Pillar 4: excellent network management is the basis
Our energy networks are among the most reliable in the world and we will ensure they remain so in the future. Thanks to efficient management and economies of scale, we are keeping the existing networks affordable. We also want to further increase the comfort our customers experience when we are carrying out work on their behalf. Because the trust of our customers is important, both for the performance of our traditional daily work and to realise our network ambitions. In 2016 we spent about € 795 million on the maintenance, replacement and construction of our energy infrastructure. The investments in the networks are tailored to the specific priorities, needs and characteristics of each region. An overview of our investments in the energy networks in each region is available on our website.
Workload puts pressure on performance
In 2016, we were unable to get through all the work we had planned to do. The reviving economy and accelerating energy transition have led to a growing demand from customers. Moreover, the labour market for technicians is tight. That is why we had to set priorities in the work we were able to do. As a result, the realisation of our objectives for network digitisation was temporarily put back. In 48% of the cases we achieved the interim milestones for our 25 most important projects. Long integration procedures and the involvement of local parties were among the chief causes of delays.
Our results in the regions
Our activities in the northern part of the province of Noord-Holland included the development of new stations in order to connect wind farms to the energy network. In the Haarlemmermeer area, we are experiencing a surge in demand for capacity due to the arrival of data centres and the expanding greenhouse sector.
One ongoing activity over the past years in Amsterdam is the reinforcement of the electricity networks in the Zuidas business area in order to meet the growing demand for electricity. In the year under review, we also expanded the infrastructure in the Watergraafsmeer and Bijlmer districts to accommodate new data centres.
Work on the existing energy infrastructure was carried out in various places, including Katwijk and Leiden. Another focus was the construction of new energy networks in the Zuidplaspolder to meet the future demand for electricity.
The activities in the Friesland region include connections for solar parks, including one on the island of Ameland in 2016. We also expanded the infrastructure in Heerenveen and Oudehaske to accommodate the growing demand for electricity from the booming agrifood business.
In Flevoland, Liander is contributing to the large-scale restructuring of wind farms. In 2016, new connections were laid throughout the province for this purpose. Moreover, we shifted the electricity cables and gas mains along the A6 to facilitate the construction of new traffic routes.
In Gelderland, various large customers were connected to a new switching station in Nijmegen. In 2016, we also expanded the infrastructure in the Bommelerwaard area to facilitate the growing energy demand from market gardeners. Liander also connected the networks of various villages to each other for additional security of supply in the future.
Electricity + gas
Amounts in € millions
Reliability of supply
Annual electricity outage duration
Investments and maintenance are designed to maintain and improve the reliability of our energy supply. In 2016, customers were without electricity for 23.3 minutes (2015: 21.9 minutes) on average. We thus failed to achieve our target for 2016 (<21 minutes). Two important measures for increasing the reliability of supply bore fruit. The Smart Cable Guard was deployed on a larger scale and in Amsterdam we put a lot of effort into the preventative removal of a certain type of fault-sensitive mid-voltage connection sleeve. However, due to the economic revival, the amount of earthworks increased in 2016, and so did the number of excavation-related incidents. This development, along with three major outages, jointly explain why our score was below the target.
In January, Amsterdam was hit by an exceptionally extensive low-voltage interruption as a result of power cables being torn during third-party excavation work. The other two major outages occurred in high-voltage stations in Alphen aan den Rijn in February and in Arnhem in July. The cause in Alphen was an engineering fault, whereas a switching error was to blame in Arnhem. Liandon investigated these outages and took measures.
The number of postcode areas with more than five interruptions per year was slightly above target, namely 17 (maximum of 16), partly because other objectives were given priority.
Smart Cable Guard deployed more often
Smart Cable Guard (SCG) is a system that detects and localises weaknesses in the underground network before these lead to interruptions. A single measurement is sufficient to check a section of several kilometres, with defects being localised within an accuracy of several metres. This saves time and costs spent on repairs to the electricity supply. Over 130 systems are already operational. After the small-scale roll-out, the deployment of SCG was expanded and improved. SCG clocked up 15 successful results in 2016. In 8 cases, SCG correctly pinpointed the defective component that had caused an energy interruption. In 7 cases, an energy interruption was pre-empted. SCG thus prevented the interruption of an estimated 410,000 usage minutes.
Gas outage due to vandalism
In 2016, households were without gas for 85 seconds on average. In Alkmaar 10,000 households were deprived of gas due to an external cause on 27 October. The gas outage occurred when automated safety mechanisms were triggered after vandals had broken open a ‘gas cabinet’ of Liander with a crowbar. Liander reported the incident to the police.
Outage duration of gas
Gas explosion on Urk
A gas explosion on Urk destroyed several houses early in June. Six families lost their homes and several persons were injured. One person was admitted to hospital. The gas explosion occurred while a third party was working on the sewage system. During this work, the gas mains were damaged, causing gas to flow into the sewer. By the time Liander's response engineer arrived on site, it was too late to close the leak. The explosion followed shortly afterwards, leaving 24 homes without gas for an evening or, in some cases, part of the weekend.
Causes outage gas
Causes outage electritity
Tariffs for network operation and reduction of sufferance tax
The network operators are tasked with providing energy transportation, connection and metering services. The tariffs are regulated and the Netherlands Authority for Consumers & Markets (ACM) sets the permitted tariff level for the individual network operators. The network operation tariffs for Liander in 2016 were comparable with the prior-year rates. The tariffs would have been lower if they had not been taxed with sharply higher regional sufferance tax levies. The costs of sufferance tax - the municipal levy that Liander is charged for using publicly-owned land - continue to rise. These local levies generically increase the tariffs for all customers, even though sufferance tax is only levied by a limited number of municipalities. The sufferance tax paid in 2016 amounted to € 149 million (2015: €110 million).
We see sufferance tax as a non-transparent measure of municipalities that raises tariffs for all customers. Moreover, the levy leads to an unfair distribution of the costs. Alliander therefore welcomes the submission of a bill seeking to restrict the authority to levy sufferance tax. The proposal means that municipalities may no longer raise their rates and have to reduce over the next five years.
Dilemma: how long should we still build gas networks?
Every year we invest tens of millions of euros in the replacement and construction of new gas networks. Looking at the trends and developments in the energy market, we foresee a more sustainable future with a falling demand for gas. Home insulation is improving, new-build housing is increasingly energy-neutral and electric heating (with e.g. heat (hybrid) pumps) is also gaining ground in new residential projects. The Energy Agenda, as presented in late 2016, also indicated a strong reduction of natural gas use in the built environment and encourage integration of low-CO2 electricity and heat. Despite this outlook, we still build new gas networks at our customers' request. Also for new-build neighbourhoods and projects. The construction of energy networks is a long-term investment for us, based on an estimated useful life of 40 to 50 years. To be climate neutral by 2050, the Netherlands must replace the existing gas networks with alternative heating solutions within the next 35 years. Hence our question: how long and where should we still build gas distribution networks?