Strategy, business model and value chain 

Business model and value chain

Being an energy infrastructure company, Alliander is tasked with ensuring an energy supply that gives everyone access to reliable, affordable and sustainable energy (NACE 3513) in six regions of the Netherlands. Driven by our mission, Alliander also considers it part of its core task to enable and even accelerate the greening of the Dutch energy system. 

Our main business activities

• Electricity distribution – We ensure reliable and efficient distribution of electricity to millions of households and companies. This includes building, operating, managing and maintaining power grids, connecting producers and consumers to those grids as requested, measuring consumption and recording, managing and exchanging data to facilitate the energy market.

• Gas distribution – We ensure reliable and efficient distribution of gas to millions of households and companies. In doing so, we see to it that our gas grid is technically sound, that network losses are minimised and that the gas grid is repurposed for the transmission and feed-in of renewable gases. Gas distribution includes building, operating, managing, modernising and maintaining gas grids, connecting producers and consumers to those grids as requested, measuring consumption and recording, managing and exchanging data to facilitate the energy market. 

• District heating networks – We ensure integrated development of district heating networks, either independently or in partnership with other companies. The development of district heating networks is an important element in greening the energy supply and phasing out fossil fuels.

Customer groups

We have two customer groups within our service area: low-volume consumers (households and small businesses) and high-volume consumers (large service providers and industries). The customer groups are primarily defined by the Dutch Energy Act. During the reporting period, there were no major changes to these groups. However, we do see many developments in our customer groups. These include developments in the energy transition, such as increases in the number of solar and wind energy producers, EV charging stations and e-boilers at industrial customers.  

Banned services, banned substances

Alliander does not supply products or services that are banned and does not use banned substances. In the past, however, certain materials were used to build our networks that we now know involve certain risks and are now banned or may be banned in the future. We have implemented precautionary measures and replacement programmes for these materials. Examples include materials that contain asbestos, the replacement of cables containing lead, polychlorinated compounds, reduction of SF₆ gas leaks, coatings containing chromium-6 and the replacement of grey cast iron used for gas pipelines.  

Climate-related emissions

Alliander abides by current Dutch government policy aimed at reducing carbon emissions by at a least 55% by 2030. Another target is for the energy system to be climate-neutral by 2050. With the energy transition now well and truly underway, it is becoming clear that the changes are more far-reaching and more difficult to achieve than all the ‘regular’ changes we have implemented as an organisation and as a society in recent decades.  

The key challenge is to accelerate sufficiently to make the energy transition possible. To do so, we need to scale up in terms of personnel, materials and services. Scaling up to the required degree creates sustainability dilemmas. This is especially true for materials and services.  

• When it comes to materials, we have set high standards in the area of sustainable and circular procurement, and value chain responsibility. However, the transformer and cable shortages we had several years ago made us realise that, ultimately, being able to acquire sufficient materials is even more important.  

• With respect to services (and equipment), the issue is that current NO_x legislation forces us to produce without emitting nitrogen. This is not always possible yet, as many of our instruments and tools run on diesel. Although the biodiesel (HVO100) we use does reduce carbon emissions, it still produces NO_x emissions. We also have no other option than to use diesel-powered generators.  

Alliander’s business model is largely the same as that of other network operators. The business model is based on the Nbility model, which incorporates the activities of the infrastructure group. We count both Alliander's own operations and those of our direct suppliers and customers as part of our value chain. We buy materials and components for the energy infrastructure from suppliers. Installers and contractors provide engineering services and carry out infrastructure projects. On the customer side, we ensure that everyone has access to reliable, affordable and sustainable energy on equal terms.   

Material impacts, risks and opportunities are directly or indirectly linked to the strategy.  

Interests and views of stakeholders

Alliander involves stakeholders in its strategy development process and in defining and putting a value on material topics. We have identified four core stakeholder groups: customers, employees, shareholders and investors, and local and regional authorities in our service area. In addition to these groups, we have a variety of societal stakeholders and partners. See the section on the double materiality assessment for a more detailed description of our stakeholders.  

We engage with the following and other stakeholder groups on a regular basis to discuss the major grid congestion and energy transition challenges: 

1. Customers: households and companies;

2. Partners in the implementation chain: suppliers of materials, services and technology, permitting authorities and financiers;

3. Public authorities, policymakers and other parties with a major role in the energy system overhaul: supervisory authorities, municipal authorities, regional authorities, other network operators, government ministries in charge of policy in our domain and civil society organisations.

