.
The Executive Board is responsible for sustainable long-
term value creation by the company, which includes
regulated and non-regulated activities.
Supervisory Board
The Supervisory Board of TenneT Holding B.V. supervises
the policies, management and the general affairs.It carries
out its duties in the interests of the company and its
stakeholders, and takes into account the effectiveness of
the company’s internal risk management and control
systems and the integrity and quality of the financial and
sustainability reporting. Supervisory Board decision-making
is supported by the Strategic Investment Committee, the
Audit, Risk and Compliance Committee and the
Remuneration and Appointments Committee. In 2023, a
temporary Ampere Committee was established to prepare
decision making on the topics of a potential split (project
Ampere) and TenneT’s disentanglement (project Tango).
TenneT has a two-tier board structure, as specified in the
Electricity Act.
Corporate governance*
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
98
Corporate
governance
All information about the Supervisory Board (such as its
rules and rotation schedule) is available on our corporate
website.
General Meeting of Shareholders
All shares in TenneT’s capital are held by the Dutch state,
which is represented by the Ministry of Finance. Under the
Electricity Act, only the Dutch state may hold voting
interests in the company. A General Meeting of
Shareholders is held within six months after the end of each
financial year. The General Meeting of Shareholders
discharged the Executive Board and Supervisory Board
members from liability from their respective activities in the
year 2023. Other shareholder meetings are held as and
when deemed necessary by the Executive Board,
Supervisory Board or the Shareholder.
Audit, Risk & Internal Control and Compliance
&Integrity
The Audit, Risk & Internal Control and Compliance &
Integrity (ARC) unit brings together the teams of Internal
Audit, Risk & Internal Control and Compliance & Integrity.
The integrated team provides benefits in terms of a single
point of contact and opportunity for more alignment and
synergy. The resulting limitations to the independence of the
Internal Audit team are managed through the outsourcing of
periodic audits on the Risk & Internal Control and
Compliance & Integrity teams to a third party. The ARC unit
provides an integrated report on a quarterly basis towards
the Executive Board and the Audit, Risk & Compliance
Committee, who advises the Supervisory Board.
The ARC unit is led by the Director ARC, who reports
hierarchically to the CFO. The management of Risk &
Internal Control and management of Compliance & Integrity
report to the Director ARC, who also manages Internal
Audit. Both the Director ARC and the Head Compliance &
Integrity have a second dotted reporting line to the CEO.
In line with the good governance practice of the three lines
model by the Institute of Internal Auditors, the management
of the organisation is responsible for directing and leading
activities to achieve the objectives of the organisation. It
establishes and maintains appropriate structures and
processes for the management of activities, including
governance, risk management and internal control. The
teams Risk & Internal Control and Compliance & Integrity
train, advise and support the organisation in their field of
expertise. The team of Risk & Internal Control facilitates the
company-level management systems for risks and internal
controls. The Compliance & Integrity team facilitates the
company-level management systems for prevention,
detection and responding to risks related to Compliance &
Integrity, including data privacy. Compliance & Integrity has
representatives in both the Netherlands and Germany.
Outside the ARC unit, teams have been established to train,
advise and support the organisation in the fields of health,
safety and environment, information security and quality
management (in line with NTA8120, ISO55001 and
ISO9001).
The team of Internal Audit provides independent assurance
and advice services regarding the adequacy of governance,
risk management and control arrangements across the
company. Internal Audit drafts an audit plan after
consultation with the Executive Board, the Audit, Risk &
Compliance Committee and the external auditor. The
internal audit plan is submitted to the Executive Board,and
then to the Supervisory Board, for approval. The functioning
of Internal Audit is annually assessed by the Executive
Board after consultation with the Audit, Risk & Compliance
Committee. The performance of the internal audit function is
assessed at least every five years by an independent third
party. The latest independent assessment was performed in
December 2021.
External auditor
The General Meeting of Shareholders has the power to
appoint external auditors to audit the financial statements
prepared by the Executive Board. These auditors report to
the Supervisory Board and the Executive Board, and their
findings are presented in an independent auditor’s report,
an assurance report, a management letter and an audit
review results report.The General Meeting of Shareholders
appointed Deloitte Accountants B.V. as TenneT’s external
auditor as per 1 January 2020.In 2022, the Executive
Board, Supervisory Board, shareholder and Deloitte have
agreed to prolong the contract of Deloitte for another two
year period in accordance with the prolongation options in
the contract. The prolongation is for the financial reporting
periods 2024 and 2025.
The functioning of the external auditor is supervised by the
Supervisory Board, advised by the Audit, Risk &
Compliance Committee, considering observations of the
Executive Board.
The external auditor attends all meetings of the Audit, Risk
& Compliance Committee, including the meeting at which
the independent auditor’s report on the financial statements
is discussed. If required, the external auditor also attends
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
99
the relevant Supervisory Board meeting.In line with previous
year the external auditor attended one meeting of the
Strategic Investments Committee for information purposes.
Deviations from the Dutch Corporate
Governance Code
Certain principles and best-practice provisions in the Code
do not apply to TenneT. The reasons why and to what
extent TenneT decided not to or could not adopt these
particular principles and best-practice provisions are
explained below:
Chapter 2:
2.1.3: Not applicable: no Executive Committee has been
established at TenneT.
2.3.2: If the Supervisory Board has more than four
members, the Code stipulates that the board shall appoint
from among its members an Audit Committee, a
Remuneration Committee, and a Selection and
Appointments Committee. The TenneT Supervisory Board
has combined the tasks of the latter two committees into a
Remuneration and Appointments Committee.
2.3.8: Not applicable: no delegated Supervisory Board
member is employed by TenneT.
2.7.5, 2.8.1 – 2.8.3: Not applicable: these provisions do not
apply to TenneT because it only has one shareholder, being
the Dutch state.
Chapter 3:
3.1.3: Not applicable: no Executive Committee has been
established at TenneT.
3.3.2, 3.3.3: Not applicable: these provisions do not apply
to TenneT because it only has one shareholder, being the
Dutch state.
Chapter 4:
Regarding paragraphs 4.1 and 4.4 TenneT complies with
the Code. Paragraphs 4.2, 4.3 and 4.5 are not applicable to
TenneT because it only has one shareholder, namely the
Dutch state.
Chapter 5:
Given TenneT’s two-tier board structure, this chapter is not
applicable.
Shareholder
Supervisory Board
Executive Board
Audit, Risk & Internal
Control, Compliance &
Integrity unit
Other central
support units
Strategic
Investment Committee
Risk Management &
Internal Control
Remuneration &
Appointment Committee
Audit, Risk &
Compliance Committee
External Audit
Compliance & Integrity
Internal Audit
Participating
interests
Business units &
subsidiaries
Corporate governance structure
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
100
Compliance and Integrity
A culture of Compliance and Integrity is essential for TenneT’s sustainable success.
Therefore, we strive to prevent and - at an early stage - identify and respond to
compliance and integrity risks that could jeopardise the implementation of the
company's strategy and objectives and lead to economic and/or legal consequences,
as well as reputational damage.
Especially in view of the high annual investment volume, we
consider the compliance risk increasing. The Compliance
and Integrity Team (ARC-COI) is part of the ARC Unit (Audit,
Risk & Compliance Unit). The Director of the ARC Unit
reports to the CFO.
Our Code of Conduct with our Guiding Principles
'Ownership', 'Connection', and 'Courage', and a number of
compliance directives guide our employees to conduct
business ethically and to comply with the applicable laws
and regulations. Each quarter all TenneT employees are
requested to follow an e-learning on a certain Code of
Conduct topic. These topics cover items regarding
compliance, privacy, safety and security.
Moreover, since 2023 all German TenneT employees are
requested to follow an e-learning on the German Supply
Chain Act. All new employees participate in compliance
trainings as part of their onboarding program. Thereafter,
they are requested to also follow the afore mentioned
e-learnings.
Data privacy
In the course of its business activities, TenneT regularly
processes personal data. We use standardised processes
to assess risks and protect the rights of data subjects.
Compliance with external laws and regulations, as well as
internal rules is ensured by the responsible specialist
departments, which receive advice from the data protection
team. Moreover, in each unit a Privacy Champion is the
main point of contact for privacy matters. This liaison
between the Privacy Champions and the Privacy team
furthers two-way communication and to-the-point privacy
advice by the Privacy team.
TenneT regularly reviews its processes for processing
personal data and trains its employees to meet data
protection requirements. External service providers are
requested to sign data protection agreements.
The independent function of the data protection officers is
guaranteed within the ARC Unit.
Advice & reporting
ARC-COI advises the business on various compliance,
integrity and data protection aspects and regularly reports
to the TenneT Executive Board and the Audit, Risk and
Compliance Committee of the Supervisory Board regarding
such topics.
Various channels exist through which (potential) Code of
Conduct violations, including compliance and data
protection issues, can be reported. Moreover, a Speak up
portal, which is operated by an external party, allows for
(potential) Code of Conduct violations to be reported
(anonymously).
Identified compliance risks are dealt with by the Compliance
and Integrity Committee in its quarterly meetings. In 2023,
no compliance incidents with a material impact were
identified for TenneT. Material impact is defined in our risk
matrix as a breach that has a significant adverse effect on
TenneT’s reputation and/or financial position.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
101
Corporate risk management and Internal control
Professional corporate risk management with integrated internal control processes are
key throughout the organisation and result into effective risk-based decisions.
Corporate risk management and internal control
framework
Risk Management continuously identifies risks, assesses
severity of risks, prioritises risks, implements risk responses
and maintains a portfolio view. It reports the identified
uncertainties, opportunities or control issues proactively on
a quarterly basis towards the Executive Board, Supervisory
Board and Senior Leaders. The principles of corporate risk
management and internal control should be taken into
account in all activities performed at and for TenneT.
Corporate risk management facilitates top-down and
bottom-up dialogues, workshops, detailed analyses and
general trainings on risk awareness at all levels within
TenneT. The resulting outcome provides management
insights to take risk-based decisions that support the
achievement of objectives set at all organisational levels.
As corporate risk management the focus and key objectives
are to:
• Identify events, assess the risk, formulate risk responses,
inform and communicate, implement control activities
and continuous monitoring;
• Establish and maintain a uniform risk management
framework;
• Provide the required tools, framework and guidelines for
risk based decision making;
• Transparent and uniform reporting based on the ISO and
COSO framework.
As TenneT the corporate risk framework is structured into:
• Strategic Risk Management (SRM);
• Operational Risk Management (ORM);
• Project Risk Management (PRM);
• Risk and Portfolio management;
• Internal Control and Process Risk Management.
TenneT’s corporate risk management and internal control
frameworks are based on ISO 31000 and COSO standards
and are compliant with the requirements of applicable laws
and regulations such as the Dutch Corporate Governance
Code, the German Control and Transparency in Business
Act and the German Accounting Law Reform Act.
During 2023, we have further developed our risk
management and internal control system by the
implementation of a corporate risk catalogue, developing an
early risk detection system, the execution of process risk
assessments and the integration of the application controls
of our new ERP system into our internal control system.
Derive business objectives
• Unit level
• Project level
• Process level (end-to-end)
Achieve objectives supported
by risk management and
internal control framework
Derive and implement
strategic objectives
Purpose,
Promise &
Principles
Objectives
Risk
Management
Process
Achieve
Objectives
Unit, Process & Project LevelBoard level
Unit, Process & Project Level
Risk area Description Rationale
High Risk Appetite
Secure Supply
Tomorrow
Planning and building a future-proof energy system
today that provides security of supply tomorrow (e.g.
Target Grid, 2GW Program, Sued(Ost)Link, hydrogen
solution) while supporting a reduction in CO
2
and SF
6
emissions.
We want to stimulate the market by entering into innovative
partnerships and will apply cutting-edge technology to develop
adequate responses to some of the most vexing challenges of the
energy transition, as well as the Climate Agreement. We accept that
some approaches could fail to fulfi l on their promise.
Risk appetite
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
102
Derive business objectives
• Unit level
• Project level
• Process level (end-to-end)
Achieve objectives supported
by risk management and
internal control framework
Derive and implement
strategic objectives
Purpose,
Promise &
Principles
Objectives
Risk
Management
Process
Achieve
Objectives
Unit, Process & Project LevelBoard level
Unit, Process & Project Level
Risk appetite
The amount of risk TenneT is willing to seek or accept in pursuit of its long-term
objectives.
The Risk Appetite Statement 2023 sets the guidance and
willingness for the activities conducted by TenneT in pursuit
of its strategic objectives. The Executive Board together
with the Senior Leadership Team reviews the Risk Appetite
Statement annually to ensure that TenneT maintains a
balance between risk and reward, relative to potential
opportunities. In terms of the amount of risk that TenneT is
willing to seek or accept, a differentiation is made between
low risk appetite to high risk appetite.
High Risk Appetite:
Areas in which TenneT has a preference for disciplined
risk-taking because we have determined that the potential
upside benefits outweigh the potential disadvantages.
Medium Risk Appetite:
Areas in which TenneT must constantly strike a balance
between potential upside benefits and potential downside
aspects of a given decision.
Low Risk Appetite:
Areas in which TenneT avoids risks, or acts to minimise or
eliminate the likelihood that the risk will occur, because we
have determined that the potential downside aspects are
intolerable. These are areas in which we typically seek to
maintain a very strong control environment.
In the sections below we depict the results which places
each risk area on a risk-appetite scale that ranges from
'low' to 'medium' to 'high':
Risk area Description Rationale
High Risk Appetite
Secure Supply
Tomorrow
Planning and building a future-proof energy system
today that provides security of supply tomorrow (e.g.
Target Grid, 2GW Program, Sued(Ost)Link, hydrogen
solution) while supporting a reduction in CO
2
and SF
6
emissions.
We want to stimulate the market by entering into innovative
partnerships and will apply cutting-edge technology to develop
adequate responses to some of the most vexing challenges of the
energy transition, as well as the Climate Agreement. We accept that
some approaches could fail to fulfi l on their promise.
Risk appetite
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
103
Risk area Description Rationale
Medium Risk Appetite
Asset Security
To ensure that demand and supply of electricity - from
renewable and traditional sources - are balanced.
We continue to ensure the security of supply of electricity transport,
and connection of new customers, always considering the limited
availability of interconnected electricity in Europe, congestion
management or the planning complexity of dispatching.
Supply Chain
Management
To have all required materials, supplies and services
available on time and in asked quality. Or new
suppliers of other countries.
We will make reasonable efforts to invest in supplier relationships and
to secure critical supplies and services on time and in agreed quality for
large projects while balancing supply chain constraints due to overall
tight market conditions.
Recruitment and
Retainment
To be able to accommodate up to 10,000 internal and
external employees to achieve our future projects.
We will continually assess best practices in the industry for attracting,
retaining and developing talent, including seeking fl exibilities for hiring
and compensating staff, while recognising that growing too rapidly
could inhibit the organisations agility and responsiveness.
Safeguard our
fi nancial health
To maintain our credit rating and have a sustainable
balance between equity and debt.
We use a variety of processes and controls to continuously monitor
and manage project capital expenditures, reporting, and the delivery
of ancillary services, recognising that raising more debt is a quick way
to fi nance our large projects. But it can negatively impact our credit
ratings. We address OPEX growth before it leads to ineffi ciencies.
IT Infrastructure
Events or circumstances that could potentially improve
or compromise the processing, stability, capacity,
performance or resilience.
We will act to minimise any weaknesses that could disrupt business
operations, affect productivity, heighten the risk of fraud or threaten the
security of information. We will work to avoid unplanned downtime that
could result in lost productivity or costs to recover data. It excludes
critical operational systems.
Low Risk Appetite
Ethics,
Compliance &
Human Rights
Working with business partners who do not share the
same ethics and compliance principles or are situated
in countries with lower human right standards.
We adopt a cautious stance for compliance by promoting and enforcing
compliance with all laws, procedures and internal standards. At times
we assume a degree of calculated risk of working with contractors and
subcontractors in countries with lower human right standards that are
essential to support our large projects.
Social
responsibility
Protecting above the legally and regulatory required
the values of our own workforce, workers in the value
chain, and communities.
We take our responsibility to fulfi l our civic duty and impact on society
seriously, including the health and well-being of all who are affected by
our task and to benefi t communities or society as a whole by balancing
societal requirements and our economical growth.
Operational Safety
To develop, promote and apply asset integrity and
safety standards while increasing our asset capacity
and effi ciency.
We recognise that for operational safety our assets must not only be
safely designed, tested, and built, but also safely maintained, operated
and replaced by trained operators and service technicians. We endeavour
to identify asset safety issues, defi ne action plans to reduce risks, monitor
its progress and to provide implementation support. We act on the basis
of the highest safety standards in our sector.
Asset Security
Ensuring the protection of our assets against physical
threats, such as attacks on sub-sea cables, onshore
connections, substations, pylons or theft of valuable
materials.
We continually assess best practices to control the risk of protecting our
assets from theft and intruders while recognising that a 100% protection
is not possible.
Cyber Security
Resilience against cyber threats or malware
infestations affecting loss of control or power outages.
We have adopted a cautious approach to cyber risk. We reduce risk as
much as possible by proactively and continuously mitigating malware and
other intrusions, preventing unauthorised disclosure of sensitive data, and
mitigating vulnerabilities in our security protocols.
Secure supply today and tomorrow
Risks Mitigating measures
• The demand for clean, renewable sourced electricity is so high
that TenneT cannot always provide sufficient capacity.
• The scale and speed of electrification cannot immediately be
accommodated by the existing network. This causes a
shortfall in available transmission capacity and grid congestion
in specific areas.
• The nitrogen impasse in the Netherlands can lead to some
major delays in projects to expand the electricity grid.
• Market risk has further increased due to a sellers dominated
market.
• Demand and electricity load on our network continues to grow,
reducing the possibility for outage windows and opportunities
for maintenance.
• Our older assets require more maintenance work and present
a growing logistical challenge and cost.
• Cyber-attack / malicious attack on IT systems
• A major delay of large projects’ delivery due to amongst others
delayed permitting procedures, scope changes, sourcing
issues can lead to additional project costs, penalty payments,
redispatch costs or reputational damage.
• The potential usage of new technologies in our assets could
cause unforeseen malfunctions and could require more focus
on maintenance.
• Suppliers are unable to deliver critical supplies (e.g. DC cables)
or services to schedule (or at all) or in agreed quality as they
experience capacity constraints.
• Protection of our assets against physical threats, such as
attacks on sub-sea cables, onshore connections, substations,
pylons or theft of valuable materials (e.g. copper)
• To increase the capacity of the grid in congestion areas, we are
investing several billions over the next 10 years, in our onshore
grid in the Netherlands.
• We took widespread measures to relieve grid congestion in the
Netherlands, including a congestion management study
together with regional electricity system operators.
• ACM allowed system operators to prioritise projects that solve
or limit congestion in the grid, thereby deviating from the
first-come-first-served principle.
• We introduced a new Outage Window Optimisation Project,
designed to increase outage capabilities in the network,
without sacrificing the pace of our work.
• Standardisation of equipment and assets is helping to
accelerate the speed and efficiency of maintenance.
• Continuation of effective monitoring and action-taking against
physical or cyber security attacks, together with our strategic
partners.
• Diversification of suppliers and measures on pricing, supplier
relationships and warehousing.
• Development and adaptation of sourcing strategies and
investment into long-term agreements with volume
commitments.
Opportunities
• Our Target Grid 2045 strategy, with the objective of having a future-proof electricity grid in place by 2045.
This will be capable of supporting a sustainable economy, with a reliable and secure supply of green electricity for all users,
from consumers to industry.
• Growing political support to reduce permitting time.
• Circularity of resources becomes more viable to reduce our footprint on for instance the usage of virgin copper.
Energise our people and organisation
Risks Mitigating measures
• A tight candidate-driven market where TenneT competes with
other TSOs, engineering firms, subcontractors, equipment
manufacturers, consultants and a host of other specialists.
• Negotiations over the possible sale of TenneT’s German
operation to the German state could be a distraction for our
people in both countries.
• Maintaining a net inflow of FTEs becomes more challenging
since external contract workers left TenneT due to legislative
restrictions on interim contracts.
• A notable rise in absenteeism due to mental health issues.
• As the scale and speed of our work increases, we are exposed
to more safety risks.
• Introduction of a new and revised structure of our Health
Safety and Environment (HSE) organisation.
• Using a competency-based approach, meaning hiring people
for their individual talent, interests and skills rather than solely
for their experience.
• Embedding our safety requirement into our contracts, with
follow-up meetings to ensure compliance.
• Company-wide-standardisation, ensuring everyone working for
TenneT, including our subcontractors speak, follow and work
using the same safety protocols.
• Closer collaboration with hiring managers to speed up the
recruitment process and attract the right candidates
Opportunities
• Structural shift towards hybrid working leads to new possibilities and addressing the shifting expectations of jobseekers. Itbetter
support our employees wellbeing, psychological safety and motivation.
• Boosting our execution power by finding better ways of working together in a performance-oriented culture.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
104
Key risks and opportunities
To provide a single structured risk overview of all the risks and opportunities identified
by TenneT, three risk tables have been introduced. A strategic risk table based on the
four strategic pillars another on regulatory risks and lastly climate-related risks. Please
note that the risks mentioned in these tables are also presented earlier in the section
'Our Performance'.
Secure supply today and tomorrow
Risks Mitigating measures
• The demand for clean, renewable sourced electricity is so high
that TenneT cannot always provide sufficient capacity.
• The scale and speed of electrification cannot immediately be
accommodated by the existing network. This causes a
shortfall in available transmission capacity and grid congestion
in specific areas.
• The nitrogen impasse in the Netherlands can lead to some
major delays in projects to expand the electricity grid.
• Market risk has further increased due to a sellers dominated
market.
• Demand and electricity load on our network continues to grow,
reducing the possibility for outage windows and opportunities
for maintenance.
• Our older assets require more maintenance work and present
a growing logistical challenge and cost.
• Cyber-attack / malicious attack on IT systems
• A major delay of large projects’ delivery due to amongst others
delayed permitting procedures, scope changes, sourcing
issues can lead to additional project costs, penalty payments,
redispatch costs or reputational damage.
• The potential usage of new technologies in our assets could
cause unforeseen malfunctions and could require more focus
on maintenance.
• Suppliers are unable to deliver critical supplies (e.g. DC cables)
or services to schedule (or at all) or in agreed quality as they
experience capacity constraints.
• Protection of our assets against physical threats, such as
attacks on sub-sea cables, onshore connections, substations,
pylons or theft of valuable materials (e.g. copper)
• To increase the capacity of the grid in congestion areas, we are
investing several billions over the next 10 years, in our onshore
grid in the Netherlands.
• We took widespread measures to relieve grid congestion in the
Netherlands, including a congestion management study
together with regional electricity system operators.
• ACM allowed system operators to prioritise projects that solve
or limit congestion in the grid, thereby deviating from the
first-come-first-served principle.
• We introduced a new Outage Window Optimisation Project,
designed to increase outage capabilities in the network,
without sacrificing the pace of our work.
• Standardisation of equipment and assets is helping to
accelerate the speed and efficiency of maintenance.
• Continuation of effective monitoring and action-taking against
physical or cyber security attacks, together with our strategic
partners.
• Diversification of suppliers and measures on pricing, supplier
relationships and warehousing.
• Development and adaptation of sourcing strategies and
investment into long-term agreements with volume
commitments.
Opportunities
• Our Target Grid 2045 strategy, with the objective of having a future-proof electricity grid in place by 2045.
This will be capable of supporting a sustainable economy, with a reliable and secure supply of green electricity for all users,
from consumers to industry.
• Growing political support to reduce permitting time.
• Circularity of resources becomes more viable to reduce our footprint on for instance the usage of virgin copper.
Energise our people and organisation
Risks Mitigating measures
• A tight candidate-driven market where TenneT competes with
other TSOs, engineering firms, subcontractors, equipment
manufacturers, consultants and a host of other specialists.
• Negotiations over the possible sale of TenneT’s German
operation to the German state could be a distraction for our
people in both countries.
• Maintaining a net inflow of FTEs becomes more challenging
since external contract workers left TenneT due to legislative
restrictions on interim contracts.
• A notable rise in absenteeism due to mental health issues.
• As the scale and speed of our work increases, we are exposed
to more safety risks.
• Introduction of a new and revised structure of our Health
Safety and Environment (HSE) organisation.
• Using a competency-based approach, meaning hiring people
for their individual talent, interests and skills rather than solely
for their experience.
• Embedding our safety requirement into our contracts, with
follow-up meetings to ensure compliance.
• Company-wide-standardisation, ensuring everyone working for
TenneT, including our subcontractors speak, follow and work
using the same safety protocols.
• Closer collaboration with hiring managers to speed up the
recruitment process and attract the right candidates
Opportunities
• Structural shift towards hybrid working leads to new possibilities and addressing the shifting expectations of jobseekers. Itbetter
support our employees wellbeing, psychological safety and motivation.
• Boosting our execution power by finding better ways of working together in a performance-oriented culture.
Strategic related risks and opportunities
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
105
Secure supply today and tomorrow
Risks Mitigating measures
• The demand for clean, renewable sourced electricity is so high
that TenneT cannot always provide sufficient capacity.
• The scale and speed of electrification cannot immediately be
accommodated by the existing network. This causes a
shortfall in available transmission capacity and grid congestion
in specific areas.
• The nitrogen impasse in the Netherlands can lead to some
major delays in projects to expand the electricity grid.
• Market risk has further increased due to a sellers dominated
market.
• Demand and electricity load on our network continues to grow,
reducing the possibility for outage windows and opportunities
for maintenance.
• Our older assets require more maintenance work and present
a growing logistical challenge and cost.
• Cyber-attack / malicious attack on IT systems
• A major delay of large projects’ delivery due to amongst others
delayed permitting procedures, scope changes, sourcing
issues can lead to additional project costs, penalty payments,
redispatch costs or reputational damage.
• The potential usage of new technologies in our assets could
cause unforeseen malfunctions and could require more focus
on maintenance.
• Suppliers are unable to deliver critical supplies (e.g. DC cables)
or services to schedule (or at all) or in agreed quality as they
experience capacity constraints.
• Protection of our assets against physical threats, such as
attacks on sub-sea cables, onshore connections, substations,
pylons or theft of valuable materials (e.g. copper)
• To increase the capacity of the grid in congestion areas, we are
investing several billions over the next 10 years, in our onshore
grid in the Netherlands.
• We took widespread measures to relieve grid congestion in the
Netherlands, including a congestion management study
together with regional electricity system operators.
• ACM allowed system operators to prioritise projects that solve
or limit congestion in the grid, thereby deviating from the
first-come-first-served principle.
• We introduced a new Outage Window Optimisation Project,
designed to increase outage capabilities in the network,
without sacrificing the pace of our work.
• Standardisation of equipment and assets is helping to
accelerate the speed and efficiency of maintenance.
• Continuation of effective monitoring and action-taking against
physical or cyber security attacks, together with our strategic
partners.
• Diversification of suppliers and measures on pricing, supplier
relationships and warehousing.
• Development and adaptation of sourcing strategies and
investment into long-term agreements with volume
commitments.
Opportunities
• Our Target Grid 2045 strategy, with the objective of having a future-proof electricity grid in place by 2045.
This will be capable of supporting a sustainable economy, with a reliable and secure supply of green electricity for all users,
from consumers to industry.
• Growing political support to reduce permitting time.
• Circularity of resources becomes more viable to reduce our footprint on for instance the usage of virgin copper.
Energise our people and organisation
Risks Mitigating measures
• A tight candidate-driven market where TenneT competes with
other TSOs, engineering firms, subcontractors, equipment
manufacturers, consultants and a host of other specialists.
• Negotiations over the possible sale of TenneT’s German
operation to the German state could be a distraction for our
people in both countries.
• Maintaining a net inflow of FTEs becomes more challenging
since external contract workers left TenneT due to legislative
restrictions on interim contracts.
• A notable rise in absenteeism due to mental health issues.
• As the scale and speed of our work increases, we are exposed
to more safety risks.
• Introduction of a new and revised structure of our Health
Safety and Environment (HSE) organisation.
• Using a competency-based approach, meaning hiring people
for their individual talent, interests and skills rather than solely
for their experience.
• Embedding our safety requirement into our contracts, with
follow-up meetings to ensure compliance.
• Company-wide-standardisation, ensuring everyone working for
TenneT, including our subcontractors speak, follow and work
using the same safety protocols.
• Closer collaboration with hiring managers to speed up the
recruitment process and attract the right candidates
Opportunities
• Structural shift towards hybrid working leads to new possibilities and addressing the shifting expectations of jobseekers. Itbetter
support our employees wellbeing, psychological safety and motivation.
• Boosting our execution power by finding better ways of working together in a performance-oriented culture.
Regulatory risk Risk-mitigating actions
General
• The grid fees have increased significantly in the current years
(mainly due to high energy prices) and will further increase
because of the investments needed to facilitate the energy
transition.
• Inability to meet increasing efficiency targets over time as
imposed by incentive regulation, especially considering a
strongly growing company and the need for significant
investments in grid expansion, maintenance, operation as
well as innovation.
• Undercoverage of the regulatory CAPEX remuneration driven
by a non-reasonable return on invested capital and an
increasing investment portfolio which could lead to more
difficulties in financing and raising sufficient funding.
• Non-compliance with the current regulatory framework.
New regulatory and legal obligations have to be implemented.
The flow of information on new regulatory and legal
requirements must be ensured.
• TenneT aims to address the affordability issue by 1) being
transparent on the financial implications of the current plans
to the relevant stakeholders, 2) ensuring efficient roll-out
strategies of assets (i.e. 2 GW offshore program, hybrid
assets) and 3) working on efficient ancillary services markets.
• TenneT performs regular reviews of its processes and
organisational structure, introduced lean management and
carries out continuous improvement activities. TenneT also
prepares make-or-buy decisions in its investment process to
optimise value for money to society and conducts strategic
dialogues with regulators (ACM, BNetzA, ACER),
policymakers and industry partners/suppliers to co-shape its
future regulatory framework.
• TenneT’s strategy is to seek mutually acceptable results with
the regulator and further stakeholders. However, if needed to
protect pivotal strategic positions on solid legal grounds, legal
action may betaken.
• Onboarding of new employees on relevant topics.
Europe
• The ‘Clean Energy Package’ (CEP) entered into force.
Itrequires amongst others that TSOs provide 70% of the total
cross-border transmission capacity to the market, an amount
difficult to achieve without extensive and costly redispatch
activities.
The German government introduced an action plan
to gradually achieve this target by 31 December 2025. Delays
in fulfilment of this plan by TenneT could lead
to material financial penalties.
Similarly, the Dutch Ministry of Economic Affairs & Climate
Policy has issued an action plan to gradually achieve the 70%
target by 1 January 2026, which also contains derogations
forTenneT.
• In Germany TenneT keeps the capacity requirements along
the ‘trajectory’ as defined in the national ‘action plan’. This
means stepping up to full 70% using instruments such as
coordinated redispatch and countertrade.
• In the Netherlands, TenneT monitors compliance against the
action plan, with regard to the conditions of the derogation.
TenneT reports on issues to the ACM and the Ministry of
Economic Affairs & Climate Policy, if any.
The Netherlands
• ACM has performed a consultation for the new Regulatory
Period starting in 2027. ACM intends to revise the regulatory
method to better account for the implications of the energy
transition. The efficiency assessment and future estimations
of the OPEX development remain challenging topics.
• Increasing congestion in the TenneT grid puts pressure on
TenneT to open up any remaining grid capacity and propose
regulatory changes if needed.
• TenneT appreciates the open vision ACM has taken towards
the new regulatory period and will support the process by
preparing consultation responses that include implementable
regulatory improvements to the current challenges. In the
consultation process TenneT will address its main concerns
with the current method being: 1) Regulation of Operational &
IT Expenditure 2) The use of the international TSO benchmark
which does not provide sufficiently robust efficiency incentives
3) Regulation of innovations.
• TenneT asserted a pro-active role within the national action
plan on grid congestion and develops new options in
cooperation with stakeholders. Early results are a proposed
implementation of time-of-use tariffs and time dependent
transmission rights.
Germany
• Due to the rise of the financing costs on the capital markets
since 2022, the BNetzA intends to increase the return on
equity (RoE) in the 4th regulatory period compared to the
initial determination of 5.07% (before corporate tax). However,
adjustments are only planned for a minor part of TenneT’s
investments. The RoE of 5.07% will be applied to the
remaining investments. The reduction compared to a RoE of
6.91% in the 3rd regulatory period will have a significant
negative impact on TenneT's cash flow and revenues.
• Following the European Court of Justice decision on the
independence of the BNetzA, the energy industry law was
changed in 2023 to give more decision-making power to the
BNetzA. The previously relevant legal ordinances, will remain
in force for a transitional period until the end of 2028.
However, the BNetzA can already deviate from these.
Furthermore, BNetzA announced a broad consultation
on changes of the regulatory framework.
• TenneT challenges the concept of the BNetzA and will
examine legal steps to achieve an adjustment of the RoE for
all investments in the 4th regulatory period. TenneT
established an internal working group including colleagues
from its regulatory, legal and political departments to
accompany the political process. Amongst others, TenneT
engages in the German Association of Energy and Water
Industry (BDEW) to support profound analysis and advocacy
work within the network industry.
• TenneT actively participates in public and expert discussions
and positions itself as a competent partner and trustful
advisor to the regulators and policymakers.
Drive the energy transition
Risks Mitigating measures
• Accidental release of Sulphur hexafluoride (SF
6
), used as a
highly effective insulator and extinguisher in switching
installations, is extremely damaging for the environment.
• Market availability is tight, with limited options available that
can substitute the properties of SF
6
at the extra-high-voltage
level.
• Grid losses could increase in coming years as we transport
more electricity and over longer distances.
• From a regulatory perspective, TenneT is not reimbursed for
the costs related to greening our grid losses in Germany. With
high prices for guarantees of origin, this affects our ability to
green as much of our grid losses.
• An ageing grid could lead to a higher risk of more oil leakages
and environmental incidents.
• Firm emission reduction goals for 2030.
• Progress continues in devising a new circularity strategy and
increasingly implementing circularity requirements in our
tenders and our procurement strategies.
• Life Cycle Assessments (LCAs) to provide answers to
questions over the provenance of materials, where the biggest
CO
2
bottlenecks are along a supply chain, and how we can
work with suppliers to reduce them.
• Environmental Cost Indicator (ECI) to incentivise our suppliers
to reduce the environmental impact of the products and
services we buy from them.
• To improve the environmental impact of our usage of materials,
we are increasingly implementing circularity requirements in our
tenders and our procurement strategies.
Opportunities
• New technologies and European collaboration to foster for instance cross-border solutions, multi-hubs and sector coupling.
• We are investigating how copper from TenneT transformers could be used to create new ones.
• Sustainability criteria can also stimulate innovation.
Safeguard our fi nancial health
Risks Mitigating measures
• The total financing requirement (debt and equity) is increasing
because of growth of our CAPEX programme in the
Netherlands and Germany.
• Misalignment between the strategic view of TenneT and the
regulatory framework resulting in the situation that not all our
long-term investment costs and our operational costs might
be covered by regulatory reimbursements.
• The rising OPEX costs incurred might not be in sync with the
allowed OPEX revenues.
• The costs for ancillary services remain at a high level,
because of high congestion management costs following
the Russia-Ukraine war.
• Exposure to credit risks or write-offs if one or more of our
partners get into financial difficulties.
• Incorrect application of (new) laws and regulations could lead
to potential errors in our financial or non-financial reporting.
• Implementing a regulatory framework to support our strategy
and by delivering a return in line with what our capital providers
expect.
• Active cost control to strive for an efficient operation to lower
OPEX expenditure as far as reasonably possible.
• Raise required external financing.
• TenneT as a company is not seeking short-term profits.
We invest for periods of 20 to 40 years or more.
• Stress testing of hypothetical worst-case scenarios and to
address any potential high risk following from the analysis.
• Implementation and control effectiveness check of our internal
controls for the financial / non-financial reporting processes.
• Support by external consultants/specialists on CSRD topics
and implementation.
Opportunities
• Investments in green businesses and economies are increasingly favoured by large investors and banks (e.g. institutional).
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
106
Secure supply today and tomorrow
Risks Mitigating measures
• The demand for clean, renewable sourced electricity is so high
that TenneT cannot always provide sufficient capacity.
• The scale and speed of electrification cannot immediately be
accommodated by the existing network. This causes a
shortfall in available transmission capacity and grid congestion
in specific areas.
• The nitrogen impasse in the Netherlands can lead to some
major delays in projects to expand the electricity grid.
• Market risk has further increased due to a sellers dominated
market.
• Demand and electricity load on our network continues to grow,
reducing the possibility for outage windows and opportunities
for maintenance.
• Our older assets require more maintenance work and present
a growing logistical challenge and cost.
• Cyber-attack / malicious attack on IT systems
• A major delay of large projects’ delivery due to amongst others
delayed permitting procedures, scope changes, sourcing
issues can lead to additional project costs, penalty payments,
redispatch costs or reputational damage.
• The potential usage of new technologies in our assets could
cause unforeseen malfunctions and could require more focus
on maintenance.
• Suppliers are unable to deliver critical supplies (e.g. DC cables)
or services to schedule (or at all) or in agreed quality as they
experience capacity constraints.
• Protection of our assets against physical threats, such as
attacks on sub-sea cables, onshore connections, substations,
pylons or theft of valuable materials (e.g. copper)
• To increase the capacity of the grid in congestion areas, we are
investing several billions over the next 10 years, in our onshore
grid in the Netherlands.
• We took widespread measures to relieve grid congestion in the
Netherlands, including a congestion management study
together with regional electricity system operators.
• ACM allowed system operators to prioritise projects that solve
or limit congestion in the grid, thereby deviating from the
first-come-first-served principle.
• We introduced a new Outage Window Optimisation Project,
designed to increase outage capabilities in the network,
without sacrificing the pace of our work.
• Standardisation of equipment and assets is helping to
accelerate the speed and efficiency of maintenance.
• Continuation of effective monitoring and action-taking against
physical or cyber security attacks, together with our strategic
partners.
• Diversification of suppliers and measures on pricing, supplier
relationships and warehousing.
• Development and adaptation of sourcing strategies and
investment into long-term agreements with volume
commitments.
Opportunities
• Our Target Grid 2045 strategy, with the objective of having a future-proof electricity grid in place by 2045.
This will be capable of supporting a sustainable economy, with a reliable and secure supply of green electricity for all users,
from consumers to industry.
• Growing political support to reduce permitting time.
• Circularity of resources becomes more viable to reduce our footprint on for instance the usage of virgin copper.
Energise our people and organisation
Risks Mitigating measures
• A tight candidate-driven market where TenneT competes with
other TSOs, engineering firms, subcontractors, equipment
manufacturers, consultants and a host of other specialists.
• Negotiations over the possible sale of TenneT’s German
operation to the German state could be a distraction for our
people in both countries.
• Maintaining a net inflow of FTEs becomes more challenging
since external contract workers left TenneT due to legislative
restrictions on interim contracts.
• A notable rise in absenteeism due to mental health issues.
• As the scale and speed of our work increases, we are exposed
to more safety risks.
• Introduction of a new and revised structure of our Health
Safety and Environment (HSE) organisation.
• Using a competency-based approach, meaning hiring people
for their individual talent, interests and skills rather than solely
for their experience.
• Embedding our safety requirement into our contracts, with
follow-up meetings to ensure compliance.
• Company-wide-standardisation, ensuring everyone working for
TenneT, including our subcontractors speak, follow and work
using the same safety protocols.
• Closer collaboration with hiring managers to speed up the
recruitment process and attract the right candidates
Opportunities
• Structural shift towards hybrid working leads to new possibilities and addressing the shifting expectations of jobseekers. Itbetter
support our employees wellbeing, psychological safety and motivation.
• Boosting our execution power by finding better ways of working together in a performance-oriented culture.
Regulatory risk Risk-mitigating actions
General
• The grid fees have increased significantly in the current years
(mainly due to high energy prices) and will further increase
because of the investments needed to facilitate the energy
transition.
• Inability to meet increasing efficiency targets over time as
imposed by incentive regulation, especially considering a
strongly growing company and the need for significant
investments in grid expansion, maintenance, operation as
well as innovation.
• Undercoverage of the regulatory CAPEX remuneration driven
by a non-reasonable return on invested capital and an
increasing investment portfolio which could lead to more
difficulties in financing and raising sufficient funding.
• Non-compliance with the current regulatory framework.
New regulatory and legal obligations have to be implemented.
The flow of information on new regulatory and legal
requirements must be ensured.
• TenneT aims to address the affordability issue by 1) being
transparent on the financial implications of the current plans
to the relevant stakeholders, 2) ensuring efficient roll-out
strategies of assets (i.e. 2 GW offshore program, hybrid
assets) and 3) working on efficient ancillary services markets.
• TenneT performs regular reviews of its processes and
organisational structure, introduced lean management and
carries out continuous improvement activities. TenneT also
prepares make-or-buy decisions in its investment process to
optimise value for money to society and conducts strategic
dialogues with regulators (ACM, BNetzA, ACER),
policymakers and industry partners/suppliers to co-shape its
future regulatory framework.
• TenneT’s strategy is to seek mutually acceptable results with
the regulator and further stakeholders. However, if needed to
protect pivotal strategic positions on solid legal grounds, legal
action may betaken.
• Onboarding of new employees on relevant topics.
Europe
• The ‘Clean Energy Package’ (CEP) entered into force.
Itrequires amongst others that TSOs provide 70% of the total
cross-border transmission capacity to the market, an amount
difficult to achieve without extensive and costly redispatch
activities.
The German government introduced an action plan
to gradually achieve this target by 31 December 2025. Delays
in fulfilment of this plan by TenneT could lead
to material financial penalties.
Similarly, the Dutch Ministry of Economic Affairs & Climate
Policy has issued an action plan to gradually achieve the 70%
target by 1 January 2026, which also contains derogations
forTenneT.
• In Germany TenneT keeps the capacity requirements along
the ‘trajectory’ as defined in the national ‘action plan’. This
means stepping up to full 70% using instruments such as
coordinated redispatch and countertrade.
• In the Netherlands, TenneT monitors compliance against the
action plan, with regard to the conditions of the derogation.
TenneT reports on issues to the ACM and the Ministry of
Economic Affairs & Climate Policy, if any.
The Netherlands
• ACM has performed a consultation for the new Regulatory
Period starting in 2027. ACM intends to revise the regulatory
method to better account for the implications of the energy
transition. The efficiency assessment and future estimations
of the OPEX development remain challenging topics.
