Statement of the Executive Board
Our customers and society at large trust us to provide them with a safe, reliable and affordable supply of energy. And again, during the past year, our employees worked hard to be worthy of that trust. We are pleased to report that, in 2015, we achieved security of supply of almost 100%. With regard to safety, we achieved most of our objectives. We set up a new programme to improve safety awareness and behaviour even further. The programme is definitely paying off, but our ambitions go beyond the results achieved so far. With regard to our efforts in the field of the environment, such as reducing our footprint, the desired improvements were achieved in 2015. Finally, our financial results were solid, enabling us to pay € 332 million in dividend to our sole shareholder, the Dutch state.
Partly due to our investments in gas infrastructure (pipelines, installations, terminals and storage facilities), customers have been able to benefit from a well-functioning gas market in the Netherlands and Germany. In the autumn, we put into use a new pipeline from our German network to Denmark, and on the Maasvlakte, in cooperation with Vopak, we started to expand our infrastructure for liquefied natural gas for the transport sector. In addition, we took further steps to set up green gas projects and develop new services regarding contracting capacity in our network and our gas storage. A well-functioning gas market also contributes to an affordable and reliable supply of gas and heating in north-west Europe. In 2015, the gas trading platform TTF continued to strengthen its position as a leading trading platform in Europe.
The changing gas market
The gas market is changing radically. In 2015, the Dutch Minister of Economic Affairs announced a further reduction of gas production in the Groningen field. To ensure sufficient gas remains available for customers and society, an additional supply of gas will be needed, either from other Dutch fields or from abroad. Thanks to the gas roundabout, this gas may come from anywhere in the world. The internal European energy market is functioning increasingly well. A shift is taking place from national to international markets. This is mainly due to the expansion of interconnection capacity and a larger international supply of gas via pipelines and LNG. We aim to maintain, and where possible strengthen, our leading position as a cross-border gas infrastructure player.
Changes in the gas market are also necessitating operational adjustments. For instance, to make gas from outside the Netherlands suitable for small-scale users in the Netherlands it needs to be blended with nitrogen to achieve the right quality. We are therefore preparing an expansion of our nitrogen facilities. By carrying out maintenance and replacement programmes, we also make sure that our infrastructure, not only in terms of pipelines and installations, but also our IT systems, stays in top condition.
The role of gas in the energy transition
In line with the agreements reached at the climate summit in Paris in 2015, the Dutch government has made the reduction of CO2 emissions the focal point of its energy policy. Accordingly, in its Energy Report published in January 2016, the government has left open all available energy options that may help create an energy system that is cleaner, while also remaining safe, reliable and affordable. It is important that the daily supply of energy is not disrupted, slowed or blocked during the transition to a fully sustainable energy future.
In its Energy Report, the government discusses various areas where gas and gas infrastructure could make a significant contribution to achieving its 2050 objectives. The underlying assumption is that gas, as the least polluting fossil fuel, will continue to play a crucial role for a long time to come. The volume of natural gas will decline in the longer term, with fossil gas gradually being replaced by renewable gases. Natural gas will then be increasingly used for applications for which no cleaner alternatives are at hand, such as in high-temperature processes in industry, or for freight transport by road or sea, where LNG can serve as a replacement for polluting fuels, such as diesel and fuel oil. In addition, gas will serve as a back-up at moments when the availability of energy from renewable sources is insufficient. We support this “Customised Gas” approach. Together with partners, we are developing LNG infrastructure and promoting the use of renewable gases, such as green gas and syn gas.
In consultation with our shareholder and the relevant ministries, we are investigating how, with our existing assets, specific competences and expertise, we can make a positive contribution to the energy supply today and to a low-CO2 energy supply in the near future that remains reliable and affordable. Given the expected declining role of coal-fired plants in the future, gas (as the cleanest fossil fuel that can be deployed flexibly) can make a significant contribution to CO2 reduction in the coming 20 years.
Energy has become a social issue, with much attention being paid to the living environment. In 2015, we held many discussions with stakeholders, both from within the gas sector and outside it, as well as with policymakers and environmental and advocacy organisations. In a number of cases, this has led to new forms of cooperation. For instance, in 2015, we co-founded the Dutch Renewable Energy Foundation. In 2016, one of our focal points will be to take an active part in the wider energy dialogue, in both our social and our political environment.
To us, the changes in the gas market mean that we will further improve the efficiency of our internal processes by accelerating and simplifying processes and structures, and by increasing our innovative power.
In carrying out our activities and in achieving our objectives, we fully rely on the dedication, knowledge and experience of our employees. On behalf of the company, we therefore wish to thank all our colleagues for their contribution in 2015. Together, we will confidently continue to build the energy infrastructure of the future.
Han Fennema, CEO
René Oudejans, CFO