Customers

We engage with our customers to get a proper understanding of their challenges and future transmission needs that guide their choices. In addition, we aim to encourage customers to be flexible in their power consumption for congestion management purposes. We do this in various ways, including by conducting targeted customer surveys, having relationship or account managers reach out to customers, sending out questionnaires and running pilots. Besides our customer services department and website, we use social media for customer contact. These channels are used to respond to individual queries and post updates on works in people’s local area. The ExCo has made improving communication with customers and stakeholders one of the priorities. We continuously monitor how often our communication channels are used and what customers think about them. Where appropriate, customers can share negative experiences through the Complaints Procedure.  

Partners in the implementation chain

With our implementation partners, we maintain close and long-term partnerships that are necessary to scale up and carry out more work. To this end, we have set up an organisational unit called ‘Major Work Packages’ that builds these partnerships aimed at scaling up. In June 2024, we sealed the Implementation Agreement with other regional network operators, public authorities and partners. This Implementation Agreement contains arrangements with respect to working together to accelerate implementation.

Other partners

We are in consultation with the Ministry of Climate Policy and Green Growth, and the Ministry of the Interior and Kingdom Relations on effective policies, among other things, for decarbonising the energy system and solving grid congestion. These consultations are part of programmes such as the National Network Congestion Action Programme, the National Energy System Plan and the National Programme on Sustainable Industry. We work with municipal and provincial authorities on the issue of spatial integration of infrastructure. Through integrated programming, we also work together on developing the future energy system. Energy Boards have been set up in each of the provinces for administrative collaboration in this area, aimed at acceleration and making choices. We involve civil society organisations and organisations representing specific stakeholders so that we can take their views and insights into account. We seek their input for our investment plans, for example, both at the start when defining the starting points for the scenarios and at the end when we submit the draft investment plan for consultation.  

How we harness stakeholder insights

We use our stakeholders’ insights to fine-tune our strategy. For many of our stakeholders, the utterly unsatisfactory grid congestion situation is their biggest problem. As we do not have an instant solution to that problem yet, we are increasingly deepening our search for unconventional solutions to rise to the challenges, so that we can ultimately meet the needs of our customers and society.  

Stakeholder bias 

Stakeholder bias is something that can manifest itself in all kinds of different ways. When estimating and determining materiality, we have always looked at which stakeholders are affected by our impact or affect us. The best way to prevent bias from creeping in is by having more eyes on our work and inviting more forums to weigh in. We engage with both internal and external stakeholders to discuss topics. These consultations are monitored by our CSRD working group and steering committee, and separately reviewed by the Management Board. We ask our youth panel called the Future Leader Board to co-read and review our annual report, and we organise a stakeholder panel every year to go over the annual report. This process reveals a wide range of insights, perspectives and interests. We focus our attention on the results of the input delivered.

Guaranteeing stakeholder engagement

 In making our policy and setting our targets, we heed the interests of the main stakeholders. The resulting policy is published on our intranet or website, as applicable. The Management Board has delegated responsibility for incorporating our stakeholders’ views on our strategy and business model to several business units/departments within the organisation: 

• The Corporate & Social Affairs (CSA) department is responsible for engaging our social stakeholders.

• Customer & Design is responsible for customer relationships with respect to future transmission needs and for acquiring land for new substations.

• Strategic Resource Management is responsible for supplier relationships.

• Asset & Product Management is responsible for gauging stakeholders’ views as part of the process of preparing our investment plan.

• High-Volume Connections, Reconstructions & Grids is responsible for major accounts and setting up new high-volume connections.

• Major Work Packages is responsible for organising large-scale projects we are taking on as part of long-term and deepened partnerships with implementation partners and public authorities.

Stakeholder table

Material impacts, risks and opportunities and their interaction with the strategy and the business model

Based on the double materiality assessment (DMA) we conducted, we have defined five ESRS themes as material topics. The ‘Information on sustainability topics’ paragraph will explain how these interact with our strategy and our business model. 

Alliander has a solid financial position, and therefore also has a resilient business model and resilient strategy in order to address material risks and impacts. Current financial impacts are recognised in the financial statements. For more background information, please see the financial statements. We have not performed any further IRO-specific qualitative or quantitative assessments based on this. Targeted financial effects are included in our business plans. Scenario analyses are part of our business plan process.