• Increasing congestion in the TenneT grid puts pressure on
TenneT to open up any remaining grid capacity and propose
regulatory changes if needed.
• TenneT appreciates the open vision ACM has taken towards
the new regulatory period and will support the process by
preparing consultation responses that include implementable
regulatory improvements to the current challenges. In the
consultation process TenneT will address its main concerns
with the current method being: 1) Regulation of Operational &
IT Expenditure 2) The use of the international TSO benchmark
which does not provide sufficiently robust efficiency incentives
3) Regulation of innovations.
• TenneT asserted a pro-active role within the national action
plan on grid congestion and develops new options in
cooperation with stakeholders. Early results are a proposed
implementation of time-of-use tariffs and time dependent
transmission rights.
Germany
• Due to the rise of the financing costs on the capital markets
since 2022, the BNetzA intends to increase the return on
equity (RoE) in the 4th regulatory period compared to the
initial determination of 5.07% (before corporate tax). However,
adjustments are only planned for a minor part of TenneT’s
investments. The RoE of 5.07% will be applied to the
remaining investments. The reduction compared to a RoE of
6.91% in the 3rd regulatory period will have a significant
negative impact on TenneT's cash flow and revenues.
• Following the European Court of Justice decision on the
independence of the BNetzA, the energy industry law was
changed in 2023 to give more decision-making power to the
BNetzA. The previously relevant legal ordinances, will remain
in force for a transitional period until the end of 2028.
However, the BNetzA can already deviate from these.
Furthermore, BNetzA announced a broad consultation
on changes of the regulatory framework.
• TenneT challenges the concept of the BNetzA and will
examine legal steps to achieve an adjustment of the RoE for
all investments in the 4th regulatory period. TenneT
established an internal working group including colleagues
from its regulatory, legal and political departments to
accompany the political process. Amongst others, TenneT
engages in the German Association of Energy and Water
Industry (BDEW) to support profound analysis and advocacy
work within the network industry.
• TenneT actively participates in public and expert discussions
and positions itself as a competent partner and trustful
advisor to the regulators and policymakers.
Drive the energy transition
Risks Mitigating measures
• Accidental release of Sulphur hexafluoride (SF
6
), used as a
highly effective insulator and extinguisher in switching
installations, is extremely damaging for the environment.
• Market availability is tight, with limited options available that
can substitute the properties of SF
6
at the extra-high-voltage
level.
• Grid losses could increase in coming years as we transport
more electricity and over longer distances.
• From a regulatory perspective, TenneT is not reimbursed for
the costs related to greening our grid losses in Germany. With
high prices for guarantees of origin, this affects our ability to
green as much of our grid losses.
• An ageing grid could lead to a higher risk of more oil leakages
and environmental incidents.
• Firm emission reduction goals for 2030.
• Progress continues in devising a new circularity strategy and
increasingly implementing circularity requirements in our
tenders and our procurement strategies.
• Life Cycle Assessments (LCAs) to provide answers to
questions over the provenance of materials, where the biggest
CO
2
bottlenecks are along a supply chain, and how we can
work with suppliers to reduce them.
• Environmental Cost Indicator (ECI) to incentivise our suppliers
to reduce the environmental impact of the products and
services we buy from them.
• To improve the environmental impact of our usage of materials,
we are increasingly implementing circularity requirements in our
tenders and our procurement strategies.
Opportunities
• New technologies and European collaboration to foster for instance cross-border solutions, multi-hubs and sector coupling.
• We are investigating how copper from TenneT transformers could be used to create new ones.
• Sustainability criteria can also stimulate innovation.
Safeguard our fi nancial health
Risks Mitigating measures
• The total financing requirement (debt and equity) is increasing
because of growth of our CAPEX programme in the
Netherlands and Germany.
• Misalignment between the strategic view of TenneT and the
regulatory framework resulting in the situation that not all our
long-term investment costs and our operational costs might
be covered by regulatory reimbursements.
• The rising OPEX costs incurred might not be in sync with the
allowed OPEX revenues.
• The costs for ancillary services remain at a high level,
because of high congestion management costs following
the Russia-Ukraine war.
• Exposure to credit risks or write-offs if one or more of our
partners get into financial difficulties.
• Incorrect application of (new) laws and regulations could lead
to potential errors in our financial or non-financial reporting.
• Implementing a regulatory framework to support our strategy
and by delivering a return in line with what our capital providers
expect.
• Active cost control to strive for an efficient operation to lower
OPEX expenditure as far as reasonably possible.
• Raise required external financing.
• TenneT as a company is not seeking short-term profits.
We invest for periods of 20 to 40 years or more.
• Stress testing of hypothetical worst-case scenarios and to
address any potential high risk following from the analysis.
• Implementation and control effectiveness check of our internal
controls for the financial / non-financial reporting processes.
• Support by external consultants/specialists on CSRD topics
and implementation.
Opportunities
• Investments in green businesses and economies are increasingly favoured by large investors and banks (e.g. institutional).
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
107
Regulatory risk Risk-mitigating actions
General
• The grid fees have increased significantly in the current years
(mainly due to high energy prices) and will further increase
because of the investments needed to facilitate the energy
transition.
• Inability to meet increasing efficiency targets over time as
imposed by incentive regulation, especially considering a
strongly growing company and the need for significant
investments in grid expansion, maintenance, operation as
well as innovation.
• Undercoverage of the regulatory CAPEX remuneration driven
by a non-reasonable return on invested capital and an
increasing investment portfolio which could lead to more
difficulties in financing and raising sufficient funding.
• Non-compliance with the current regulatory framework.
New regulatory and legal obligations have to be implemented.
The flow of information on new regulatory and legal
requirements must be ensured.
• TenneT aims to address the affordability issue by 1) being
transparent on the financial implications of the current plans
to the relevant stakeholders, 2) ensuring efficient roll-out
strategies of assets (i.e. 2 GW offshore program, hybrid
assets) and 3) working on efficient ancillary services markets.
• TenneT performs regular reviews of its processes and
organisational structure, introduced lean management and
carries out continuous improvement activities. TenneT also
prepares make-or-buy decisions in its investment process to
optimise value for money to society and conducts strategic
dialogues with regulators (ACM, BNetzA, ACER),
policymakers and industry partners/suppliers to co-shape its
future regulatory framework.
• TenneT’s strategy is to seek mutually acceptable results with
the regulator and further stakeholders. However, if needed to
protect pivotal strategic positions on solid legal grounds, legal
action may betaken.
• Onboarding of new employees on relevant topics.
Europe
• The ‘Clean Energy Package’ (CEP) entered into force.
Itrequires amongst others that TSOs provide 70% of the total
cross-border transmission capacity to the market, an amount
difficult to achieve without extensive and costly redispatch
activities.
The German government introduced an action plan
to gradually achieve this target by 31 December 2025. Delays
in fulfilment of this plan by TenneT could lead
to material financial penalties.
Similarly, the Dutch Ministry of Economic Affairs & Climate
Policy has issued an action plan to gradually achieve the 70%
target by 1 January 2026, which also contains derogations
forTenneT.
• In Germany TenneT keeps the capacity requirements along
the ‘trajectory’ as defined in the national ‘action plan’. This
means stepping up to full 70% using instruments such as
coordinated redispatch and countertrade.
• In the Netherlands, TenneT monitors compliance against the
action plan, with regard to the conditions of the derogation.
TenneT reports on issues to the ACM and the Ministry of
Economic Affairs & Climate Policy, if any.
The Netherlands
• ACM has performed a consultation for the new Regulatory
Period starting in 2027. ACM intends to revise the regulatory
method to better account for the implications of the energy
transition. The efficiency assessment and future estimations
of the OPEX development remain challenging topics.
• Increasing congestion in the TenneT grid puts pressure on
TenneT to open up any remaining grid capacity and propose
regulatory changes if needed.
• TenneT appreciates the open vision ACM has taken towards
the new regulatory period and will support the process by
preparing consultation responses that include implementable
regulatory improvements to the current challenges. In the
consultation process TenneT will address its main concerns
with the current method being: 1) Regulation of Operational &
IT Expenditure 2) The use of the international TSO benchmark
which does not provide sufficiently robust efficiency incentives
3) Regulation of innovations.
• TenneT asserted a pro-active role within the national action
plan on grid congestion and develops new options in
cooperation with stakeholders. Early results are a proposed
implementation of time-of-use tariffs and time dependent
transmission rights.
Germany
• Due to the rise of the financing costs on the capital markets
since 2022, the BNetzA intends to increase the return on
equity (RoE) in the 4th regulatory period compared to the
initial determination of 5.07% (before corporate tax). However,
adjustments are only planned for a minor part of TenneT’s
investments. The RoE of 5.07% will be applied to the
remaining investments. The reduction compared to a RoE of
6.91% in the 3rd regulatory period will have a significant
negative impact on TenneT's cash flow and revenues.
• Following the European Court of Justice decision on the
independence of the BNetzA, the energy industry law was
changed in 2023 to give more decision-making power to the
BNetzA. The previously relevant legal ordinances, will remain
in force for a transitional period until the end of 2028.
However, the BNetzA can already deviate from these.
Furthermore, BNetzA announced a broad consultation
on changes of the regulatory framework.
• TenneT challenges the concept of the BNetzA and will
examine legal steps to achieve an adjustment of the RoE for
all investments in the 4th regulatory period. TenneT
established an internal working group including colleagues
from its regulatory, legal and political departments to
accompany the political process. Amongst others, TenneT
engages in the German Association of Energy and Water
Industry (BDEW) to support profound analysis and advocacy
work within the network industry.
• TenneT actively participates in public and expert discussions
and positions itself as a competent partner and trustful
advisor to the regulators and policymakers.
Regulatory risks
Climate related risks
Risks How might this affect TenneT? Risk mitigating actions
• Transition
risks
• Policy and
legal risks
• Policy and legal risks are related to our regulatory
framework. Choices we make that can help society
andus as a company to transition to a climate-neutral
economy are subject to discussion with our regulator.
Our regulatory framework is updated once every 5 years
and this might pose a risk that if ambitions from
governments in the areas we serve move faster than
thespirit of the regulatory framework, this might be a
constraining factor to drive the energy transition.
• We mitigate this by lobbying on national and European
level, run pilot projects and present business cases,
and focus on those topics that promise the highest
benefit for society, which are integration of power and
hydrogen as well as flexibility and grid utilisation
together with partners.
• Technology
risk
• A risk of stranded assets might occur in case a new
technology is developed if for instance the new
technology is unable to communicate with the old
technology. Or if the technology used by TenneT is not
able to connect or communicate with the technology
used by other TSOs.
• Mitigating actions include challenging the necessity of
each investment and embracing other solutions, if
those promise more societal value and actively work
and invest in new technology as part of our strategy.
Next to this, our approach to innovation aims to focus
on the most important areas and implementing new
technology as fast as possible, which reduces this risk.
• Market risk
• Our market risks relate to dealing with the higher infeed
of renewable energy sources and impacting the way we
balance our grid and market prices. Renewable energy
sources are more volatile and cannot easily be
increased in case of a higher demand. Differences in
market prices can lead to too high requests for energy
atone location, e.g. Southern-Germany, where not all
energy can be transmitted to the users. In such
situations additional measures are required to balance
the grid, such as redispatch.
• TenneT plans and builds DC-grid connections in
Germany and interconnectors within Europe. We
investigate the grid integration of green hydrogen and
power grids as well as improving the quality of data
topredict power production and consumption.
• Reputation
risk
• A reputation risk could occur when we are unable to
deliver on our strategic goal to drive the energy
transition. Connected to this are the increasing
ambitions of the governments in the areas we serve to
meet these requirements. When realising our assets, we
also have areputational risk if there is a growing
resistance from local communities and governments, if
we do not engage with our stakeholders properly (‘not
in my backyard’). Furthermore the overall cost of the
energy transition is also a risk from a reputational
perspective (affordability).
• To mitigate this risk we aim to communicate in an
openand transparent fashion. Next to this, we invite
stakeholders in the planning and approval process of
projects to voice their opinion which we consider in, for
example, the final route of a certain project. We also
aim to balance affordability, sustainability and security
of supply in all our investment decisions. Further
mitigation takes place through the usage of
professional planning, project management and costs
forecasting.
• Physical
risks
• Acute
• Acute risks are related to, for example, extreme weather
conditions that could impact our assets and supply
chain.
• Acute weather conditions are mitigated during the
design, construction and maintenance of our assets,
such as the choice of location and the materials.
Regarding our supply chain, monitoring of suppliers
anddiversification are mitigating factors.
• Chronic
• Chronic physical risks can relate to rising sea and
ground water levels for instance, where our assets
might be at a risk due to this.
• We monitor developments to gain more experience
and insights related to the scenarios and effects.
Examples include projects related to assets such as
our Krimpen aan de IJssel substation and one of our
pylons, which we both have elevated. TenneT insures
all substations and buildings during construction and
operation against risks from natural catastrophes.
Pylons and overhead-lines are not insured.
Opportunities How might this affect TenneT?
• Resource efficiency
• Increased decentralised power production and storage including self-balancing micro grids as well as electrolysers if
they are correctly located can relieve high-voltage grids. Furthermore, DC-interconnectors enhance the transmission
of power of very long distances and connect renewable power production and demands in different countries.
• Solutions related to flexibility help us to make smarter use of our grid. This might have a positive effect as this could
lead to less grid expansion and therefore help us reduce the amounts of resources required to secure supply today
and tomorrow.
• Energy source
• TenneT is a leading investor in the energy transition and so we have been able to gain a vast amount of experience
connecting renewable energy sources, such as offshore wind, to our grid. This experience helps us to further drive
the energy transition together with partners and fulfil the future investment portfolio.
• Products and Services
• Our project portfolio has significantly changed in order to meet national and European climate goals. Key projects
are connecting offshore wind energy to our grid or to ensure that our onshore grid is prepared for a new energy
future. The gathering and analysis of energy data may lead to new products and services provided by TSOs, such as
Equigy.
• Markets
• Strategies and objectives of financial institutes and banks provide opportunities for TenneT to attract sustainable
financing at favourable terms and conditions by issuing green finance products to finance andrefinance our
investments in green infrastructure projects.
• Resilience
• Trends in the society, like the electrification of mobility, result in higher demand on a stable grid and power supply. To
ensure resilience, integration of power and gas grids is a vital alternative. Digitalisation using technologies like
automatisation, robotics and block-chain will help to optimise grid utilisation while safeguarding a reliable supply of
electricity.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
108
Regulatory risk Risk-mitigating actions
General
• The grid fees have increased significantly in the current years
(mainly due to high energy prices) and will further increase
because of the investments needed to facilitate the energy
transition.
• Inability to meet increasing efficiency targets over time as
imposed by incentive regulation, especially considering a
strongly growing company and the need for significant
investments in grid expansion, maintenance, operation as
well as innovation.
• Undercoverage of the regulatory CAPEX remuneration driven
by a non-reasonable return on invested capital and an
increasing investment portfolio which could lead to more
difficulties in financing and raising sufficient funding.
• Non-compliance with the current regulatory framework.
New regulatory and legal obligations have to be implemented.
The flow of information on new regulatory and legal
requirements must be ensured.
• TenneT aims to address the affordability issue by 1) being
transparent on the financial implications of the current plans
to the relevant stakeholders, 2) ensuring efficient roll-out
strategies of assets (i.e. 2 GW offshore program, hybrid
assets) and 3) working on efficient ancillary services markets.
• TenneT performs regular reviews of its processes and
organisational structure, introduced lean management and
carries out continuous improvement activities. TenneT also
prepares make-or-buy decisions in its investment process to
optimise value for money to society and conducts strategic
dialogues with regulators (ACM, BNetzA, ACER),
policymakers and industry partners/suppliers to co-shape its
future regulatory framework.
• TenneT’s strategy is to seek mutually acceptable results with
the regulator and further stakeholders. However, if needed to
protect pivotal strategic positions on solid legal grounds, legal
action may betaken.
• Onboarding of new employees on relevant topics.
Europe
• The ‘Clean Energy Package’ (CEP) entered into force.
Itrequires amongst others that TSOs provide 70% of the total
cross-border transmission capacity to the market, an amount
difficult to achieve without extensive and costly redispatch
activities.
The German government introduced an action plan
to gradually achieve this target by 31 December 2025. Delays
in fulfilment of this plan by TenneT could lead
to material financial penalties.
Similarly, the Dutch Ministry of Economic Affairs & Climate
Policy has issued an action plan to gradually achieve the 70%
target by 1 January 2026, which also contains derogations
forTenneT.
• In Germany TenneT keeps the capacity requirements along
the ‘trajectory’ as defined in the national ‘action plan’. This
means stepping up to full 70% using instruments such as
coordinated redispatch and countertrade.
• In the Netherlands, TenneT monitors compliance against the
action plan, with regard to the conditions of the derogation.
TenneT reports on issues to the ACM and the Ministry of
Economic Affairs & Climate Policy, if any.
The Netherlands
• ACM has performed a consultation for the new Regulatory
Period starting in 2027. ACM intends to revise the regulatory
method to better account for the implications of the energy
transition. The efficiency assessment and future estimations
of the OPEX development remain challenging topics.
• Increasing congestion in the TenneT grid puts pressure on
TenneT to open up any remaining grid capacity and propose
regulatory changes if needed.
• TenneT appreciates the open vision ACM has taken towards
the new regulatory period and will support the process by
preparing consultation responses that include implementable
regulatory improvements to the current challenges. In the
consultation process TenneT will address its main concerns
with the current method being: 1) Regulation of Operational &
IT Expenditure 2) The use of the international TSO benchmark
which does not provide sufficiently robust efficiency incentives
3) Regulation of innovations.
• TenneT asserted a pro-active role within the national action
plan on grid congestion and develops new options in
cooperation with stakeholders. Early results are a proposed
implementation of time-of-use tariffs and time dependent
transmission rights.
Germany
• Due to the rise of the financing costs on the capital markets
since 2022, the BNetzA intends to increase the return on
equity (RoE) in the 4th regulatory period compared to the
initial determination of 5.07% (before corporate tax). However,
adjustments are only planned for a minor part of TenneT’s
investments. The RoE of 5.07% will be applied to the
remaining investments. The reduction compared to a RoE of
6.91% in the 3rd regulatory period will have a significant
negative impact on TenneT's cash flow and revenues.
• Following the European Court of Justice decision on the
independence of the BNetzA, the energy industry law was
changed in 2023 to give more decision-making power to the
BNetzA. The previously relevant legal ordinances, will remain
in force for a transitional period until the end of 2028.
However, the BNetzA can already deviate from these.
Furthermore, BNetzA announced a broad consultation
on changes of the regulatory framework.
• TenneT challenges the concept of the BNetzA and will
examine legal steps to achieve an adjustment of the RoE for
all investments in the 4th regulatory period. TenneT
established an internal working group including colleagues
from its regulatory, legal and political departments to
accompany the political process. Amongst others, TenneT
engages in the German Association of Energy and Water
Industry (BDEW) to support profound analysis and advocacy
work within the network industry.
• TenneT actively participates in public and expert discussions
and positions itself as a competent partner and trustful
advisor to the regulators and policymakers.
Regulatory risks
Climate-related risks and opportunities
The Taskforce for Climate-Related Financial Disclosures
provides recommendations for companies to improve and
increase the reporting of climate-related financial
information. We have followed up on its recommendations,
including including climate-related topics in our risk
assessment process, and have identified the following
climate related risks and opportunities for TenneT, which we
clustered below. Please note that there might be some
overlap with risks also being mentioned earlier in the report,
but this is to provide one structured overview in this section.
Climate related risks
Risks How might this affect TenneT? Risk mitigating actions
• Transition
risks
• Policy and
legal risks
• Policy and legal risks are related to our regulatory
framework. Choices we make that can help society
andus as a company to transition to a climate-neutral
economy are subject to discussion with our regulator.
Our regulatory framework is updated once every 5 years
and this might pose a risk that if ambitions from
governments in the areas we serve move faster than
thespirit of the regulatory framework, this might be a
constraining factor to drive the energy transition.
• We mitigate this by lobbying on national and European
level, run pilot projects and present business cases,
and focus on those topics that promise the highest
benefit for society, which are integration of power and
hydrogen as well as flexibility and grid utilisation
together with partners.
• Technology
risk
• A risk of stranded assets might occur in case a new
technology is developed if for instance the new
technology is unable to communicate with the old
technology. Or if the technology used by TenneT is not
able to connect or communicate with the technology
used by other TSOs.
• Mitigating actions include challenging the necessity of
each investment and embracing other solutions, if
those promise more societal value and actively work
and invest in new technology as part of our strategy.
Next to this, our approach to innovation aims to focus
on the most important areas and implementing new
technology as fast as possible, which reduces this risk.
• Market risk
• Our market risks relate to dealing with the higher infeed
of renewable energy sources and impacting the way we
balance our grid and market prices. Renewable energy
sources are more volatile and cannot easily be
increased in case of a higher demand. Differences in
market prices can lead to too high requests for energy
atone location, e.g. Southern-Germany, where not all
energy can be transmitted to the users. In such
situations additional measures are required to balance
the grid, such as redispatch.
• TenneT plans and builds DC-grid connections in
Germany and interconnectors within Europe. We
investigate the grid integration of green hydrogen and
power grids as well as improving the quality of data
topredict power production and consumption.
• Reputation
risk
• A reputation risk could occur when we are unable to
deliver on our strategic goal to drive the energy
transition. Connected to this are the increasing
ambitions of the governments in the areas we serve to
meet these requirements. When realising our assets, we
also have areputational risk if there is a growing
resistance from local communities and governments, if
we do not engage with our stakeholders properly (‘not
in my backyard’). Furthermore the overall cost of the
energy transition is also a risk from a reputational
perspective (affordability).
• To mitigate this risk we aim to communicate in an
openand transparent fashion. Next to this, we invite
stakeholders in the planning and approval process of
projects to voice their opinion which we consider in, for
example, the final route of a certain project. We also
aim to balance affordability, sustainability and security
of supply in all our investment decisions. Further
mitigation takes place through the usage of
professional planning, project management and costs
forecasting.
• Physical
risks
• Acute
• Acute risks are related to, for example, extreme weather
conditions that could impact our assets and supply
chain.
• Acute weather conditions are mitigated during the
design, construction and maintenance of our assets,
such as the choice of location and the materials.
Regarding our supply chain, monitoring of suppliers
anddiversification are mitigating factors.
• Chronic
• Chronic physical risks can relate to rising sea and
ground water levels for instance, where our assets
might be at a risk due to this.
• We monitor developments to gain more experience
and insights related to the scenarios and effects.
Examples include projects related to assets such as
our Krimpen aan de IJssel substation and one of our
pylons, which we both have elevated. TenneT insures
all substations and buildings during construction and
operation against risks from natural catastrophes.
Pylons and overhead-lines are not insured.
Opportunities How might this affect TenneT?
• Resource efficiency
• Increased decentralised power production and storage including self-balancing micro grids as well as electrolysers if
they are correctly located can relieve high-voltage grids. Furthermore, DC-interconnectors enhance the transmission
of power of very long distances and connect renewable power production and demands in different countries.
• Solutions related to flexibility help us to make smarter use of our grid. This might have a positive effect as this could
lead to less grid expansion and therefore help us reduce the amounts of resources required to secure supply today
and tomorrow.
• Energy source
• TenneT is a leading investor in the energy transition and so we have been able to gain a vast amount of experience
connecting renewable energy sources, such as offshore wind, to our grid. This experience helps us to further drive
the energy transition together with partners and fulfil the future investment portfolio.
• Products and Services
• Our project portfolio has significantly changed in order to meet national and European climate goals. Key projects
are connecting offshore wind energy to our grid or to ensure that our onshore grid is prepared for a new energy
future. The gathering and analysis of energy data may lead to new products and services provided by TSOs, such as
Equigy.
• Markets
• Strategies and objectives of financial institutes and banks provide opportunities for TenneT to attract sustainable
financing at favourable terms and conditions by issuing green finance products to finance andrefinance our
investments in green infrastructure projects.
• Resilience
• Trends in the society, like the electrification of mobility, result in higher demand on a stable grid and power supply. To
ensure resilience, integration of power and gas grids is a vital alternative. Digitalisation using technologies like
automatisation, robotics and block-chain will help to optimise grid utilisation while safeguarding a reliable supply of
electricity.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
109
Climate related opportunities
Opportunities How might this affect TenneT?
• Resource efficiency
• Increased decentralised power production and storage including self-balancing micro grids as well as electrolysers if
they are correctly located can relieve high-voltage grids. Furthermore, DC-interconnectors enhance the transmission
of power of very long distances and connect renewable power production and demands in different countries.
• Solutions related to flexibility help us to make smarter use of our grid. This might have a positive effect as this could
lead to less grid expansion and therefore help us reduce the amounts of resources required to secure supply today
and tomorrow.
• Energy source
• TenneT is a leading investor in the energy transition and so we have been able to gain a vast amount of experience
connecting renewable energy sources, such as offshore wind, to our grid. This experience helps us to further drive
the energy transition together with partners and fulfil the future investment portfolio.
• Products and Services
• Our project portfolio has significantly changed in order to meet national and European climate goals. Key projects
are connecting offshore wind energy to our grid or to ensure that our onshore grid is prepared for a new energy
future. The gathering and analysis of energy data may lead to new products and services provided by TSOs, such as
Equigy.
• Markets
• Strategies and objectives of financial institutes and banks provide opportunities for TenneT to attract sustainable
financing at favourable terms and conditions by issuing green finance products to finance andrefinance our
investments in green infrastructure projects.
• Resilience
• Trends in the society, like the electrification of mobility, result in higher demand on a stable grid and power supply. To
ensure resilience, integration of power and gas grids is a vital alternative. Digitalisation using technologies like
automatisation, robotics and block-chain will help to optimise grid utilisation while safeguarding a reliable supply of
electricity.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
110
Consolidated financial statements 112
Notes to the consolidated financial statements 119
Company financial statements 186
Notes to the company financial statements 188
Other information 192
Profit appropriation** 192
Independent auditor’s report** 193
Limited assurance report of the independent auditor 202
About this report 205
EU Taxonomy disclosures* 213
Glossary 220
SWOT Analysis 226
Key figures: five-year summary 227
Company addresses** 228
Financial
Statements
Financial statements
* These sections reflect the director's report as mentioned by Part 9 of Book 2 of the Dutch Civil Code.
** These sections reflect the Other Information as required by Part 9 of Book 2 of the Dutch Civil Code.
Integrated Annual Report 2022 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
111
Consolidated financial statements
Consolidated statement of financial position
For the year ended 31 December (EUR million)
Assets
Notes
2023 2022
Non-current assets
Tangible fixed assets 10 11,764 26,823
Right of use assets
11 105 748
Intangible assets 12 254 306
Investments in joint ventures 14 211 630
Investments in associates 14 32 36
Deferred tax assets
8 580 711
Other financial assets 15 24 44
Total non-current assets 12,970 29,298
Current assets
Inventories 16 15 132
Account- and other receivables 17 452 2,348
Income tax receivable 8 - 158
Cash and cash equivalents 18 673 6,547
Total current assets 1,140 9,185
Assets of disposal group classified as held for sale 2 27,613 26
Total assets 41,723 38,509
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
112
Consolidated financial statements
Consolidated statement of financial position
For the year ended 31 December (EUR million)
Equity and liabilities
Notes
2023 2022
Equity
Equity attributable to ordinary shares 20 5,516 5,133
Hybrid securities
20 2,125 2,125
Equity attributable to owners of the company 7,641 7,258
Non-controlling interests 21 400 455
Total equity 8,041 7,713
Non-current liabilities
Borrowings 22 18,871 19,006
Contract liabilities 23 530 531
Deferred tax liability 8 1 12
Provisions 24 490 1,235
Lease liabilities 11 90 574
Net employee defined benefit liabilities 25 - 174
Other financial liabilities 26 - 185
Other liabilities 10 31
Total non-current liabilities 19,992 21,748
Current liabilities
Borrowings 22 3,640 709
Contract liabilities
23 12 17
Income tax payable 8 72 26
Provisions 24 54 77
Other financial liabilities 26 1,975 550
Lease liabilities 11 16 155
Account- and other payables 27 640 7,489
Total current liabilities 6,409 9,023
Liabilities of disposal group classified as held for sale 2 7,281 25
Total equity and liabilities
41,723 38,509
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
113
Consolidated statement of income
For the year ended 31 December (EUR million)
Notes 2023 2022
Revenue 4 2,297 1,919
Grid expenses 5 -1,485 -2,174
Personnel expenses
5 -182 -137
Depreciation and amortisation of assets 10,11, 12 -375 -330
Other operating expenses 5 -218 -178
Other (gains)/losses 6 3 -6
Total operating expenses -2,257 -2,825
Share in profit of joint ventures and associates 14 132 110
Operating result 172 -796
Finance income 7 41 41
Finance expenses 7 -147 -64
Finance result -106 -23
Result before income tax from continued operations 66 -819
Income tax expense 8 1 229
Result for the year from continued operations 67 -590
Result for the year from discontinued operations after tax 2 644 -289
Result for the year 711 -879
Result attributable to:
Owners of the company
Equity holders of ordinary shares continued operations 20 10 -647
Equity holders of ordinary shares discontinued operations 2 585 -320
Hybrid securities 20 57 57
Owners of the company 652 -910
Non-controlling interests
Result from discontinued operations 2, 21 59 31
Non-controlling interests 59 31
Result for the year 711 -879
Earnings per share attributable to the equity holders of ordinary shares
For the year ended 31 December (EUR per share)
Note
2023 2022
Basic and diluted earnings per share from continuing operations 9 50 -3,235
Basic and diluted earnings per share from discontinuing operations
9 2,925 -1,600
Total basic and diluted earnings per share 9 2,975 -4,835
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
114
Consolidated statement of comprehensive income
For the year ended 31 December (EUR million)
Non-
control-
ling
interest
Total
equity
Retained
earnings
Unappro-
priated
result
Equity
attribut-
able to
ordinary
shares
Hybrid
securities
Equity
attribut-
able to
owners of
the
company
Notes
20 20 30 21
2022
Items not to be reclassified to profit or
loss in subsequent years:
Remeasurement of defined benefit pensions 25 160 - 160 - 160 - 160
Taxation
8 -48 - -48 - -48 - -48
Total other comprehensive income
2022 112 - 112 - 112 - 112
Result for the year - -967 -967 57 -910 31 -879
Total comprehensive income 2022 112 -967 -855 57 -798 31 -767
2023
Items not to be reclassified to profit or
loss in subsequent years:
Remeasurement of defined benefit pensions 25 -29 - -29 - -29 - -29
Taxation 8 9 - 9 - 9 - 9
Total other comprehensive income
2023 -20 - -20 - -20 - -20
Result for the year - 595 595 57 652 59 711
Total comprehensive income 2023 -20 595 575 57 632 59 691
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
115
Consolidated statement of changes in equity
For the year ended 31 December (EUR million)
Attributable to equity holders of the company Non-
con-
trolling
interest
Total
equity
Paid-up
and
called-up
capital
Share
premium
reserve
Retained
earnings
Unappro-
priated
result
Equity
attribut-
able to
ordinary
shares
Hybrid
securities
Equity
attribut-
able to
owners
of the
company
(EUR million)
Notes
20 20 20 20 20 21
At 1 January 2022
100 1,790 3,396 -401 4,885 2,125 7,010 455 7,465
Result for the year - - - -967 -967 57 -910 31 -879
Total other comprehensive income - - 112 - 112 - 112 - 112
Total comprehensive income - - 112 -967 -855 57 -798 31 -767
-
Dividends paid 20 - - - -141 -141 - -141 -20 -161
Capital contribution 20 - 1,230 - - 1,230 - 1,230 - 1,230
Capital repayment 20 - - - - - - - -11 -11
Distribution on hybrid securities
20 - - - - - -57 -57 - -57
Tax on distribution on hybrid securities 20 - - 14 - 14 - 14 - 14
Appropriation remaining prior year
result - - -542 542 - - - - -
At 31 December 2022 100 3,020 2,980 -967 5,133 2,125 7,258 455 7,713
Result for the year - - - 595 595 57 652 59 711
Total other comprehensive income - - -20 - -20 - -20 - -20
Total comprehensive income - - -20 595 575 57 632 59 691
Dividends paid 20 - - - -207 -207 - -207 -17 -224
Capital repayment
20 - - - - - - - -97 -97
Distribution on hybrid securities 20 - - - - - -57 -57 - -57
Tax on distribution on hybrid securities
20 - - 15 - 15 - 15 - 15
Appropriation remaining prior year
result - - -1,174 1,174 - - - - -
-
At 31 December 2023 100 3,020 1,801 595 5,516 2,125 7,641 400 8,041
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
116
Continues next page
Consolidated statement of cash flows
For the year ended 31 December (EUR million)
Notes
2023 2022
Operating result from continuing operations 172 -796
Operating result from discontinuing operations 1,252 -180
Operating result 1,424 -976
Non-cash adjustments to reconcile result to net cash flows:
Depreciation, amortisation and impairment of assets 2, 10, 11 ,12 1,350 1,233
Result on disposal of assets 1 38
Share in result of joint ventures and associates 14, 2 -150 -120
Dividends received from joint ventures and associates
14, 2 155 92
Movements in provisions and other (financial) liabilities and assets 12 104
1,368 1,347
Working capital adjustments excluding EEG working capital:
(Increase)/decrease in account- and other receivables 15, 2 -342 -1,026
(Increase)/decrease in inventories -21 -49
Increase/(decrease) in account- and other payables
27, 2 596 -33
Increase/(decrease) in contract liabilities 23, 2 81 103
Increase/(decrease) in current financial liabilities 26, 2 -177 269
Cash generated from operation 137 -736
Income tax paid (net) -140 -231
Net cash flows from operating activities excluding EEG
working capital 2,789 -596
EEG working capital adjustments:
(Increase)/decrease in EEG receivables 17, 2 -1,250 592
(Increase)/decrease EEG deposits > 3 months 17, 2 - 472
Increase/(decrease) in EEG payables 27, 2 -3,193 728
-4,443 1,792
Net cash flows from operating activities -1,654 1,196
Investing activities
Purchase of tangible and intangible fixed assets 10, 12, 27 -7,319 -4,424
Proceeds from sale of tangible and intangible fixed assets 4 5
Proceeds from sale of subsidiaries 13 33 -
Interest received 7 35 45
Capital repayments from joint ventures 14, 2 34 32
Capital contribution to joint ventures and associates 14, 2 - -3
Net cash flows used in investing activities -7,213 -4,345
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
117
Consolidated statement of cash flows
For the year ended 31 December (EUR million)
Continues from previous page
Notes
2023 2022
Financing activities
Net financing
Proceeds from borrowings 22 3,787 7,338
Repayment of borrowings 22 -1,004 -1,339
2,783 5,999
Other financing activities
Payment of lease liabilities 11 -177 -221
Interest paid -417 -202
Capital contribution by ordinary shareholder of the company 20, 26 - 1,230
Contribution by ordinary shareholder of the company 20, 26 1,602 -
Dividends paid to ordinary shareholders of the company 20 -207 -141
Distribution on hybrid securities 20 -57 -57
Repayment of financial liability 26 -37 -20
Dividends paid and capital repayments to non-controlling interests 21 -114 -32
593 557
Net cash flows from financing activities 3,376 6,556
Net change in cash and cash equivalents -5,491 3,407
Cash and cash equivalents at 31 December
18 1,056 6,547
Cash and cash equivalents at 1 January 18 6,547 3,140
-5,491 3,407
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
118
Notes to the consolidated financial statements
We are continuously improving our financial reporting to make it more relevant and
understandable to our stakeholders. These financial statements focus on the material
(financial) topics for 2023. Like last year, the notes to the consolidated financial statements
are disclosed following largely the sequence of items in the consolidated statement of
financial position and consolidated statement of income. Accounting policies are indicated
with i, while key assumptions and estimates are identified by using + in front of the header.
1 Basis for reporting 120
2 Discontinued operations and assets classified as
held for sale 122
3 Segment information 127
4 Revenue 136
5 Operating expenses 137
6 Other (gains)/losses 140
7 Finance income and expenses 140
8 Corporate income tax 140
9 Earnings per share 144
10 Tangible fixed assets 145
11 Right of use assets and lease liabilities 147
12 Intangible assets 151
13 Business combinations and changes in
consolidated entities 153
14 Investments in joint ventures and associates 154
15 Other financial assets 157
16 Inventory 158
17 Account- and other receivables 158
18 Cash, cash equivalents and bank overdrafts 159
19 Capital management 160
20 Equity 162
21 Non-controlling interests 163
22 Borrowings 166
23 Contract liabilities 168
24 Provisions 169
25 Net employee defined benefit liabilities 171
26 Other financial liabilities 175
27 Account- and other payables 175
28 Financial risk management 176
29 Fair values 180
30 i Accounting policies for financial instruments 180
31 Contingencies and commitments 181
32 Related parties 183
33 Consolidated subsidiaries 184
34 Events after the reporting period 185
35 Company accounting policies 188
36 Personnel expenses 188
37 Other operating expenses 188
38 Finance income 188
39 Finance expenses 188
40 Investments in subsidiaries 188
41 Investments in associates 189
42 Other financial assets 189
43 Account- and other receivables 189
44 Equity 190
45 Borrowings 190
46 Financial liabilities 190
47 Account- and other payables 191
48 Events after the reporting period 191
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
119
Notes to the consolidated financial statements
1 Basis for reporting
Basis for preparation
The accounting policies describe our approach to recognise and measure transactions and balance sheet items in the
financial statements. Accounting policies, including new European Union (EU) endorsed accounting standards, amendments
and interpretations, relating to the consolidated financial statements as a whole are described below. This section also
provides general guidance regarding assumptions, estimates and judgements used in the preparation of the financial
statements. A more detailed description of accounting policies and material estimates related to specific reported amounts is
presented in the respective notes. Only accounting policies that are deemed material are presented in these financial
statements. We consider an item material if, in our view, it is likely to have an impact on the economic decisions of primary
users of these financial statements.
General
TenneT Holding B.V. has subsidiaries which are leading electricity transmission system operator with activities in the
Netherlands. Our activities are conducted by TenneT TSO B.V. and its subsidiaries.
The Dutch state owns the entire issued share capital of TenneT Holding B.V. Furthermore, TenneT Holding B.V. has issued
hybrid securities which are deeply subordinated and are accounted for as part of equity attributable to equity holders of the
Company. The registered office of TenneT Holding B.V. is located at Utrechtseweg 310, Arnhem, the Netherlands, with its
statutory seat in Arnhem and a registration with the Dutch Commercial Register under number 09083317.
These consolidated financial statements of TenneT Holding B.V. and its subsidiaries (hereafter referred to as 'TenneT’, ‘the
Company’ or ‘the Group’) for the year ended 31 December 2023 were prepared by our Executive Board and authorised for
issuance in accordance with a resolution of the Supervisory Board on 4 March 2024. The financial statements will be
submitted for adoption at the General Meeting of Shareholders. These consolidated financial statements have been audited
by Deloitte Accountants B.V.
Assets held for sale
In February 2023, TenneT started to explore the potential sale of German activities to the German state. Over the past year,
constructive discussions have taken place between TenneT and KfW, acting on behalf of the German state, with close
involvement of the German state and the Dutch state as TenneT's sole shareholder. The Dutch government supports the sale
of German activities.
To the date of this report, no agreement has been reached yet on the potential sale of German activities. TenneT and KfW
continue their discussions in the coming period, however it is not certain that a deal will be reached. TenneT considers that it
is highly probable that a transaction will be concluded in 2024. In the consolidated financial statements the IFRS 5 ‘Non
current assets held for sale and discontinued operations' standard is applied, which implies that the German activities are no
longer continued per 31 December 2023.
NOVEC B.V. is a 100% subsidiary of TenneT Holding B.V. The activities of NOVEC are part of the segment non-regulated
activities. Following a strategic review, considering TenneT’s focus on the energy transition, it was concluded that TenneT
Holding B.V. no longer needs to remain shareholder of NOVEC. Currently, TenneT is negotiating about a transaction and
expects to finalise it within one year.
Further reference is made to note 2.
Basis for preparation
These consolidated financial statements are prepared in accordance with International Financial Reporting Standards as
adopted by the European Union (IFRS) and Part 9 of Book 2 of the Dutch Civil Code. The company financial statements for
TenneT Holding B.V. are prepared in accordance with the provisions of Part 9 of Book 2 of the Dutch Civil Code.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
120
The consolidated financial statements are prepared on a going concern basis. The going concern basis presumes that the
Group has adequate resources to remain in operation and that the Executive Board intends it to do so, for at least one year
from the date of the end of the reporting period.
The consolidated financial statements are prepared on a historical cost basis, unless described otherwise in the
accounting policy of a balance sheet position. They are presented in euros and all values are rounded to the nearest million
(EUR 000,000), except when otherwise indicated.
Earnings per share are disclosed on voluntary basis, please refer to note 9.
Changes in accounting estimates
Annually, the Group reassesses its estimate for the useful lives of tangible fixed assets. Based on this year's review, the
Group concluded that the useful lives of offshore platforms, cables (subsea) and the related decommissioning
provision should be extended in the Netherlands. For more details reference is made to note 10. The useful lives are adjusted
prospectively per 1 July 2023, resulting in a decrease of the depreciation of EUR 12 million in the last six months of 2023.
The Group has concluded that the useful lives of several onshore assets should be extended prospectively per
1 January 2024. The expected decreased depreciation is about EUR 40-50 million on an annual basis, impacting both
continued (EUR 20-25 million) and discontinued operations (EUR 20-25 million).
Changes in EU-endorsed published IFRS standards and interpretations effective in 2023
Material new and amended standards adopted by the Group
• Amendments to IAS 8 Accounting policies, changes in accounting estimates and errors.
• Amendments to IAS 12 Income taxes.
TenneT has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective.
IFRS standards issued but not yet effective and adopted by the Group
• Amendments to IAS 1 Presentation of Financial Statements
• Amendments to IFRS 16 Leases
• Amendments to IAS 21 The effect of changes in foreign exchange rates
• Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosure
It is anticipated that any issued changes to IFRS standards that are not yet effective and adopted by TenneT will not have a
material impact.
