Strategy and developments
We have a public task and, in carrying out this task, our goal is to enable a safe, reliable, affordable and sustainable energy supply. The role played by gas infrastructure in achieving this goal forms the foundation for our strategy. Through the connecting role of our infrastructure, we anticipate the energy needs of customers and consumers. In order to be able to continue to do so, we work in an innovative and pioneering way in the field of energy – and of gas and natural gas in particular. Through our efforts, we want to create value for both our shareholder and society. We have included the aspects that play a part in this process of value creation in our value creation model. In order to be able to realise our strategic objectives, we use a business model that allows us to take optimum account of opportunities and risks in the market and to generate value for our stakeholders.
The wishes of our customers largely determine our service provision. We aim to expand our leading European position and, in doing so, we are always looking for possible collaborations with partners, both nationally and internationally. In our strategy, we take into account the opportunities and challenges of the rapidly changing energy market. We regularly conduct environs analyses to ensure good alignment between our strategy, our objectives, our business model and current developments.
Through the connecting role of our infrastructure, we anticipate the energy needs of customers and consumers.
Developments in our environment: environs analyses
The position of natural gas is under pressure. This is caused by various developments, such as the dwindling gas production in north-west Europe. In addition, the dependency on Russian gas, the extraction of shale gas and the earthquakes in Groningen are serious matters of debate in the Netherlands.
In the residential sector, options are now sometimes weighed up as to whether to connect new houses to the gas grid or have all their energy requirements supplied by other sources. In addition, some gas-fired power stations in Europe have ceased operation because of strong competition from coal, partly due to the low CO2 prices.
Due to the overproduction of sustainable wind and solar energy, mainly in Germany, the prices on the energy market have fallen, as a result of which the returns of power stations are under pressure. Large international utility companies are reflecting on their future business model. For example, E.On has announced that it will split up the company into one part with conventional power stations and another part that combines distribution networks and sustainable electricity production.
In December 2014, Russia announced that it will abandon the construction of the South Stream pipeline via the Black Sea and Bulgaria to Austria. Russia is now considering a pipeline to Turkey. For the time being, Nord Stream will therefore remain the only connection by sea between Russia and Western Europe. The consequences of these developments for the gas supply in Western Europe are still unclear.
All this contributes to the uncertainty of the future of gas in the European energy supply, which makes it difficult for the players in this market to decide on often substantial investments with durations that may span up to decades.
What do these developments mean for us?
We carefully monitor developments in the market. We take them into account in our annual evaluation of our strategy, and adjust the strategy if we believe this is justified. We see that the interconnectivity of the Dutch and German gas markets with surrounding gas markets is increasing. The national objectives of a reliable and affordable gas supply are therefore increasingly determined and affected by European objectives, and decision-making is increasingly taking place on a European scale. These developments mean that we need to have a European focus, and working together with European partners will become increasingly important.
In the sustainable energy system of the future, various kinds of gas, electricity and heat will jointly play a role and influence each other. By joining up the strong points of gas, electricity and heat, the weak points of each individual energy carrier can be offset. To this end, the gas infrastructure will need to be able to feed in other kinds of gas, such as hydrogen, and connections will need to be made between the gas, heat and electricity systems, which are currently separate. We believe that a hybrid system offers the best solutions for the future. An example of such a hybrid system is the heating of houses whereby an electric heat pump and a high-efficiency gas boiler are combined to deal with peak moments as needed. Together with other stakeholders, we have started studies into the opportunities and challenges associated with the integration of the various energy systems, the feed-in of new gases, and the adjustments to the gas network that may be necessary.
By joining up the strong points of gas, electricity and heat, the weak points of each individual energy carrier can be offset.
In order to be able to realise our strategic objectives, we focus on three strategic pillars that contribute to enabling a reliable, affordable and sustainable energy supply:
- Optimising the value of our existing assets
- Strengthening our leading position as a cross-border gas infrastructure company in Europe
- Enabling the transition towards a more sustainable use of energy
Optimising the value of our existing assets
Our gas infrastructure activities are central to our strategy. In this, our primary focus lies on carrying out the legal tasks of network operators GTS and Gasunie Deutschland, in order to facilitate a well-functioning gas market. Through our network operators, we ensure the management and development of the gas transport network by means of transport services and related services, quality conversion and guaranteed security of supply. Our guiding principle here is operational excellence: safety, reliability and efficiency.
Strengthening our leading position as a cross-border gas infrastructure company in Europe
In an increasingly consolidating market, we take up the challenge to maintain, and where possible strengthen, our leading position as a cross-border gas infrastructure player. In this, we aim to make sure that our infrastructure is the preferred route for market players for their gas transport, so that our assets are put to optimum use. In addition, it also strengthens our position as the ideal negotiating partner for regulatory authorities. This enables us to exert a positive influence on appropriate legislation. Our positioning as an innovative service provider also contributes to this. In the past year, we worked intensively on possible collaborations with other gas infrastructure companies to arrive at a further expansion of the gas roundabout, for instance by increasing opportunities for the supply and throughput of gas.
Enabling the transition towards a more sustainable use of energy
The issues in the field of energy and sustainability are more challenging than ever. On the way towards a cleaner energy future that is not only feasible, but also reliable and, above all, affordable, we want to take advantage of any opportunities that arise. We believe in a sustainable future in which gas will play an ongoing role. In 2014, we carefully worked out our sustainability ambitions and laid them down in our ‘Roadmap to Green’. In this, we focus on green gas, power-to-gas, heat provision in the built-up environment, and carbon capture, transport and storage (CCTS). If society opts for CCTS, we will help to facilitate that.