In the first six months of 2012 TenneT realised a steady growth (underlying) of revenue and profit in both the Netherlands and Germany.
Underlying revenue amounted to EUR 842 million (EUR 816 million reported revenue), with underlying growth both in the Netherlands (23%) and in Germany (28%). Underlying operating profit for this period was EUR 167 million (EUR 134 million reported operating profit), with underlying growth both in the Netherlands (24%) and in Germany (27%). Cash outflow for total investing activities increased from EUR 320 million in the first half of 2011 to EUR 535 million in the first half of 2012.
Discussions regarding co-investment in future offshore projects in Germany are progressing with various international investors. TenneT continues to enjoy strong credit ratings, demonstrating its ability to finance its entire committed capital expenditure programme. Grid performance and customer satisfaction have improved.
CEO Mel Kroon: “TenneT showed a solid operational and financial performance in the first half year of 2012. We continued to expand and strengthen the grids in the Netherlands and Germany in order to meet increasing reliability and sustainability requirements. We have 10 offshore grid connections in parallel under development or construction in the German part of the North Sea, but are experiencing delays on the supplier side.
With committed investments of EUR 6 billion, TenneT makes an unparalleled contribution to the German Energy transition. To allow further offshore investments in Germany, additional equity is required. Solid legal arrangements will facilitate attracting investors. Political progress has been made with respect to issues relating to liability, long-term planning and financing.”
Grid expansion in the Netherlands well under way
In the Netherlands more than 300 projects are in progress, including four long-distance 380kV lines. The expansion of the extra high-voltage grid is necessary in order to accommodate the expected growth in demand for electricity transmission in the Netherlands.
For two of these 380kV lines: a fourth interconnection with Germany and a new connection from the northern Dutch seaport Eemshaven towards the West of the Netherlands, the Ministry of Economic Affairs, Agriculture and Innovation and the Ministry of Infrastructure and the Environment, have made provisional decisions.
Financing offshore projects
In February 2012, TenneT entered into a partnership with Mitsubishi Corporation in the German offshore high-voltage cable projects BorWin1 and BorWin2. Mitsubishi’s aggregate equity contribution of EUR 240 million represents 20% of the expected combined capital expenditures of approximately EUR 1.2 billion. Final closing of the transaction is still subject to satisfactory legislation limiting offshore liability in Germany. In March 2012, TenneT and Mitsubishi Corporation signed a Letter of Intent for an additional participation in two German offshore connection projects, HelWin2 and DolWin2.
Regulatory developments
TenneT has indicated the need for a binding separate long-term offshore plan and clarification of legal liability in case of delay or unavailability of offshore connections. German authorities have prepared the outlines of a draft law addressing limitation of potential liability of TSOs regarding offshore wind farms. Final legislation is expected to be passed before year end.
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Press Release, August 31, 2012