Basis for consolidation
The consolidated financial statements incorporate the financial statements of TenneT Holding B.V. and its subsidiaries at
31 December 2023. A list of the legal entities included in the consolidation is included in note 33. Subsidiaries are
consolidated from the date of acquisition, constituting the date on which control is obtained and continue to be consolidated
until the date when such control ceases. The financial statements of subsidiaries are prepared for the same reporting period
as the parent company, using consistent accounting policies. All intercompany balances, transactions, unrealised gains and
losses resulting from intercompany transactions and dividends are eliminated in full in consolidation.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If we
cease to have control over a subsidiary, we derecognise the subsidiary's assets (including goodwill), liabilities and any
non-controlling interest in the former subsidiary at the date control is lost (including the cumulative translation differences).
Furthermore, the fair value of the consideration received, the fair value of any investment retained and any surplus or deficit
in statement of income are recognised. Acquisitions are accounted for using the acquisition method, where the purchase
price is allocated to the identifiable assets acquired and liabilities assumed on a fair value basis and the remainder is
recognised as goodwill.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
121
Material accounting judgements, estimates and assumptions
The preparation of financial statements requires us to make estimates and assumptions that affect the reported amounts of
assets and liabilities, disclosures of contingent assets and liabilities and the reported amounts of revenue and expenses
during the reporting period. Such estimates are assessed continuously on the basis of previous results and experience,
consultations with experts, trends, prognoses and other methods which we deem appropriate in each individual case. Actual
results could differ from these estimates. Material items containing estimates and assumptions are as follows:
Estimate/assumptions Item Note Assets and liabilities held for sale, discontinued operations 2 Estimate of probable date of sale, estimate of sale price Estimate of remaining useful life, identification of cash-generating units for fixed asset impairment testing In both the assessment of the useful lives of our assets and in the design phase of new assets, climate related risks are considered. Climate-related risks are reduced by adjusting design or taking Tangible fixed assets 10 mitigating measures. Estimates of discount rate and expected extension or Right of use assets and liabilities 11 accelerated termination date Intangible fixed assets 12 Estimate of recoverable amount and remaining useful life Impairment review of goodwill 12 Estimate of cash flow projections and pre-tax discount rate Grid expense payable 27 Amongst others estimate of electricity usage and energy prices Impairment of current assets 17 Estimate of expected credit losses Estimate of removal costs, removal dates, discount rate and Provision for environmental management and decommissioning 24 price increases in the period leading up to removal Other provisions 24 Mainly relate to estimate of probability and realisation date Net employee benefit obligations 25 Financial, actuarial and demographic assumptions
Functional currency
These consolidated financial statements are presented in euros, which is also the parent company's and all subsidiaries`
functional currency.
Adjustment in prior year’s figures
After publication of the TenneT Integrated Annual Report 2022, we identified a misstatement in the consolidated statement of
comprehensive income and consolidated statement of income; The re-measurement of defined benefit pensions was
reported as EUR 217 million and should have been reported as EUR 160 million, taxation was reported as -/- EUR 64 million
and should have been reported as -/- EUR 48 million. The balance at 31 December 2021 for retained earnings was reported
as EUR 3,355 million and should have been reported as EUR 3,396 million. We have adjusted the misstatement.
2 Discontinued operations and assets classified as held for sale
The majority of assets and liabilities classified as held for sale, are mainly related to TenneT GmbH & Co. KG and its
subsidiaries (together TenneT Germany). The remaining part is related to the assets and liabilities of NOVEC B.V. For an
explanation as to why the assets are classified as held for sale, please refer to note 1.
TenneT Germany
As a result of classifying TenneT Germany's operations as held for sale, TenneT Germany's operations are classified in the
statement of income as discontinued operations. The activities are presented as if TenneT Germany were a third party to
TenneT Holding B.V. and the group, except for loans issued to TenneT Germany. From a business perspective, these
operations are continued and remain an integral part of the TenneT group. Also internal management reports still include
German operations. Therefore the segment information still includes the German underlying operations.
Corporate tax expenses and corporate tax receivables of TransTenneT B.V. are also part of held for sale, since TransTenneT
is responsible for the German corporate tax of the German activities.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
122
TenneT has not recognised an impairment loss for any write-down of assets as the fair value less costs to sell is (expected to
be) higher than the carrying amount.
Assets and liabilities
The major classes of assets and liabilities of TenneT Germany classified as held for sale at 31 December 2023 are as follows:
(EUR million) Notes 31 December 2023 Assets Tangible fixed assets 10 21,880 Right of use assets 11 872 Intangible assets 12 119 Investments in joint ventures 14 384 Investments in associates 14 1 Deferred tax assets 8 272 Other financial assets 15 18 Inventories 16 138 Account- and other receivables 17 3,489 Income tax receivable 8 38 Cash and cash equivalents 18 383 Assets held for sale 27,594 Liabilities Deferred tax liabilities 8 2 Provisions (including net employee defined benefit obligation) 24, 25 1,510 Lease liabilities 11 862 Contract liabilities 23 85 Other liabilities 27 Other financial liabilities 26 169 Income tax payable 8 81 Account- and other payables 27 4,532Liabilities held for sale 7,268 Net assets directly associated with disposal group 20,326
TenneT Holding has issued EUR 15.9 billion of long-term loans to TenneT Germany. These are eliminated in the group's
financial statements and as such not part of liabilities held for sale. These loans relate to cash management activities of
TenneT Holding B.V. with TenneT Germany. The agreed interest rate for the intercompany loans is our cost of fund rate
+0.125bps. These receivables were unsecured. Refer to note 7. Furthermore cash loans of EUR 231 million were issued by
TenneT Holding to TenneT Germany for cash operating activities. These cash loans have an agreed interest rate. Beside this
TenneT Germany has cash loans issued to TenneT Holding of EUR 270 million.
The details about the net employee defined benefit liabilities are disclosed in note 25.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
123
Statement of income
The results of TenneT Germany for the year are disclosed below. (EUR million) 2023 2022 Revenue 7,001 6,380 Grid expenses -4,482 -5,343 Personnel expenses -153 -148 Depreciation and amortisation -975 -903 Other operating expenses -159 -144 Other gains/(losses) - netted 2 -32 Total operating expenses -5,767 -6,570 Share in result of joint ventures and associates 18 10 Operating result 1,252 -180 Finance result -347 -234 Result for income tax from discontinued operations 905 -414 Income tax expenses -261 125 Result for the year from discontinued operations 644 -289 Result attributable to: Equity holders of ordinary shares 585 -320 Non-controlling interests 59 31 Result for the year from discontinued operations 644 -289 2023 2022 Average workforce in FTEs 3,625 3,109
Revenue increased mainly due to a growing asset base in consequence of ongoing investments and higher compensation
for certain cost of capital, as well as the in 2022 higher expected costs for system services (especially such as redispatch,
grid losses and control power) as well as higher costs for grid and capacity reserve power plants. ) which are incorporated in
the tariffs of 2023.
The result from discontinued operations mainly increased due to higher revenues. These revenues increased as they are
based on the in 2022 higher costs for ancillary services (part of grid expenses). The actual costs for ancillary services
decreased compared to 2022. Both increased revenues and decreased costs for ancillary services result in an increased
result of discontinued operations compared to 2022.
The net cash flows generated by TenneT Germany are as follows:
(EUR million) 2023 2022 Operating -2,236 1,702 Investing -4,393 -2,963 Financing 2,294 3,058 Net cash inflow/(outflow) -4,335 1,797
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
124
Contingencies and commitments
Assets and liabilities held for sale also include contingencies and commitments. This consists mainly capital commitments
issued, bank guarantees received and comfort letters received.
Capital commitments increased due to investments in 2GW projects. Capital commitments are commitments entered
into with regard to the purchase of tangible fixed and to a very small fraction of intangible assets (2023: EUR 79 million,
2022: EUR 43 million). Approximately EUR 4.1 billion of capital commitments were payable within 12 months, as at
31 December 2023 (2022: EUR 3.3 billion).
Other off-balance sheet commitments mainly comprise a payment guarantee for specific payment obligations of TenneT
Holding B.V. issued by the German Group. 31 Decem-31 December (EUR million) * ber 2023 2022 Investment related off-balance items Off-balance sheet rights Bank guarantees received and other items 1,828 1,563 Comfort letters received 2,165 1,620 Total 3,993 3,183 Off-balance commitments Capital commitments 24,445 8,063 Comfort letters issued 813 797 Total 25,258 8,860 Other off-balance items Other off-balance obligations Grid-related commitments 712 827 Other off-balance sheet commitments 5,382 5,068 Total 6,094 5,895
*
The 2022 figures have been included in the comparative figures of the “contingencies and commitments of continued operations” in note 31,
for comparison reasons. Note that the 2023 figures of the discontinued operations are not included in note 31.
Electricity Revenue Cap Act
The Electricity Revenue Cap Act ("Strompreisbremsegesetz, StromPBG”) was passed by the German legislator on
20 December 2022 and went into force on 24 December in the same year. It aimed to protect domestic end-consumers in
2023 from strongly increased electricity prices resulting from the turmoil on the energy markets in Europe following the
Ukraine war. The Act expired on 31 December 2023.
Energy suppliers have processed the price caps in their individual invoices with end-consumers, the Transmission System
Operators (TSOs) have paid them on monthly data. The TSOs were compensated for these payments by direct transfers
from the government and by funds received from electricity generators. To enable the process, detailed rules for the
calculation of excess revenues from generators as well as for the settlement and pay out to end-consumers are determined
in the law.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
125
Furthermore, the German regulator BNetzA has an oversight role in the process. Payments from TSOs to end-consumers
via the energy suppliers started in February 2023 with retroactive effect as per January. First governmental transfer payments
to bridge-finance started in February 2023. The first inflow of excess revenues from generators has started as of mid of
August 2023. TSOs do not have any liquidity or profitability risks from the regime which they perform as trustees of society
and on a pass-through basis.
There is no impact on the results and equity per 31 December 2023. As part of the Electricity Revenue Cap Act the Group
received EUR 5.6 billion compensation from the government and by funds from electricity generators, which was passed on
to end-consumers as a relief. The total effect on revenues in 2023 is EUR nil (2022: nil).
NOVEC B.V.
NOVEC's operations are not classified as discontinued operations, since it does not represent a major line of business, and
as such the segment information still includes the NOVEC's underlying operations.
TenneT has not recognised an impairment loss for any write-down of assets as the fair value less costs to sell is (expected to
be) higher than the carrying amount.
Assets and liabilities
The major classes of assets and liabilities of NOVEC classified as held for sale at 31 December 2023 are as follows:
(EUR million) Notes 31 December 2023 Assets Tangible fixed assets 10 7 Right of use assets 11 7 Intangible assets 12 3 Investments in associates 1 Account- and other receivables 17 1 Assets held for sale 19 Liabilities Lease liabilities 11 6 Provisions 1 Account- and other payables 27 6 Liabilities held for sale 13 Net assets directly associated with disposal group 6
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
126
3 Segment information
This section sets out the financial performance for the year in accordance with the way in which we manage our business
(operating segments). We measure and assess our performance based on underlying financial information, which is
explained further below.
We generate substantially all of our revenue from our regulated operating segments in the Netherlands and Germany.
Therefore, close collaboration with our respective regulators to obtain regulations and agreements that provide reasonable
compensation for the risks we face, is key to us. Our involvement in certain limited non-regulated activities is closely related
and ancillary to our core tasks.
Segment analysis
Our operating segments consist of:
• TSO Netherlands
• TSO Germany (part of discontinued operations and held for sale)
• Non-regulated activities (partly part of held for sale)
For the entire year TenneT has been steered on Dutch, German and non-regulated activities. TenneT Germany is included in
the segment information as discontinued operations. TenneT will be steered on both Dutch, German and non-regulated
activities until the sale will be materialised.
For management information purposes, the performance of our regulated activities in the Netherlands and in Germany is
considered separately into two geographical segments. This segmentation, based on separately applicable regulatory
frameworks, is the key determinant for financial management of the business and for decision-making on budgets, allocation
of resources and financing.
Financing activities (including finance income and expenses) are managed on a Group basis and amounts related thereto are
not allocated to the segments. Transfer prices between the Netherlands and Germany are set at arm’s length in a manner
similar to transactions with third parties. These intercompany transactions are eliminated in consolidation.
Our Executive Board is the chief operating decision-making body of the company (as defined by IFRS 8 ‘Operating
segments’). Periodically, it monitors the performance of the respective operating segments for the purpose of performance
management and decision making about resource allocation. The segment performance is based on underlying financial
information, where EBIT, investments and return on capital are key metrics. The definition of EBIT equals operating result.
Performance of non-regulated activities is evaluated based on EBIT and return on capital of these activities.
Underlying financial information is based on the principle of recognising regulatory assets and liabilities for all of our regulated
activities. This implies that amounts resulting from past events and which are allowed to be received or are required to be
returned through future tariffs are recorded as an asset or liability, respectively. TenneT’s Executive Board believes that the
presentation of underlying financial information provides additional relevant insight in the actual business, financial
performance, and as such economic reality.
We have one (2022: nil) individual clients which is invoiced more than 10% of our total group underlying revenue. For the
segment TSO Germany the revenue from this customer amounted to EUR 1,335 million (2022: not applicable).
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
127
2023 2022 Underlying Underlying Underlying Underlying (EUR million) Investments Investments Assets Liabilities Assets Liabilities TSO Netherlands 15,586 9,020 2,948 12,328 7,697 1,527 Non-regulated companies 629 1,837 3 1,779 220 5 TSO Germany - - - 27,115 21,574 2,961 Total continued segments underlying 16,215 10,857 2,951 41,222 29,491 4,493 TSO Germany (held for sale) 28,830 23,786 4,779 - - - NOVEC B.V. (held for sale) 110 16 - - - - Total segments underlying 45,155 34,659 7,730 41,222 29,491 4,493 Eliminations and adjustments -409 -99 - -256 1,980 - Consolidated underlying information 44,746 34,560 7,730 40,966 31,471 4,493
Matching is achieved through recognition of regulatory deferral accounts. The key requirement for such recognition is that an
existing regulatory framework must be in place that permits the future reimbursement or requires the future settlement of
regulated assets or liabilities, respectively. Consequently, a regulated asset is recognised in underlying financial information in
respect of permitted reimbursements of current year expenses in future year's tariffs. Vice versa, a regulated liability is
recognised in underlying financial information in respect of required settlements (i.e. repayments) of current year revenues
through future tariffs. Furthermore, until 2015 certain investments in the Netherlands were financed via auction receipts
resulting from auctioning available electricity transmission capacity on cross-border interconnections.
Investment amounts recognised under IFRS equal underlying investments. Investments consists of additions to tangible fixed
assets, relate to note 10, and additions to intangible assets, relate to note 12.
Below the reconciliation between underlying total net assets and liabilities and IFRS total net assets and liabilities is
disclosed:
2023 2022 IFRS IFRS (EUR million) IFRS Assets IFRS Assets Liabilities Liabilities TSO Netherlands 13,563 8,479 10,828 7,260 Non-regulated companies 629 1,837 1,779 216 TSO Germany - - 26,157 21,339 Total continued segments IFRS 14,192 10,316 38,764 28,815 TSO Germany (held for sale) 27,831 23,450 - - NOVEC B.V. (held for sale) 110 16 - - Total segments underlying 42,133 33,782 38,764 28,815 Eliminations and adjustments -410 -100 -255 1,981 Consolidated IFRS information 41,723 33,682 38,509 30,796
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
128
(EUR million) 2023 2022 Consolidated underlying information Assets 44,746 40,966 Liabilities -34,560 -31,471 Total net assets and liabilities 10,186 9,495 To be settled in tariffs -3,565 -2,847 Auction receipts 592 370 Valuation differences tangible fixed assets -198 -218 Other regulatory receivables and payables 193 199 Tax impact 833 714 Total underlying impact -2,145 -1,782 Consolidated IFRS information 8,041 7,713 Consolidated IFRS information Assets 41,723 38,509 Liabilities -33,682 -30,796 Total net assets and liabilities 8,041 7,713
For an analysis of underlying results please refer to the ‘Safeguard sustainable financial performance’ section of the
Integrated Annual Report.
Regulatory deferral accounts: reconciliation to IFRS figures
The difference between underlying financial information - as presented in the segment information and board report - and
IFRS reported figures is related to the recognition of regulated assets and liabilities, auction receipts and the measurement of
tangible fixed assets. In the IFRS financial statements, revenue from contracts with customers is recognised when control of
the goods or services is transferred to the customer at an amount that reflects the consideration to which the Group expects
to be entitled in exchange for those goods or services. In the underlying financial information revenues are recognised
according to the allowed revenue as set by the regulator. By doing so, volume and post calculation differences are directly
matched to the related costs and therefore provide additional relevant insight to manage TenneT's business.
These differences also result in different deferred tax balances in underlying financial information compared to IFRS reported
figures. No other differences between underlying financial information and IFRS exist.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
129
Underlying financial information can be reconciled to reported IFRS figures as follows:
2023 Elimina-TSO Elimina-Contin-tions to Germany Non- regu-tions within ued Total discontin-(EUR million) TSO NL (discontin-Total lated continued opera-segments ued ued operation tions operar-operations) tions Connection and transmission services 2,094 - - 2,094 4,516 6,610 - 6,610 Maintaining the energy balance 139 - - 139 384 523 - 523 Operation of energy exchanges 1 - - 1 - 1 - 1 Offshore (balancing) 465 - - 465 1,452 1,917 - 1,917 Other 34 48 - 82 89 171 - 171 Inter-segment 53 5 -11 47 24 71 -71 - Total underlying revenue 2,786 53 -11 2,828 6,465 9,293 -71 9,222 Grid expenses -1,487 -1 2 -1,486 -4,003 -5,489 12 -5,477 Other operating expenses -753 -54 9 -798 -1,339 -2,137 59 -2,078 Share in result of joint ventures and associates 2 130 - 132 18 150 - 150 Underlying operating result 548 128 - 676 1,141 1,817 - 1,817 Revenue adjustment to IFRS -484 - - -484 560 76 - 76 Inter-segment adjustment - - -27 -27 27 - - - Cost adjustment to IFRS 7 - - 7 -476 -469 - -469 Discontinued operations to IFRS - - - - -1,252 -1,252 - -1,252 IFRS operating result 71 128 -27 172 - 172 - 172 Finance result -106 Result before income tax from continued operations 66 Income tax expense 1 Result for the year from continued operations 67 Result from the year from discontinued operations 644 Result for the year 711
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
130
2022 Elimina-TSO Elimina-Contin-tions to Germany Non- regu-tions within ued Total discontin-(EUR million) TSO NL (discontin-Total lated continued opera-segments ued ued operation tions operar-operations) tions Connection and transmission services 2,459 - - 2,459 4,333 6,792 - 6,792 Maintaining the energy balance 301 - - 301 872 1,173 - 1,173 Operation of energy exchanges 2 - - 2 - 2 - 2 Offshore (balancing) 286 - - 286 1,387 1,673 - 1,673 Other 41 51 - 92 108 200 - 200 Inter-segment 28 - -6 22 73 95 -95 - Total underlying revenue 3,117 51 -6 3,162 6,773 9,935 -95 9,840 Grid expenses -2,190 -1 - -2,191 -4,714 -6,905 52 -6,853 Other operating expenses -617 -52 6 -663 -1,279 -1,942 43 -1,899 Share in result of joint ventures and associates 2 109 - 111 11 122 - 122 Underlying operating result 312 107 - 419 791 1,210 - 1,210 Revenue adjustment to IFRS -1,220 - - -1,220 -321 -1,541 - -1,541 Inter-segment adjustment - - -2 -2 2 - - - Cost adjustment to IFRS 8 - - 8 -651 -643 - -643 Share in result of joint ventures and associates to IFRS -1 - - -1 -1 -2 - -2 Discontinued operations to IFRS - - - - 180 180 - 180 IFRS operating result -901 107 -2 -796 - -796 - -796 Finance result -23 Result before income tax from continued operations -819 Income tax expense 229 Result for the year from continued operations -590 Result from the year from discontinued operations -289 Result for the year -879
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
131
Reconciliation IFRS to underlying figures 2023 IFRS figures Discontinued Underlying Underlying (EUR million) Continued Eliminations Total operations items figures operations Connection and transmission services 1,344 4,524 - 5,868 742 6,610 Maintenance of the energy balance 261 432 - 693 -170 523 Operation of energy exchanges 275 475 - 750 -749 1 Offshore (balancing) 345 1,473 - 1,818 99 1,917 Other 72 97 - 169 2 171 Total revenue 2,297 7,001 - 9,298 -76 9,222 Inter-segment 47 24 -71 - - - Revenue including inter-segment 2,344 7,025 -71 9,298 -76 9,222 Grid expenses -1,485 -4,482 - -5,967 490 -5,477 Personnel expenses -182 -153 - -335 -1 -336 Depreciation and amortisation of assets -375 -975 - -1,350 -19 -1,369 Other operating expenses -218 -159 - -377 -1 -378 Other (gains)/losses 3 2 - 5 - 5 Total operating expenses -2,257 -5,767 - -8,024 469 -7,555 Inter-segment -20 -51 71 - - - Total operating expenses including inter-segment -2,277 -5,818 71 -8,024 469 -7,555 Share in profit of joint ventures and associates 132 18 - 150 - 150 Operating result 172 1,252 - 1,424 393 1,817 Finance income 41 1 - 42 102 144 Finance expenses -147 -348 - -495 -15 -510 Finance result -106 -347 - -453 87 -366 Result before income tax 66 905 - 971 480 1,451 Income tax expense 1 -261 - -260 -120 -380 Result for the year 67 644 - 714 360 1,074 Result attributable to: Equity holders of ordinary shares continued operations 10 - - 10 945 955 Equity holders of ordinary shares discontinued operations - 585 - 585 -585 - Hybrid securities 57 - - 57 - 57 Owners of the company 67 585 - 652 360 1,012 Non-controlling interests - 59 - 59 - 59 Result for the year 67 644 - 711 360 1,071 Basic and diluted earnings per share 50 2,925 2,975 4,775 Underlying items To be settled in tariffs 829 Auction receipts -748 Investment contributions 4 Maintenance of the energy balance -161 Revenue -76
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
132
Reconciliation IFRS to underlying figures 2022 IFRS figures Discontinued Underlying Underlying (EUR million) Continued Eliminations Total operations items figures operations Connection and transmission services 897 3,328 - 4,225 2,567 6,792 Maintenance of the energy balance 456 891 - 1,347 -174 1,173 Operation of energy exchanges 242 660 - 902 -900 2 Offshore (balancing) 242 1,387 - 1,629 44 1,673 Other 82 114 - 196 4 200 Total revenue 1,919 6,380 - 8,299 1,541 9,840 Inter-segment 22 73 -95 - - - Revenue including inter-segment 1,941 6,453 -95 8,299 1,541 9,840 Grid expenses -2,174 -5,343 - -7,517 664 -6,853 Personnel expenses -137 -148 - -285 - -285 Depreciation and amortisation of assets -330 -903 - -1,233 -21 -1,254 Other operating expenses -178 -144 - -322 - -322 Other (gains)/losses -6 -32 - -38 - -38 Total operating expenses -2,825 -6,570 - -9,395 643 -8,752 Inter-segment -22 -73 95 - - - Total operating expenses including inter-segment -2,847 -6,643 95 -9,395 643 -8,752 Share in profit of joint ventures and associates 110 10 - 120 2 122 Operating result -796 -180 - -976 2,186 1,210 Finance income 41 1 - 42 -11 31 Finance expenses -64 -235 - -299 -10 -309 Finance result -23 -234 - -257 -21 -278 Result before income tax -819 -414 - -1,233 2,165 932 Income tax expense 229 125 - 354 -615 -261 Result for the year -590 -289 - -879 1,550 671 Result attributable to: Equity holders of ordinary shares continued operations -647 - - -647 1,237 590 Equity holders of ordinary shares discontinued operations - -320 - -320 320 - Hybrid securities 57 - - 57 - 57 Owners of the company -590 -320 - -910 1,557 647 Non-controlling interests - 31 - 31 -7 24 Result for the year -590 -289 - -879 1,550 671 Basic and diluted earnings per share -3,235 -1,600 -4,835 2,950 Underlying items To be settled in tariffs 2,603 Auction receipts -900 Investment contributions 11 Maintenance of the energy balance -173 Revenue 1,541
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
133
The decrease in the underlying revenues can mainly be explained by:
• The lower costs for redispatch, grid losses, reserve power plants and control power in 2023 result in lower underlying
revenues, since those lower costs will be reimbursed through future tariffs;
• Increased revenues due to ongoing and increasing investments, resulting in a growing regulatory asset base and higher
onshore and offshore revenues which are based upon these asset base values;
• Increased regulatory returns due to an increase in interest rates.
The material differences between underlying financial information and IFRS are hereafter further disclosed:
To be settled in tariffs
Revenue surpluses and deficits resulting from variances related to actual costs or transmission volumes (ex post) and
estimates used to set tariffs (ex ante) are incorporated in the tariffs of subsequent years in both Germany and the
Netherlands. In underlying financial information, these surpluses and deficits are recorded as assets and liabilities,
respectively, under ‘to be settled in tariffs’. The expenses related to these items have to be settled in future tariffs in the
coming years.
The underlying item 'to be settled in tariffs' is related to the revenue stream 'connection and transmission services' and
'offshore' and concerns an increase amounting to EUR 829 million (2022: increase of EUR 2,603 million).
Auction receipts & investment contributions
Auction receipts result from auctioning the available electricity transmission capacity on cross-border interconnections. These
receipts are not at TenneT's free disposal. In accordance with Regulation (EU) 2019/943, auction receipts shall be used to
fulfil the following priority objectives:
a. guaranteeing the actual availability of the allocated capacity including firmness compensation; or
b. maintaining or increasing cross-zonal capacities through optimisation of the usage of existing interconnectors by means
of coordinated remedial actions, where applicable, or covering costs resulting from network investments that are relevant
to reduce interconnector congestion.
In Germany, auction receipts are recognised as interest-free capital on investments and are released over 20 years. The
reversal amounts are applied in the revenue cap of the TenneT TSO GmbH with t-2 offset. Thus, the reversal amount offsets
the depreciation of the investments. When these priority objectives have been adequately fulfilled, auction receipts may be
used as income to be taken into account by the regulatory authorities when approving the methodology for calculating network
tariffs or fixing network tariffs, or both. In the Netherlands, TenneT agreed with its regulator (Autoriteit Consument en Markt) that
investments in interconnectors are no longer financed through the auction receipts as of 2016. The current outstanding
balance of auction receipts will be used in accordance with the aforementioned objectives. On 22 November 2022, the
competence agreement of 2015 between TenneT and the ACM was dissolved. Investments in previous years financed by
using auction receipts are classified as investment contributions and are reported under ‘liabilities’. A periodic amount equal to
the depreciation charges, plus a portion of the operating expenses, is released to the statement of income, following the
release scheme as described above
The underlying item auction receipts is part or revenue stream 'operations of energy exchanges' for a decrease amounting to
EUR 748 million (2022: decrease EUR 900 million). The underlying item investment contribution is part of revenue stream
'other' for an amount of EUR 4 million increase (2022: EUR 11 million increase).
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
134
Maintenance of the energy balance
As system manager of the high-voltage grid in the Netherlands, TenneT receives funds for performing certain statutory
duties, such as the maintenance of the energy balance. The proceeds from these activities (i.e., imbalance settlements) may
only be used after approval by the ACM. Imbalance settlements collected during the year are to be offset in transmission
tariffs in the subsequent year. Consequently, these amounts are recorded as a liability and released in the subsequent year in
the underlying financial information.
As the balancing group coordinator, TenneT TSO GmbH ('TTG') is responsible for balancing the balancing groups in terms of
energy. We balance surplus or shortfall balancing groups by means of control energy and bill the balancing group managers
for the resulting costs. For this billing of balance imbalances, the so-called 'Uniform balancing energy price across control
zones' (reBAP) is used. As a result, TTG receives higher payments from the balancing group managers than TTG pays to the
power plant operators. The resulting additional revenues from the balancing energy billing system are to be deducted from
the grid charges. Analogously, revenue shortages will increase future grid fees.
The underlying item maintenance of the energy balance is part of revenue 'stream maintenance' of the energy balance for an
amount of EUR 161 million decrease (2022: EUR 173 million decrease).
Depreciation and amortisation of assets
Differences in depreciation and amortisation of assets occur due to the difference in accounting treatment of the regulatory
deferral accounts and the related cash flows in order to determine the economic useful life and recoverable amount of the
assets resulting from acquisitions and used for impairment analysis.
Between Underlying and IFRS there is no difference in depreciation method, but the amount of depreciation differs due to an
impairment under IFRS of the NorNed cable in 2015 of EUR 232 million which is not recognised under Underlying.
i Accounting policies applied for underlying financial information
Underlying financial information matches regulatory revenues and expenses in a corresponding reporting period and defers
certain income items until used for investments or tariff reductions.
IFRS
Regulatory
Deferral
Accounts
Underlying
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
135
4 Revenue
2023 Non- Total (EUR million) TSO NL Eliminations Eliminations Total regulated segments Connection and transmission services 1,344 - - 1,344 - 1,344 Maintenance of the energy balance 261 - - 261 - 261 Operation of energy exchanges 275 - - 275 - 275 Offshore (balancing) 345 - - 345 - 345 Revenue to related parties 3 4 - 7 - 7 Other 21 44 - 65 - 65 Inter-segment 6 5 -11 - - - Revenue to TenneT Germany 47 - - 47 -47 - Total IFRS revenue 2,302 53 -11 2,344 -47 2,297 2022 Non- Total (EUR million) TSO NL Eliminations Eliminations Total regulated segments Connection and transmission services 896 - 896 - 896 Maintenance of the energy balance 456 - 456 - 456 Operation of energy exchanges 242 - 242 - 242 Offshore (balancing) 242 - 242 - 242 Revenue to related parties 5 4 9 - 9 Other 27 47 74 - 74 Inter-segment 6 - -6 - - - Revenue to TenneT Germany 22 - 22 -22 - Total IFRS revenue 1,896 51 -6 1,941 -22 1,919
Connection and transmission services
Revenue from connection and transmission services is regulated by the ACM in the Netherlands and includes revenue from
services provided to DSOs and industrial clients (such as resolution of transmission restrictions, congestion management
and reactive power management). Increase in the revenues is mainly explained by the increase in the asset base and its
related costs. The generated revenue of Net op Zee phase 2 is financed through the tariffs and included in this section of
the revenue.
Maintenance of the energy balance
TenneT is responsible to ensure that electricity supply and demand is in balance at all times (i.e. the alternating current
frequency in the power grid must be at 50 Hz continuously). If this balance is significantly disrupted, it may result in a power
outage or even a black-out, depending on the length and severity of the imbalance. To ensure this balance, TenneT contracts
and deploys (among others) reserve and emergency capacity to compensate unexpected fluctuations in supply and demand.
Revenue decreased mainly due to lower energy prices, which resulted in a lower price for the imbalance settlement.
Operation of energy exchanges
This amount includes revenues resulting from the auctioning of cross-border (electricity transmission "interconnection")
capacity and with that the availability which determines the amount of this revenue stream. The majority of the increase in
2023 compared to 2022 was recognised in the long-term auctions, which amounted to an increase of EUR 132 million. This
was due to uncertainties on the market when the annual auction was run in November 2022 and the appetite for these kind
of auctions increased. This increase was for a large extend offset against the short-term auctions, which amounted to a
negative effect of EUR 100 million.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
136
Offshore
Offshore revenues are regulated by ACM in the Netherlands. The offshore revenues are a government grant obtained from
the ministry of Economic Affairs & Climate Policy and is based on the revenue decision of the ACM. Offshore revenue
increased mainly due to an increase of the asset base for Net op Zee phase 1 and assets that since 2023 generate revenues
for the entire year, compared to 2022. Revenues furthermore increased due to a higher WACC.
i Accounting policy
Revenue primarily represents the sales value derived from the connection and transmission of electricity together with the
sales value derived from the provision of other services to customers during the year. Revenue from contracts with
customers is recognised when control of the goods or services is transferred to the customer at an amount that reflects the
consideration to which the Group expects to be entitled in exchange for those goods or services.
Revenues arise from contracts with a single performance obligation. The assessment of unbilled connection and
transmission services supplied to customers between the date of the last meter reading and year-end is subject to significant
judgement. This assessment is primarily based on expected consumption and weather patterns.
If revenue received or receivable exceeds the maximum annual amount as determined by the national regulator, ACM, a
downward adjustment will be made to future tariffs to reflect this over-recovery. Under IFRS, no liability is recognised since
this adjustment relates to the provision of future services. Similarly, no asset is recognised under IFRS when a regulator
permits increases to be made to future tariffs in respect of under-recovery.
Offshore revenues in the Netherlands are accounted for in accordance with the recognition and measurement principles of
IAS 20. These revenues are not recognised until there is reasonable assurance that the Group satisfies the conditions
attached to receiving this income.
5 Operating expenses
Grid expenses
(EUR million) 2023 2022 System services 432 927 Connection and transmission services 715 803 Maintenance of the energy balance 138 293 Other ancillary services 23 -10 Total ancillary services 1,308 2,013 Maintaining and operating transmission grids 177 161 Total 1,485 2,174
Following mild weather, societal savings of fossil fuels, a diversification of gas supplies including LNG to Europe, and
increased solar and wind output energy prices dropped significantly and the energy markets became less volatile in 2023.
As such, our ancillary services costs decreased from EUR 2,013 million in 2022, to EUR 1,308 million in 2023. The grid
expenses will be reimbursed through future tariffs, which will result in grid tariffs in future years. Please refer to note 3 for
further details about differences between IFRS and Underlying financial information.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
137
Personnel expenses (EUR million) 2023 2022 Salaries 242 187 Social security contributions 27 21 Pension charges defined benefit plans - - Pension charges other plans 36 34 Other personnel expenses 31 20 Capitalised costs for (in)tangible fixed assets -154 -125 Total 182 137 Average internal workforce in FTEs (almost all are employed in the Netherlands) 2,652 2,320
Personnel increased mainly due to increasing FTEs. Furthermore salaries has increased to compensate employees for
increased inflation. Almost all employees (except for 16 FTEs (2022: 14 FTEs)) work in the Netherlands.
Key management remuneration
Members of the Executive Board and Supervisory Board are regarded as key management. Key management remuneration
relates to both continued and discontinued operations.
Aggregate remuneration of members of the Supervisory Board and Executive Board is as follows:
Fixed Committee Supervisory Board (EUR thousand) Total remuneration fee 2023 155 80 235 2022 128 61 189 Fixed Executive Board (EUR thousand) Pension cost Total remuneration 2023 1,753 274 2,091 2022 1,682 409 2,091
The entire Executive Board consists of statutory directors. Pension remuneration equals (i) the contributions payable to the
defined contribution plan for service rendered in the period or (ii), for defined benefit plans, the current service cost and,
when applicable, past service cost. We refer to the Supervisory Board Report for a more detailed disclosure on
remuneration.
Other operating expenses (EUR million) 2023 2022 Accommodation and office expenses 57 48 Consultancy expenses 48 32 Hiring of temporary personnel 48 49 Travel and living expenses 19 8 Other expenses 46 41 Total 218 178
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
138
Other operating expenses mainly increased due increased portfolio and increased FTEs which lead to higher travel expenses
and higher expenses for IT. Furthermore consultancy expenses increased, due to possible sale of TenneT Germany.
Auditors' remuneration
The fees listed in the table below relate to the services provided to the Company and its consolidated Group entity by
Deloitte Accountants B.V., the Netherlands, the external auditor as referred to in section 1(1) of the Dutch Accounting Firm
Oversight Act (Dutch acronym: Wta), as well as by other Dutch and non-Dutch Deloitte legal entities, including their tax
services and advisory groups.
(EUR thousand) 2023 2022 Audit of the financial statements Deloitte Accountants B.V. 879 938 Deloitte GmbH Wirtschaftsprüfungsgesellschaft 789 718 Total audit of the financial statements 1,668 1,656 Other assurance services Deloitte Accountants B.V. 255 390 Deloitte GmbH Wirtschaftsprüfungsgesellschaft 409 278 Total other assurance services 664 668 Total audit fees 2,332 2,324
The costs related to Deloitte GmbH Wirtschaftsprüfungsgesellschaft are part of discontinued operations, relate to note 2.
The fees for the audit of the financial statements include the audit fees related to (i) TenneT’s Integrated Annual Report,
(ii) any statutory financial statements of subsidiaries and (iii) services that are normally provided by the auditor in connection
with their audit mandate.
The other assurance fees include the aggregate fees invoiced for assurance and services for other audit services, which
generally only the company’s independent auditor can reasonably provide, such as comfort letters, regulatory statements
and audits of grant statements.
i Accounting policy
TenneT has energy purchase contracts for the forward purchase of energy or gas that are used to satisfy physical delivery
requirements to customers or for the energy that the group uses itself. Substantially all our costs of purchasing electricity for
supply to customers are recoverable at an amount equal to cost. The timing of recovery of these costs can vary between
financial periods leading to an under- or over-recovery within any particular year that can lead to large fluctuations in the IFRS
income statement. We follow approved policies to manage price and supply risks for our commodity activities.
TenneT's energy procurement risk management policy and delegations of authority govern its commodity trading activities
for energy transactions. The purpose of this policy is to ensure we transact within pre-defined risk parameters and only in the
physical and financial markets where we or our customers have a physical market requirement. In addition, state regulators
require TenneT to manage commodity risk and cost volatility prudently through diversified pricing strategies. In both the
Netherlands and Germany, we are required to file a plan outlining our energy procurement strategy to be approved by the
respective regulator. In certain cases, we might receive guidance with regard to specific hedging limits.
Energy purchase contracts for the forward purchase of electricity that are used to satisfy physical delivery requirements to
customers, or for energy that TenneT uses itself, meet the expected purchase or usage requirements of IFRS 9. They are,
therefore, not recognised in the financial statements until they are realised. In note 28 of the consolidated financial
statements commitments under such contracts have been disclosed as 'Grid related commitments'.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
139
Operating expenses are expenses incurred during regular day-to-day business, such as system services, connection and
transmission services, personnel expenses, depreciation and accommodation and travel costs. Operating expenses are
recorded in the statement of income in the period they are incurred.
6 Other (gains)/losses
The net result on other (gains)/losses mainly consists of sold subsidiaries Novec GmbH and Globalways GmbH partly offset
by impairment on IT projects.
7 Finance income and expenses
Finance income
This mainly relates to interest on bank accounts. For previous year finance income mainly relates to interest on a settled
court case.
Finance expenses
(EUR million) 2023 2022 Interest on borrowings and credit facilities 394 245 Capitalised interest on assets under construction -25 -12 Interest on provisions 8 6 Interest on lease liability 1 1 Other finance expenses 46 11 Subtotal interest expenses 424 251 Allocated to TenneT Germany 277 187 Total interest expenses 147 64
Gross finance expenses mainly increased due to bonds of 2022 that are recognised in 2023 for the first entire year. These
bonds had higher interest rates as most of the bonds are issued before 2022. Interest on provisions increased due to the
increased provisions and increased discount rates. Interest allocated to TenneT Germany relate to intercompany loans issued
to TenneT Germany.
i Accounting policy
Finance expenses comprise mainly interest expenses, such as interest and fees on borrowings and credit facilities, interest
on provisions and interest on lease liabilities. Finance expenses are recorded in the statement of income using the effective
interest rate method.
8 Corporate income tax
TenneT strives to comply with all applicable tax legislation in a socially responsible manner, maintaining among the highest
levels of transparency, quality and integrity. Management responsibility and oversight of our tax strategy lies with our 'Chief
Financial Officer' (CFO), the Director Financial Governance and Services and the Head of Tax who monitor our tax activities
and report to the Executive Board and the Audit, Risk and Compliance Committee.
Our tax strategy is fully consistent with our corporate strategy. Building a transparent relationship with tax authorities based
on mutual trust is an integral part of this strategy. We have built and are continuously improving our tax internal control
framework system to be 'in control' and of mitigate tax risks and to allow the company to demonstrate to all its stakeholders,
including the tax authorities, that the company complies with all applicable laws and regulations.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
140
Corporate income tax is payable in the Netherlands and Germany. In the Netherlands, we recently extended the so called
'horizontal monitoring agreement' with the Dutch tax authorities. Based on transparency and mutual trust, this agreement is
meant to ensure that tax positions are fully disclosed and agreed on in advance, therefore generally no tax audits are
performed by the Dutch tax authorities. The corporate income tax returns in the Netherlands have been filed up to and
including 2021. Corporate income tax paid in the Netherlands in 2023 amounted to EUR 74 million.
In Germany, corporate income and trade tax returns for all German entities have been filed up to and including fiscal year
2022. In 2023, we paid EUR 66 million of corporate income and trade tax in Germany. German tax receivables and payables
are part of assets classified as held for sale (refer to note 2). German tax expenses are part of discontinued operations (refer
to note 2).
Key components of corporate income tax expense are:
Consolidated income statement (EUR million) 2023 2022 Current income tax charge 157 86 Deferred tax -158 -315 Income tax expense reported in the statement of income -1 -229 Consolidated statement of comprehensive income (EUR million) 2023 2022 Effect of remeasurement of defined benefit pensions 9 -48 Income tax charged directly to other comprehensive income 9 -48
Corporate income tax on results has been applied at the rates prevailing in the respective countries. In the Netherlands, a
statutory corporate income tax rate of 25.8% was applied, while in Germany, on average, a marginal statutory corporate
income tax rate of 30.1% was applied (including trade tax levied by municipalities or 'Gewerbesteuer'). Reconciliation
between corporate income tax expense and the accounting result before income tax multiplied by a statutory corporate
income tax rate of 25.8% is as follows:
(EUR million) 2023 2022 Result from continued operations before tax 66 -819 Result from discontinued operations before tax (note 2) 905 -414 Total result before tax 971 -1,233 Statutory corporate income tax rate in the Netherlands of 25.8% (2022: 25.8%) 251 -318 Effect of discontinued operations (including tax rate effect) 32 -17 Adjustment in respect to current and deferred tax of previous years - 1 Non-deductible costs 13 10 Non-taxable income -36 -30 At the effective corporate income tax rate of 27% (2022: 29%) 260 -354 Income tax expense reported in statement of profit and loss -1 -229 Income tax expense attributable to discontinued operations (note 2) 261 -125 Total income tax expenses 260 -354
The main reason for the slightly higher effective tax rate of 26% compared to the Dutch statutory rate of 25.8% is the effect
of the non-deductible costs and the effect of the discontinued operations (including the higher tax rate effect of the
discontinued operations), which both increase the effective tax rate. This effect is largely compensated by the effect of the
non-taxable income (due to Dutch participation exemption), which decreases the effective tax rate.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
141
Deferred taxes relate to the following:
Statement of financial position Held for sale Statement of income (EUR million) 2023 2022 2023 2023 2022 Auction receipts -41 -41 -56 34 -6 Investment contributions -62 -69 -4 -1 -2 Tariffs to be settled 566 327 -13 -179 -302 Depreciation for tax purposes 113 -108 -342 -8 - Provisions 10 262 346 -2 -3 Result allocation to hybrid securities -6 -6 - - - Receivable/payable - 343 342 - - Other -1 -9 -3 -2 -2 Net deferred tax assets/(liabilities) 579 699 270 Deferred tax expense/(income) -158 -315
Deferred taxes are presented in the statement of financial position as follows:
(EUR million) 2023 2022 Deferred tax assets from continuing operations 580 711 Deferred tax liabilities from continuing operations -1 -12 Deferred tax, net from continuing operations 579 699 Deferred tax assets from assets held for sale (note 2) 272 - Deferred tax liabilities from liabilities held for sale (note 2) -2 - Deferred tax, net from assets and liabilities held for sale 270 - Deferred tax, net 849 699
Movements in deferred tax positions are set out below.
(EUR million) 2023 2022 At 1 January 699 139 Tax expense during the period recognised in statement of income from continued operations 158 315 Tax expense during the period recognised in statement of income from discontinued operations -19 293 Transfer to current tax payable 15 14 Deconsolidation 2 - Tax income during the period recognised in equity -15 -14 Tax income during the period recognised in other comprehensive income 9 -48 Transfer to held for sale (note 2) -270 - At 31 December 579 699
Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become
probable that future taxable profits will allow the deferred tax asset to be recovered. There are no unrecognised carry-forward
losses per 31 December 2023 (2022: nil).
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
142
Pillar Two legislation
The TenneT Group has applied the temporary exception as issued by the IASB from the accounting requirements for
deferred taxes in IAS 12. Accordingly, the TenneT Group neither recognises nor discloses information about deferred tax
assets and liabilities related to Pillar Two income taxes.
In the Netherlands, the Pillar Two legislation is enacted, and will be effective as of 2024 and will be applicable to TenneT.
Since TenneT is mainly operating in the Netherlands and Germany with statutory rates of 25.8% and 30.1% respectively.
Based on a safe harbour analyses on the current year and the previous year financial information, the effective tax rate for
TenneT Group in the Netherlands and Germany was not below 15%. Therefore, it is expected and estimated that the Pillar
Two legislation will not lead to exposure for TenneT Group. The Pillar Two exposure will be further assessed in 2024.
i Accounting policy
The corporate income tax charge for the period is recognised in the statement of income, equity or the statement of
comprehensive income, in accordance with the relevant accounting treatment of the related transaction. The corporate
income tax charge comprises both current and deferred tax.
Current income tax assets and liabilities are measured at the amount expected to be recovered from, or paid to, the tax
authorities. The tax rates and tax laws used to calculate these amounts are those enacted or substantively enacted at the
reporting date in those countries where we operate and where we generate taxable income.
Deferred tax is recognised using the liability method with respect to temporary differences between the tax bases of assets
and liabilities and their respective carrying amounts for financial reporting purposes at the reporting date. Deferred tax assets
and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is
settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date in the
relevant jurisdictions.
Deferred tax is generally recognised in respect of all temporary differences, the carry-forward of unused tax credits and any
unused tax losses. Deferred tax assets (also in association with investments in subsidiaries, associates and interests in joint
arrangements) are recognised to the extent that it is probable that taxable result will be available against which the deductible
temporary differences and the carry-forward of unused tax credits and unused tax losses can be utilised. This assessment is
performed annually. Deferred tax is not recognised for the temporary differences arising from the initial recognition of goodwill
or an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither
the accounting profit nor taxable profit or loss.
Deferred tax assets and liabilities are recognised on a gross basis in the statement of financial position unless:
• the entity has a legally enforceable right to set off current tax assets against current tax liabilities and
• the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on
either:
• the same taxable entity, or
• different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realise the
assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax
liabilities or assets are expected to be settled or recovered.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
143
9 Earnings per share
Earnings per share were calculated by dividing results for the year attributable to ordinary shareholder of the Group, after
adjustment for the distribution on hybrid securities, by the weighted average number of ordinary shares outstanding during
the year. The following table reflects the income and share data used for the basic and diluted earnings per share
calculations.
(EUR million) 2023 2022 Result attributable to ordinary equity holders of the parent: Continuing operations 10 -647Discontinuing operations 585 -320Result for the year attributable to equity holders of the company adjusted for the allocation to hybrid securities 595 -967 Weighted average number of ordinary shares in issue (in thousands) 200 200
i Accounting policy
Calculation of earnings per share is based on the result for the year attributable to TenneT's sole shareholder and the
weighted average number of shares outstanding during the year.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
144
10 Tangible fixed assets
High-voltage High-voltage Assets under (EUR million) Other assets Total substations connections construction Cost At 1 January 2022 11,732 10,145 1,151 7,600 30,628 Additions 252 331 -6 3,825 4,402 Transfers 996 1,071 163 -2,230 - Changes in estimations -170 -120 - -22 -312 Impairment - - - -9 -9 Disposals -92 -11 -5 -11 -119 Transfer to held for sale (note 2) - - -12 - -12 At 31 December 2022 12,718 11,416 1,291 9,153 34,578 Additions 242 174 201 6,986 7,603 Transfers 2,144 1,464 45 -3,653 - Changes in estimations -23 399 - 14 390 Deconsolidation of subsidiaries (note 13) - - -13 - -13 Acquisition of a subsidiary (note 13) - - 3 - 3 Disposals -23 -40 -8 -2 -73 Transfer to held for sale (note 2) -10,028 -7,927 -1,015 -8,456 -27,426 At 31 December 2023 5,030 5,486 504 4,042 15,062 Depreciation and impairment At 1 January 2022 3,489 2,878 450 - 6,817 Depreciation for the year 555 407 60 - 1,022 Disposals -73 -9 -2 - -84 At 31 December 2022 3,971 3,276 508 - 7,755 Depreciation for the year 628 441 67 - 1,136 Deconsolidation of subsidiaries (note 13) - - -2 - -2 Acquisition of a subsidiary (note 13) - - 4 - 4 Disposals -16 -38 -2 - -56 Transfer to held for sale (note 2) -3,253 -2,018 -268 - -5,539 At 31 December 2023 1,330 1,661 307 - 3,298 Net book value: At 1 January 2022 8,243 7,267 701 7,600 23,811 At 31 December 2022 8,747 8,140 783 9,153 26,823 At 31 December 2023 3,700 3,825 197 4,042 11,764
High-voltage substations include onshore and offshore transformer and converter stations. High-voltage connections consist
of overhead and underground connections. Unlike lands for substations, lands surrounding high-voltage pylons and cables
are generally not owned by TenneT. Other tangible fixed assets consist of office buildings, office ICT equipment and other
company assets.
Assets under construction include investments new build onshore and offshore transformer and converter stations and
onshore lines and offshore platforms and (subsea) cables. We refer to our website for more details.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
145
In 2023 the discount rate used for the decommissioning provision was between 2.328% and 2.443% (2022: 2.086% and
2.942%) for offshore wind farms (OWF) connections consisting of offshore platforms and (subsea) cables, (refer to note 24).
The discount rate was adjusted in 2023 to reflect current market assessments of the time value of money and the risks
specific to this liability. The main part of the decommissioning provision was recognised as part of the carrying value of the
related asset. Besides the change of the discount rate, also changes in inflation, changes in underlying assumptions and
updated price levels are included in the change of estimates.
In 2023 an analysis within tangible fixed assets led to a change in the presentation of converter halls. To improve
understandability they were reclassed from other assets to high-voltage substations, accordingly costs of EUR 138 million
and depreciation of EUR 51 million were transferred.
The amount of borrowing costs capitalised during 2023 is disclosed in note 7. The effective interest rate used to determine
the amount of borrowing costs capitalised was 1.86% (2022: 1.34%).
Annual impairment trigger analyses on tangible assets, and where applicable testing for impairment, is done at the individual
asset level, or smallest identifiable group of assets that generates cash inflows that are largely independent of the cash
inflows from other assets or groups of assets (cash generating units (CGUs)). For our three operating segments this consists
of:
• TSO Netherlands (One large CGU consisting of regulated on- and offshore assets, and the NorNed cable, considered for
impairment (triggers), on individual level);
• TSO Germany (One large CGU consisting of regulated on- and offshore assets), part of discontinued operations and
assets held for sale (refer to note 2);
• Non-regulated companies (Several small CGUs as well as individual assets).
The non-regulated companies also include the Joint Venture investment in the BritNed cable, tested, for impairment
(triggers), on individual level.
Off balance commitments related to tangible fixed assets are disclosed in note 31.
+ Key estimates and assumptions
To calculate depreciation amounts, the following useful lives of various asset categories were assumed:
Estimated useful lives tangible fixed assets 2023 2022 Substations Switches and offshore converter stations 20-35 20-35 Offshore platforms 20-35 20 Security and control equipment 10-20 10-20 Power transformers 20-35 20-35 Capacitor banks 20-35 20-35 Telecommunications equipment 10-20 10-20 Connections Pylons/lines 35-40 35-40 Cables (subsea and underground) 20-40 20-40 Other Office buildings 40-50 40-50 Office IT equipment 3-5 3-5 Process automation facilities 5 5 Other company assets 5-10 5-10
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
146
For assets in the Netherlands useful lives of offshore platforms and (subsea) cables have been extended with 5 years, from
1 July 2023 onwards, resulting in a decrease of the depreciation. New offshore platforms have a useful life of 35 years.
Residual values, useful lives and methods of depreciation of assets are reviewed at each financial year-end and adjusted
prospectively, if appropriate.
i Accounting policy
Tangible fixed assets are valued at cost, net of accumulated depreciation and accumulated impairment losses, if any. Such
costs include the cost of replacing part of the asset and borrowing costs for long-term construction projects if the
recognition criteria are met. When material parts of the asset are required to be replaced at intervals, such parts are
recognised as individual assets with specific useful lives and depreciated accordingly. Likewise, when major maintenance is
performed, its cost is recognised in the carrying amount of the asset as a replacement, if the recognition criteria are met. All
other repair and maintenance costs are recognised in the statement of income as incurred. The present value of the
expected cost for the decommissioning of an asset after its use is included in the cost of the respective asset if the
recognition criteria for a provision are met. Depreciation is calculated on a straight line basis.
An asset is impaired or disposed or when no future economic benefits are expected from its use. Any gain or loss arising on
derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the
asset) is included in the statement of income when the asset is impaired or disposed.
General and specific borrowing costs directly attributable to the acquisition, construction or production of the tangible fixed
assets, are added to the cost, until such time that the assets are substantially ready for their intended use or sale. No
borrowing costs are capitalised if and to the extent such borrowing costs are directly compensated in the year of
construction.
11 Right of use assets and lease liabilities
Right of use assets
Other right-of-use (EUR million) Land & buildings Power plants NordLink cable Total assets Cost At 1 January 2022 117 81 159 76 433 Additions 32 - - 6 38 Disposal - - - -8 -8 Remeasurement 13 98 355 3 469 Depreciation -21 -70 -73 -17 -181 Transfer to held for sale (note 2) - - - -3 -3 At 31 December 2022 141 109 441 57 748 Additions 9 397 - 16 422 Disposal -2 - - 3 1 Remeasurement 9 -14 -10 2 -13 Depreciation -23 -64 -71 -18 -176 Transfer to held for sale (note 2) -65 -428 -360 -24 -877 At 31 December 2023 69 - - 36 105
Leased Land & Buildings
Land is mainly leased to set up pylons for electricity transmission lines and for constructed substations. These contracts run
for a period of 18-142 years. Buildings are leased mainly as office space and for storage space. These contracts run for a
period of 1-22 years.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
147
Lease contracts for buildings are negotiated individually and include a range of different terms and conditions, including
extension options.
Lease payments are in substance fixed, only a minority of the lease contracts contain clauses with reference to the consumer
price index (CPI) index.
Leased power plants
Leased power plants are as of 2023 part of assets held for sale refer to note 2.
Till effective date of potential sale, TenneT is committed to the use of grid reserve power plants representing lease
commitments according to IFRS 16. The commitments had a maturity of 1-10 years (2022: 1-3 years) and could be
prolonged depending on the decision of regulatory authorities.
Lease payments were in substance fixed and TenneT had no power plant leases which contained variable lease payments.
Lease contracts did not include any clauses with reference to an index or contractual rate.
Leased NordLink cable
The leased NordLink cable is as of 2023 part of held for sale refer to note 2.
Till effective date of potential sale, TenneT leases the NordLink submarine cable from NOKA to transport electricity between
Germany and Norway. The lease contract was extended which resulted in a remeasurement and had a remaining maturity of
5 years and no extension option according to IFRS 16, was included in the lease contract. Lease payments were in
substance fixed.
Leased others
Telecom lease contracts (including fibreglass cables) run for a period between 5 and 30 years. For qualifying employees
TenneT leased cars with a lease term between 1 and 8 years. TenneT does not purchase or guarantee the value of leased
telecom assets or leased cars.
TenneT had several contracts with termination/extension options. In determining the lease term all relevant facts and
circumstances that create a significant economic incentive to exercise those options are taken into consideration.
TenneT had no material 'sub lease' contracts in 2023 and 2022 and therefore no material income from subleasing right-of-
use assets. TenneT has not entered into any sale and leaseback contracts. No lease contracts with residual value guarantees
are entered into. No lease contracts have been concluded that contain restrictions or covenants.
Lease payments were in substance fixed, only some of the lease contracts had pre-determined lease payment changes.
Short-term leases and leases of low value
TenneT leased certain other assets with terms up to 1 year. TenneT considers these assets to be of low-value or short-term
in nature and therefore no right of use assets and lease liabilities were recognised for these leases. The aggregate total
of short-term lease expenses for more than one month and low value assets lease expenses amounted to EUR 2 million
(2022: EUR 2 million).
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
148
Lease liability
2023 2022 (EUR million) Current Non-current Total Current Non-current Total Lease liability Land & buildings 10 59 69 20 121 141 Lease liability power plants - - - 53 62 115 Lease liability NordLink - - - 66 349 415 Lease liability other leases 6 31 37 16 42 58 Total 16 90 106 155 574 729 Lease liability Lease liability Lease liability Lease liability (EUR million) Land & Total power plants NordLink other leases buildings At 1 January 2022 118 81 130 75 404 Addition 28 - - 6 34 Interest 1 - 3 1 5 Disposal - - - -8 -8 Remeasurement 12 98 355 5 470 Repayments -18 -64 -73 -18 -173 Transfer to held for sale (note 2) - - - -3 -3 At 31 December 2022 141 115 415 58 729 Addition 9 397 - 16 422 Interest 2 4 11 1 18 Disposal - -4 - -1 -5Remeasurement 9 -14 -10 2 -13 Repayments -26 -56 -80 -15 -177 Transfer to held for sale (note 2) -66 -442 -336 -24 -868At 31 December 2023 69 - - 37 106
The total cash outflow (including low value items and short-term leases) in 2023 was EUR 179 million
(2022: EUR 223 million). There are no material future cash outflows of leases not yet commenced but to which TenneT
is committed.
The undiscounted maturity analysis of lease liabilities is disclosed in note 28.
The table below reconciles the costs in the profit and loss related to lease liabilities.
(EUR million) 2023 2022 Depreciation expense of right-of-use assets -16 -14 Short-term lease expenses - -2 Interest expense on lease liabilities -1 -1 Total amount recognised in profit and loss -17 -17
Below the discounted maturity of the lease liability:
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
149
(EUR million) 2023 2022 <1 month 2 13 1 to 3 months 2 22 3 to 12 months 12 146 1 to 5 years 42 404 More than 5 years 48 144 Total discounted maturity 106 729
i Accounting policy
At inception of a contract, TenneT assesses whether a contract conveys the right to control the use of an identified asset for
a period in exchange for consideration, in which case it is classified as a lease.
TenneT recognises a right-of-use asset and a lease liability at the lease commencement date. The asset is initially measured
at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the
commencement date, plus any initial direct costs incurred and an estimate of costs to restore the underlying asset, less any
lease incentives received.
The lease asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of
the end of the useful life of the right-of-use asset or the end of the lease term, considered to be indicated by the lease term.
The lease asset is periodically adjusted for certain remeasurements of the lease liability and impairment losses (if any).
The lease liability is initially measured at the present value of outstanding lease payments, discounted using the interest rate
implicit in the lease or, if that rate cannot be readily determined, TenneT's incremental borrowing rate. If available, the interest
rate implicit in the lease is used for discounting (e.g. car leases). Otherwise the incremental borrowing rate is used and
shown in the table below.
2023 2022 Under 5 years 2.6% 0.0%-0.5% 5-10 years 3.2% 0.1%-1.6% 10-15 years 3.5% 0.4%-2.2% 15-25 years 3.7% 0.7%-2.5% Above 25 years 3.9% 1.1%-2.8%
After initial recognition, the lease liability is measured at the present value of the remaining lease payments using the effective
interest method and is remeasured when there is a change in future lease payments arising from a change in an index or rate
or if TenneT changes its assessment of whether it will exercise a purchase, extension or termination option. A corresponding
adjustment is made to the carrying amount of the right-of-use asset with any excess over the carrying amount of the asset
being recognised as profit or loss.
Short-term leases and leases of low value
TenneT has elected not to recognise right-of-use assets and lease liabilities for short-term leases (leases with a term of
12 months or less) and leases of low-value assets. TenneT recognises the lease payments associated with these leases as
an expense on a straight-line basis over the lease term or another systematic basis if that basis is more representative of the
pattern of the lessee’s benefit. Furthermore, TenneT has elected not to recognise the lease of intangible assets.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
150
12 Intangible assets
Other Intangible Customer (EUR million) Goodwill Software intangible assets under Total contracts assets construction Cost At 1 January 2022 34 357 64 47 73 575Additions - 3 - - 88 91 Transfers - 46 - - -46 - At 31 December 2022 34 406 64 47 115 666 Additions - 12 - 1 114 127Transfers - 117 - - -117 - Impairment - - - - -2 -2 Deconsolidation of subsidiaries (note 13) -3 - - -6 - -9 Transfer to held for sale (note 2) -28 -115 - -2 -39 -184 At 31 December 2023 3 420 64 40 71 598 Amortisation and impairment At 1 January 2022 - 242 62 17 - 321 Amortisation for the year - 35 2 2 - 39 At 31 December 2022 - 277 64 19 - 360 Amortisation for the year - 45 - 1 - 46 Transfer to held for sale (note 2) - -60 - -2 - -62 At 31 December 2023 - 262 64 18 - 344Net book value: At 1 January 2022 34 115 2 30 73 254 At 31 December 2022 34 129 - 28 115 306 At 31 December 2023 3 158 - 22 71 254
At 31 December 2023 goodwill was allocated to the cash generating units (CGUs) in the following operating segments: TSO
Netherlands (EUR 3 million). At 31 December 2022 also goodwill was allocated to the TSO Germany CGU (EUR 24 million)
and non-regulated activities (EUR 7 million). Please refer to note 2 and note 13 for details on change of goodwill.
During 2023 EUR 39 million (2022: EUR 46 million) of software was internally developed.
Additions to intangible assets under constructions mainly relate to customising activities of a new ERP (enterprise resource
planning) system and other software systems.
+ Key estimates and assumptions
Estimated useful lives intangible assets Years Goodwill Indefinite Software 3-12 Customer contracts 10-14 Purchased rights to use land 25-45 Other 5-15
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
151
Intangible assets, with the exception of goodwill, are assumed to have a fixed useful life within the ranges outlined above and
are amortised over this useful life. The useful life is re-assessed each reporting period. Intangible assets are amortised on a
straight line basis, as this best reflects the use of the asset.
Additions to intangible assets under construction relate to a variety of software projects including the continuing customizing
activities of a new ERP (enterprise resource planning) system.
Goodwill is assumed to have an indefinite useful life and is therefore not amortised, but is tested for impairment annually or
more frequently, if events or changes in circumstances indicate a triggering event, either individually or at CGU level.
Impairment testing of goodwill
For the purpose of annual impairment testing, goodwill acquired in a business combination is allocated to each of the CGUs.
For our three operating segments this consists of:
• TSO Netherlands (One large Cash Generating Unit consisting of regulated on- and offshore assets)
• TSO Germany (One large Cash Generating Unit consisting of regulated on- and offshore assets) (part of discontinued
operations and assets held for sale, refer to note 2)
• Non-regulated companies (Several small Cash Generating Units, refer to note 2)
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate
that reflects our assessment of current market conditions in respect of the time value of money and the risks specific to the
asset. In determining fair value less costs of disposal, an appropriate valuation model is used, if no recent market
transactions can be identified.
The impairment calculation is based on detailed projections, which are prepared separately for each of the CGUs to which
the individual assets are allocated. The projections take into account current regulatory parameters, considering expected
future regulatory developments. Management believes that the resulting cash flows can be determined reliably and that they
give an appropriate reflection of the CGU's cash flow generating potential.
The recoverable amount of the Germany CGU was determined based on a value-in-use calculation using cash flow
projections following our investment portfolio. The pre-tax discount rate applied to cash flow projections was 6.0% (2022:
6.7%). The cash flows were estimated on the basis of regulatory allowed returns and invested capital, based on TenneT’s
business plan and a transition period to reach a steady state. The terminal value is determined by the invested capital
(adjusted for regulatory minus IFRS NBV of tangible fixed assets). We concluded that the recoverable amount was
significantly in excess of the carrying value and as such no impairment loss needed to be recognised and as such no
impairment is required.
i Accounting policy
Intangible assets are measured at acquisition cost on initial recognition. The cost of intangible assets acquired in a business
combination is recognised at fair value at the date of acquisition. Following initial recognition, intangible assets are carried at
cost less any accumulated amortisation and accumulated impairment losses. Except for capitalised development costs,
internally generated intangible assets are not capitalised and expenses are reflected in the statement of income in the period
in which they incur.
Goodwill is initially measured at cost and represents the excess (i) of the consideration transferred over (ii) TenneT’s interest in
the value of the net identifiable assets, liabilities and contingent liabilities of the acquiree and the amount of the non-
controlling interest in the acquiree. After initial recognition, goodwill is measured at cost less accumulated impairment losses.
At each reporting date, we assess whether there is an indication that an asset may be impaired. If any indication exists, or
when annual impairment testing for an asset is required, the asset’s recoverable amount is estimated. The recoverable
amount is the higher of an asset’s or CGU’s fair value less costs of disposal and its value in use. If the carrying amount of an
asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable
amount.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
152
13 Business combinations and changes in consolidated entities
Mergers and acquisitions
As per 1 September Relined B.V. has acquired Nederlands-Duitse Internet Exchange B.V. for a not material purchase price.
As per 25 October TenneT Holding B.V. established together with Gasunie N.V. National Energy Information Services B.V.
Both shareholders have 50% of the shares.
Assets and liabilities classified as held for sale
Assets and liabilities classified as held for sale entirely mainly relate to TenneT Germany. The Group holds per
31 December 2023 100% interest in TenneT Germany. Please refer to note 2.
Furthermore the assets and liabilities of NOVEC B.V. are classified as held for sale. Please refer to note 2.
As per 31 December 2022 the assets and liabilities classified as held for sale fully relate to NOVEC GmbH.
Divestments
At 27 November 2023 Relined GmbH sold Globalways GmbH to Zayo Infrastructure Deutschland GmbH, located in
Frankfurt, Germany for a price of EUR 24 million, this resulted in a net gain of EUR 2 million.
At 30 November 2023 NOVEC B.V. sold NOVEC GmbH to Phoenix Tower International, located in Boca Raton, FL, USA, for
a price of EUR 11 million, this resulted in a net gain of EUR 10 million.
i Accounting policy
Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the
aggregate of assets and liabilities measured at their acquisition-date fair value (with a limited number of specified exceptions)
including the amount of any non-controlling interest in the acquiree. For each business combination, we decide whether to
measure the non-controlling interest in the acquiree at fair value or at the proportionate share of the acquiree’s identifiable net
assets. Acquisition-related costs are expensed as incurred in connection with an acquisition and included in other operating
expenses (see note 5).
Non-current assets held for sale are defined as non-current assets (other than financial instruments or property investments)
immediately available for sale and highly probable to be sold within a year. Non-current assets held for sale have been stated
at the lower of (i) the asset’s carrying value and, (ii) fair value less costs of disposal.
Acquisitions
The company accounts for business combinations using the acquisition method when control is transferred to the group.
The consideration transferred in the acquisition is generally measured at fair value, as are the identifiable net assets acquired
and the liabilities assumed. Transaction costs are expensed as incurred. Any contingent consideration is measured at fair
value at the acquisition date and is initially presented in long-term provisions. When the timing and amount of the
consideration become more certain, it is reclassified to accrued liabilities. If the contingent consideration that meets the
definition of a financial instrument is classified as equity, it is not remeasured and settlement is accounted for within equity.
Otherwise, subsequent changes in the fair value of the contingent consideration are recognised in the Consolidated
statements of income.
Changes to the initial fair value of the acquired assets and liabilities, based on new information about the circumstances at
the acquisition date, can be made up to twelve months after the acquisition date.
Divestments
Upon loss of significant influence over the business combinations, any retained investment is valued at fair value. Any
difference between the carrying amount of the investment upon loss of significant influence and the fair value of the retained
investment and proceeds from disposal is recognised in the statement of income.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
153
Upon loss of control, the company derecognises the assets and liabilities of the subsidiary, any non-controlling interests and
the other components of equity related to the subsidiary, any surplus or deficit arising from the loss of control is recognised in
the consolidated statement of income. If the company retains any interest in the previous subsidiary, such interest is
measured at fair value at the date the control is lost. Subsequently it is accounted for as either an equity-accounted investee
(associate) or as a financial asset, depending on the level of influence retained. Further information on loss of control can be
found in discontinued operations and assets classified as held for sale (refer to note 2).
14 Investments in joint ventures and associates
Joint ventures
TenneT has, directly or indirectly, 50% equity stakes in BritNed Development Ltd. ('BritNed'), Reddyn B.V., VertiCer B.V.,
NED B.V. and Tensz B.V. We have a 20% equity stake in Equigy B.V. For the investment in Equigy B.V., joint control is
exercised, despite unequal equity stakes. Therefore this investment is classified as joint venture. As of 25 October 2023
TenneT has a 50% participation in National Energy Information Services B.V. (NEIS).
These investments are classified as joint ventures, for which only the investment in BritNed (legal seat: Arnhem,
the Netherlands) is considered as an investment of material value. Other joint ventures are considered immaterial per
31 December 2023 and are therefore not further disclosed. TenneT's share in result (which is equal to other and total
comprehensive income) of these immaterial joint ventures amounted to EUR 2 million in 2023 (2022: EUR 1 million).
As per 31 December 2023 TenneT has, directly or indirectly, also 50% stakes in DC Nordseekabel GmbH & Co. KG
(‘NOKA’). DC Nordseekabel Beteiligungs GmbH and Flexcess GmbH. NOKA (legal seat: Bayreuth, Germany) was considered
as an investment of material value. Flexcess GmbH has a 20% participation in Equigy B.V. effective as of 1 January 2022. At
31 December 2023 these are part of assets classified as held for sale and discontinued operations.
As per 31 December TenneT has, directly or indirectly, also 25% stakes in Open Tower Company (OTC). For this investment,
joint control was exercised, despite unequal stakes. Therefor this investment was classified as joint venture. OTC was
considered as an investment of material value. At 31 December 2023 it was part of assets classified as held for sale.
BritNed is the only material joint venture at 31 December 2023. The table below contains summarised financial information
with respect to material joint ventures and a reconciliation with their carrying amounts.
2023 2022 Statement of financial position (EUR million) BritNed BritNed NOKA OTC Non-current assets 446 458 783 80 Cash and cash equivalents 99 140 55 22 Other current assets 20 23 10 2 Non-current liabilities -45 -47 -33 -134 Current liabilities -106 -119 -15 -5 Equity 414 455 800 -35 Ownership TenneT 50% 50% 50% 25% Carrying amount of the investment 207 228 400 -
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
154
2023 2022 Statement of income (EUR million) BritNed BritNed Revenue 374 304 Depreciation and amortisation -18 -18 Other costs -32 -22 Operating result 324 264 Finance income and expenses -2 -3 Income tax expense -78 -59 Result for the year* 244 202 Ownership TenneT 50% 50% Group's share in result 122 101
* Result for the year is equal to other and total comprehensive income.
BritNed
BritNed is a joint venture with National Grid International Ltd (National Grid), the British TSO. It owns and operates a
1,000 MW 'Direct Current'(DC) interconnector between the United Kingdom and the Netherlands. Operating costs and
trading revenue are shared equally between TenneT and National Grid. BritNed had contingent liabilities of EUR 2 million
(2022: EUR 1 million) mainly related to comfort letters issued. In 2023 EUR 142 million dividend was received from BritNed
(2022: EUR 88 million).
TenneT Holding B.V. has, together with the other shareholder, National Grid Holding One plc, provided a parent company
guarantee on the liabilities of BritNed.
NOKA
NordLink is an interconnector between Norway and Germany jointly owned by Statnett SF, TenneT and KfW IPEX-Bank
GmbH (KfW) to establish an interconnector between Norway and Germany under the project name ‘NordLink’. Ownership of
the interconnector is equally split, with TenneT and KfW owning the southern part through NOKA, a jointly owned company
and Statnett owning the northern part. In 2022 the main activity of NOKA was operating the southern part of the
interconnector. Operating costs and trading revenue are shared equally between NOKA and Statnett. NOKA is per
31 December 2023 part of assets classified as held for sale and discontinued operations (relate to note 2).
At 31 December, NOKA had contingent liabilities of EUR 2 million (2022: EUR 3 million) mainly related to purchase
obligations. During 2023 TenneT has withdrawn EUR 34 million from NOKA's capital (2022: EUR 32 million).
OTC
OTC is a holding company and holds majority interests in four separate asset companies: Colonne B.V., Mobile Radio
Networks Vehicle B.V. (MRNV), OTC Networks B.V. and OTC II B.V. These companies mainly own infrastructure assets
specifically designed for terrestrial communications. OTC had no contingent liabilities as at 31 December 2023 (2022: nil).
We received EUR 4 million dividend from OTC in 2023 (2022: nil). OTC is per 31 December 2023 part of assets classified as
held for sale (refer to note 2) due to the possible merger with NOVEC B.V. and the possible sale of the merged entity
afterwords.
Other
None of our joint ventures are permitted to distribute profits without the consent from all shareholders or partners. We
received nil from other interests in joint ventures (2022: nil).
Other interests in joint ventures amounted EUR 4 million at 31 December 2023 (2022: EUR 2 million).
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
155
Associates
At 31 December 2023 our substantial investments in associates consisted of a 34% interest in Holding des Gestionaires de
Réseaux de Transport d'Electricité S.A.S. (HGRT). In addition, the Group holds four immaterial investments in Energie Data
Services Nederland B.V. (EDSN) (12.5%), WL Winet B.V. (40%), Beheer Afsprakenstelsel B.V. (BAS) (25%) and TSCNET
Services GmbH (TSC) (12.5%). Both TenneT TSO B.V. and TenneT Germany has a share of 6.25%. The Group's share in
result (which is equal to other and total comprehensive income) of these immaterial associates amounted to nil in 2023
(2022: nil). The German share in TSC and WL Winet B.V. are at 31 December 2023 part of assets classified as held for sale.
Summarised financial information in respect of material associates and reconciliation with their respective carrying amounts,
of the investment in the consolidated financial statements is as follows:
2023 2022 Statement of financial position (EUR million) HGRT HGRT Non-current assets 91 91 Current assets 1 1 Non-current liabilities - - Current liabilities - - Equity 92 92 Ownership TenneT 34% 34% Carrying amount of the investment 31 31 2023 2022 Statement of income (EUR million) HGRT HGRT Revenue - - Depreciation and amortisation - - Other costs - - Operating result - - Finance income and expenses 13 13 Income tax expense - - Result for the year* 13 13 Ownership TenneT 34% 34% Group's share in result 4 4
* Result for the year is equal to total and other comprehensive income.
HGRT
The legal seat of HGRT is in Paris, France. HGRT holds a 49% stake in EPEX. EPEX is the exchange for the power spot
markets for the 'North West Europe' region and the United Kingdom. At 31 December 2023, HGRT had no contingent
liabilities outstanding (2022: nil). In 2023 EUR 4 million dividend was received (2022: EUR 4 million).
Other
Our interest in other associates amounted EUR 1 million at 31 December 2023 (2022: EUR 5 million). From other associates
we received EUR 1.5 million dividend in 2023 (2022: nil).
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
156
i Accounting policy
A joint venture is an arrangement whereby the parties in the arrangement have joint control over the net assets of the joint
arrangement.
Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the
relevant activities require unanimous consent of the parties sharing control. An associate is an entity in which we have
significant influence, but no control. Significant influence is the power to participate in the financial and operating policy
decisions of the investor.
Investments in joint ventures and associates are accounted for using the equity method. Under the equity method, the
investment in the joint venture or associate is initially recognised at cost. The carrying amount of the investment is adjusted
to recognise changes in the Group’s share of net assets of the investment since the acquisition date. Goodwill relating to the
associate is included in the carrying amount of the investment and is neither amortised nor individually tested for impairment.
The statement of income reflects our share in the results of operations of investments. Any change in other comprehensive
income of these investments is presented as part of the other comprehensive income. In addition, when there is a change
recognised directly in the equity of the investment, our share of any change is recognised in the statement of changes in
equity. Unrealised gains and losses resulting from transactions between us and any investment are eliminated to the extent of
the interest in such investment. When an associate or joint venture distributes dividend to us in excess of our carrying
amount, a liability is recognised if TenneT:
• is obliged to refund the dividend;
• has incurred a legal or constructive obligation; or
• made payments on behalf of the associate.
In the absence of such obligations, the excess in net result for the period is recognised. When the associate or joint venture
subsequently generates results, this is only recognised if and to the extent they exceed the excess cash distributions
recognised in net results plus any previously unrecognised losses.
After application of the equity method, we determine whether it is necessary to recognise an impairment loss on our
investment in the joint venture or associate. At each reporting date, we determine whether there is objective evidence that
the investment is impaired. If such evidence exists, the amount of impairment is calculated as the excess of the carrying
value of the investment over its recoverable amount and recognised in the statement of income.
Upon loss of significant influence over the joint venture/associate, any retained investment is valued at fair value. Any
difference between the carrying amount of the investment upon loss of significant influence and the fair value of the retained
investment and proceeds from disposal is recognised in the statement of income.
15 Other financial assets
(EUR million) 2023 2022 Fees for credit facilities available 2 3 Financial assets through profit or loss 15 15 Other 7 26 Total 24 44
Financial assets through profit and loss
Financial assets through profit and loss interests includes investments in Westley Fund 3 and 4, located in Menlo Park,
California, USA, with fair value of EUR 7 million (2022: EUR 10 million) and in Set Ventures 2, 3 and 4 located in Amsterdam,
for a total fair value of EUR 8 million (2022: EUR 5 million). We contributed EUR 2 million in capital for these minorities
(2022: EUR 3 million). We have recognised EUR 2 million (2022: nil) fair value loss.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
157
Other financial assets
Per 31 December 2022 the position other mainly relates to pension assets. Per 31 December 2023 amounting to
EUR 14 million is part of assets classified as held for sale (relate to note 2).
i Accounting policy
Please refer to note 30.
16 Inventory
Inventory primarily composes of strategic stock. The allowance for inventory is EUR 3 million (2022: EUR 8 million). The fair
value of inventory was not materially different from the carrying value. Per 31 December 2023 amounting to EUR 138 million
is part of assets classified as held for sale. Per 31 December 2023 the allowance for inventory part of assets classified as
held for sale amounting to EUR 3 million (relate to note 2).
i Accounting policies
Inventory is stated at the lower of cost and net realisable value. Cost comprises direct purchase costs and associated costs
incurred in bringing inventories to their present condition and location. The net realisable value is the estimated selling price in
the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make a sale.
17 Account- and other receivables (EUR million) 2023 2022 Amounts to be invoiced to EEG trade debtors - 184 EEG trade receivables - 35 Trade receivables 201 501 Amounts to be invoiced 86 1,051 VAT receivables - 300 Susbidies to be received 131 80 Other 34 197 Total 452 2,348
EEG trade receivables and amounts to be invoiced to EEG trade debtors
EEG receivables are part of assets classified as held for sale, per 31 December 2023 amounting to EUR 1,469 million
(relate to note 2).
In accordance with the Renewable Energy Sources Act (EEG) TenneT TSO GmbH is required to purchase electricity from
producers of renewable energy at fixed feed-in tariffs. Subsequently such renewable energy is sold on power exchanges at
spot prices.
EEG revenues and expenses are legally required to be administrated separately and are legally designated to be equal,
except for certain potential bonus amounts payable to TenneT TSO GmbH for marketing the energy on the power exchange.
The EEG surcharge was set to zero by law on 1 July 2022 and abolished with effect from 1 January 2023. Since then, the
promotion of renewable energies has been financed by the federal budget. TenneT TSO GmbH acts as an agent with
respect to these EEG services.
EEG trade debtors and receivables consisted of the accrual of unbilled EEG levy mainly for the month December, the
outstanding invoices for the EEG levy, the accrual for horizontal balancing amounts (i.e. unsettled charges to the other
German TSOs) and energy trading revenues. EEG trade receivables were not at our free disposal. Please refer to note 27 for
the EEG accounts payable.
Please refer to note 2 and note 18 for EEG deposits.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
158
Trade receivables
Per 31 December 2023 EUR 361 million is part of assets classified as held for sale (relate to note 2).
At 31 December, the ageing of trade receivables was as follows:
Past due More than 60 (EUR million) 0-30 days 31-60 days Total Not past due days 2023 201 181 8 8 4 2022 501 453 27 13 8
Changes in the allowance for expected credit losses were as follows:
(EUR million) 2023 2022 At 1 January 28 40 Charge for the year 2 7 Utilisation of provision -14 -19 Unused amounts reversed -1 - Transfer to held for sale (note 2) -5 - At 31 December 10 28
Per 31 December 2023 amounting to EUR 5 million is part of assets classified as held for sale (relate to note 2).
Per 31 December 2023, receivables with an initial value of EUR 8 million (2022: EUR 5 million) were fully provided for.
Amounts to be invoiced
Per 31 December 2023 amounting to EUR 1,335 million is part of assets classified as held for sale (relate to note 2).
i Accounting policy
Please refer to note 30, accounting policies for financial instruments.
18 Cash, cash equivalents and bank overdrafts
Cash and cash equivalents consisted of the following items.
2023 2022 At free Not at free At free Not at free (EUR million) Total Total disposal disposal disposal disposal Collateral securities - 373 373 - 550 550 EEG funds - - - - 1,414 1,414 EEG deposits < 3 months - - - - 3,300 3,300 Deposits - - - 300 - 300 Cash at bank 298 2 300 982 1 983 Cash and cash equivalents 298 375 673 1,282 5,265 6,547 Cash at banks and short-term deposits part of assets held for sale (note 2) 2 381 383 - - - Total cash and cash equivalents used in cash flow statement 300 756 1,056 1,282 5,265 6,547
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
159
Decrease of cash not at free disposal is mainly related to EEG deposits and EEG funds which are part of assets classified as
held for sale (relate to note 2) .
Funds related to EEG activities have been legally separated as required by BNetzA. EEG Funds are not at the TenneT's free
disposal. The same applies for funds related to KWK-G and Electricity Revenue Cap Act (‘Strompreisbremse’). For further
reference regarding EEG we refer to note 2 and note 17. Cash at banks carry interest at floating rates based on daily bank
deposit rates.
Collateral securities are related to other financial liabilities, we refer to note 26.
The Group presents its cash flows in the consolidated statement of cash flows using the indirect method. The Group has
elected to classify interest received as cash flows from investing activities and interest paid (including interest on lease
liabilities) as cash flows from financing activities.
i Accounting policy
In the consolidated statement of cash flows, cash and cash equivalents include cash at bank, deposits held at call with
banks and other short-term highly liquid investments with remaining maturities of three months or less and are presented net
of outstanding bank overdrafts and including discontinued operations. Securities are deposits on collaterals that serve as
financial security for transactions relating to auction, energy exchange and balancing responsibilities. A matching obligation is
recognised towards the party that deposited the funds as collateral. Securities are stated at fair value upon receipt and
subsequently at amortised cost.
19 Capital management
The primary objective of TenneT's capital structure is to ensure a sustainable financial position to absorb adverse changes in
the regulatory environment and to enable us to execute our extensive investment programme which is essential for the
success of the energy transition in the Netherlands. The majority of the funding for our investment programme is sourced
from the debt capital markets, commercial banks and international financial institutions (e.g. the European Investment Bank).
To maintain broad access to financial markets at favourable conditions, we have defined capital management objectives,
policies and processes which include:
1. to maintain a senior unsecured long-term credit rating of at least A3/A-;
2. to maintain a long-term average Funds From Operations (FFO) to Net debt based on ‘underlying’ financial information of
at least 8.5% (with individual years of at least 8.0%);
3. to diversify the maturities of long-term funding instruments to limit refinancing risk;
4. to maintain liquidity through cash and undrawn committed credit lines covering at least our net cash requirement on a
rolling 12-month forward-looking basis.
Capital consists of equity and debt.
1. Maintain a senior unsecured credit rating of at least A3/A-
As of 31 December 2023 TenneT Holding B.V. had the following senior unsecured long-term credit ratings from Standard &
Poor’s and Moody's Investor Service, which comply with our financial policy.
Short-term Unsecured credit rating at 31 December 2022 and 31 December 2023 Long-term rating rating Standard & Poor's A– (stable outlook) A-2 Moody's Investor Service A3 (stable outlook) P-2
2. Maintain a long-term average FFO/Net debt ratio based on underlying financial information of at least 8.5%
To maintain a solid financial position, we intend to maintain a long-term average FFO/Net debt ratio of at least 8.5% based
on underlying financial information (see note 3), which meets the minimum requirements for an A-/A3 long-term unsecured
credit rating as formulated by the credit rating agencies Standard & Poor's and Moody's Investor Service. Individual years
have a FFO/Net debt of at least 8.0%.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
160
A reconciliation of the Adjusted FFO and net debt is provided in the following table. Please refer to the chapter 'Secure a
sustainable financial performance and investor rating' for detailed information about the Adjusted FFO.
Based on underlying information (EUR million) 2023 2022 Net result for the year* 1,071 671 + amortisation, depreciation and impairments* 1,369 1,254 + other (gains)/losses (non-cash)* -5 38 + result on disposal of assets (non-cash) - - Total FFO 2,435 1,963 Capitalised interest on assets under construction (note 7) -25 -12 Interest on provisions (note 7) 32 25 50% Hybrid interest (note 20) -28 -28 Adjusted FFO 2,414 1,948 Net debt + Long-term borrowings (note 22) 18,871 19,006 + Short-term borrowings (note 22) 3,640 709 - Cash and cash equivalents at free disposal (note 18) -300 -1,282 - To be settled in tariffs (note 3) -3,565 -2,847 Lease liabilities (note 2 and note 11) 974 729 Net employee defined benefit liabilities (note 2) 217 174 50% Hybrid loan (note 20) 1,062 1,062 Net debt 20,899 17,551 Adjusted FFO/net debt 11.6% 11.1% * Net result and amortisation, depreciation and impairments include both continued and discontinued operations. Reference is made to note 3.
Further reference is made to note 3 Segment information.
3. Diversify maturities of long-term funding instruments to limit refinancing risk
To minimise refinancing risk, we diversify the maturity profile of our senior debt. As of 31 December 2023, our interest
bearing debt (excluding bank overdrafts) had the following annual redemption profile:
Annual redemption of debt (EUR million)
Year Maturities Year Maturities Year Maturities Year Maturities Year Maturities 2024 3,640 2029 1,742 2034 1,843 2039 784 2044 14 2025 868 2030 782 2035 1,048 2040 784 2045 7 2026 1,973 2031 1,015 2036 628 2041 684 2046 – 2027 1,225 2032 1,182 2037 48 2042 1,724 2028 1,282 2033 1,298 2038 40 2043 14
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
161
4. Maintaining liquidity through cash and undrawn committed credit lines covering at least our net cash
requirement on a rolling 12-month forward-looking basis
We monitor the liquidity of the Group on a rolling 12-month forward-looking basis. This means that the sum of (i) cash and
cash equivalents, (ii) undrawn committed credit facilities and (iii) 12-month expected net cash flow from operating activities
should be sufficient to meet the expected aggregate of scheduled debt repayments, investments in fixed assets and
dividend payments over the subsequent 12 months. The 12-month liquidity requirement was met on 31 December 2023 and
31 December 2022.
20 Equity
Paid-up and called-up capital
The Company’s authorised share capital amounted to EUR 500 million (2022: EUR 500 million), divided into one million
shares of EUR 500 each. Of these shares, two hundred thousand shares have been issued and paid-up.
Share premium reserve
The share premium reserve consists of the capital contributions, made by the Shareholder of ordinary shares, the Dutch
state represented by the Ministry of Finance. In 2022 EUR 1,230 million was received. In June 2023 TenneT received a
contribution from our Shareholder of EUR 1,602 million. Given the conditions precedent, the contribution is classified as
current financial liability instead of equity. Refer to note 26.
Retained earnings
Part of the retained earnings has been presented as legal reserve. For more details see note 43.
Hybrid securities
Hybrid securities are deeply subordinated securities and are, with the exception of common equity, the most junior
instruments in the capital structure of the Company. The hybrid securities are undated and do not default on non-payment of
coupons (unless such payment was mandatory following a resolution or payment of a dividend to common shareholders, i.e.
as so called ‘dividend pusher’).
The holders of the hybrid securities have limited ability to influence the outcome of a bankruptcy proceeding or a
restructuring outside bankruptcy. Consequently, the hybrid security holders cannot oblige TenneT to pay distributions or
redeem the securities in part or in full. Payment of distributions on and redemption of the securities is at our sole discretion.
As a result, the hybrid securities are classified as part of the equity attributable to the company's owners.
On 31 December 2023, TenneT had EUR 2.1 billion of green hybrid securities outstanding divided in two tranches. The first
tranche consisted of EUR 1.1 billion green hybrid securities that bear an optional, cumulative coupon of 2.995%, payable at
TenneT's discretion annually on 1 June of each year. At 31 December 2023, the unpaid cumulative dividend for this tranche
amounted to EUR 18 million (2022: EUR 18 million), relating to the period 1 June until 31 December and payable on 1 June
2024. The second tranche consisted of EUR 1 billion green hybrid securities that bear an optional, cumulative coupon of
2.374%, payable at TenneT’s discretion annually on 22 October of each year. At 31 December 2023, the unpaid cumulative
dividend for this tranche amounted to EUR 7 million (2022: EUR 7 million).
Dividend distribution
In 2023 a common full-year dividend of EUR 207 million (EUR 1,035 per share) to our ordinary shareholder was distributed
(2022: EUR 141 million). In agreement with the State of the Netherlands TenneT has established a dividend policy with a
pay-out of 35% of the underlying profit for the year, after payments of distributions to hybrid securities holders and minority
equity investors. We made aggregate distributions to the holders of hybrid securities of EUR 57 million during 2023
(2022: EUR 57 million). The appropriation of the 2023 result is at the free disposal of the General Meeting of Shareholders.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
162
21 Non-controlling interests
The proportion of economic interests held by non-controlling interests in the Group’s subsidiaries is as follows:
% Non-Controlling Interests Country 2023 2022 TenneT Offshore 2. Beteiligungsgesellschaft mbH ('TO2') Germany 69% 69% TenneT Offshore 8. Beteiligungsgesellschaft mbH ('TO8') Germany 63% 63%
The Group has the power to control TO2 and, TO8 and holds 51% of the voting rights in these entities. Movements in the
non-controlling interest, to the extent material, are summarised below.
Movement schedule Non-Controlling interests (EUR million) TO2 TO8 Total At 1 January 2022 251 204 455 Result attributable to non-controlling interests 16 15 31 Dividends paid -12 -8 -20 Capital repayment -13 2 -11 At 31 December 2022 242 213 455 Result attributable to non-controlling interests 41 18 59 Dividends paid -16 -1 -17 Capital repayment -53 -44 -97 At 31 December 2023 214 186 400
The non-controlling interest in TO2 and TO8 are held by Copenhagen Infrastructure Partners (CIP, legal seat: Copenhagen,
Denmark), which owns an economic interest of 69% for TO2 and 63% for TO8 in the adjusted (for certain regulatory effects)
profits of these companies and 49% of the voting rights.
Financial information of these subsidiaries, to the extent material, is summarised below on a consolidated basis before
intercompany eliminations and in conformity with our accounting principles.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
163
2023 Statement of financial position (EUR million) TO2 TO8 Total Non-current assets 817 1,155 1,972 Current assets 153 122 275 Non-current liabilities -594 -880 -1,474 Current liabilities -69 -99 -168 Equity 307 298 605 Attributable to owners of the parent 93 112 205 Attributable to non-controlling interests 214 186 400 2022 Statement of financial position (EUR million) TO2 TO8 Total Non-current assets 812 1,218 2,030 Current assets 168 234 402 Non-current liabilities -555 -906 -1,461 Current liabilities -77 -205 -282 Equity 348 341 689 Attributable to owners of the parent 106 128 234 Attributable to non-controlling interests 242 213 455 2023 Statement of income (EUR million) TO2 TO8 Total Revenue 222 222 444 Depreciation and amortisation -78 -100 -178 Other expenses -52 -62 -114 Operating result 92 60 152 Finance income and expenses -8 -18 -26 Income tax expense -25 -13 -38 Result from discontinuing operations for the year* 59 29 88 Attributable to owners of the parent 18 11 29 Attributable to non-controlling interests 41 18 59 2022 Statement of income (EUR million) TO2 TO8 Total Revenue 208 250 458 Depreciation and amortisation -80 -102 -182 Other expenses -86 -95 -181 Operating result 42 53 95 Finance income and expenses -11 -18 -29 Income tax expense -10 -10 -20 Result from discontinuing operations for the year* 21 25 46 Attributable to owners of the parent 5 10 15 Attributable to non-controlling interests 16 15 31
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
164
2023 (EUR million) TO2 TO8 Total Net cash flows from operating activities 150 107 257 Net cash flows used in investing activities 3 6 9 Net cash flows from financing activities -153 -113 -266 Change in cash and cash equivalents - - - 2022 (EUR million) TO2 TO8 Total Net cash flows from operating activities 68 75 143 Net cash flows used in investing activities -12 -16 -28 Net cash flows from financing activities -56 -59 -115 Change in cash and cash equivalents - - -
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
165
22 Borrowings
Effective Redemption (EUR million) Maturity 2023 2022 interest rate schedule 0.75% green bond 2017 EUR 500 million 0.87% Jun-25 At maturity 499 499 1.000% green bond 2016 EUR 500 million 1.04% Jun-26 At maturity 499 499 1.75% green bond 2015 EUR 500 million 1.84% Jun-27 At maturity 499 498 1.375% green bond 2018 EUR 500 million 1.50% Jun-28 At maturity 497 497 1.375% green bond 2017 EUR 500 million 1.42% Jun-29 At maturity 499 499 0.875% green bond 2019 EUR 500 million 0.99% Jun-30 At maturity 497 496 4.750% bond 2010 EUR 200 million 4.98% Jun-30 At maturity 198 197 1.250% green bond 2016 EUR 500 million 1.36% Oct-33 At maturity 495 495 2.000% green bond 2018 EUR 750 million 2.05% Jun-34 At maturity 747 746 1.875% green bond 2016 EUR 500 million 2.00% Jun-36 At maturity 494 493 1.500% green bond 2019 EUR 750 million 1.60% Jun-39 At maturity 741 740 0.125% green bond 2020 EUR 600 million 0.21% Nov-32 At maturity 596 595 0.500% green bond 2020 EUR 750 million 0.54% Nov-40 At maturity 745 744 0.125% green bond 2021 EUR 650 million 0.17% Dec-27 At maturity 649 648 0.500% green bond 2021 EUR 500 million 0.61% Jun-31 At maturity 496 496 0.875% green bond 2021 EUR 1,000 million 0.93% Jun-35 At maturity 994 994 1.125% green bond 2021 EUR 650 million 1.17% Jun-41 At maturity 646 646 1.625% green bond 2022 EUR 1,250 million 1.79% Nov-26 At maturity 1,244 1,243 2.125% green bond 2022 EUR 1,000 million 2.24% Nov-29 At maturity 994 993 2.375% green bond 2022 EUR 750 million 2.51% May-33 At maturity 742 742 2.750% green bond 2022 EUR 850 million 2.90% May-42 At maturity 835 834 3.875% green bond 2022 EUR 650 million 3.94% Oct-28 At maturity 648 648 4.250% green bond 2022 EUR 500 million 4.34% Apr-32 At maturity 497 497 4.500% green bond 2022 EUR 1,000 million 4.59% Oct-34 At maturity 994 993 4.750% green bond 2022 EUR 850 million 4.84% Oct-42 At maturity 842 842 Non-current interest-bearing bonds 16,587 16,574 0.717% loan 2015 EUR 500 million 0.72% 2018-2032 Linear 276 310 0.766% loan 2015 EUR 150 million 0.77% 2018-2037 Linear 97 105 0.813% loan 2016 EUR 125 million 0.81% 2019-2038 Linear 88 94 0.05% loan 2020 EUR 100 million 0.05% Sep-26 At maturity 100 100 0.436% loan 2020 EUR 350 million 0.44% 2025-2042 Linear 350 350 0.562% loan 2022 EUR 250 million 0.56% 2025-2043 Linear 250 250 Floating rate Loan 2022-2025 EUR 300 million 4.29% Aug-25 At maturity 300 300 Non-current interest-bearing loans 1,461 1,509 0.989% green Schuldschein 2016 EUR 100 million May-24 At maturity - 100 1.310% green Schuldschein 2016 EUR 55 million 1.32% May-26 At maturity 55 55 1.500% green Schuldschein 2016 EUR 50 million 1.51% May-28 At maturity 50 50 1.750% green Schuldschein 2016 EUR 43 million 1.76% May-31 At maturity 43 43 1.750% green Schuldschein 2016 EUR 95 million 1.76% May-31 At maturity 95 95 2.000% green Schuldschein 2016 EUR 80 million 2.01% May-36 At maturity 80 80 Non-current interest-bearing Schuldschein 323 423 1.61% USPP 2019 EUR 160 million 1.63% Jan-29 At maturity 160 160 1.83% USPP 2019 EUR 295 million 1.85% Jan-31 At maturity 295 295 2.01% USPP 2019 EUR 45 million 2.03% Jan-34 At maturity 45 45 Total non-current interest-bearing USPP 500 500 Total non-current interest-bearing borrowings 18,871 19,006
Continues next page
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
166
Effective Redemption (EUR million) Maturity 2023 2022 interest rate schedule 4.625% bond 2011 EUR 500 million Feb-23 At maturity - 500 Current interest-bearing bonds - 500 0.989% green Schuldschein 2016 EUR 100 million 1.01% May-24 At maturity 100 - Current interest-bearing Schuldschein 100 - 4.44% loan 2010 EUR 140 million Nov-23 Linear - 11 2.74% loan 2012 EUR 150 million Sep-23 At maturity - 150 0.72% loan 2015 EUR 500 million 0.72% Oct-24 Linear 34 34 0.77% loan 2015 EUR 150 million 0.77% Apr-24 Linear 8 8 0.813% loan 2016 EUR 125 million 0.81% Oct-24 Linear 6 6 Jan-24 Cash loans 4.04% - Mar-24 At maturity 540 - Jan-24 Commercial papers 4.03% - Mar-24 At maturity 2,372 - Borrowings under committed bilateral bank credit facilities 4.21% Jan-24 At maturity 380 - Borrowings under uncommitted bilateral bank credit facilities 4.63% Jan-24 At maturity 200 - Current interest-bearing loans 3,540 209 Total current interest-bearing borrowings 3,640 709 Total borrowings 22,511 19,715
TenneT has developed a Green Financing Framework to finance its renewable energy activities. The Green Financing
Framework is aligned to the 2021 ICMA Green Bond Principles (GBP) and the 2021 LMA Green Loan Principles (GLP) and
addresses their four pillars; Use of Proceeds, Process for Project Evaluation and Selection, Management of Proceeds and
Reporting. Under this framework we have issued across different formats (senior bonds, hybrid bonds, US Private Placement
and Schuldschein). US Private Placement is an issuance on the US private placement market and Green Schuldschein is a
type of privately placed German debt.
Changes in borrowings arising from financing activities are as follows:
(Non) (Non)-current (Non) -current Non-current - current inter-interest-bear-(EUR million) interest-bear-interest-bear-Total est-bearing ing Schulds-ing loans ing USPP bonds chein At 1 January 2022 10,776 1,930 500 499 13,705 Cash inflow from new borrowings 6,787 550 - - 7,337 Cash outflow from redemptions -500 -762 -77 - -1,339 Amortisation (non-cash) 11 - - 1 12 At 31 December 2022 17,074 1,718 423 500 19,715 Cash inflow from new borrowings - 3,787 - - 3,787 Cash outflow from redemptions -500 -504 - - -1,004 Amortisation (non-cash) 13 - - - 13 At 31 December 2023 16,587 5,001 423 500 22,511
TenneT has a Revolving Credit Facility (RCF) of EUR 3.3 billion at 31 December 2023 (available till November 2026).
At 31 December 2023, this facility was undrawn. Furthermore, TenneT has also available EUR 700 million of undrawn
long-term loan commitments from the EIB at 31 December 2023.
Continues from previous page
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
167
In May 2023, a term facility agreement of EUR 8 billion with a tenor of 2.5 years was reached. The facility is undrawn at
31 December 2023.
In addition, TenneT has EUR 1.75 billion of committed bilateral RCF’s (EUR 1.37 billion undrawn) and uncommitted bank
facilities of EUR 0.65 billion (EUR 0.45 billion undrawn) at its disposal at 31 December 2023.
At 12 January 2024, TenneT and the Dutch state have made arrangements regarding a temporary shareholder loan facility
of EUR 25 billion, safeguarding our planned investments in the Netherlands and Germany for 2024 and 2025. The loan
facility, which will be granted at market conditions, is subject to a customary parliamentary approval process, which is
currently in progress.
The amount of borrowing costs (including fair value adjustment) capitalised was minus EUR 116 million, this is due to
increased interest rates leading to lower fair value for bonds (2022: EUR 126 million).
For more information about the fair value see note 29.
i Accounting policy
Refer to note 30, accounting policies for financial instruments.
23 Contract liabilities
This position fully relates to investment contributions.
(EUR million) 2023 2022 At 1 January 548 430 Addition 94 131 Amortisation -15 -13 Transfer to held for sale (note 2) -85 - At 31 December 542 548 (EUR million) 2023 2022 < 1 year 12 17 1-5 years 49 54 > 5 years 481 477 Total 542 548
Additions in contract liabilities mainly relate to new grid connections from clients that will be connected to our grid and have
to be paid by the customer.
i Accounting policy
Contract liabilities are recognised when payments are made, or the payments are due (whichever is earlier) before a related
performance obligation is satisfied. Contract liabilities are recognised in accordance with the related contract. At initial
recognition, contributions received from third parties are measured at transaction price, presented as contract liabilities
(‘investment contributions’) and are subsequently recognised as revenue over the related asset’s useful life.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
168
24 Provisions
2023 2022 (EUR million) Current Non-current Total Current Non-current Total Environmental and decommissioning 2 465 467 7 1,193 1,200 Other 52 25 77 70 42 112 Total 54 490 544 77 1,235 1,312 Environmental management (EUR million) Other Total and decommissioning At 1 January 2022 1,378 84 1,462 Addition 140 55 195 Utilisation -4 -8 -12 Changes in estimations -338 -9 -347 Unused amounts reversed - -11 -11 Imputed interest 24 1 25 At 31 December 2022 1,200 112 1,312 Addition 102 92 194 Utilisation -4 -43 -47 Changes in estimations 381 4 385 Unused amounts reversed -26 -12 -38 Imputed interest 31 -1 30 Transfer to held for sale (note 2) -1,217 -75 -1,292 At 31 December 2023 467 77 544
Provisions for environmental management and decommissioning
Provisions for environmental management and decommissioning serve to cover future obligations in relation to high-voltage
connections, underground cables and offshore platforms, including decommissioning costs. Asset retirement obligations are
included for the legal and constructive obligations in relation to all our offshore interconnectors and offshore assets,
consisting of offshore platforms and (subsea) cables. In 2023 EUR 102 million was added (2022: EUR 140 million) for future
decommissioning costs for projects constructed during 2023. Changes in estimates related to the provision for
decommissioning resulted in an increase of EUR 381 million (2022: release of EUR 338 million), mainly due to changes in the
used discount rate (increase of EUR 51 million), used inflation rate (decrease of EUR 17 million) and further due to changes in
underlying assumptions and applicable price levels and extended useful lifetimes (increase of EUR 347 million). The changes
in estimates were not recognised through the statement of income. There was no decommissioning of substations in 2023
or 2022. In line with current regulation and permits, the first decommissioning of offshore platforms and linked grid
connections is expected to be finalised in 2046.
Other provisions
The majority of other provisions relate to claims related to construction contracts and planning damage where the estimated
additional payments are capitalised.
On 2 September 2022 a short circuit occurred on the newly built substation Dronten and led to a chain of events that
caused damage to various parties. For the estimated costs we have recognised in 2022 a current provision which is
recognised through the statement of income.
Furthermore this provision is related to long-term service bonuses.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
169
+ Key estimates and assumptions
The estimated decommissioning provision involves:
1. Decommissioning costs; and
2. Assessing the expected remaining useful life of relevant assets.
The main uncertainties related to the decommissioning costs are the removal method (currently assuming reverse
installation), the uncertainties around equipment and vessel availability, and market rates at expected time of
decommissioning. At 31 December 2023, updated benchmark information was available, due to updated assumptions, new
offshore platforms and offshore cables and updated market information. Decommissioning costs are provided for at the
present value of expected costs to settle the obligation. The useful life of the offshore platforms and linked grid connections
is estimated at 20 till 35 years and have been extended compared to previous year due to reassessment of the useful lives
(2022: 20 till 30 years). For offshore interconnectors the useful life is estimated at 40 years. This provision assumed a
discount rate between 2.476% and 2.545% was applied for other provisions (2022: between 2.737% and 2.942%) and an
inflation rate between 2.328% and 2.443% (2022: between 2.594% and 2.624%). A change in the discount rate of 1 percent
point would have a maximum impact of EUR 105 million on the asset value and liability value.
A discount rate of 3.0% was applied for other provisions (2022: 2.7%). A change in discount rate of 1 percent point would
have a maximum impact of EUR 4 million on the related book value.
The estimated number of risks associated with delays and interruptions concerning the Group’s offshore activities is based
on the number of offshore grid connections and the compensation payable to the operators of offshore grid connections.
We are of the opinion that the recorded provisions reflect the best estimate of the probable outflow of resources. However,
uncertainty about the assumptions and estimates could result in outcomes that require a material adjustment to the carrying
amount of these provisions in future periods.
Due to the business TenneT operates in and TenneT's legal structure, TenneT faces several contingent liabilities. In general,
the following items are recognised as contingent liabilities at TenneT:
• Possible impact of the Dutch regulatory frameworks on the TenneT's business financial conditions and net income;
• Operational risks and risks related to material projects;
• Impact of environmental issues;
• Risks relating to the legal structure of TenneT;
• Risks relating to the financing of TenneT;
• Factors which are material for the purpose of assessing market risks.
Uncertainties relating to contingent liabilities make a reliable estimation of the financial impact impossible. For further
contingent liabilities we refer to note 31.
i Accounting policy
Provisions are recognised when there is (i) a legal or constructive obligation as a result of past events, (ii) it is probable that an
outflow of resources embodying economic benefits will be required to settle the obligation and (iii) when the amount can be
reliably estimated. Provisions are measured at the present value of estimated cash flows to settle obligations, based on
expected price levels. Cash flows are discounted at a pre-tax rate that reflects the risks specific to the liability. The unwinding
of interest components associated with provisions is recognised in the statement of income as a finance cost.
Estimated future costs are reviewed annually and adjusted as appropriate. Changes in estimated future costs and discount
rates for decommissioning costs are recognised as changes in estimations and recorded in tangible fixed assets. All other
provisions changes in estimated future costs and discount rates are recognised in the statement of income.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
170
25 Net employee defined benefit liabilities
Net employee defined benefit liabilities are part of liabilities held for sale (relate to note 2).
Pension plans Germany
We have defined benefit plans for the majority of our German personnel. Said personnel are mainly employed based on the
collective labour agreement of 'Tarifgruppe Energie' and thus enjoy benefits in the form of old-age, disability and surviving
dependents' pensions. The large majority of the benefit obligations are based on pension schemes that define annual
pension claims based on respective employees' pensionable income of a particular year. Furthermore, each employee is
allowed to defer a certain amount of his compensation to raise his pension claim within defined bounds.
The Group contributes to two post-employment defined benefit plans in Germany, pursuant to a works council agreement
called 'Betriebliche Alterssicherung' (hereafter referred to as 'pension scheme 2001') and a works council agreement called
'Beitragsplan' (hereafter referred to as 'pension scheme 2008'), as well as to a small number of individual pension
commitments. The pension obligations related to these plans are partly covered by assets held in two Contractual Trust
Arrangements (CTA) administrated by ‘Helaba Pension Trust e.V.’ (Helaba). According to German law, TenneT remains
ultimately liable for fulfilling these pension obligations.
Pension scheme 2001
This scheme covers employees who started their employment with TenneT Germany on or before 31 December 2007 (or
later if the individual employment contract was agreed on or before 1 April 2008). The scheme became effective on
1 January 2001 and absorbed older plans at the time. As part of the transition in 2001 to the new plan, employees were
guaranteed a vested pension claim based on the old plan for their years of service prior to the transition date. The plan offers
benefits in the form of old-age, disability and surviving dependents' pensions and is composed of an employer-funded basic
level based on the respective employee's yearly pensionable income, an employer-funded top-up level based on the
respective company's performance and an employee-funded supplementary level which allows employees to increase their
pension entitlement through deferred compensation. Yearly fixed pension claims are calculated with a fixed internal interest
rate that sum up to the total earned pension benefits of the respective employee.
Pension scheme 2008
This scheme covers employees who started their employment with TenneT Germany after 31 December 2007 (unless the
individual employment contract was agreed before 1 April 2008, in which case the pension scheme 2001 applies). This
scheme offers benefits in the form of old-age, disability and surviving dependents’ pensions.
Pension cost is composed on the employer-funded basic level based on the respective employee’s yearly pensionable
income, an employer funded top-up level based on the respective company’s performance and an employee-funded
supplementary level which allows employees to increase their pension entitlement through deferred compensation. If the
employee contribution to the supplementary level reaches a certain level, the company pays an additional contribution of
one-third of the respective basic level contribution.
Annually, for each year a contribution to the pension claims is increased with an interest rate that is recalculated based on
the weighted average current yield of German Federal Government Bonds (Bundesanleihen), with an effective floor of 3.0%
and with different maturities (10, 20 and 30 years) reflecting the average duration of the plan. The annual pension claim
contributions for all years of service sum up to the total earned pension benefits of the respective employee.
Differences between the plans are limited and refer mainly to the way internal interest rates and the pensionable income are
determined. Therefore, the disclosure in the notes below comprises the combined plans.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
171
The funded status of the plans and the amounts recognised in the statement of financial position at 31 December were as
follows:
(EUR million) 2023 2022 Defined benefit obligation 314 265 Fair value of plan assets -109 -103 Funded status 205 162 Benefit asset included in other financial assets 14 14 Defined benefit liability 219 176
The defined benefit liabilities at 31 December 2023 were as follows. The short-term part of the benefit liability is presented as
provisions, relate to note 2.
(EUR million) 2023 2022 Defined benefit liability long-term 217 174 Defined benefit liability short-term 2 2 Total defined benefit liability 219 176
Changes in the present value of the long-term defined benefit obligation (‘DBO’) over the year were as follows:
(EUR million) 2023 2022 Defined benefit obligation at 1 January 265 410 Current service costs 11 23 Interest costs 10 6 Contributions by plan participants 3 3 Benefits paid -6 -5 Remeasurements on obligation 31 -172 Transfer to held for sale (note 2) -314 -Defined benefit obligation at 31 December - 265
Re-measurements on obligation are mainly due to the change of the discount rate from 3.9% to 3.45%.
Changes in the fair value of plan assets at 31 December of the year were as follows:
(EUR million) 2023 2022 Fair value of plan assets at 1 January 103 113 Actual return on plan assets 6 -9 Contributions by employer 5 4 Benefits paid -5 -5 Transfer to held for sale (note 2) -109 - Fair value of plan assets at 31 December - 103
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
172
Major categories of plan assets as a percentage of the fair value of the total plan assets were as follows:
2023 2022 Quoted in active markets: Equity instruments 32% 33% Debt securities 44% 45% Other 5% 4% Unquoted investments: Debt securities 0% 0% Real estate 13% 14% Cash 4% 3% Other 2% 1%
Remeasurements, including actuarial gains and losses arising from experience adjustments and changes in actuarial
assumptions, recognised in the statement of comprehensive income were as follows:
(EUR million) 2023 2022 Accumulated balance at 1 January -14 146Remeasurements during the year 29 -160 Accumulated balance at 31 December 15 -14
Remeasurements of the year originate from the following items:
(EUR million) 2023 2022 Remeasurements from actuarial (gains)/losses in DBO 31 -172 Exceeding return on plan assets (over net interest included in net liability) -2 12 Accumulated balance at 31 December 29 -160 Thereof: actuarial (gains)/losses from experience 5 5 actuarial (gains)/losses from changes in actuarial assumptions 26 -177
+ Key estimates and assumptions
Pension obligations and pension entitlements that are known on the reporting date are valued using economic trend
assumptions including, among others, salary growth rates and pension increase rates, which are intended to reflect realistic
expectations, as well as variables specific to reporting dates such as discount rates. The principal assumptions used in
determining the pension obligation were as follows:
2023 2022 Discount rate 3.45% 3.90% Future salary increases 2.50% 2.50% Future pension increases 1.00% 1.00%
The vast majority of our pension plans include a fixed annual pension increase of 1% after retirement. For pension
agreements that do not foresee this fixed increase, a future pension increase of 2.3% per year (2022: 2.3% per year) was
used in the calculation of defined benefit obligations.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
173
Assumptions regarding future mortality experience are set based on actuarial advice in accordance with published statistics
and actuarial experience. An increase in each of the main assumptions would have had the followings effects:
(EUR million) 2023 2022 0.25% change of discount rate -14 -11 0.5% change of salary increase rate 1 1 0.5% change of pension increase rate 1 1 Change of 1 year in life expectancy 8 6
The sensitivities indicated are computed based on the same methods and assumptions used to determine the present value
of the defined benefit obligations and are based on variations in a single variable only. Note that the sensitivity analyses may
not be representative of an actual change in the defined benefit obligation, as it is unlikely that changes in assumptions
would occur in isolation.
Due to the development of plan assets and the change in (statutory) discount rates, we expect to have no obligation to
contribute to plan assets in 2024. We expect the following, undiscounted, benefit payments from the plan:
(EUR million) 2023 2022 Within the next 12 months 7 7 Within 1-5 years 35 31 Within 5-10 years 57 52 More than 10 years 529 482 Total 628 572
i Accounting policy
For defined benefit plans, pension costs are determined using the projected unit credit method. Re-measurements,
comprising of actuarial gains and losses, the effect of the asset ceiling (excluding net interest) and the return on plan assets
(excluding net interest), are recognised in other comprehensive income in the period in which they occur. Re-measurements
are not reclassified to the statement of income in subsequent periods.
Service costs comprising current service costs and, if applicable, past-service costs, gains and losses on curtailments and
non-routine settlements are recognised as personnel expenses in the consolidated statement of income. Interest is
calculated by applying the discount rate to the net defined benefit liability or asset and is recognised as part of the finance
result in the statement of income.
Prepaid pension costs relating to defined benefit plans are capitalised only if they lead to refunds to the employer or to
reductions in future contributions to the plan by the employer.
Pension plan the Netherlands
For the majority of our Dutch personnel we have a multi-employer scheme offered by ABP Pension Fund (ABP) in the
Netherlands. The pension contribution rate for 2023 was 20.1% of the pensionable salary. In 2024 we expect to contribute
EUR 42 million, based on 2023 number of employees, to the ABP scheme. Compared to the total participants in the ABP
pension fund, our share in ABP is limited. We are not liable for any deficits in the multi-employer plan.
ABP has indicated that it is unable to provide the kind of company-specific information required by IFRS for defined-benefit
pension schemes. Consequently, this scheme is treated as if it were a defined contribution scheme.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
174
The policy funding ratio is the 12-month moving average of the nominal funding ratio. ABP’s policy funding ratio at
31 December 2023 was 113.9% (2022: 118.6%) which is above the critical regulatory coverage rate level under which
pensions would have to be reduced.
i Accounting policy
Payments to defined contribution plans are charged as an expense in the period to which they relate.
26 Other financial liabilities
In June 2023 TenneT received a contribution from our Shareholder of EUR 1,602 million. Given the conditions precedent, the
contribution is classified as current financial liability instead of equity.
Furthermore this position consists of financial liabilities relate to shares held by Copenhagen Infrastructures in TOD3 for 67%.
The movement of this liability is disclosed below. Per 31 December this part is disclosed as liabilities classified as held
for sale.
The remaining short-term other financial liabilities (EUR 373 million) relate to collateral securities given by third parties to
underwrite trading on energy exchanges and the auctioning of cross-border interconnection capacity. as disclosed in note 18.
(EUR million) 2023 2022 At 1 January 185 183 Profit share current year 21 22 Contribution by ordinary shareholder 1,602 - Capital repaid -37 -20 Transfer to held for sale (note 2) -169 - At 31 December 1,602 185
i Accounting policy
Please refer to note 31, accounting policies for financial instruments.
27 Account- and other payables
(EUR million) 2023 2022 EEG accounts payable - 4,934 Accounts payable 207 368 Accruals for tangible fixed assets - 332 Grid expenses payable 101 1,452 Interest payable 148 142 Social securities and other taxes payable 25 22 Other payables 159 239 Total 640 7,489
EEG accounts payable
EEG accounts payable are recognised as liabilities classified as held for sale, per 31 December 2023 amounting to
EUR 1,741 million (refer to note 2).
Accruals for tangible fixed assets
Payables in connection with tangible fixed assets purchases are related to unbilled services and deliveries for onshore and
offshore investment projects, per 31 December 2023 is EUR 588 million recognised as liabilities classified as held for sale
(refer to note 2).
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
175
Interest payable
Interest payable increased due to increased borrowings. These new loans have higher interest rates, which also has impact
to the increase of interest payable.
Grid expenses payable
The grid expenses payable consisted mainly of accrued expenses for redispatch measures. Grid expense payable mainly
decreased due to movement to liabilities classified as held for sale, per 31 December 2023 amounting to EUR 1,846 million
(refer to note 2).
+ Key estimates and assumptions
Accrued expenses for measures taken to restore the imbalance of the electricity grid, relate to balancing services provided
by various electricity generating parties. At year-end, we record a pass-through accrual for all balancing costs. The accrual is
based on actual volumes or, if not available, forecast volumes derived from models. Several assumptions are made in these
models such as weather conditions, requested volumes and capacity power plant. Prices are based on underlying contracts
and/or historical data.
Other payables
Other payables mainly comprised compensation payments to offshore wind farm operators (OWFs), personnel-related
liabilities and accruals for which invoices had not yet been received.
Other payables mainly decreased due to reclassification to liabilities classified as held for sale, per 31 December 2023
amounting to EUR 107 million (refer to note 2).
+ Key estimates and assumptions
Compensation payments to OWFs are based on amounts of electricity which could not be fed into the grid. The pass-
through accrual is based on a comparison of the costs incurred and the revenue generated by the offshore grid surcharge.
i Accounting policy
Please refer to note 31, accounting policies for financial instruments.
28 Financial risk management
Our business activities are exposed to a number of financial risks such as interest rate risk, credit risk, liquidity risk and
refinancing risk, which are described in detail in this note. Our financial risk management strategy primarily focuses on
protecting liquidity, equity capital and net result in order to safeguard our ability to continue active operations while providing
an adequate return to our shareholders. Our approach to managing financial risks, including a number of specific disclosures
(such as a maturity analysis of contractual undiscounted financial obligations) required by accounting standards, are set out
in this note. For details about regulatory risks we refer to the 'Corporate Governance' section of our Executive Board report.
Risk management related to financing activities is done by our Treasury department under policies included in the Treasury
Statute approved by our Executive Board. The Treasury department's objective is to facilitate the realisation of our financial
and strategic objectives from a funding and financial risk perspective. The Treasury Statute includes principles covering
specific areas such as interest rate risk, liquidity risk, the use of derivatives and the investment of excess liquidity. The use of
all ordinary course financial instruments is permitted, provided these are used solely to cover open positions of the Company.
Any speculative use of financial instruments is explicitly not authorised.
Interest rate risk
TenneT is exposed to interest rate risk on its debt portfolio. To limit this risk, our policy is to base the majority of our loan
portfolio on fixed interest rates. As of 31 December 2023, the senior debt portfolio was for more than 83% (2022: 98%)
based on fixed interest rates. An increase or decrease in interest rates of 2 percentage points would result in an increase or
decrease of EUR 70 million in our interest cost (2022: EUR 6 million). The increase is mainly related to the increased short-
term loans compared to 31 December 2022.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
176
Furthermore, there is a risk that interest payable on borrowings exceeds the interest compensation received by TenneT under
the prevailing regulatory systems in the Netherlands. In 2022, a new regulatory period started in the Netherlands. The risk
that the interest payable on borrowings exceeds the interest compensation received by TenneT is largely mitigated with the
ex-post settlement of the interest rates which is part of the new regulatory period as of 2022.
Credit risk
TenneT is exposed to the risk of loss resulting from counterparties’ defaulting on their commitments including failure to pay or
make a delivery on a contract. Our exposure to credit risk from operating activities and treasury activities is inherent to our
business activities.
Operational credit risk
In respect of our operating activities, TenneT has a credit policy in place, which takes into account the risk profiles of our
counterparties. We also have policies in place to monitor the financial viability of counterparties.
In the Netherlands, TenneT is responsible for maintaining the balance between supply and demand of energy. The associated
costs are covered by income from parties with balance responsibility, which are charged for any imbalances attributable to
them. Any surplus is deducted from subsequent tariffs for system services. For certain situations, securities in the form of bank
guarantees and collaterals are held as protection against the default risk of parties with balance responsibility. With respect to
investment projects, we require counterparties to deliver bank guarantees or collaterals as a protection against defaults.
Credit risk on trade and other receivables is limited because most of our trade and other debtors have a low risk of default.
Consequently, TenneT requires no material collateral as security and no insurance for credit risk. The maximum exposure to
credit risk at the reporting date is the carrying value of each class of financial assets disclosed in note 15 and note 17. The
movement of the allowance for expected credit losses of trade receivables is included in note 17.
The provision rates for expected credit losses are based on groupings of various customer segments with similar loss
patterns (such as customer type and arrears in payments). Any expected credit losses for financial guarantee contracts and
commitment letters (if any) are also provided for. The calculation reflects the probability-weighted outcome, the time value of
money and reasonable and supportable information that is available at the reporting date about past events, current
conditions and forecasts of future economic conditions. Generally, trade receivables and other financial assets are written-off
if there is no reasonable expectation of recovering the contractual cash flows. The Group considers a financial asset in
default when contractual payments are 90 days past due. However, in certain cases, TenneT may also consider a financial
asset to be in default when internal or external information indicates that the Group is unlikely to receive the outstanding
contractual amounts in full before taking into account any credit enhancements held by the Group.
Financial credit risk
In 2023, financial credit risk arose mainly from TenneT's transactions and positions with several financial institutions.
At 31 December 2023, the maximum credit risk amounted to nil (2022: EUR 3,600 million).
Counterparty risk may be defined as the risk that a party that has entered into a contract with the TenneT Group is unable
to fulfil its financial obligations towards the TenneT Group. In accordance with our treasury policies, counterparty credit
exposure is monitored frequently against the counterparty credit limits. Exposure per counterparty is calculated for the group
as a whole (excluding the positions for EEG, KWKG and ASK) We have concentration limits in place for the group, EEG,
KWKG and ASK for current account balances, when funds are placed on deposit and when financial derivatives, Money
Market Loans and other products are entered into. At 31 December 2023 we had nil at our free disposal for these deposits.
These deposits had a maturity of less than 3 months (2022: EUR 300 million), see note 17.
At 31 December 2023 we had nil deposits with third parties for EEG cash amounts. These were part of assets held for sale
(relate to note 2) (2022: EUR 3,300 million) and no financial derivatives outstanding. As of 31 December 2023 these deposits
had a maturity of more than 3 months (2022: EUR 3,300 million), please refer to note 2, note 17 and note 18.
Management does not expect any significant losses from non-performance by treasury counterparties.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
177
Liquidity risk
Liquidity risk is defined as the risk that the Group cannot meet its short-term financial obligations. Liquidity is monitored every
quarter on a rolling 12-month forward-looking basis. Our 12-month liquidity objective was met on 31 December 2023 and
31 December 2022.
The following maturity schedule presents our financial obligations on a contractual, non-discounted basis. The liquidity risk
for lease liabilities, account- and other payables and other financial liabilities mainly decreased due to liabilities which per
31 December 2023 are classified as held for sale.
3 to 12 More than 5 (EUR million) Notes <1 month 1 to 3 months 1 to 5 years Total months years At 31 December 2023 Account- and other payables 27 314 131 47 - - 492 Other financial liabilities 26 373 - 1,602 - - 1,975 Lease liabilities 11 3 2 13 46 64 128Borrowings 22 1,611 1,918 491 6,658 15,626 26,304 Total 2,301 2,051 2,153 6,704 15,690 28,899At 31 December 2022 Account- and other payables 27 2,465 1,353 3,529 - - 7,347 Other financial liabilities 26 550 - - - 185 735 Lease liabilities 11 13 22 115 427 162 739Borrowings 22 5 527 543 5,566 17,213 23,854 Total 3,033 1,902 4,187 5,993 17,560 32,675
TenneT's borrowings have a diversified maturity profile, which reduces refinancing risks (see also note 21).
The EEG has a significant impact on the Group’s working capital position and to prevent negative EEG bank account
balances and additional short-term bridge financing, a liquidity buffer is included in the EEG levy. In accordance with EEG
legislation, shortfalls are reimbursed through EEG levies and/or government contributions at the latest in the following
yearwas regulated in a contract between the German TSOs and the German Federal Ministry for Economic Affairs and
Climate Action following the abolition of the EEG surcharge in July 2022. From 1 January 2023, the EEG costs used to
finance payments made to renewable energy producers are to be financed entirely from the federal budget. Nevertheless
liquidity risks may arise for the four TSOs in the EEG settlement due to the current prognosis-mechanism. Interim financing
to bridge shortfalls is necessary and is currently being discussed intensively with political decision-makers.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
178
In order to reduce liquidity risk, TenneT has EUR 3.3 billion committed revolving credit facilities (RCFs) at its disposal for
general corporate purposes. At 31 December 2023, this facility was undrawn. Furthermore, we had EUR 700 million of
undrawn long-term loan commitments from the European Investment Bank (EIB) available at 31 December 2023 and
EUR 1.75 billion committed bilateral RCFs (EUR 0.38 billion drawn at 31 December 2023). Next to that we had
EUR 650 million of uncommitted bank facilities (EUR 200 million drawn at 31 December 2023).
In May 2023, a term facility agreement of EUR 8 billion with a tenor of 2.5 years was reached. The facility is undrawn at
31 December 2023.
At 12 January 2024, TenneT and the Dutch state have made arrangements regarding a temporary shareholder loan facility
of EUR 25 billion, safeguarding our planned investments in the Netherlands and Germany for 2024 and 2025. The loan
facility, which will be granted at market conditions, is subject to a customary parliamentary approval process, which is
currently in progress.
The size of our credit facilities is such that we expect that all substantial adverse financial developments and events can
reasonably be expected to be accommodated and that continuation of day-to-day operations is ensured for at least
12 months. The terms and conditions of our credit facilities include negative pledge and pari passu clauses. No security
interest over any of the Group's assets has been provided. All credit facilities have floating-rate interest conditions.
TenneT also has access to diversified funding sources through its medium-term note (EMTN) programme and our
commercial paper (CP) programme. Both programmes significantly reduce our dependency on bank financing.
TenneT expects to meet its financial obligations for 2024 with (i) cash and cash equivalents, (ii) funds from operations, (iii)
unused credit facilities, (iv) capital market transactions and (v) equity contributions from our shareholder. We expect to meet
our financial obligations for the subsequent years through various capital market transactions and equity contributions and
intend to manage future refinancing risks by spreading the tenors of new financing arrangements.
Equity risk
There is a risk of a lack of access to equity on a sustainable basis. This risk reflects the inability to raise additional equity in a
timely fashion in case of unexpectedly large increases in our investment portfolio or negative regulatory developments.
Actions taken in order to mitigate this risk are: (i) an active financing strategy to create and maintain an optimal capital
structure as well as to diversify funding sources and manage financial risks, (ii) a proactive approach of potential investors
and active discussion with our shareholder to contribute additional equity (which effected in EUR capital contribution of 1.21
billion for period 2022, see note 20 and a conditional contribution of EUR 1.62 billion see note 26) and (iii) lobbying activities
to ensure that regulatory frameworks remain adequate to safeguard regulators income and returns to investors.
Commodity price risk
Energy purchase contracts for the forward purchase of electricity that are used to satisfy physical delivery requirements to
customers, or for energy that the Group uses itself, meet the expected purchase or usage requirements of IFRS 9. They are,
therefore, not recognised in the financial statements until they are realised. Disclosure of commitments under such contracts
is made in note 30.
Energy purchase contracts are considered to comprise two components, being a forward purchase of power at spot prices,
and a forward purchase of environmental certificates at a variable price (being the contract price less the spot power price).
With respect to our current contracts, neither of these components meets the requirement to be accounted for as a
derivative. As currently no liquid market for environmental certificates exists, this component meets the expected purchase
or usage exemption of IFRS 9. We expect to enter into an increasing number of these contracts, in order to meet our
compliance requirements in the short to medium term. It is possible that in future, if and when liquid markets develop, and to
the extent that we are in receipt of environmental certificates in excess of our required levels, this exemption may cease to
apply, and we may be required to account for forward purchase commitments for environmental certificates as derivatives at
fair value through profit and loss.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
179
29 Fair values
The table below provides an overview of the carrying value and fair value of financial instruments, including IFRS treatment
and the level in the valuation hierarchy. Instruments are measured at fair value.
Carrying amount Fair value (EUR million) Notes 2023 2022 2023 2022 Hierarchy Financial assets Other financial assets: - Financial assets through profit and loss 15 14 15 14 15 Level 3 Total 14 15 14 15 Financial liabilities Borrowings: - Borrowings – bonds 22 16,585 17,074 16,025 14,615 Level 1 - Borrowings – other 22 5,923 2,641 5,643 2,221 Level 2 Total 22,508 19,715 21,668 16,836
At 31 December 2023, no instruments carried at fair value were held (2022: nil). Furthermore, we concluded that the fair
value of the loans and receivables, cash and cash equivalents, account- and other payables and other financial liabilities
approximate their carrying amounts at year end 2023, due to the short-term maturities of these instruments.
The following hierarchy by valuation technique was used to calculate the fair value of assets and liabilities:
• Level 1: Measurement based on quoted prices (unadjusted) in active markets for identical assets or liabilities.
• Level 2: Measurement based on inputs other than quoted prices included in Level 1 that are observable for the asset or
liability, either directly (that is, as prices) or indirectly (that is, derived from prices).
• Level 3: Measurement based on inputs for the asset or liability that are not based on observable market data (that is,
unobservable inputs).
The fair value of the level 2 borrowings was based on discounted cash flows. A change in the assumptions used to calculate
the fair value should not result in a significantly different outcome. There were no transfers between the fair value hierarchy
levels during 2023 or 2022.
The fair value of the level 3 financial assets through profit and loss was based on information received by the investment
funds.
30 i Accounting policies for financial instruments
Financial assets
All financial assets are recognised initially at fair value, net of directly attributable transaction cost.
After initial recognition financial assets are measured at amortised cost, fair value through other comprehensive income (OCI)
and fair value through profit or loss. Financial investments in investment funds (see note 14) are classified as fair value
through profit or loss. All other of TenneT's financial assets are classified as amortised cost, because the following two
conditions are met:
• The financial assets are held within a business model with the objective to hold financial assets in order to collect
contractual cash flows, and
• The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal
and interest on the principal amount outstanding.
Financial assets at amortised cost are subsequently measured using the effective interest (EIR) method and are subject to
impairment.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
180
The Group recognises an allowance for expected credit losses (ECLs) for financial assets. ECLs are based on the difference
between the contractual cash flows due in accordance with the contract and the cash flows that the Group expects to
receive, discounted at an approximation of the original effective interest rate. For trade receivables and contract assets, the
Group applies a simplified approach in calculating ECLs. Therefore, the Group does not track changes in credit risk, but
instead recognises a loss allowance based on lifetime ECLs at each reporting date.
Financial liabilities
All financial liabilities are recognised initially at fair value and, in case of loans, borrowings and payables, net of directly
attributable transaction costs. The Group’s financial liabilities include trade and other payables, loans and borrowings
including bank overdrafts.
After initial recognition at fair value, interest-bearing loans and borrowings are subsequently measured at amortised cost
using the EIR method. Gains and losses are recognised in the statement of income when the liabilities are derecognised as
well as through the EIR amortisation process. Amortised cost is calculated by taking into account any discount or premium
on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance expense in
the statement of income.
31 Contingencies and commitments
Off-balance sheet rights and related obligations for continuing operations consist of the following categories:
(EUR million) 2023 2022 Investment related off-balance items Off-balance sheet rights Bank guarantees received and other items 1,918 1,907 Comfort letters received - 1,620 Total 1,918 3,527 Off-balance commitments Capital commitments 11,333 9,923 Comfort letters issued - 797 Total 11,333 10,720 Other off-balance items Other off-balance obligations Grid-related commitments 46 914 Other off-balance sheet commitments 55 74 Total 101 988
The comparative figures include both continued and discontinued operations. Comparative figures of discontinued operations are also included in note 2.
The expected cash flows in respect of capital commitments equal the amounts in the above table. For comfort letters issued,
no cash flows are expected.
Bank guarantees received and other items
The majority is related to bank guarantees received included guarantees for investment projects.
Comfort letters received
Comfort letters received decreased due to assets classified as held for sale (relate to note 2).
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
181
Capital commitments
Capital commitments increased due to investments in our 2GW Program. In 2022 for continued operations amounted to
EUR 1,860 million. Capital commitments of discontinued operations are part assets classified as held for sale (relate to note 2).
Capital commitments are commitments entered into with regard to the purchase of tangible fixed assets. Approximately
EUR 5.3 billion of capital commitments were payable within 12 months, at 31 December 2023 (2022: EUR 4.4 billion).
Comfort letters issued
Comfort letters issued are part of liabilities classified as held for sale (relate to note 2).
Grid related commitments
Grid related commitments mainly decreased due to assets classified as held for sale (relate to note 2).
Grid-related commitments mainly consist of the outstanding value of purchase orders related to grid expenses to which we
are committed to, amounting to EUR 46 million (2022: EUR 86 million).
Other
Other off-balance sheet commitments mainly consisted of:
• Compensation claimed by several parties for the delay or non-availability of the offshore grid connection. The related legal
proceedings are still pending. If and to the extent the claims are (partly) justified and the payments resulting therefrom
could not be passed through to the end customers, the binding rulings may have a negative impact on the financial
position;
• Capital commitments to minority participating interests;
For these items, it is not practically possible to determine the financial effect and possible timing of cash outflows and cash
inflows.
Various other off-balance sheet commitments and contingencies as well as other off-balance sheet rights existed as of
31 December 2023 but were immaterial from a disclosure perspective. The majority of these claims related to (i) construction
contracts and planning damage where additional payments would be capitalised, (ii) claims relating to compensation for
delays and interruptions where any compensation would be pass-through for TenneT or (iii) claims relating to refunds of
transmission services, which would be compensated in future tariffs. In the unlikely event that these claims would prevail in
court, this could have a material impact on the Company’s financial situation.
Insurance captive
At 23 October 2023 TenneT Holding B.V. has established TenneT Reinsurance N.V. This entity will reinsure our Dutch
offshore activities as of mid 2024. Future capital contributions are related to restricted equity need for Solvency II
requirements.
Environmental obligations
The Group is exposed to risks regarding environmental obligations arising from past activities. For example, a number of
sites have to be decontaminated and restored to their original condition before being handed back at the end of the
contractual period. Under current legislation, environmental plans and any other measures to be adopted have to be agreed
with local, regional and national authorities as appropriate. As soon as such plans are approved or other legal obligations
arise, a provision is formed based on the most reliable estimate possible of future expenses. TenneT is of the opinion that the
currently recognised provisions are adequate, based on information currently available.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
182
32 Related parties
Note 33 provides an overview of legal entities included in the consolidated financial statements.
TenneT has entered into transactions with the following related parties:
• The shareholder, state of the Netherlands: TenneT Holding B.V. is controlled by the Dutch state, which owns 100% of the
Company’s ordinary shares (refer to note 20);
• Joint ventures NOKA, OTC, BritNed and VertiCer (refer to note 14);
• Associate HGRT (refer to note 14);
• Members of the Executive Board and Supervisory Board of TenneT Holding B.V. (refer to note 5).
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
183
33 Consolidated subsidiaries
The following legal entities were included in the consolidation of TenneT Holding B.V.:
Voting interest Economic interest Subsidiary Legal seat Country 2023 2022 2023 2022 Direct subsidiaries NLink International B.V. Arnhem Netherlands 100% 100% 100% 100% * Relined B.V. Utrecht Netherlands 100% 100% 100% 100% TenneT Duitsland Coöperatief U.A. Arnhem Netherlands 100% 100% 100% 100% * TenneT Green B.V. Arnhem Netherlands 100% 100% 100% 100% * TenneT Orange B.V. Arnhem Netherlands 100% 100% 100% 100% TenneT Reinsurance N.V. Arnhem Netherlands 100% 0% 100% 0% TenneT TSO B.V. Arnhem Netherlands 100% 100% 100% 100% TenneT TSO Duitsland B.V. Arnhem Netherlands 100% 100% 100% 100% * Direct subsidiaries part of assets and liabilities held for sale as per 31 December 2023 NOVEC B.V. The Hague Netherlands 100% 100% 100% 100% Indirect subsidiaries B.V. Transportnet Zuid-Holland Voorburg Netherlands 100% 100% 100% 100% * CertiQ B.V. Arnhem Netherlands 0% 100% 0% 100% *** Duvekot Rentmeesters B.V. Bathmen Netherlands 100% 100% 100% 100% Nadine Netwerk B.V. Arnhem Netherlands 100% 100% 100% 100% * Nederlands-Duitse Internet Exchange B.V. Enschede Netherlands 100% 0% 100% 0% Saranne B.V. Arnhem Netherlands 100% 100% 100% 100% * Stichting Beheer Doelgelden Landelijk Hoogspanning-snet Arnhem Netherlands N/A N/A N/A N/A Relined GmbH Emsbüren Germany 100% 100% 100% 100% TransTenneT B.V. Arnhem Netherlands 100% 100% 100% 100% * Indirect subsidiaries part of assets and liabilities held for sale as per 31 December 2023 Omroepmasten B.V. Vianen Netherlands 100% 100% 100% 100% DC Netz DolWin4 GmbH Bayreuth Germany 100% 100% 100% 100% DC Netz HelWin1 GmbH Bayreuth Germany 100% 100% 100% 100% DC Netz SylWin2 GmbH Bayreuth Germany 100% 100% 100% 100% Globalways GmbH Stuttgart Germany 0% 100% 0% 100% Greennet Stiftung Bayreuth Germany N/A N/A N/A N/A NOVEC GmbH Emsbüren Germany 0% 100% 0% 100% TenneT GmbH & Co. KG Bayreuth Germany 100% 100% 100% 100% ** TenneT Offshore 1. Beteiligungsgesellschaft mbH Bayreuth Germany 51% 51% 31% 31% TenneT Offshore 2. Beteiligungsgesellschaft mbH Bayreuth Germany 51% 51% 31% 31% TenneT Offshore 8. Beteiligungsgesellschaft mbH Bayreuth Germany 51% 51% 37% 37% TenneT Offshore 9. Beteiligungsgesellschaft mbH Bayreuth Germany 51% 51% 37% 37% TenneT Offshore Dolwin3 Beteiligungs GmbH & Co. KG Bayreuth Germany 51% 51% 30% 30% ** TenneT Offshore Dolwin3 GmbH & Co. KG Bayreuth Germany 51% 51% 30% 30% TenneT Offshore Dolwin3 Verwaltungs GmbH Bayreuth Germany 51% 51% 33% 33% TenneT Offshore GmbH Bayreuth Germany 100% 100% 100% 100% TenneT TSO GmbH Bayreuth Germany 100% 100% 100% 100% TenneT Verwaltungs GmbH Bayreuth Germany 100% 100% 100% 100%
* For these companies TenneT has issued a declaration of liability as referred to in Part 9 of Book 2 of the Dutch Civil Code, article 403.
** This company, which has been consolidated in these financial statements, has opted for the exemption of Section 264b of the German Commercial Code.
*** Per 31 December 2022 CertiQ B.V. merged with Vertogas B.V. into VertiCer B.V. which is a joint venture per the same date, reference is made to note 11.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
184
As TenneT is able to exercise direct control over its management and financial and operational policies, Stichting Beheer
Doelgelden Landelijk Hoogspanningsnet, a foundation which temporarily manages funds arising from the maintenance of the
energy balance and auctioning of cross-border capacity by TenneT TSO B.V., is included in the consolidation.
As TenneT is able to exercise direct control over its management and financial and operational policies, Greennet Stiftung,
the foundation that compensate negative impact due to construction work of TenneT in our German grid is included in the
consolidation.
At 30 November 2023 NOVEC B.V. sold NOVEC GmbH to Phoenix Tower International, located in Boca Raton, FL, USA.
At 27 November 2023 Relined GmbH sold Globalways GmbH to Zayo Infrastructure Deutschland GmbH, located in
Frankfurt, Germany.
At 23 October 2023 TenneT Holding B.V. has founded TenneT Reinsurance N.V. TenneT has many offshore activities. The
insurance market hardened, especially for offshore risks, which results in lower limits, coverage, market capacity and higher
premiums. Due to TenneT Reinsurance N.V., TenneT has access to a better market with lower insurance premiums, since
part of the risk is not insured by the market, but by TenneT Reinsurance N.V. Activities will start in 2024.
34 Events after the reporting period
At 12 January 2024, TenneT and the Dutch state have made arrangements regarding a temporary shareholder loan facility
of EUR 25 billion, safeguarding our planned investments in the Netherlands and Germany for 2024 and 2025. The loan
facility, which will be granted at market conditions, is subject to a customary parliamentary approval process, which is
currently in progress.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
185
Company financial statements
The balance sheet is prepared on a basis before result appropriation.
Company statement of financial position
For the year ended 31 December (EUR million)
Assets
Notes
2023 2022
Non-current assets
Investments in subsidiaries 40 10,661 8,491
Investments in associates
41 31 31
Other financial assets 42 22,299 17,412
Total non-current assets 32,991 25,934
Current assets
Other financial assets 42 317 323
Account- and other receivables 43 5 1
Cash and cash equivalents 295 1,275
Total current assets 617 1,599
Total assets 33,608 27,533
Equity and liabilities
Notes
2023 2022
Equity
Paid up and called-up capital 100 100
Share premium 3,020 3,020
Reserve participating interests 184 181
Retained earnings 1,617 2,799
Unappropriated result 595 -967
Equity attributable to ordinary shares 5,516 5,133
Hybrid securities
2,125 2,125
Equity attributable to owners of the company 44 7,641 7,258
Non-current liabilities
Borrowings 45 18,871 19,006
Deferred tax liability 6 7
Total non-current liabilities 18,877 19,013
Current liabilities
Borrowings
45 3,640 709
Financial liability 46 1,602 -
Account- and other payables 47 1,848 553
Total current liabilities 7,090 1,262
Total equity and liabilities 33,608 27,533
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
186
Company financial statements
Company statement of income
For the year ended 31 December (EUR million)
(EUR million)
Notes
2023 2022
Revenue - -
Other operating expenses 37 -23 -10
Other gains/(losses)
- -
Total operating expenses -23 -10
Share in profit of joint ventures and associates 4 5
Operating result -19 -5
Finance income 38 436 281
Finance expenses 39 -456 -259
Finance result -20 22
Result before income tax
-39 17
Income tax expense -3 -12
Result from subsidiaries 40 694 -915
Result for the year 652 -910
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
187
Notes to the company financial statements
These notes contain information about the company financial statements of TenneT Holding B.V.
Details related to TenneT Holding B.V.'s financial results and position are provided, as well as a
description of the specific accounting policies applied when compiling these company financial
statements.
35 Company accounting policies
The company financial statements for TenneT Holding B.V. have been prepared in accordance with the provisions of Part 9 of
Book 2 of the Dutch Civil Code. The same principles governing valuation and the determination of results (including the
principles governing the classification of financial instruments as equity or liability) have been applied when compiling the
company financial statements and the consolidated financial statements, as permitted by as permitted by Article 362 clause 8
of Part 9 of Book 2 of the Dutch Civil Code.
Expected credit loss (ECL) provisions for receivables from subsidiaries have been eliminated as intercompany positions.
Changes in these ECL provisions may impact the carrying amounts of the financial assets in the company statement of the
financial position due to a possible provision. This may result in a difference between the company's equity and the
consolidated equity. No ECL provision was deemed necessary.
36 Personnel expenses
TenneT Holding B.V. did not employ any personnel during 2023 or 2022, and as a result did not incur any personnel expenses
in those periods. Members of the Executive Board and Supervisory Board of the Company received their remuneration, as
disclosed in note 5 of the consolidated financial statements, from other entities within the Group.
37 Other operating expenses
Other operating expenses mainly comprise of consultancy expenses due to advise for held for sale activities.
38 Finance income
Finance income was mainly related to the interest received on intercompany loans and other inhouse financing activities (see
note 42). The intercompany agreements have terms equivalent to those that prevail in arm’s length transactions.
39 Finance expenses
Finance expenses mainly related to interest on borrowings and credit facilities (2023: EUR 394 million; 2022: EUR 245 million).
This increase is related to increased interest rates and increased borrowings.
40 Investments in subsidiaries
Changes in investments in subsidiaries can be broken down as follows:
(EUR million) 2023 2022
At 1 January 8,491 8,216
Share in result 694 -915
Deconsolidation - 1
Capital contribution 1,602 1,230
Capital repayment -42 -144
Dividends received -64 -50
Remeasurement of defined benefit pension -20 153
At 31 December 10,661 8,491
Notes to the company financial statements
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
188
Notes to the company financial statements
Investments in subsidiaries relate to the legal entities included in the consolidation as disclosed in note 33 of the
consolidated financial statements.
i Accounting policies
Investments in subsidiaries are measured at net asset value. The net asset value of a participating interest is determined by
valuing assets, provisions and liabilities and calculating the result using the accounting principles applied to the consolidated
financial statements.
When TenneT's share of losses in an investment equals or exceeds its interest on investment, (including separately
presented goodwill or any other unsecured non-current receivables, as part of the net investment), it does not recognise any
further losses, unless it has incurred legal or constructive obligations or made payments on behalf of this investment. In such
case, TenneT will recognise a provision.
41 Investments in associates
Investments in are related to HGRT. In 2023, TenneT's share in HGRT's result amounted to EUR 4 million
(2022: EUR 4million) and EUR 4 million (2022: EUR 4 million) dividends were received. Further reference is made to note 14
of the consolidated financial statements.
42 Other financial assets
In relation to financial assets through profit and loss reference is made to note 15 of the consolidated financial statements.
Receivables from subsidiaries mainly related to intercompany loans and cash management activities of TenneT Holding B.V.
The agreed interest rate for the intercompany loans is our cost of fund rate +0.125%. These receivables were unsecured.
The movement schedule is as follows:
(EUR million) 2023 2022
At 1 January 17,412 12,861
Additions 6,432 5,482
Capital contribution to minority participating interests 2 3
Repayments -1,338 -834
Transfer to current -207 -100
Fair value adjustment equity investments -2 -
At 31 December 22,299 17,412
TenneT Holding B.V. had EUR 251 million (2022: EUR 325 million) of current other financial assets which were related to
receivables from subsidiaries. Certain subsidiaries have guaranteed the payment to, certain creditors of TenneT Holding B.V.
up to an aggregate amount of EUR 400 million (2022: EUR 400 million).
43 Account- and other receivables
Account- and other receivables mainly related to corporate income tax receivable.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
189
44 Equity
(EUR million)
Reserve
participating
interests
Reserve for
internally
generated
assets
Revaluation
reserve
Total reserve
participating
interests
At 1 January 2022 64 88 11 163
Result NOKA and HGRT 30 - - 30
Dividend NOKA and HGRT
-25 - - -25
Internally generated intangible assets - 46 - 46
Amortisation on internally generated intangible assets - -23 - -23
Depreciation revaluation tangible fixed assets - - -10 -10
At 31 December 2022
69 111 1 181
Result NOKA, HGRT, VertiCer and associates 23 - - 23
Dividend NOKA and HGRT -39 - - -39
Internally generated intangible assets - 39 - 39
Amortisation on internally generated intangible assets
- -19 - -19
Depreciation revaluation tangible fixed assets
- - -1 -1
At 31 December 2023 53 131 - 184
The statement of changes in equity and disclosures to that statement are included in the consolidated financial statements.
For details on the hybrid securities see note 20.
Reserve participating interests
The revaluation reserve covers the IFRS 1 revaluation of tangible fixed assets in 2004. The reserve for participating interests
relates to HGRT, NOKA, Verticer and associates, for which TenneT does not control payment of dividends. The reserve for
internally generated assets relates to software created by internal employees. In the consolidated financial statements, the
revaluation reserve, the reserve for internally generated assets and the reserve for participating interests were included in
retained earnings.
The reserve participating interests are not freely distributable.
Appropriation of result for the year ended 31 December 2023
The financial statements of 2022 were approved in the General Meeting held on 11 March 2023. The General Meeting
determined the appropriation of result in accordance with the proposal being made to that end.
The appropriation of the 2023 result is at the free disposal of the General Meeting of Shareholders and has not been
recorded in the financial statements.
45 Borrowings
Details on borrowings are included in the consolidated financial statements, see note 22.
46 Financial liabilities
In June 2023 TenneT received a contribution from our Shareholder of EUR 1,602 million. Given the conditions precedent, the
contribution is classified as current financial liability instead of equity.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
190
47 Account- and other payables
(EUR million) 2023 2022
Payables to subsidiaries 1,627 406
Interest payable 148 142
Income tax payable 70 1
Other payables 3 4
Total
1,848 553
48 Events after the reporting period
See note 34 of the consolidated financial statements.
Arnhem, 4 March 2024
Executive Board TenneT Holding B.V.
M.J.J. van Beek (Chair)
T.C. Meyerjürgens
M.C. Abbenhuis
A.C.H. Freitag
Supervisory Board TenneT Holding B.V.
A.F. van der Touw (Chair)
A.C.C. van Els
E. Kairisto
E.M. Schöne
M.R.P.M. Camps
K. Singh
TenneT Holding B.V.
Utrechtseweg 310
6812 AR Arnhem
The Netherlands
Postbus 718
6800 AS Arnhem
The Netherlands
Chamber of Commerce register 09083317
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
191
Other
information
Profit appropriation
Profit appropriation is governed by Section 38.3 of the Articles of Association, which states the following 'To the extent that
the profit is not used to make up prior losses in accordance with the provision of paragraph 2, it shall be at the free disposal
of the general meeting. In the calculation of the profit amount to be distributed on every share, only the amount of the
compulsory payments on the nominal amount of the shares shall be taken into consideration. In the event of a tied vote on a
proposal to distribute or reserve profits, the profits to which the proposal relates shall be reserved'.
Hybrid securities are deeply subordinated securities and are, with the exception of common equity, the most junior
instruments in the capital structure of the Company. The hybrid securities are undated and do not default on non-payment of
coupons (unless such payment was mandatory following a resolution or payment of a dividend to common shareholders, i.e.
as so called ‘dividend pusher’).
The holders of the hybrid securities have limited ability to influence the outcome of a bankruptcy proceeding or a
restructuring outside bankruptcy. Consequently, the hybrid security holders cannot oblige TenneT to pay distributions or
redeem the securities in part or in full. Payment of distributions on and redemption of the securities is at our sole discretion.
As a result, the hybrid securities are classified as part of the equity attributable to the company's owners.
Other information
Profit appropriation**
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
192
Other information Profit appropriation**
Independent auditor’s report
To: the Shareholder and Supervisory Board of TenneT Holding B.V. (“TenneT” or the “Company”)
Report on the audit of the financial statements 2023 included in the Integrated Annual Report 2023
Our opinion
We have audited the financial statements 2023 of TenneT, based in Arnhem, the Netherlands (the “Financial Statements”).
The Financial Statements comprise the consolidated financial statements and the company financial statements.
In our opinion:
• the accompanying consolidated financial statements give a true and fair view of the financial position of TenneT as at
31 December 2023, and of its result and its cash flows for 2023 in accordance with International Financial Reporting
Standards as adopted by the European Union (“IFRS”) and with Part 9 of Book 2 of the Dutch Civil Code; and
• the accompanying company financial statements give a true and fair view of the financial position of TenneT as at
31 December 2023, and of its result for 2023 in accordance with Part 9 of Book 2 of the Dutch Civil Code.
The consolidated financial statements comprise:
1. the consolidated statement of financial position as at 31 December 2023;
2. the following statements for 2023: the consolidated statement of income, the consolidated statements of comprehensive
income, changes in equity and cash flows; and
3. the notes comprising a summary of the accounting policies and other explanatory information.
The company financial statements comprise:
1. the company statement of financial position as at 31 December 2023;
2. the company statement of income for 2023; and
3. the notes comprising a summary of the accounting policies and other explanatory information.
Basis for our opinion
We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. Our responsibilities under
those standards are further described in the 'Our responsibilities for the audit of the Financial Statements' section of our report.
We are independent of TenneT in accordance with the EU Regulation on specific requirements regarding statutory audit of
public-interest entities, the ‘Wet toezicht accountantsorganisaties’ (Audit firms supervision act), the ‘Verordening inzake de
onafhankelijkheid van accountants bij assurance-opdrachten’ (Code of Ethics for Professional Accountants, a regulation with
respect to independence) and other relevant independence regulations in the Netherlands. Furthermore, we have complied
with the ‘Verordening gedrags- en beroepsregels accountants’ (Dutch Code of Ethics).
We believe the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Information in support of our opinion
We designed our audit procedures in the context of our audit of the Financial Statements as a whole and in forming our
opinion thereon. The following information in support of our opinion was addressed in this context, and we do not provide a
separate opinion or conclusion on these matters.
Materiality
Based on our professional judgement we determined the materiality for the Financial Statements as a whole at
EUR 75 million (2022: EUR 60 million). The materiality is based on 7% of the average of underlying operating profits for the
years 2023, 2022 and 2021. We have also taken into account misstatements and/or possible misstatements that in our
opinion are material for the users of the Financial Statements for qualitative reasons.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
193
Independent auditor’s report**
Independent auditor’s report**
Component audits are performed using the materiality levels determined by the judgement of the group engagement team,
considering materiality for the consolidated financial statements as a whole and the reporting structure of the group. For the
largest reporting entities, the audits are performed using the following component materiality levels:
• TenneT GmbH & Co. KG (“TSO DE”): EUR 51 million (2022: EUR 40.8 million); and
• TenneT TSO B.V. (“TSO NL”): EUR 33 million (2022: EUR 26.4 million).
For the other reporting entities, the component materiality levels did not exceed EUR 15 million (2022: EUR 12 million).
We agreed with the Supervisory Board that misstatements in excess of EUR 3.75 million (2022: EUR 3 million), which are
identified during the audit, would be reported to them, as well as smaller misstatements that in our view must be reported on
qualitative grounds.
Scope of the group audit
TenneT is at the head of a group of entities. The financial information of this group is included in the consolidated financial
statements of TenneT.
Because we are ultimately responsible for the opinion, we are responsible for directing, supervising and performing the group
audit. In this respect we have determined the nature and extent of the audit procedures to be carried out for reporting
entities. Decisive were the size and/or the risk profile of the reporting entities or operations. On this basis, we selected
reporting entities for which an audit had to be carried out on the complete set of financial information or specific items.
In establishing the overall group audit strategy and plan, we determined the type of work that needed to be performed at the
components by the group engagement team and the component auditors.
Where the work was performed by component auditors, we determined the level of involvement we needed to have in the
audit work at those components to be able to conclude whether sufficient appropriate audit evidence was obtained as a
basis for our opinion on the Financial Statements as a whole. For each component we determined whether we required an
audit of their complete financial information or whether other procedures would be sufficient.
Our group audit mainly focused on the significant group entities TenneT Holding B.V., TSO DE and TSO NL, because
combined they make up more than 95% of the group’s revenue, underlying operating profit and assets. We included
additional reporting entities in the scope of our group audit to have additional audit coverage on the group’s consolidated
financial statements, and performed other procedures with respect to residual risk in components and account balances that
have not been included in audit scope.
The group consolidation, Financial Statements disclosures and certain centrally coordinated accounting topics were audited
by the group engagement team. These topics included among others treasury and corporate income tax. Team members
with specialized knowledge were involved in the areas of forensic, tax, accounting, valuation, pension and information
technology.
We have obtained the following audit coverage of the group with our audit procedures:
Audit coverage
Revenue 99%
IFRS 98%
Assets 99%
By performing the procedures mentioned above at group entities, together with additional procedures at group level, we
have been able to obtain sufficient and appropriate audit evidence about the group's financial information to provide an
opinion on the consolidated financial statements.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
194
Audit approach fraud risks
Description
An auditor conducting an audit in accordance with Dutch Standards on Auditing is responsible for obtaining reasonable
assurance that the Financial Statements taken as a whole are free from material misstatement, whether caused by fraud or
error. Owing to the inherent limitations of an audit, there is an unavoidable risk that some material misstatements of the
Financial Statements may not be detected. The risk of not detecting a material misstatement resulting from fraud is higher
than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
We have exercised professional judgement and have maintained professional scepticism throughout our audit in identifying
and assessing the risks of material misstatement of the Financial Statements due to fraud, designing and performing audit
procedures responsive to those risks, and obtaining audit evidence that is sufficient and appropriate to provide a basis for
our opinion.
Our response
We performed the following procedures:
• In identifying potential risks of material misstatement due to fraud, we obtained an understanding of TenneT and its
environment, including its internal controls. We evaluated TenneT’s fraud risk assessment and made inquiries with
management, those charged with governance and others within TenneT, including but not limited to the units/
departments (i) Internal Audit, (ii) Compliance & Integrity and (iii) Financial Governance Services. We reviewed their process
for identifying and responding to the risk of fraud, the internal communication regarding their views on business practices
and ethical behaviour and whether they have knowledge of any actual, suspected or alleged fraud affecting the Company.
We considered whether identified fraud risks factors indicated a risk of material misstatement due to fraud.
• Following these procedures, and the presumed risks under the prevailing auditing standards, we identified significant risks
due to fraud related to (i) management override of controls, amongst others in classification of operational expenditure
as capitalised expenditure given the differences in related regulatory accounting and thus future revenues, and
(ii) (procurement on) large Target Grid 2045 projects given their size and strategic importance.
• We held discussions amongst team members and component auditors to identify fraud risk factors and considered
whether other information obtained from our risk assessment procedures indicated risks of material misstatement due to
fraud. Fraud risk factors identified include among others:
• fraud, bribery and corruption;
• compliance with respect to trade regulations/sanctions;
• compliance with respect to environmental requirements; and
• compliance with procurement policies.
• We evaluated whether unusual or unexpected relationships have been identified in performing analytical procedures, that
may indicate risks of material misstatement due to fraud.
• We involved forensic specialists, focused on our fraud and non-compliance risk assessment, inquiries with management,
the evaluation of the internal control environment and in determining the audit response.
• We determined overall responses to address the assessed risks of material misstatement due to fraud at the financial
statement level or at the assertion level which included:
• assigning and supervising personnel with the adequate knowledge, skills and ability;
• evaluating whether the selection and application of accounting policies by the group, particularly those related to
subjective measurements and complex transactions, may be indicative of fraudulent financial reporting;
• we tested the operating effectiveness of the relevant controls in the business processes surrounding project
procurement and project cost accounting;
• incorporating elements of unpredictability in the selection of the nature, timing and extent of our audit procedures,
e.g. related to (i) our selections for further testing of tangible fixed asset projects, including Target Grid 2045 projects
and (capital) expenses and (ii) our approach to (physical) asset inspections;
• testing the appropriateness of journal entries recorded in the general ledger and adjustments made in the preparation
of the Financial Statements;
• evaluating whether the judgments and decisions made by management in making the accounting estimates included
in the Financial Statements indicate a possible bias that may represent a risk of material misstatement due to fraud.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
195
Significant accounting judgements, estimates and assumptions that might have a major impact on the Financial
Statements are disclosed in note 1 of the consolidated Financial Statements. Useful life of assets, grid expense
payables and the provision for decommissioning were focus areas in our audit as the related account balances are
subject to significant management judgment. Reference is made to the section “Our key audit matters”; and
• performing a retrospective review of management judgments and assumptions related to significant accounting
estimates such as cost assumptions on the decommissioning provisions and in-feed management accruals reflected in
prior year Financial Statements. We considered available information and made enquiries of relevant executives and
the Supervisory Board.
Based on our procedures performed, we have no matters to report.
Audit approach compliance with laws and regulations
Description
We are responsible for obtaining reasonable assurance that the Financial Statements, taken as a whole, are free from
material misstatement, whether due to fraud or error taking into account the applicable legal and regulatory framework.
However, we are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all
laws and regulations.
Owing to the inherent limitations of an audit, there is an unavoidable risk that some material misstatements in the Financial
Statements may not be detected, even though the audit is properly planned and performed in accordance with the auditing
standards. In the context of laws and regulations, the potential effects of inherent limitations on the auditor’s ability to detect
material misstatements are greater for such reasons as the following:
• There are many laws and regulations, relating principally to the operating aspects of an entity, that typically do not affect
the financial statements and are not captured by the entity’s information systems relevant to financial reporting.
• Non-compliance may involve conduct designed to conceal it, such as collusion, forgery, deliberate failure to record
transactions, management override of controls or intentional misrepresentations being made to the auditor; and
• Whether an act constitutes non-compliance is ultimately a matter to be determined by a court or other appropriate
adjudicative body.
Ordinarily, the less directly non-compliance is linked to the events and transactions reflected in the financial statements, the
less likely the auditor is to become aware of it or to identify the non-compliance.
Our response
We performed the following procedures:
• As part of obtaining an understanding of TenneT and its environment we obtained a general understanding of the legal
and regulatory framework applicable to TenneT and the industry in which it operates and how TenneT is complying with
that framework.
• We assessed the laws and regulations relevant to the Company through discussion with management, those charged
with governance and others within TenneT, including the units (i) Internal Audit, Risk & Internal Control and Compliance &
Integrity, (ii) Legal Affairs, (iii) Regulatory Affairs, (iv) Business Guidance and (v) Financial Governance Services. We have
read related minutes and reports. We involved our forensic specialists in our evaluation.
• We obtained sufficient appropriate audit evidence regarding provisions of those laws and regulations generally recognised
to have a direct effect on the determination of material amounts and disclosures in the Financial Statements such as
(corporate) tax and pension laws and financial reporting regulations, the requirements under IFRS and Part 9 of Book 2
of the Dutch Civil Code.
• Apart from these, TenneT is subject to other laws and regulations where the consequences of non-compliance could have
a material effect on amounts and/or disclosures in the Financial Statements, for instance, through imposing fines or
litigation. Given the nature of TenneT’s business and the complexity of European public procurement regulations, the
Energiewet (Dutch Electricity Act), the Energiewirtschafsgesetz (German Energy Industry Act), and other relevant Dutch
and German energy laws and regulations, as well as environmental laws, there is a risk of non-compliance with the
requirements of such laws and regulations. In addition, we considered relevant laws and regulations applicable to
listed companies.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
196
• Our procedures are more limited with respect to other laws and regulations that do not have a direct effect on the
determination of the amounts and disclosures in the Financial Statements. These laws and regulations compliance may
be fundamental to the operating aspects of the business, to TenneT’s ability to continue its business, or to avoid material
penalties (e.g., compliance with the energy laws in the Netherlands and Germany or compliance with environmental
regulations) and therefore non-compliance with such laws and regulations may have a material effect on the Financial
Statements. Our responsibility is limited to undertaking specified audit procedures to help identify non-compliance with
those laws and regulations that may have a material effect on the Financial Statements.
• Our procedures are limited to (i) inquiry of the Executive Board, the Supervisory Board and others within TenneT as to
whether the Company is in compliance with such laws and regulations and (ii) inspecting correspondence, if any, with the
relevant licensing or regulatory authorities to help identify non-compliance with those laws and regulations that may have
a material effect on the Financial Statements.
• We remained alert to indications of (suspected) non-compliance throughout the audit.
• We obtained written representations that all known instances of (suspected) fraud or non-compliance with laws and
regulations have been disclosed to us.
Based on our procedures performed, we have no matters to report.
Audit approach going concern
Description
We are responsible for obtaining reasonable assurance that the Company is able to continue as a going concern. Management
is responsible to assess the Company’s ability to continue as a going concern and disclosing in the Financial Statements any
events or circumstances that may cast significant doubt on the Company’s ability to continue as a going concern.
As described in note 1, the Executive Board believes that no events or conditions give rise to doubt about the ability of the
Company to continue in operation, for at least one year from the date of the end of the reporting period.
Our response
We performed the following procedures:
• We evaluated management’s assessment of the going concern assumption and related disclosure note 1 of the
Financial Statements;
• We challenged management’s cash flow forecasts and primary assumptions, also in the light of our understanding
obtained with regards to management’s outlook as reported in the Board Report;
• We evaluated the Company’s capital management objectives, including its long-term credit rating and liquidity on a rolling
12-month forward looking basis as disclosed in note 19; and
• We considered the Company’s repayment obligations as disclosed in note 28.
Based on our procedures performed, we have no matters to report.
Our key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
Financial Statements. We have communicated the key audit matters to the Supervisory Board. The key audit matters are not
a comprehensive reflection of all matters discussed.
These matters were addressed in the context of our audit of the Financial Statements as a whole and in forming our opinion
thereon, and we do not provide a separate opinion on these matters.
Project Ampere
Description
On 10 February 2023, TenneT announced that it intends to engage in discussion with the German government to investigate
the potential full sale of TenneT’s German activities. Since then, talks between the Dutch and German governments on the
potential sale (“Project Ampere”) have been ongoing. Based on the current state of the negotiation, TenneT has concluded
that the IFRS 5 ‘Held for Sale’ criteria have been met per 31 December 2023 and therefore have been applied to the
Financial Statements.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
197
We have included this as a key audit matter because of:
• the additional reporting risks such as incorrectly concluding that all IFRS 5 criteria have been met; and
• the one-off nature of this potential transaction could lead to incorrect accounting under the treatment of IFRS 5 and
incomplete disclosures on the matter.
Our response
We performed the following procedures:
• We obtained a detailed understanding of the (internal) process that TenneT management uses to keep track of all
developments in Project Ampere.
• We have reviewed all relevant minutes and reports, made regular inquiries with TenneT’s Executive Board, Supervisory
Board, and other key officers involved.
• We performed an analysis on the media coverage surrounding this topic, including potential developments in the process.
• We evaluated the affected accounting positions, including the judgment if all IFRS 5 ‘Held for Sale’ criteria have been met
as per 31 December 2023, and the related disclosures in the Financial Statements around the potential transaction.
Our observations
Our procedures did not identify material observations and we considered management’s judgment and the disclosure
thereon to be adequate.
Tangible fixed assets
Description
Securing supply and facilitating the energy transition by expanding and enhancing the high-voltage grid through integration
of sustainable energy sources require substantial investments and flexible access to (equity) funding. TenneT expects to
increase its annual investment volume to at least EUR 10 billion in 2024 for on- and offshore grid connections.
We have included this as a key audit matter because of:
• the financial significance of the tangible fixed assets and related capital expenditures;
• the risks associated with large investment projects, complexity in procurement, construction and timely completion;
• the professional judgment required in determining the impact of the energy transition on (i) (funding) the capital investment
planning, and (ii) the existing asset portfolio, including the assessment of remaining useful lives of assets; and
• the professional judgement required in (i) assessing whether there is any indication that an asset may be impaired and (ii) if
there is any such indication, estimating the recoverable amount of that asset (i.e., measuring any impairment).
Our response
We performed the following procedures:
• We tested the internal control environment related to tangible fixed assets through testing of operating effectiveness of
relevant controls, including controls related to (i) investment approval, (ii) the financial closing of assets under construction,
and (iii) the periodic determination of the useful lives of tangible fixed assets.
• We tested the design and implementation of relevant controls related to TenneT’s liquidity forecast underpinning its ability
to finance investments.
• We obtained and discussed internal management reports about progress of the key assets under construction and
performed tests of details on the additions to and other movements in tangible fixed assets.
• We evaluated management’s estimation of the useful lives of tangible fixed assets based on economic, regulatory and
technical data.
• We evaluated management’s assessment that no indications were identified that any assets may be impaired as at
31 December 2023.
Our observations
Our procedures did not identify material observations and we considered management’s key assumptions, to be within the
reasonable range of our own expectations.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
198
Provision for decommissioning of (offshore) assets
Description
Moving towards a renewable future involves significant investments in (offshore) assets that are to be decommissioned over
the next 20 to 40 years, thus requiring recognition of decommission provisions. The corresponding provisions are based on
estimates of costs, timing of decommissioning, discount rates and inflation.
We have included this as a key audit matter because of:
• the significance of the provision and additions for the year triggered by the start of construction of new (offshore) assets; and
• the uncertainty involved in measuring the provision and sensitivity to changes in key assumptions, including the cost base,
the inflation rate and the discount rate.
Our response
We have obtained management’s position papers on the cost assumptions and alignment of the methodology across the
Netherlands and Germany. Our audit procedures included testing of design and implementation of relevant controls around the
periodical assessment of these assumptions and the evaluation of the financial model used to calculate the provision.
Our substantive audit procedures further included an assessment of the reasonability of the key assumptions through
comparison with observable market data and procedures to address the completeness of the provision.
Furthermore, we evaluated the appropriateness of the disclosure of the accounting policy and estimation uncertainty of these
provisions.
Our observations
Our procedures did not identify material observations and we considered management’s key assumptions, to be within the
reasonable range of our own expectations.
Report on the other information included in the Integrated Annual Report 2023
The Integrated Annual Report 2023 contains other information, in addition to the Financial Statements and our auditor's report
thereon. The other information consists of:
1. Director’s Report, consisting of:
a. About TenneT;
b. Our performance in 2023;
c. Corporate Governance; and
d. EU Taxonomy disclosures.
2. Supervisory Board Report.
3. Other Information as required by Part 9 of Book 2 of the Dutch Civil Code.
4. Other information included in the integrated annual report.
Based on the following procedures performed, we conclude that the other information:
• is consistent with the Financial Statements and does not contain material misstatements; and
• contains all the information regarding the director’s report and the other information as required by Part 9 of Book 2 of the
Dutch Civil Code.
We have read the other information. Based on our knowledge and understanding obtained through our audit of the Financial
Statements or otherwise, we have considered whether the other information contains material misstatements.
By performing these procedures, we comply with the requirements of Part 9 of Book 2 of the Dutch Civil Code and the Dutch
Standard on Auditing 720. The scope of the procedures performed is substantially less than the scope of those performed in
our audit of the Financial Statements.
Management is responsible for the preparation of the other information, including the Director’s Report in accordance with
Part 9 of Book 2 of the Dutch Civil Code, and the other information as required by Part 9 of Book 2 of the Dutch Civil Code.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
199
Report on other legal and regulatory requirements and ESEF
Engagement
We were engaged by the annual meeting of shareholders as auditor of TenneT on 18 December 2019, as of the audit for the
year 2020 and have operated as statutory auditor ever since that financial year.
No prohibited non-audit services
We have not provided prohibited non-audit services as referred to in Article 5(1) of the EU Regulation on specific
requirements regarding statutory audit of public-interest entities.
European Single Electronic Format (ESEF)
TenneT has prepared its annual report in ESEF. The requirements for this are set out in the Commission Delegated Regulation
(EU) 2019/815 with regard to regulatory technical standards on the specification of a single electronic reporting format (the
“RTS on ESEF”).
In our opinion, the annual report, prepared in XHTML format, including the (partly) marked-up consolidated financial
statements, as included in the reporting package by TenneT complies in all material respects with the RTS on ESEF.
Management is responsible for preparing the annual report including the Financial Statements in accordance with the RTS
on ESEF, whereby management combines the various components into a single reporting package.
Our responsibility is to obtain reasonable assurance for our opinion whether the annual report in this reporting package
complies with the RTS on ESEF.
We performed our examination in accordance with Dutch law, including Dutch Standard 3950N ‘Assurance-opdrachten
inzake het voldoen aan de criteria voor het opstellen van een digitaal verantwoordingsdocument’ (assurance engagements
relating to compliance with criteria for digital reporting).
Our examination included amongst others:
• Obtaining an understanding of the Company's financial reporting process, including the preparation of the reporting package.
• Identifying and assessing the risks that the annual report does not comply in all material respects with the RTS on ESEF and
designing and performing further assurance procedures responsive to those risks to provide a basis for our opinion, including:
• obtaining the reporting package and performing validations to determine whether the reporting package containing the
Inline XBRL instance and the XBRL extension taxonomy files has been prepared in accordance with the technical
specifications as included in the RTS on ESEF; and
• examining the information related to the consolidated financial statements in the reporting package to determine
whether all required mark-ups have been applied and whether these are in accordance with the RTS on ESEF.
Description of responsibilities regarding the Financial Statements
Responsibilities of management and the Supervisory Board for the Financial Statements
Management is responsible for the preparation and fair presentation of the Financial Statements in accordance with IFRS
and Part 9 of Book 2 of the Dutch Civil Code. Furthermore, management is responsible for such internal control as
management determines is necessary to enable the preparation of the Financial Statements that are free from material
misstatement, whether due to fraud or error.
As part of the preparation of the Financial Statements, management is responsible for assessing the Company's ability to
continue as a going concern. Based on the financial reporting frameworks mentioned, management should prepare the
Financial Statements using the going concern basis of accounting unless management either intends to liquidate the
company or to cease operations, or has no realistic alternative but to do so.
Management should disclose events and circumstances that may cast significant doubt on the Company's ability to continue
as a going concern in the Financial Statements.
The Supervisory Board is responsible for overseeing the Company's financial reporting process.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
200
Our responsibilities for the audit of the Financial Statements
Our objective is to plan and perform the audit assignment in a manner that allows us to obtain sufficient and appropriate
audit evidence for our opinion.
Our audit has been performed with a high, but not absolute, level of assurance, which means we may not detect all material
errors and fraud during our audit.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of these Financial Statements.
The materiality affects the nature, timing and extent of our audit procedures and the evaluation of the effect of identified
misstatements on our opinion.
We have exercised professional judgement and have maintained professional skepticism throughout the audit, in accordance
with Dutch Standards on Auditing, ethical requirements and independence requirements. Our audit included among others:
• Identifying and assessing the risks of material misstatement of the Financial Statements, whether due to fraud or error,
designing and performing audit procedures responsive to those risks, and obtaining audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is
higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations,
or the override of internal control.
• Obtaining an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's
internal control.
• Evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by management.
• Concluding on the appropriateness of management’s use of the going concern basis of accounting, and based on the audit
evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on
the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to
draw attention in our auditor's report to the related disclosures in the Financial Statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.
• Evaluating the overall presentation, structure and content of the Financial Statements, including the disclosures.
• Evaluating whether the Financial Statements represent the underlying transactions and events in a manner that achieves
fair presentation.
We communicated with the Supervisory Board regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant findings in internal control that we identified during our audit. In this
respect we also submitted an additional report to the Audit, Risk and Compliance Committee in accordance with Article 11
of the EU Regulation on specific requirements regarding statutory audit of public-interest entities. The information included in
this additional report is consistent with our audit opinion in this auditor's report.
We provided the Supervisory Board with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on
our independence, and where applicable, related safeguards.
From the matters communicated with the Supervisory Board, we determine the key audit matters: those matters that were of
most significance in the audit of the Financial Statements. We describe these matters in our auditor's report unless law or
regulation precludes public disclosure about the matter or when, in extremely rare circumstances, not communicating the
matter is in the public interest.
Rotterdam, 4 March 2024
Deloitte Accountants B.V.
Signed on the original J.A. de Bruin
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
201
Limited assurance report of the independent auditor
with respect to the 2023 Sustainability Information of
TenneT Holding B.V.
To: the Shareholder and Supervisory Board of TenneT Holding B.V. (“TenneT” or the “Company”)
Our conclusion
We have performed a limited assurance engagement on the sustainability information included in the Integrated Annual
Report for the year 2023 (“IAR”), of TenneT based in Arnhem (the “Sustainability Information”). Our procedures did not
cover the information set out in the section EU Taxonomy disclosures’ on page 213.
Based on our procedures performed and the assurance information obtained, nothing has come to our attention that causes
us to believe that the Sustainability Information in the accompanying IAR does not present fairly, in all material respects:
• the policy and business operations with regard to sustainability; and
• the business operations, events and achievements in 2023
in accordance with the applicable criteria as included in the ‘Reporting criteria’ section of our report.
The Sustainability Information consists of the performance information in the chapters ‘At a glance 2023’, ‘Letter from the
Board’, ‘About TenneT’, ‘Our Performance in 2023’ (excluding the sections ‘Safeguard sustainable financial performance’
and ‘Statements of the Executive Board’) and the section ‘About this report’ in the IAR.
Basis for our conclusion
We have performed our limited assurance engagement on the Sustainability Information in accordance with Dutch law,
including Dutch Standard 3810N ‘Assurance-opdrachten inzake duurzaamheidsverslaglegging’ (Assurance engagements
relating to sustainability reports) which is a specified Dutch Standard that is based on the International Standard on
Assurance Engagements (ISAE) 3000 ‘Assurance engagements other than audits or reviews of historical financial
information’. This assurance engagement is aimed at obtaining limited assurance. Our responsibilities under this standard
are further described in the ‘Our responsibilities for the review of the Sustainability Information’ section of our report.
We are independent of TenneT in accordance with the ‘Verordening inzake de onafhankelijkheid van accountants bij
assurance-opdrachten’ (ViO, Code of Ethics for Professional Accountants, a regulation with respect to independence) and
other relevant independence regulations in the Netherlands. This includes that we do not perform any activities that could
result in a conflict of interest with our independent assurance engagement. Furthermore, we have complied with the
‘Verordening gedrags- en beroepsregels accountants’ (VGBA, Dutch Code of Ethics for Professional Accountants).
We believe that the assurance evidence we have obtained is sufficient and appropriate to provide a basis for our conclusion.
Reporting criteria
The reporting criteria applied for the preparation of the Sustainability Information are the Sustainability Reporting Standards of
the Global Reporting Initiative (“GRI Standards”) and the criteria supplementally applied as disclosed in the chapter ‘About
the report” of the IAR.
The Sustainability Information is prepared with reference to the GRI Standards. The GRI Standards used are listed in the GRI
Content Index as disclosed on page 205 of the IAR.
The comparability of Sustainability Information between entities and over time may be affected by the absence of a uniform
practice on which to draw, to evaluate and measure this information. This allows for the application of different, but
acceptable, measurement techniques.
Consequently, the Sustainability Information needs to be read and understood together with the criteria applied.
Limited assurance report of the independent
auditor
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
202
Limited assurance report of the independent
auditor
Limited assurance report of
the independent auditor
Materiality
Based on our professional judgement we determined materiality levels for each relevant part of the sustainability information.
When evaluating our materiality levels, we considered quantitative and qualitative aspects as well as the relevance of
information for both stakeholders and the company.
Limitations to the scope of our review
The Sustainability Information includes prospective information such as ambitions, strategy, plans, expectations, estimates
and risk assessments. As discussed in the section ‘Climate related risks and opportunities’ on page 109 of the IAR, the
Sustainability Information includes information based on climate-related scenarios that is subject to inherent uncertainty
because of incomplete scientific and economic knowledge about the likelihood, timing or effect of possible future climate-
related impacts. Prospective information relates to events and actions that have not yet occurred and may never occur. We
do not provide any assurance on the assumptions and achievability of this prospective information.
In the Sustainability Information, the calculations to determine the Impact Indicators are mostly based on assumptions and
sources from third parties. The assumptions and sources used are disclosed in the chapter The Sustainable Development
Goals of the IAR and further elaborated in the Additional CSR data document as available on the website of TenneT. We have
reviewed that these assumptions and external sources are appropriate, but we have not performed procedures on the
content of these assumptions and external sources
The references to external sources or websites in the Sustainability Information are not part of the Sustainability Information
as included in the scope of our assurance engagement. We therefore do not provide assurance on this information. Our
conclusion is not modified in respect to these matters.
Responsibilities of management and the Supervisory Board for the Sustainability Information
Management is responsible for the preparation and fair representation of the Sustainability Information in accordance with
the criteria as included in the ‘Reporting criteria’ section, including the identification of stakeholders and the definition of
material matters. Management is also responsible for selecting and applying the criteria and for determining that these
criteria are suitable for the legitimate information needs of stakeholders, considering applicable law and regulations related to
reporting. The choices made by management regarding the scope of the Sustainability Information and the reporting policy
are summarised in the chapter ‘Our strategy and value creation’ of the IAR.
Furthermore, management is responsible for such internal control as it determines is necessary to enable the preparation of
the Sustainability Information that is free from material misstatement, whether due to fraud or error.
The Supervisory Board is responsible for overseeing the sustainability reporting process of TenneT.
Our responsibilities for the assurance engagement on the Sustainability Information
Our responsibility is to plan and perform the review in a manner that allows us to obtain sufficient and appropriate assurance
evidence to provide a basis for our conclusion.
Our assurance engagement is aimed to obtain a limited level of assurance to determine the plausibility of information. The
procedures vary in nature and timing from, and are less in extent, than for a reasonable assurance engagement. The level of
assurance obtained in a limited assurance engagement is therefore substantially less than the assurance that is obtained
when a reasonable assurance engagement is performed.
We apply the ‘Nadere voorschriften kwaliteitssystemen’ (NVKS, regulations for Quality management systems) and
accordingly maintain a comprehensive system of quality management including documented policies and procedures
regarding compliance with ethical requirements, professional standards and other relevant legal and regulatory requirements.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
203
Our limited assurance engagement included among others:
• Performing an analysis of the external environment and obtaining an understanding of relevant social themes and issues,
and the characteristics of TenneT.
• Evaluating the appropriateness of the reporting criteria used, their consistent application and related disclosures in the
Sustainability Information. This includes the evaluation of TenneT’s materiality assessment and the reasonableness of
estimates made by management.
• Obtaining through inquiries a general understanding of the internal control environment, the reporting processes and
information systems and the entity’s risk assessment process relevant to the preparation of the Sustainability Information,
without obtaining assurance information about the implementation or testing the operating effectiveness of controls.
• Identifying areas of the Sustainability Information where misleading or unbalanced information or material misstatements,
whether due to fraud or error, is likely to arise. Designing and performing further assurance procedures aimed at
determining the plausibility of the Sustainability Information responsive to this risk analysis. These procedures consisted
amongst others of:
• obtaining inquiries from management, KPI owners and/or other relevant staff at corporate and business level
responsible for the sustainability strategy, policy and results;
• obtaining inquiries from relevant staff responsible for providing the information for, carrying out internal control
procedures on, and consolidating the data in the Sustainability Information;
• determining the nature and extent of the procedures for KPI’s. For this, the nature, extent and/or risk profile of the KPI’s
are decisive. Based thereon we selected the KPI owners or other relevant staff whom we have interviewed.
• obtaining assurance evidence that the Sustainability Information reconciles with underlying records of TenneT;
• reviewing, on a limited test basis, relevant internal and external documentation; and
• performing an analytical review of the data and trends.
• Reading the information in the IAR which is not included in the scope of our assurance engagement to identify material
inconsistencies, if any, with the Sustainability Information.
• Considering the overall presentation and balanced content of the sustainability information.
• Considering whether the Sustainability Information as a whole, including the sustainability matters and disclosures, is
clearly and adequately disclosed in accordance with the applicable criteria.
We communicated with the Executive Board and Supervisory Board regarding, among other matters, the planned scope,
timing and outcome of the review and significant findings that we identified during our review.
Rotterdam, 4 March 2024
Deloitte Accountants B.V.
Signed on the original J.A. de Bruin
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
204
About this report
Scope of this report
The scope of this report is TenneT Holding B.V. and the subsidiaries in which it has a controlling interest (generally speaking a
voting interest of over 50%). For example, our 50% stake in BritNed and BritNed’s activities are not included in our results.
This integrated report covers the full year 2023, i.e. 1 January 2023 to 31 December 2023. TenneT’s Integrated Annual
Report 2023 was published on 11 March 2024 and is available online.
In 2023, there were no significant acquisitions or divestments impacting our non-financial reporting. A complete overview of
all the consolidated entities in this Integrated Annual Report is disclosed in note 31 of the consolidated financial statements.
Our reporting policy in the event of acquisitions or divestments is disclosed in notes 1, 2, 12 and 13 of the consolidated
financial statements. For non-financial performance we report acquisitions and divestments from the day of purchase or
when an entity is sold respectively. We recognise that in the event of acquisitions, reporting improvements may be required
which may result in data being estimated.
Reporting principles
Our non-financial qualitative and quantitative information is prepared with reference to the Global Reporting Initiative
(GRI) Universal Standards. In absence of sector guidance, we also adhere to the sector guidelines for our industry (G4
sector disclosures - electric utilities). For more information, please refer to the reporting guidance document on our corporate
website.
The GRI context index, as included on our corporate website, shows which GRI aspects are material to TenneT and refers
to those sections in the report describing this aspect. In addition, and in accordance with the policy on state-owned
companies (Nota Deelnemingenbeleid Rijksoverheid 2022), TenneT complies with the Dutch Corporate Governance Code,
as laid down in the Corporate Governance section of this report. As required per this policy, TenneT also signed the Diversity
Charter in 2021 and embraces the principles of the Tax Governance Code.
We have used the Integrated Reporting (IR) framework, as defined by the International Integrating Reporting Council (IIRC,
which together with SASB formed the Value Reporting Foundation in 2021) as a basis for this integrated report. This allows
us to be transparent about our impact as an organisation. The financial information in this report was prepared in accordance
with IFRS, as adopted by the EU, and complies with Part 9 of Book 2 of the Dutch Civil Code.
Furthermore, our Integrated Annual Report complies with the EU Non-Financial Reporting Directive (NFRD), which
was translated to Dutch legislation and has been mandatory for annual reports since 2017. In 2022, the successor of
this legislation was published: the Corporate Sustainability Reporting Directive (CSRD). This directive sets out the legal basis
to which companies, that fulfil the requirements set out in this legislation, need to comply to and as of which date to be more
transparent on how companies manage and perform with respect to the organisation’s environmental, social and
governance related impacts, risks and opportunities. As a company already needing to comply to the NFRD, TenneT needs
to report in accordance with the CSRD as of reporting year 2024. TenneT has started its preparations to comply to this new
EU legislation, ahead of the finalisation of the legislation and delivery of the reporting standards connected to them, the
European Sustainability Reporting Standards (ESRS).
The CSRD legislation was finalised in November 2022 and the final wording of the ESRS was agreed upon and adopted by
the European Commission in July 2023. TenneT has started preparing to become CSRD ready and to be able to report on
the requirements set by the ESRS. Therefore, TenneT has performed a double materiality analysis (refer to the ‘Stakeholders
and materiality’ section) and been performing gap analyses to determine potential gaps between what the ESRS requires
and how impacts, risks and opportunities for a certain topic are currently managed.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
205
About this report
Examples of this relate to where we can better explain the connection between TenneT’s strategy, the policies, actions,
targets and metrics defined for instance. With a relatively new topic for TenneT such as circularity, we are aware that
managing this impact in the context of ESRS, is a journey and there is still ground to cover. That is why we have been
working step by step on this and closing gaps one step at a time. In 2024, TenneT will continue to work on gaps identified.
Furthermore, this report is also part of our progress and how we implement the 10 principles of the United Nations Global
Compact (UNGC). We have endorsed these principles since 2015, not just to underline our own commitment, but also to
drive CSR performance in the value chain. The UNGC principles are the basis of our TenneT Supplier Code of Conduct and
mandatory for all suppliers. New suppliers who do not meet our standards during supplier visits, are disqualified from our
tender procedures. The way communication on the progress related to the UNGC has changed in 2022 and as of 2023 this
will be shared via the UNGC website.
In 2015, the United Nations launched the Sustainable Development Goals (SDGs). These goals are accepted worldwide
as driving sustainability. The section in our Integrated Annual Report ‘The Sustainable Development Goals’ describes our
impact and the contribution we make to the SDGs that are most relevant to our business.
Stakeholders and materiality
In accordance with the applied reporting principles, this integrated report covers topics considered material to
our organisation. TenneT uses the materiality principle to determine which subjects/impacts to include in the report related
to which activities (also with respect to our supply chain) to take into account. Our corporate website (www.tennet.eu)
includes additional information which was not considered material for integrated reporting purposes. How we defined the
material topics and the results of this assessment can be found in the materiality section below. The fact that we report on
selected topics does not mean we do not manage aspects that are not considered material to our business. Our activities
and CSR policy are broader and are not limited to the outcome of the materiality analysis. For more detailed information, go
to the CSR section of our website.
Materiality
TenneT’s own
environmental impact
Safety
Responsible supply
chain practices
Securing supply
today and tomorrow
(Cyber) security
Driving the energy
transition
Compliance Financial health
Creating a sustainable
workplace
Stakeholder engagement
Strategic partnerships
Significance of TenneT’s Economic, Environmental and Social impact
Low Medium High
Economic Environmental Social Most significant impacts
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
206
Our policy is to perform a materiality analysis every two to three years and review the analysis every year to identify gaps in
intermediate years. As 2023 is the final year we will be reporting based on GRI, due to the reporting requirements related to
the CSRD as of reporting year 2024, we made use of the materiality analysis performed in 2022 and reconfirmed its
appropriateness for our 2023 annual reporting. This is based on the guidance provided by GRI in their Universal Standards
(2021), described in GRI 3. Here, the analysis of the significance of TenneT’s economic, social and environmental impact was
performed and determined through an internal analysis. We included the views of our (external) stakeholders from earlier
surveys and interactions in this analysis. This determined whether our impact per topic is either high, medium or low. The
outcome of this analysis was reviewed and validated by our highest governance body, being both the Executive Board and
the Supervisory Board. The outcome of this was that the following four impacts are considered to be our key material topics:
safety, securing supply today and tomorrow, driving the energy transition and financial health. The materiality process is
thoroughly embedded in the TenneT organisation. After validation, the materiality analysis was completed and resulted in the
overview, depicted on the previous page.
As aforementioned, the European Commission adopted the CSRD legislation in 2022, and will replace the NFRD requirement
when the first organisations need to report based on the ESRS in regarding fiscal year 2024, such as TenneT. With respect
to materiality, the concept of double materiality is mentioned in both the NFRD as well as the CSRD. This means that on the
one hand, companies need to assess the degree of the impact the organisation’s material environmental, social and
governance (ESG) impacts, risks and opportunities on people and planet and also on the other hand how these impacts,
risks and opportunities financially impact the organisation.
As TenneT, our impact on both dimensions is disclosed in our annual reporting already in several ways. This is on the one
hand a part of the materiality analysis where the significance of TenneT's impact is assessed per relevant topic. Key impacts
are also disclosed quantitatively and qualitatively in the relevant chapters. With regards to our impact on people, this is
disclosed in 'Our stakeholders' and the chapter 'Safe and inspiring workplace'. Our impact on the environment is disclosed
in the chapter 'Create value to transition to a climate-neutral economy'.
On the other hand, the impact of ESG impacts, risks and opportunities on TenneT is currently described in the way we
incorporate the Taskforce for Climate related Financial Disclosures (TCFD) recommendations in Integrated Annual Report
2023. The impact of climate change on our activities and the associated risks and opportunities are disclosed here. We also
disclose how developments related to people and the environment could impact us as a company, for example in 'Key
Developments' and the 'What could prevent us from reaching our goals?' in each chapter of 'Our performance'. This relates
to the effects of climate change, scarcity of goods and services, changing demographics, also related to our people and
future employees, might impact us, as for instance changing demographics and scarcity of (technical) talent provides
challenges.
However, this is just covering a part of the ESRS requirements. That is why we have finalised our double materiality analysis
in the second half of 2023 to prepare ourselves for the reporting year 2024 and reporting based on ESRS. As there are
differences between how GRI and ESRS approach the concept of materiality, we have used the outcomes of this
assessment purely for the preparation of the 2024 reporting and not to base our Integrated Annual Report 2023 on.
Materiality
TenneT’s own
environmental impact
Safety
Responsible supply
chain practices
Securing supply
today and tomorrow
(Cyber) security
Driving the energy
transition
Compliance Financial health
Creating a sustainable
workplace
Stakeholder engagement
Strategic partnerships
Significance of TenneT’s Economic, Environmental and Social impact
Low Medium High
Economic Environmental Social Most significant impacts
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
207
The double materiality analysis performed has been executed in accordance with ESRS 2 and has made use of obtaining the
views of stakeholders via surveys, internal desktop research and expert sessions with internal stakeholders from multiple
departments such as CSR experts, risk specialists and colleagues with a broad financial background. This analysis has been
reviewed and validated by both our Executive Board and Supervisory Board in 2023. As a result, the following impacts, risks
and opportunities have been identified as material:
• Safe working environment
• Security of supply
• Financial health
• Climate change
• Resource use and circularity
• Responsible Supply Chain Practices
• Delivering the energy transition
These outcomes are used to prepare ourselves for the 2024 annual reporting based on ESRS. In this year’s annual report,
we already disclose information on all of the topics that are deemed material based on this double materiality assessment,
where for certain topics to a greater extent than for others. In Integrated Annual Report 2024, we will ensure that our
disclosures on how we manage these topics are prepared in accordance with ESRS.
Scope and boundaries
The table on the next pages provides a clear overview of the material topics, their impact, our contribution and the
boundaries. A detailed disclosure of our management approach on each material topic can be found in the CSR section of
our website.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
208
Material topic Safety Security of supply
Drive the energy
transition Financial health
Reference
• Chapter • Create a safe and
inspiring workplace
• Deliver a high security
of supply
• Deliver a high security
of supply, Ensure critical
infrastructure for
society,
• Create value to
transition to a climate
neutral economy,
• Solve societal
challenges with
stakeholders and
through partnerships
• Safeguard sustainable
financial performance
• Why material? • Our employees are our
most important and
valuable asset, which is
why the safety of
everyone involved in our
activities (employees
and contractors) is a
top priority.
• Our main task is to
ensure security of
electricity supply to
more than 43 million
people across the
Netherlands and
Germany.
• With our knowledge,
experience and vision
with respect to the
future energy
landscape, we believe
that we can serve
society by helping to
drive the energy
transition in an effective
and efficient manner.
• Safeguarding
sustainable financial
performance will enable
us to drive the energy
transition against lower
societal costs. We need
to invest in onshore and
offshore grid
infrastructure to realise
the energy transition
over the next ten years
and achieve the energy
goals set by the Dutch
and German
government.
• What is the impact? • We need to make sure
our employees can
perform their work
safely, as every safety
incident is one too
many.
• Electricity is the
backbone of the
economy of the
countries we operate in.
• National governments in
the area we serve have
committed themselves
to national and
international climate
agreements. We are an
important stakeholder
to help realise this.
• It is important to
carefully make the right
investment decisions
and to manage them
properly to be sure we
are doing the right
things at acceptable
costs.
• What is our role? • We are responsible for
integrating safety into
our daily pratices as a
TSO.
• We are responsible for
maintaining a balance
between supply and
demand; we operate
and manage the
high-voltage grid.
• To connect everyone
with a brighter energy
future, we need to lead
as a green grid
operator, be a thought
leader in the energy
transition, develop
innovative instruments
to unlock flexibility and
establish a pivotal role
in the energy data world
to facilitate innovation.
• We are responsible for
realising the investment
programme and living
up to our stakeholders’
expectations.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
209
Material topic Safety Security of supply
Drive the energy
transition Financial health
• What are the bounderies? • We are responsible for
making sure everyone
that works with and for
us can return safely to
their homes at the end
of the day. The scope of
our safety reporting
relates to both our own
employees as safety
incidents from
employees working for
our contractors related
to our projects.
• We are responsible for
transmission services.
Production is the
responsibility of
producers, distribution
lies with DSOs.
• Our boundaries related
to this topic align with
the scope of this report.
• For our carbon footprint
reporting, we
broadened the scope of
our reporting this year
as also the scope 3
emissions related to
purchased and capital
goods and services are
included related to the
realisation of our assets.
• We are responsible for
realising our investment
portfolio. The
investment programme
is based on the task we
are given by the Dutch
and German
governments.
• Key Performance
Indicators (KPIs)
• TRIR • Security of supply:
uptime in %
• Amount of GW of
offshore capacity
realised
• Adjusted underlying
EBIT group FFO/Net
debt ROIC
• Targets/ambitions • 4.3 (in 2023) • 99.99962% grid
availability onshore
95.07% grid availability
offshore
• TenneT aims to connect
over 43 GW of offshore
wind energy by ~2030.
• In 2023, our investment
target was EUR 6.3
billion
• To finance our
investments, our target
is to deliver at least EUR
10 billion per year in
projects while securing
our supply chain.
• Unit(s) responsible within
organisation
• Health, Safety &
Environment (HSE)
• Asset Management
(AMT) Large Projects
departments (LPG),
(LPN), (LPD), (LPO)
System Operations
(SOP), Grid Field
Operations, (GFO)
• Large Projects
departments (LPG),
(LPN), (LPD), (LPO)
Digital & Process
Business Technology
Organisation (BTO),
Grid Field Operations
(GFO)
• Strategic Investment
Committee, Supervisory
Board, Business
Guidance Corporate
(BGD)
For most of our figures, our reporting focus is on our own operations, although we do take some aspects of the value
chain into account in our carbon footprint and safety (TRIR). We recognise that reporting outside our gate (so-called ‘value
chain reporting’) provides a better overview of our impact. We will strive to expand the boundaries of our reporting where
possible in the next years.
EU Non-Financial Reporting Directive
Our Integrated Annual Report complies with the EU Non-Financial Reporting Directive with respect to non-financial
and diversity information. The table below provides a clear overview of where the different aspects of this directive are
reported.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
210
A description of the
policies pursued,
including due
dilligence.
The outcome of
those policies.
Principle risks in
own operations and
within value chain.
How risks are
managed.
Non-financial key
performance
indicators.
Topic
• Relevant social and
personnel matters (e.g.
HR, safety etc.)
• Create a safe and
inspiring workplace
• Create a safe and
inspiring workplace
• Create a safe and
inspiring
workplace
• Create a safe
and inspiring
workplace
• Create a safe and
inspiring
workplace
• Create value to
transition to a
climate-neutral
economy
• Create value to
transition to a
climate-neutral
economy
• Create value to
transition to a
climate-neutral
economy
• Create value to
transition to a
climate-neutral
economy
• Create value to
transition to a
climate-neutral
economy
• Solve societal
challenges with
stakeholders and
through
partnerships
• Solve societal
challenges with
stakeholders and
through
partnerships
• Solve societal
challenges with
stakeholders and
through
partnerships
• Solve societal
challenges with
stakeholders
and through
partnerships
• Solve societal
challenges with
stakeholders and
through
partnerships
• Relevant Environmental
matters (e.g. climate-
related impacts)
• Create value to
transition to a
climate-neutral
economy
• Create value to
transition to a
climate-neutral
economy
• Create value to
transition to a
climate-neutral
economy
• Create value to
transition to a
climate-neutral
economy
• Create value to
transition to a
climate-neutral
economy
• Climate related
risks
• Relevant matters with
respect for human rights
(e.g. labour protection)
• About TenneT -
The supply chain of
TenneT
• About TenneT
- The supply chain
of TenneT
• About TenneT
- The supply chain
of TenneT
• About TenneT
- The supply
chain of TenneT
• About TenneT
- The supply
chain of TenneT
• Create value to
transition to a
climate-neutral
economy
• Create value to
transition to a
climate-neutral
economy
• Relevant matters with
respect to anti-corruption
and bribery
• Corporate
Governance
• Corporate
Governance
• Corporate
Governance
• Corporate
Governance
• Corporate
Governance
A description of
the policies
pursued. Diversity targets
Description of
how the policy is
implemented
Results of the
diversity policy
Topic
• Insight into the diversity (executive board and the
supervisory board)
• Create a safe
and inspiring
workplace
• Supervisory
Board report, 8.
Inclusion and
Diversity
• Create a safe
and inspiring
workplace
• Supervisory
Board report, 8.
Inclusion and
Diversity
• Create a safe
and inspiring
workplace
• Supervisory
Board report, 8.
Inclusion and
Diversity
• Create a safe
and inspiring
workplace
• Supervisory
Board report, 8.
Inclusion and
Diversity
Data collection process
The reported data is obtained from financial and non-financial data management systems in our own operations, such as
IFS and SAP for financial and HR data, Mecoms for our electricity transport data, and Zenya for our incident reporting, i.e.
safety data. The key non-financial qualitative and quantitative data is included in the regular planning and control cycles
and reported internally at least once a quarter by the Business Guidance department which performs a check on the quality
and reliability of the data. TenneT’s Executive Board and senior management contribute to the context of the report and
the quantitative data.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
211
The definitions and calculations used are disclosed in the abbreviations and definitions section of this Integrated
Annual Report and in the CSR section of our corporate website. The definitions and calculations used were re-assessed
based on such things as process improvements, further alignment within the group and the materiality analysis. As a result,
certain originally reported comparative figures were re-classified to conform to the current year’s presentation.
The data for this report was measured, and where no data was available, it was estimated. An example of this is the
energy use at some of our smaller offices. Due to the nature and maturity level of non-financial data, we acknowledge that it
is a journey to fully align this with the level of financial systems and processes. Therefore, improvements can be made over
time with the aim to provide our stakeholders better and more relevant information. That is why 100% completeness
and accuracy of our data cannot be guaranteed as processes may be subject to a higher degree of manual data collection.
External assurance
The financial statements included in this report are subject to an independent external audit and TenneT’s non-
financial reporting is subject to a limited assurance review. These were both conducted by our external auditor, Deloitte
Accountants B.V.. Reliable data is essential in our dialogue with stakeholders, so we decided to have our non-financial data
reviewed by an external assurance provider. We have requested Deloitte to review the Integrated Annual Report sections ‘At
a Glance’, ‘Letter from the Board’, ‘About TenneT’ and ‘Our Performance in 2023’ (excluding ‘Safeguard sustainable
financial performance’ and ‘Statements of the Executive Board’) with reference to the GRI Standards and audit the financial
statements in accordance with IFRS as adopted by the EU and Part 9 of Book 2 of the Dutch Civil Code.
Governance of CSR
For TenneT, CSR covers a broad range of subjects, all aimed at creating a sustainable future for our internal and
external stakeholders. CSR is embedded in our current strategy. We have set clear priorities, targets and key performance
indicators in this. For some areas we are currently developing new or updating key performance indicators. On an overall
level, our Executive Board is responsible for our strategy and company target setting, which includes the areas with respect
to CSR. Our Strategy and Partnerships department, is mandated by the Executive Board to make decisions based on the
CSR areas in our overall strategy and to execute studies for future ambitions with respect to CSR. In case new decisions and
directions, this will be approved by the relevant decision committee within our organisation depending on the topic (Future
Design, Asset, Integrated Work Planning or Systems & Market committee). In addition, business units are responsible for the
topics that relate to their unit and sustainable development. The senior leaders are requested to manage and steer on
their respective responsibility areas.
These units report the progress with respect to our strategy, our financial and non-financial performance (including our
CSR policy and actions) on a quarterly basis and this is reviewed by our Executive Board and Supervisory Board in that
frequency to evaluate whether we are on track and or if actions are deemed necessary to improve. Our Supervisory Board
consists of members all with knowledge of various elements of sustainable development. For more information, refer to page
90 of the Supervisory Board report where the capabilities matrix is included.
Other information
TenneT Holding B.V. and its subsidiaries are a leading electricity transmission system operator with activities in
the Netherlands and a large part of Germany. In the Netherlands, our activities are conducted by TenneT TSO B.V. and
its subsidiaries. In Germany, our activities are performed by TenneT GmbH & Co. KG and its subsidiaries.
The Dutch state owns the entire issued share capital of TenneT Holding B.V. Furthermore, TenneT Holding B.V. has
issued hybrid securities which are deeply subordinated and are accounted for as part of equity attributable to equity holders
of the Company. The registered office of TenneT Holding B.V. is located at Utrechtseweg 310, Arnhem, the Netherlands, with
its statutory seat in Arnhem and a registration with the Dutch Commercial Register under number 09083317.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
212
Introduction
The EU Taxonomy constitutes one of the cornerstones for both the European Green Deal as well as the EU Action Plan
on Sustainable Finance. It aims to facilitate the flow of capital towards more sustainable investments in the EU. However, to
do so, a clear definition of what constitutes as “sustainable” is needed. And this is what the EU Taxonomy is aimed at
– providing clear guidance on when an activity can be deemed sustainable. In 2023, additional guidance has been published
with respect to the remaining four environmental goals:
• The sustainable use and protection of water and marine resources
• The transition to a circular economy
• Pollution prevention and control
• The protection and restoration of biodiversity and ecosystems
Considering that nearly all of our activities already relate to EU Taxonomy 4.9 ‘Transmission and distribution of electricity’
(NACE code D35.12), the published guidance on the remaining four environmental goals is not final yet and that the
guidance in TenneT's case relates to assessing the remaining approximately 1% of our Taxonomy metrics against this
guidance, we concluded that we do not claim eligibility and alignment against one of the other environmental goals for the
currently remaining ineligible part of our activities.
Reporting requirements
TenneT, subject to the Non-Financial Reporting Directive (NFRD) via Part 9 of Book 2 of the Dutch Civil Code, is required to
apply the EU Taxonomy Regulation 2020/852 in its corporate reporting as of reporting year 2021. As of 2022, and in
accordance with these requirements, TenneT reported on its eligible contribution to the European Union’s environmental
objectives of climate change mitigation (CCM) according to the guidelines laid down in the EU Taxonomy. We reported the
share of turnover, capital expenditure (CAPEX) and operating expenditure (OPEX) that we have deemed ‘Taxonomy-eligible’
- irrespective of whether these activities met any or all the technical screening criteria stated in the Taxonomy. As of 2022,
and in accordance with these requirements, TenneT reported on its eligible contribution to the European Union’s
environmental objectives of climate change mitigation (CCM) according to the guidelines laid down in the EU Taxonomy.
In reporting year 2023, TenneT determined whether its activities are taxonomy ‘eligible’ and ‘aligned’ for the environmental
goal climate change mitigation. This builds on the 2021 ‘EU Taxonomy eligibility’ by requiring the activities to meet additional
criteria for:
• Substantial contribution to climate change mitigation;
• Do no significant harm (DNSH) to any other environmental objectives for those activities; and
• Minimum safeguards at the organisational level.
To this end, we analysed whether we met the requirements for these elements, based on the assessment performed in
2022 and updated this on certain elements. This relates to reviewing and assessing the technical screening criteria related
to this economic activity, next to the review of the respective DNSH as included in the respective annex as well as the
minimum safeguards to which the European Commission provided additional guidance in their final report of October 2022.
Furthermore, we comprehensively analysed and screened our eligible economic activities and the turnover they generate,
as well as our CAPEX and OPEX, and determined the share that qualifies as Taxonomy-aligned.
For reporting year 2023, we leveraged on the 2022 assessments and updated them where required.
Basis for preparation
As indicated in Annex I to the Commission Delegated Regulation, article 1.2, the basis of how the KPIs are prepared,
is included in our Integrated Annual Report 2023. This relates to the accounting policy (1.2.1), where is explained how
these KPIs were determined and how the allocation has been performed. As nearly all of our activities are related to EU
Taxonomy 4.9 ‘Transmission and distribution of electricity’, allocation to different economic activities is not applicable. This is
because our primary tasks are to provide electricity transmission services and system services and to facilitate the energy
Integrated Annual Report 2023 - TenneT Holding B.V.
EU Taxonomy disclosures
EU Taxonomy
disclosures*
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
213
EU Taxonomy disclosures*
market. Those economic activities are linked to NACE code D35.12 and are concluded to substantially contribute to climate
change mitigation, since TenneT is transmitting and distributing renewable energy in line with Directive (EU) 2018/2001,
including necessary reinforcement or extension of the grid. In line with technical screening criterium 4.9 ’Transmission and
distribution of electricity’ on climate mitigation, as per Commission Delegated Regulation (EU) 2021/2139 of 4 June 2021
Annex I. The regulated activities are as such EU Taxonomy eligible activities (in the table known as activity A) and the
non-regulated activities are EU Taxonomy non-eligible activities (in the table known as activity B).
Both turnover and operational expenditures are based on underlying financial information as disclosed in note 3
‘Segment information’ of the consolidated financial statements and as used in the director’s report. Capital expenditures are
also based on underlying financial information, but there are no differences with investments based on IFRS.
There were no changes to the application of calculations compared to the previous reporting period, nor material changes
to the implementation of the CAPEX plans. We consider Annex 1, articles 1.2.2.1c, 1.2.2.2., 1.2.2.3 and 1.2.3 to be
not applicable to our situation, with the exception of the key information about our CAPEX plans related to our Taxonomy
eligible and aligned activities. Please note that we deem the risk of double counting not applicable our eligible
economic activities only relates to one activity (the aforementioned NACE code D35.12). More information on our
investments, can be found in the chapter ‘Ensure critical infrastructure for society’ of the director’s report. These investments
contribute to a future green energy system, related to the EU’s environmental goal of climate change mitigation. Significant
research and development and innovation activities are mentioned in the ‘Our performance in 2023’ section of this report.
Our additional disclosures are therefore related to how these KPIs were determined and how the allocation has
been performed.
Scope of sustainability reporting
For sustainability reporting purposes, TenneT consolidates data in line with the scope of our report as set out on page 205
‘About this report’. The EU Taxonomy includes reporting of entities that are consolidated in the Group’s consolidated
financial statements, in line with the requirements of IFRS 10 ‘Consolidated financial statements’. As such the EU Taxonomy
reporting scope is limited to our subsidiaries. Joint ventures and associates are not included for EU Taxonomy purposes as
no turnover, OPEX and CAPEX are recognised in the consolidated financial statements, because of accounting under the
equity method for these types of investments.
Financial year 2023 Year Substantial contribution criteria DNSH criteria (‘Does Not
Signifi cantly Harm’)
Economic activities (1)
Code (2)
Turnover (3)
Proportion of Turnover, year 2023 (4)
Climate change mitigation (5)
Climate change adaptation (6)
Water (7)
Pollution (8)
Circular economy (9)
Biodiversity (10)
Climate change mitigation (11)
Climate change adaptation (12)
Water (13)
Pollution (14)
Circular economy (15)
Biodiversity (16)
Minimum safeguards (17)
Proportion of Taxonomy-aligned (A.1) or
-eligible (A.2) turnover, year 2022 (18)
Category enabling activity (19)
Category transitional activity (20)
35.12
in EUR
million % % E T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1 Environmentally sustainable activities (Taxonomy-aligned)
Transmission of electricity
inthe Netherlands
35.12 2,709 29.4% Y N/EL N/EL N/EL N/EL N/EL Y Y Y Y Y Y Y 31.1% E
Transmission of electricity
inGermany
35.12 6,310 68.4% Y N/EL N/EL N/EL N/EL N/EL Y Y Y Y Y Y Y 66.6% E
Turnover of environmentally
sustainable activities
(Taxonomy-aligned) (A.1)
9,019 97.8% 97.8% 0% 0% 0% 0% 0% Y Y Y Y Y Y Y 97.7%
Of which enabling 9,019 97.8% 97.8% 0% 0% 0% 0% 0% Y Y Y Y Y Y Y 97.7% E
Of which transitional – 0% 0% Y Y Y Y Y Y Y 0% T
A.2. Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
Transmission of electricity in the
Netherlands last mile to fossil power
plant
24 0.3% N/EL N/EL N/EL N/EL N/EL N/EL 0.3%
Transmission of electricity in Germany
last mile to fossil power plant
131 1.4% N/EL N/EL N/EL N/EL N/EL N/EL 1.5%
Turnover of Taxonomy- eligible but
not environmentally sustainable
activities (not Taxonomy-aligned
activities) (A.2)
155 1.7% 1.7% 0% 0% 0% 0% 0% 1.8%
A. Turnover of Taxonomy-eligible
activ ities (A.1+A.2)
9,174 99.5% 99.5% 0% 0% 0% 0% 0% 99.5%
B. TAXONOMY NON-ELIGIBLE ACTIVITIES
Turnover of Taxonomy-
non-eligible activities
48 0.5%
Total (A+B) 9,222 100%
Y Yes, Taxonomy-eligible and Taxonomy-aligned
activity with the relevant environmental objective
N No, Taxonomy-eligible but not Taxonomy-aligned
activity with the relevant environmental objective
N/EL not eligible, Taxonomy-non-eligible activity for the
relevant environmental objective
Turnover
Proportion of turnover / Total turnover
Taxonomy-aligned per objective Taxonomy-eligible per objective
CCM 97.8% 99.5%
CCA 0% 0%
WTR 0% 0%
CE 0% 0%
PPC 0% 0%
BIO 0% 0%
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
214
Financial year 2023 Year Substantial contribution criteria DNSH criteria (‘Does Not
Signifi cantly Harm’)
Economic activities (1)
Code (2)
Turnover (3)
Proportion of Turnover, year 2023 (4)
Climate change mitigation (5)
Climate change adaptation (6)
Water (7)
Pollution (8)
Circular economy (9)
Biodiversity (10)
Climate change mitigation (11)
Climate change adaptation (12)
Water (13)
Pollution (14)
Circular economy (15)
Biodiversity (16)
Minimum safeguards (17)
Proportion of Taxonomy-aligned (A.1) or
-eligible (A.2) turnover, year 2022 (18)
Category enabling activity (19)
Category transitional activity (20)
35.12
in EUR
million % % E T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1 Environmentally sustainable activities (Taxonomy-aligned)
Transmission of electricity
inthe Netherlands
35.12 2,709 29.4% Y N/EL N/EL N/EL N/EL N/EL Y Y Y Y Y Y Y 31.1% E
Transmission of electricity
inGermany
35.12 6,310 68.4% Y N/EL N/EL N/EL N/EL N/EL Y Y Y Y Y Y Y 66.6% E
Turnover of environmentally
sustainable activities
(Taxonomy-aligned) (A.1)
9,019 97.8% 97.8% 0% 0% 0% 0% 0% Y Y Y Y Y Y Y 97.7%
Of which enabling 9,019 97.8% 97.8% 0% 0% 0% 0% 0% Y Y Y Y Y Y Y 97.7% E
Of which transitional – 0% 0% Y Y Y Y Y Y Y 0% T
A.2. Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
Transmission of electricity in the
Netherlands last mile to fossil power
plant
24 0.3% N/EL N/EL N/EL N/EL N/EL N/EL 0.3%
Transmission of electricity in Germany
last mile to fossil power plant
131 1.4% N/EL N/EL N/EL N/EL N/EL N/EL 1.5%
Turnover of Taxonomy- eligible but
not environmentally sustainable
activities (not Taxonomy-aligned
activities) (A.2)
155 1.7% 1.7% 0% 0% 0% 0% 0% 1.8%
A. Turnover of Taxonomy-eligible
activ ities (A.1+A.2)
9,174 99.5% 99.5% 0% 0% 0% 0% 0% 99.5%
B. TAXONOMY NON-ELIGIBLE ACTIVITIES
Turnover of Taxonomy-
non-eligible activities
48 0.5%
Total (A+B) 9,222 100%
Y Yes, Taxonomy-eligible and Taxonomy-aligned
activity with the relevant environmental objective
N No, Taxonomy-eligible but not Taxonomy-aligned
activity with the relevant environmental objective
N/EL not eligible, Taxonomy-non-eligible activity for the
relevant environmental objective
Turnover
Proportion of turnover / Total turnover
Taxonomy-aligned per objective Taxonomy-eligible per objective
CCM 97.8% 99.5%
CCA 0% 0%
WTR 0% 0%
CE 0% 0%
PPC 0% 0%
BIO 0% 0%
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
215
Financial year 2023 Year Substantial contribution criteria DNSH criteria (‘Does Not
Signifi cantly Harm’)
Economic activities (1)
Code (2)
CAPEX (3)
Proportion of CAPEX, year 2023 (4)
Climate change mitigation (5)
Climate change adaptation (6)
Water (7)
Pollution (8)
Circular economy (9)
Biodiversity (10)
Climate change mitigation (11)
Climate change adaptation (12)
Water (13)
Pollution (14)
Circular economy (15)
Biodiversity (16)
Minimum safeguards (17)
Proportion of Taxonomy-aligned (A.1) or
-eligible (A.2) CAPEX, year 2022 (18)
Category enabling activity (19)
Category transitional activity (20)
in EUR
million % % E T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1 Environmentally sustainable activities (Taxonomy-aligned)
Transmission of electricity
inthe Netherlands
35.12 2,956 36.3% Y N/EL N/EL N/EL N/EL N/EL Y Y Y Y Y Y Y 33.8%
Transmission of electricity
inGermany
35.12 5,192 63.7% Y N/EL N/EL N/EL N/EL N/EL Y Y Y Y Y Y Y 66.0% E
CAPEX of environmentally
sustainable activities
(Taxonomy-aligned) (A.1)
8,148 100% 100% 0% 0% 0% 0% 0% Y Y Y Y Y Y Y 99.8%
Of which enabling 8,148 100% 100% 0% 0% 0% 0% 0% Y Y Y Y Y Y Y 99.8% E
Of which transitional – 0% 0% Y Y Y Y Y Y Y 0% T
A.2. Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
Transmission of electricity in the
Netherlands last mile to fossil power
plant
– 0% N/EL N/EL N/EL N/EL N/EL N/EL 0%
Transmission of electricity in Germany
last mile to fossil power plant
– 0% N/EL N/EL N/EL N/EL N/EL N/EL 0%
CAPEX of Taxonomy-eligible but
not environmentally sustainable
activities (not Taxonomy-aligned
activities) (A.2)
– 0% 0% 0% 0% 0% 0% 0% 0%
A. CAPEX of Taxonomy-eligible
activ ities (A.1+A.2)
8,148 100% 0% 0% 0% 0% 0% 0% 99.8%
B. TAXONOMY NON-ELIGIBLE ACTIVITIES
CAPEX of Taxonomy-
non-eligible activities
3 0%
Total 8,151 100%
Proportion of CAPEX / Total CAPEX
Taxonomy-aligned per objective Taxonomy-eligible per objective
CCM 100% 100%
CCA 0% 0%
WTR 0% 0%
CE 0% 0%
PPC 0% 0%
BIO 0% 0%
Y Yes, Taxonomy-eligible and Taxonomy-aligned
activity with the relevant environmental objective
N No, Taxonomy-eligible but not Taxonomy-aligned
activity with the relevant environmental objective
N/EL not eligible, Taxonomy-non-eligible activity for the
relevant environmental objective
CAPEX
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
216
Financial year 2023 Year Substantial contribution criteria DNSH criteria (‘Does Not
Signifi cantly Harm’)
Economic activities (1)
Code (2)
OPEX (3)
Proportion of OPEX, year 2023 (4)
Climate change mitigation (5)
Climate change adaptation (6)
Water (7)
Pollution (8)
Circular economy (9)
Biodiversity (10)
Climate change mitigation (11)
Climate change adaptation (12)
Water (13)
Pollution (14)
Circular economy (15)
Biodiversity (16)
Minimum safeguards (17)
Proportion of Taxonomy-aligned (A.1) or
-eligible (A.2) OPEX, year 2022 (18)
Category enabling activity (19)
Category transitional activity (20)
in EUR
million % % E T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1 Environmentally sustainable activities (Taxonomy-aligned)
Transmission of electricity
inthe Netherlands
35.12 1,475 26.9% Y N/EL N/EL N/EL N/EL N/EL Y Y Y Y Y Y Y 31.5% E
Transmission of electricity
inGermany
35.12 3,971 72.5% Y N/EL N/EL N/EL N/EL N/EL Y Y Y Y Y Y Y 67.9% E
OPEX of environmentally
sustainable activities
(Taxonomy-aligned) (A.1)
5,446 99.4% 99.4% 0% 0% 0% 0% 0% Y Y Y Y Y Y Y 99.4%
Of which enabling 5,446 99.4% 99.4% 0% 0% 0% 0% 0% Y Y Y Y Y Y Y 99.4% E
Of which transitional – 0% 0% Y Y Y Y Y Y Y 0% T
A.2. Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
Transmission of electricity in the
Netherlands last mile to fossil power
plant
8 0.2% Y N/EL N/EL N/EL N/EL N/EL 0.2%
Transmission of electricity in Germany
last mile to fossil power plant
22 0.4% Y N/EL N/EL N/EL N/EL N/EL 0.4%
OPEX of Taxonomy-eligible but
not environmentally sustainable
activities (not Taxonomy-aligned
activities) (A.2)
30 0.6% 0.6% 0% 0% 0% 0% 0% 0.6%
A. OPEX of Taxonomy-eligible
activ ities (A.1+A.2)
5,476 100% 100% 0% 0% 0% 0% 0% 100%
B. Taxonomy non-eligible activities
OPEX of Taxonomy-non- eligible
activities
1 0%
Total 5,477 100 %
Proportion of OPEX / Total OPEX
Taxonomy-aligned per objective Taxonomy-eligible per objective
CCM 99.4% 100%
CCA 0% 0%
WTR 0% 0%
CE 0% 0%
PPC 0% 0%
BIO 0% 0%
Y Yes, Taxonomy-eligible and Taxonomy-aligned
activity with the relevant environmental objective
N No, Taxonomy-eligible but not Taxonomy-aligned
activity with the relevant environmental objective
N/EL not eligible, Taxonomy-non-eligible activity for the
relevant environmental objective
OPEX
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
217
Accounting policy
EU Taxonomy Turnover (page 215)
Turnover for taxonomy-eligible activities (A. Taxonomy - eligible activities)
All regulated revenues are eligible to the EU Taxonomy turnover.
Determination of numerator for taxonomy – aligned turnover
All regulated revenues are aligned to EU Taxonomy, except the other revenues stream and the total share of the
direct connections between our substation or grid and the network and a power production plant that is more greenhouse
gas intensive than 100 gCO
2
e/kWh measured on a life cycle basis. This turnover is excluded from the final calculation
to determine the reporting metrics related to this regulation and this turnover is disclosed under A.2. Taxonomy-eligible but
not environmentally sustainable activities.
Determination of denominator for taxonomy-aligned turnover
Total turnover as included in note 3 ‘Segmenting information’.
EU Taxonomy CAPEX (page 216)
CAPEX for taxonomy-eligible activities (A. Taxonomy - eligible activities)
All regulated investments are eligible to the EU Taxonomy CAPEX.
Determination of numerator for taxonomy - aligned activities
All investments are related to new connections to green electricity producers or other parts of the grid that are needed
to transmit green electricity. The amount is based on the regulated investments and additions to the right-of-use
assets, reference is made to the table below.
Determination of denominator for taxonomy - aligned activities
Total of the investments and the right-of-use assets additions, reference is made to the next table.
(EUR million) TSO NL TSO DE Regulated
Non-
regulated
Total
Investments (note 3) 2,948 4,779 7,727 3 7,730
Right-of-use assets (note 10) 8 413 421 - 421
Total EU Taxonomy CAPEX 2,956 5,192 8,148 3 8,151
Since we do not have any investments related to fossil power plants we have no CAPEX disclosed under A.2. Taxonomy-
eligible but not environmentally sustainable activities.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
218
EU Taxonomy OPEX (page 217)
OPEX for taxonomy-eligible activities (A. Taxonomy - eligible activities)
Based on the frequently asked questions from October 2022 (Commission Notice on the interpretation of the Disclosures
Delegated Act from October 2022) and December 2022 (Second Draft Commission Notice on interpretation and
implementation EU Taxonomy Climate Delegated Act from December 2022), the OPEX category is closely related to
maintenance and repair and can include the following costs for: maintenance material, cost of employee repairing a machine,
cost of employee cleaning a factory, IT dedicated to maintenance. In view of the above, TenneT has included grid related
expenses in calculating the OPEX. This methodology has not been changed compared to our Integrated Annual Report 2022.
All regulated grid expenses are eligible to the EU Taxonomy OPEX.
Determination of numerator for taxonomy - aligned activities OPEX
All regulated grid expenses are aligned to EU Taxonomy, except the total share of the direct connections between
our substation or grid and the network and a power production plant that is more greenhouse gas intensive than 100 gCO
2
e/
kWh measured on a life cycle basis. These OPEX are excluded from the final calculation to determine the reporting metrics
related to this regulation and are disclosed as OPEX under A.2. Taxonomy-eligible but not environmentally
sustainable activities.
Determination of denominator for taxonomy - aligned activities OPEX
All grid expenses as included in note 3 ‘Segmenting information’.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
219
Glossary
ABP – Algemeen Burgerlijk Pensioenfonds
ABP is the civil service pension fund for government,
education and energy employees in the Netherlands.
AC – Alternating current
In alternating current (AC), the flow of electricity periodically
reverses direction. By contrast direct current (DC), electricity
only flows in one direction. AC is used to transport
electricity over relatively shorter distances and DC longer
ones.
ACER – Agency for the Cooperation of Energy
Regulators
The European network organisation for energy regulators. It
has a key role in the integration of European electricity and
gas markets, providing a framework for co-operation at EU
level and regulatory certainty.
ACM – Autoriteit Consument & Markt
Dutch national regulatory authority.
Adjusted FFO – Adjusted funds from operations
Profit for the year plus depreciation, amortisation and
impairments minus gain/loss on the disposal of assets
minus capitalised interest on assets under construction,
plus interest on provisions, minus 50% of Hybrid interest.
Adjusted FFO/net debt
Adjusted funds from operations divided by net debt.
Blockchain
The digital process of verifying and documenting the
performance of distributed flexible devices. Blockchain is
suited to connecting multiple parties and large numbers of
distributed computed nodes and enabling them to
undertake joint action in a scalable, transparent and trusted
network.
BNetzA – Bundesnetzagentur für Elektrizität,
Gas, Telekommunikation, Post und Eisenbahnen
German national regulatory authority.
BritNed
The 260 km-long high-voltage direct current BritNed cable
has a capacity of 1,000 MW and connects the Dutch and
British electricity grids.
CAPEX – Capital expenditure
Capital expenditure (CAPEX) is the amount spent on
acquiring or improving long-term assets. Its benefits are
enjoyed over a long period time, not only in the current year.
CAPEX is of a non-recurring nature and results in the
acquisition of permanent assets.
Carbon footprint
The total amount of greenhouse gases produced to directly
and indirectly support human activities, usually expressed in
equivalent tons of carbon dioxide (CO
2
).
CGU – Cash-generating unit
A cash-generating unit is the smallest group of assets that
independently generates cash flow and whose cash flow is
largely independent of the cash flows generated by other
assets.
CIP – Copenhagen Infrastructure Partners
Copenhagen Infrastructure Partners is a fund management
company that is joined between four senior partners and
PensionDenmark.
CO2 – Carbon dioxide
Carbon dioxide is a greenhouse gas formed by the burning
of carbon-based fuels. Its concentration in the atmosphere
is rapidly increasing, leading to global warming.
Power units
• Power is energy per unit of time
• Power output is measured
in watts (W)
• 1 kW (kilowatt) = 1,000 W
• 1 MW (megawatt) = 1,000 kW
• 1 GW (gigawatt) = 1,000,000 kW
Energy units
• Energy is power multiplied by time
• 1 kWh (kilowatt hour) = 1 kW in one hour
• 1 MWh (megawatt hour) = 1,000 kWh
• 1 GWh (gigawatt hour) = 1,000,000 kWh
• 1 TWh (terawatt hour)
= 1,000,000,000 kWh
Weight units
• ktonnes (kilotonnes) = 1,000 tonnes
• Mt or Mtonnes (megatonnes)
= 1,000,000 tonnes
Voltage
• 1 kV (kilovolt) = 1,000 volts (V)
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
220
Glossary
COBRAcable
A 275 km-long high-voltage direct current cable that is
under construction to connect the Dutch and Danish
electricity grids. It will have a capacity of 700 MW.
COSO – Committee of Sponsoring Organisations
of the Treadway Commission
COSO has established the common internal control model
against which companies and organisations assess their
control systems.
CP programme – Commercial paper programme
A commercial paper is a flexible short-term debt instrument
that is issued directly to the market with different maturities
and is offered continuously.
CPI index
A consumer price index measures changes in the price level
of a weighted average market basket of consumer goods
and services purchased by households.
CSR – Corporate social responsibility
Corporate social responsibility relates to the socially
responsible business practices of a company, balancing
people, planet and profit.
CSRD – Corporate Sustainability Reporting
Directive
The objective of the proposed CSRD is to improve
sustainability reporting and ensure it is brought into a
company’s management report to better leverage the
potential of the European single market and to contribute to
the transition to a fully sustainable and inclusive economic
and financial system in line with the European Green Deal
and the UN Sustainable Development Goals (SDGs).
Cross-border TSO
A cross-border TSO is a TSO that operates in more than
one country.
CTA - Contractual Trust Arrangements
A contractual trust arrangement is essentially a form of
company pension fund where the fund's assets have been
transferred to a legal entity separate from the company.
DBO - Defined Benefit Obligation
A defined benefit obligation pension plan is a type of
pension plan in which an employer/sponsor promises a
specified pension payment, lump-sum or combination
thereof on retirement that is predetermined by a formula
based on the employee's earnings history, tenure of service
and age, rather than depending directly on individual
investment returns.
DC – Direct current
In direct current (DC), the flow of electricity is only in one
direction. In alternating current (AC), the electricity flows
periodically reverses direction. DC is used to transport
electricity over relatively longer distances and AC over
shorter ones.
DSO – Distribution system operator
A regional electricity distribution company, that is connected
with end users and is responsible for providing (1) power
distribution services, by constructing and maintaining a
robust high-voltage grid, and (2) facilitating a smooth
functioning, liquid and stable electricity market.
E-wet – Elektriciteitswet 1998
The Dutch electricity law.
EBIT – Earnings before interest and tax
Earnings for the period before income tax expense and
interest payments are deducted.
EBITDA – Earnings before interest, tax,
depreciation and amortisation
Earnings for the period before income tax expense, interest
payments depreciation and amortisation are deducted.
EC – European Commission
The European Commission is the executive of the European
Union and promotes its general interest.
ECL - Expected Credit Loss
Expected Credit Loss is the probability-weighted estimate of
credit losses (i.e., the present value of all cash shortfalls)
over the expected life of a Financial Instrument.
EEG – Erneuerbare-Energien-Gesetz
German Renewable Energy Act, designed to govern the
preferred supply of electricity from renewable sources into
the grid with guaranteed, fixed minimum producer prices. It
is intended to serve and protect the climate and is one of
several statutory provisions aimed at reducing Germany's
dependence on fossil fuels such as oil, natural gas or coal,
and nuclear power.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
221
EIB – European Investment Bank
The European Investment Bank is one of the key financial
institutions of the EU. It is the only bank owned by and
representing the interests of the EU member states,
providing financing for sustainable investment projects that
contribute to furthering EU policy objectives.
EIR - Effective Interest Rate
The effective interest rate is the interest rate on a loan or
financial product restated from the nominal interest rate and
expressed as the equivalent interest rate if compound
interest was payable annually in arrears.
EMTN – Euro medium-term note
A flexible medium-term debt instrument that is issued
directly to the market with different maturities and is offered
continuously rather than all at once like a bond issue.
Energinet
Energinet is the Danish TSO that TenneT is partnering with
to build the COBRAcable between the Netherlands and
Denmark. Energinet.dk is also participating in the
development of the North Sea Wind Power Hub.
EnWG – Energiewirtschaftsgesetz
The German electricity law.
ENTSO-E – European Network of Transmission
System Operators for Electricity
ENTSO-E is the organisation of transmission system
operators at a European level, representing 39 TSOs from
35 countries. Its mission is to promote important aspects of
energy policy, especially integrating renewable energy and
the completion of an internal energy market.
Equigy B.V.
Together with TenneT (Germany and the Netherlands),
Transpower (Germany), Swissgrid (Switzerland) and Terna
(Italy), four of the largest European transmission system
operators are now jointly developing a cross-border
blockchain platform - Equigy. This will enable millions of
European households and owners of e.g. electric vehicles
to actively offer the flexible capacity of their cars and house
batteries on the energy markets to stabilise the electricity
system and thus earn money from the energy transition.
ESG ratings
ESG ratings asses environmental, social and governance
information of TenneT.
EU – European Union
The European Union (EU) is a political-economic union of 28
member states located in Europe.
Flexumers
Energy consumers simultaneously acting as producers
FTE – Full-time equivalent
Full-time equivalent is a unit that measures work by
converting workload hours into the number of people
required to complete that task.
Gasunie – N.V. Nederlandse Gasunie
Gasunie is a European gas infrastructure company that
transports natural gas and green gas in the Netherlands and
the northern part of Germany. Gasunie is participating in the
development of the North Sea Wind Power Hub.
GIS – Gas insulated switchgear
A switchgear insulated via SF
6
gas or other gasses.
Green (hybrid) bonds
The proceeds of the green bonds are used to finance,
refinance and/or invest in projects relating to the
transmission of renewable electricity from offshore wind
power plants into the onshore electricity grid using direct
current technology or alternating current technology.
Green hybrid bonds are perpetual bonds without an
end-date.
GRI – Global Reporting Initiative
The Global Reporting Initiative is a non-profit organisation
that promotes sustainability and produces global standards
for sustainability reporting.
Helaba – Helaba Pension Trust e.V.
Helaba Pension Trust e.V. is a subsidiary of German bank
Landesbank Hessen-Thüringen and holds a part of the
assets of the German pension plan.
HGRT – Holding des Gestionnaires de Réseaux
de Transport d'Électricité S.A.S.
Holding des Gestionnaires de Réseaux de Transport
d'Électricité S.A.S. is a holding company of EPEX SPOT
power exchange.
HR – Human resources
Our HR department aims to make a distinctive contribution
to TenneT's position as a leading TSO by attracting,
recruiting and retaining qualified staff, as well as by creating
a healthy and stimulating working environment.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
222
HVDC – High-voltage direct current
A high-voltage, direct current system can transmit bulk
electricity over longer distances than an alternating current
system and with lower grid losses. As such, HVDC is used
for linking offshore wind farms to the onshore grid and for
our Interconnectors NorNed to Norway, BritNed to the UK
and COBRAcable to Denmark and NordLink to Norway.
IAS - International Accounting Standards
International Accounting Standards (IAS) are older
accounting standards issued by the International
Accounting Standards Board (IASB), an independent
international standard-setting body based in London.
The IAS were replaced in 2001 by International Financial
Reporting Standards (IFRS).
ICF – Internal control framework
Framework for the set of internal controls, to provide
reasonable assurance on the reliability of our internal and
external reporting.
IFRIC - International Financial Reporting
Interpretations Committee
IFRIC Interpretations are developed by the IFRS
Interpretations Committee (previously the International
Financial Reporting Interpretations Committee, IFRIC) and
are issued after approval by the International Accounting
Standards Board (IASB).
IFRS – International Financial Reporting
Standards
The internationally prescribed and recognised reporting
guidelines.
IIRC – International Integrated Reporting Council
The International Integrated Reporting Council (IIRC) is a
global coalition of regulators, investors, companies,
standard setters, the accounting profession, academia and
NGOs. The coalition promotes communication about value
creation as the next step in the evolution of corporate
reporting. Together with the Sustainability Accounting
Standards Board (SASB) the IIRC formed the Value
Reporting Foundation.
ISS ESG
ISS ESG is a sustainability rating agency and external
assessor for benchmarking CSR reports.
KfW – Kreditanstalt für Wiederaufbau
KfW is the Reconstruction Credit Institute development
bank owned by the German government.
KWK-G – Kraft-Wärme-Kopplungs-Gesetz
The German Combined Heat and Power Act.
LEAN
The core idea of LEAN is to maximise customer value while
minimising waste. Simply, LEAN means creating more value
for customers with fewer resources. The principles of LEAN
were developed by the Japanese car manufactory Toyota.
LoR – Letter of Representation
A Letter of Representation is signed by the management of
the Group and/or performance unit to attest to the accuracy
of the financial statements.
Moody's
Moody's Investors Service provides credit ratings, research,
and risk analysis.
Net debt
Gross debt minus cash and cash equivalents at free
disposal plus lease liabilities plus net employee defined
benefit obligation plus 50% of hybrid securities.
Netbeheer Nederland
Netbeheer Nederland is the association in the energy sector
representing the interests of national and regional electricity
and gas network operators in the Netherlands.
NGO – Non-governmental organisation
A non-governmental organisation is a voluntary citizens'
group that is neither a government initiative nor a
conventional for-profit business.
NOKA – DC Nordseekabel GmbH & Co. KG
NOKA is jointly owned by TenneT and German development
bank KfW. It is responsible for financing and building the
German part of the NordLink cable.
NorNed
NorNed is a 580-kilometre long high-voltage direct current
submarine power cable between Feda in Norway and the
seaport of Eemshaven in the Netherlands, which
interconnects both countries electrical grids.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
223
NordLink
TenneT is jointly developing the NordLink interconnector
with its project partners, the Norwegian TSO Statnett and
German development bank KfW. With an overall
transmission capacity of 1,400 MW, the subsea cable will
run between Tonstad in the South of Norway and Wilster in
Northern German.
NSWPH – North Sea Wind Power Hub
The consortium of the North Sea Wind Power Hub
programme has joined forces to realise climate goals. The
consortiums work is based on research, stakeholder
interaction and experience from earlier projects. Partners in
the consortium are Energinet, Gasunie and TenneT.
OCI - Other comprehensive Income
Other comprehensive income comprises items of income
and expense (including reclassification adjustments) that are
not recognised in profit or loss as required or permitted by
other IFRSs.
OECD – Organisation for Economic
Co-operation and Development
The Organisation for Economic Co-operation and
Development is an intergovernmental economic
organisation with 36 member countries, founded in 1961 to
stimulate economic progress and world trade.
OPEX – Operational expenditure
Operating expenditure (OPEX) is the expense that a
company incurs as a result of its normal business
operations.
OPEX deficit
The difference between our operation expenditure and the
reimbursement for these costs.
OWF – Offshore wind farm operators
Offshore wind farms are constructed in bodies of water to
generate electricity from wind.
PBA - Project Budget Approval
The process of formally identifying and approving the
project budget, prior to the start of the project.
RCF – Revolving credit facility
A line of credit where TenneT pays a commitment fee and
can then use the funds as and when needed.
RES – Renewable Energy Sources
All sources of renewable energy including sunlight, wind,
tides, waves, biomass and geothermal heat.
ROIC – Return on invested capital
Underlying EBIT Group expressed as a percentage of the
average underlying invested equity plus loans and bank
overdrafts minus cash at free disposal during the year.
S&P – Standard & Poors
Standard & Poors provides credit ratings, research, and risk
analysis.
SASB – Sustainability Accounting Standards
Board
The Sustainability Accounting Standards Board is a
non-profit organisation that sets financial reporting
standards. SASB was founded in 2011 to develop and
disseminate sustainability accounting standards. Together
with the IIRC, the SASB formed the Value Reporting
Foundation.
SBTi – The Science Based Targets initiative
The SBTi is a partnership between CDP, the United Nations
Global Compact, World Resources Institute (WRI) and the
World Wide Fund for Nature (WWF). The SBTi call to action
is one of the We Mean Business Coalition commitments.
SCL – Safety Culture Ladder
TenneT uses the Safety Culture Ladder (SCL) as a tool to
increase safety awareness and enhance safety culture, not
only within our own organisation but also for our
contractors. The Safety Culture Ladder is a requirement in
the selection phase of a tender as described in the 'Safety
by Contractor Management' programme.
SDG – United Nations Sustainable Development
Goals
The Sustainable Development Goals (SDGs) are a universal
call to action to end poverty, protect the planet and improve
the lives and prospects of everyone, everywhere. The 17
aspirational ‘global goals’ with 169 targets between them
were adopted by all UN Member States in 2015, as part of
the 2030 Agenda for Sustainable Development which set
out a 15-year plan to achieve the Goals.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
224
SF
6
– Sulphur hexafluoride
An inorganic, colourless, odourless and non-flammable
greenhouse gas that is used in the electricity industry to
insulate high-voltage circuit breakers, switchgear and other
electrical equipment.
SHE – Safety, Health & Environment
SHE is the set of activities relating to safety, health &
environment.
SIC - Standard Interpretation Committee
SIC Interpretations were previously issued by the Standard
Interpretations Committee (SIC), and were subsequently
endorsed by the International Accounting Standards Board
(IASB). The IFRS Interpretations Committee has reissued
Interpretations in this series if it considers it necessary.
SLA – Service level agreement
A service-level agreement is an agreement between two or
more parties, where one is the customer and the others are
service providers.
SuedLink
A DC connection to transport electricity generated in the
north of Germany to the South.
SuedOstLink
A DC connection to transport electricity generated in north
of Germany to the South-East.
Sustainalytics
Sustainalytics is a sustainability ratings agency and external
assessor for benchmarking CSR reports.
TRIR – Total recordable incident rate
The total recordable incident rate is the number of total
recordable incidents per million hours worked. Recordable
incidents are fatalities, lost work day cases, restricted work
day cases and medical treatment cases.
TSCNET
TSCNET Services is one of Europe’s Regional Security
Coordinators (RSCs). The company based in Munich,
renders integrated services for power transmission system
operators (TSOs) and their control centres to maintain the
operational security of our electricity system – 24 hours a
day, seven days a week.
TSO – Transmission system operator
A transmission system operator transports electricity at
national or regional level from producers to distributers. A
TSO is responsible for providing (1) power transmission
services, by constructing and maintaining a robust high-
voltage grid, (2) system services, by maintaining the balance
between supply and demand of electricity 24/7 and (3)
facilitating a smooth functioning, liquid and stable electricity
market.
UN – United Nations
An international organisation formed to promote
international peace, security, and co-operation under the
terms of the charter signed by 51 founding countries in San
Francisco in 1945.
UNGC – United Nations Global Compact
A call from the UN to companies to align strategies and
operations with universal principles on human rights, labour,
environment and anti-corruption, and take actions that
advance societal goals.
VKE – Versorgungskasse Energie VVaG
Versorgugnskasse Energie VVaG is pension fund for energy
mutuals and a subsidiary of E.ON SE. It holds a part of the
assets of the German pension plan.
WACC – Weighted average cost of capital
The WACC is the rate that a company is expected to pay
on average to all its capital providers to finance its assets.
Workforce
All internal and external people who works for TenneT and
where TenneT is responsible for their safety relating to our
work.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
225
SWOT Analysis
In the section 'Our performance in 2023' of our report, we elaborated on TenneT's performance, strategic risks and the
outlook for 2024. Our SWOT provides an insight into our company's opportunities and strengths, as well as threats and
weaknesses, providing context to our stakeholders.
SWOT Analysis
Strengths
Opportunities
Weaknesses
Threats
High level of security of supply
Technical innovations
Leader in European market integration
in North-West Europe
First cross-border TSO in Europe and a favorable
corporate reputation amongst stakeholders
Stable credit rating
First mover attitude in shaping the grid of the future
Standardisation of assets and components
Attractive employer
More favorable laws to support the energy transition
System integration / sector coupling (a.o. hydrogen)
Usage of artificial intelligence applications
Dependency on the availability of suppliers
Grid extensions, customer connections
and congestion management
Increasing OPEX costs
Maintenance pressure aging assets
Supply chain disruptions and scarcities
Volatile European grid
Unavailability of new hires
Cyber and physical security threat
Changes in national or European political landscape
Affordability of the energy transition
Not having the capacity to deliver large projects in time
S
O
W
T
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
226
SWOT Analysis
Key figures: five-year summary
(based on underlying figures)
2023 2022 2021 2020 2019
Energise our people and organisation
TRIR
4.5 4.9 5.8 4.1 4.8
Absentee rate NL
3.9 3.7 3.1 2.7 3.4
Absentee rate DE
3.4 4.1 2.6 2.5 2.8
Diversity % female inflow to total inflow
32% 33% 31% 33% 31%
Internal headcount
6,937 5,930 5,168 4,321 3,768
Secure supply today and tomorrow
Investments (in)tangible fixed assets
7,730 4,493 3,969 3,412 3,012
Grid availability (onshore)
99.99993% 99.99963% 99.99999% 99.99995% 99.99982%
Interruptions (onshore)
14 11 17 4 14
Interconnectors
17 17 17 15 15
Drive the energy transition
Percentage greened of our carbon footprint
33% 35% 69% 62% 27%
Safeguard our fi nancial health
Net debt
20,899 17,551 15,584 14,004 10,815
Underlying EBIT group
1,817 1,210 834 910 768
Underlying result for the year
1,071 671 493 516 401
Adjusted ROIC
5.8% 4.9% 4.2% 5.1% 5.1%
Adjusted FFO/Net debt
11.6% 11.1% 10.5% 11.3% 12.9%
IFRS EBIT group from continuing operations
172 -796 -275 1,356 1,077
IFRS result from continuing operations
67 -590 -320 837 630
IFRS result from discontinuing operations
644 -289 – – –
IFRS result
711 -879 -320 837 630
SWOT Analysis
Strengths
Opportunities
Weaknesses
Threats
High level of security of supply
Technical innovations
Leader in European market integration
in North-West Europe
First cross-border TSO in Europe and a favorable
corporate reputation amongst stakeholders
Stable credit rating
First mover attitude in shaping the grid of the future
Standardisation of assets and components
Attractive employer
More favorable laws to support the energy transition
System integration / sector coupling (a.o. hydrogen)
Usage of artificial intelligence applications
Dependency on the availability of suppliers
Grid extensions, customer connections
and congestion management
Increasing OPEX costs
Maintenance pressure aging assets
Supply chain disruptions and scarcities
Volatile European grid
Unavailability of new hires
Cyber and physical security threat
Changes in national or European political landscape
Affordability of the energy transition
Not having the capacity to deliver large projects in time
S
O
W
T
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
227
Key figures: five-year summary
Company addresses
Head office
TenneT Holding B.V. and TenneT TSO B.V.
Mariëndaal Centre of Excellence
Utrechtseweg 310
6812 AR Arnhem
The Netherlands
Phone +31 (0)26 373 11 11
Postbus 718
6600 AS Arnhem
The Netherlands
communicatie@tennet.eu
www.tennet.eu
Regional offices
The Netherlands
TenneT region West
Tielweg 28
2803 PK Gouda
The Netherlands
TenneT region North
De Stroom 2
7901 TE Hoogeveen
The Netherlands
TenneT region South
Copernicusstraat 9
6003 DE Weert
The Netherlands
Germany
Head office Germany
TenneT TSO GmbH
Bernecker straße 70
95448 Bayreuth
Germany
Phone + 49 (0) 921 50740-0
TenneT Lehrte
Eisenbahnlängsweg 2a
31275 Lehrte
Germany
TenneT Berlin
Representative Office
Friedrichstraße 150
10117 Berlin
Germany
Belgium
TenneT Brussels
TenneT Holding B.V.
European Office
Rue des Deux Eglises 29
1000 Brussels
Belgium
Company addresses**
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
228
Company addresses**
Colophon
TenneT Holding B.V.
Visiting address
Utrechtseweg 310, 6812 AR, Arnhem, the Netherlands
T: +31 (0)26 – 37 31 111
Concept & Design
DartGroup, Amsterdam
Copy
Stampa Communications, Amsterdam
Corporate Communications Department
T: +31 (0)26 – 37 32 600
E: communication@tennet.eu
We look forward to receiving your feedback on this report.
Please send an email.
Disclaimer
`We´, `TenneT´, `TenneT Holding´, `the Group´, `the company´ or similar expressions are used in this report as a synonym for
TenneT Holding B.V. and its subsidiaries.
Parts of this report contain forward-looking information. These parts may include unqualified statements on future operating
results, government measures, the impact of other regulatory measures on the activities of TenneT as a whole, TenneT´s
shares and those of its subsidiaries and joint-ventures in existing and new markets, industrial and macro-economic trends
and TenneT´s performance in these. Such statements are preceded or followed by or contain words such as `believes´,
`expects´, `anticipates´ or similar expressions. These forward-looking statements are based on current assumptions
concerning future activities and are subject to known and unknown factors, and other uncertainties, many of which are
beyond TenneT´s control, so that future actual results may differ significantly from these statements.
All financial information in this Integrated Annual Report is reported in millions of euro, unless stated otherwise. As a result,
small rounding differences may occur.
Integrated Annual Report 2023 - TenneT Holding B.V.
At a glance
2023
Our performance
in 2023
Letter from
the Board
Supervisory
Board Report
Financial
statements
About
TenneT
Corporate
governance
Other
information
229
TenneT is a leading European grid operator. We are committed to
providing a secure and reliable supply of electricity 24 hours a day,
365 days a year, while helping to drive the energy transition in our
pursuit of a brighter energy future – more sustainable, reliable
andaffordable than ever before. In our role as the first cross-border
Transmission System Operator (TSO) we design, build, maintain
and operate over 25,000 km of high-voltage electricity grid in
the Netherlands and large parts of Germany, and facilitate the
European energy market through our 17 interconnectors to
neighbouring countries. We are one of the largest investors in
national and international onshore and offshore electricity grids,
with a turnover of EUR 9.2 billion and a total asset value of
EUR45billion. Every day more than 8,300 people working at
TenneT take ownership, show courage and make and maintain
connections toensure thatthe supply and demand of electricity
is balanced forover 43million people.
Together, we are lighting the way ahead
TenneT Holding B.V.
Utrechtseweg 310, 6812 AR, Arnhem, the Netherlands
P.O. Box 718, 6800 AS Arnhem, the Netherlands
Telephone: +31 (0)26 – 37 31 111
E-mail: communication
@
tennet.eu
Website: www.tennet.eu
© TenneT – March 2024
724500LTUWK3JQG639032023-12-31724500LTUWK3JQG639032022-12-31724500LTUWK3JQG639032023-01-012023-12-31724500LTUWK3JQG639032022-01-012022-12-31724500LTUWK3JQG639032022-01-012022-12-31ifrs-full:RetainedEarningsMember724500LTUWK3JQG639032022-01-012022-12-31TEN:UnappropriatedResultMember724500LTUWK3JQG639032022-01-012022-12-31TEN:EquityAttributableToOrdinaryEquityHoldersOfParentEntityMember724500LTUWK3JQG639032022-01-012022-12-31TEN:HybridCapitalMember724500LTUWK3JQG639032022-01-012022-12-31ifrs-full:EquityAttributableToOwnersOfParentMember724500LTUWK3JQG639032022-01-012022-12-31ifrs-full:NoncontrollingInterestsMember724500LTUWK3JQG639032023-01-012023-12-31ifrs-full:RetainedEarningsMember724500LTUWK3JQG639032023-01-012023-12-31TEN:UnappropriatedResultMember724500LTUWK3JQG639032023-01-012023-12-31TEN:EquityAttributableToOrdinaryEquityHoldersOfParentEntityMember724500LTUWK3JQG639032023-01-012023-12-31TEN:HybridCapitalMember724500LTUWK3JQG639032023-01-012023-12-31ifrs-full:EquityAttributableToOwnersOfParentMember724500LTUWK3JQG639032023-01-012023-12-31ifrs-full:NoncontrollingInterestsMember724500LTUWK3JQG639032021-12-31ifrs-full:IssuedCapitalMember724500LTUWK3JQG639032022-01-012022-12-31ifrs-full:IssuedCapitalMember724500LTUWK3JQG639032022-12-31ifrs-full:IssuedCapitalMember724500LTUWK3JQG639032021-12-31ifrs-full:SharePremiumMember724500LTUWK3JQG639032022-01-012022-12-31ifrs-full:SharePremiumMember724500LTUWK3JQG639032022-12-31ifrs-full:SharePremiumMember724500LTUWK3JQG639032021-12-31ifrs-full:RetainedEarningsMember724500LTUWK3JQG639032022-12-31ifrs-full:RetainedEarningsMember724500LTUWK3JQG639032021-12-31TEN:UnappropriatedResultMember724500LTUWK3JQG639032022-12-31TEN:UnappropriatedResultMember724500LTUWK3JQG639032021-12-31TEN:EquityAttributableToOrdinaryEquityHoldersOfParentEntityMember724500LTUWK3JQG639032022-12-31TEN:EquityAttributableToOrdinaryEquityHoldersOfParentEntityMember724500LTUWK3JQG639032021-12-31TEN:HybridCapitalMember724500LTUWK3JQG639032022-12-31TEN:HybridCapitalMember724500LTUWK3JQG639032021-12-31ifrs-full:EquityAttributableToOwnersOfParentMember724500LTUWK3JQG639032022-12-31ifrs-full:EquityAttributableToOwnersOfParentMember724500LTUWK3JQG639032021-12-31ifrs-full:NoncontrollingInterestsMember724500LTUWK3JQG639032022-12-31ifrs-full:NoncontrollingInterestsMember724500LTUWK3JQG639032021-12-31724500LTUWK3JQG639032023-01-012023-12-31ifrs-full:IssuedCapitalMember724500LTUWK3JQG639032023-12-31ifrs-full:IssuedCapitalMember724500LTUWK3JQG639032023-01-012023-12-31ifrs-full:SharePremiumMember724500LTUWK3JQG639032023-12-31ifrs-full:SharePremiumMember724500LTUWK3JQG639032023-12-31ifrs-full:RetainedEarningsMember724500LTUWK3JQG639032023-12-31TEN:UnappropriatedResultMember724500LTUWK3JQG639032023-12-31TEN:EquityAttributableToOrdinaryEquityHoldersOfParentEntityMember724500LTUWK3JQG639032023-12-31TEN:HybridCapitalMember724500LTUWK3JQG639032023-12-31ifrs-full:EquityAttributableToOwnersOfParentMember724500LTUWK3JQG639032023-12-31ifrs-full:NoncontrollingInterestsMemberiso4217:EURiso4217:EURxbrli:shares