Risks

Alliander works hard to keep energy reliable, affordable and accessible for everyone. Risk management helps bring focus to Alliander’s management so that we achieve our objectives. Our work involves risks, including safety and financial risks. These risks cannot be entirely eliminated. However, risk management does provide insight into these risks, so that we can take informed decisions about (measures to control) these risks. We use a single risk management method within Alliander. This ensures that the risk management process takes place in accordance with the same steps everywhere in the organisation.

Risk awareness

The management of risks forms part of our governance and decision-making. The Management Board and Supervisory Board of Alliander regularly discuss the principal risks. They assess what effects the risks can have on the strategic objectives, the operations and our reputation.

Alliander is committed to complying with the guidelines in the (revised) Corporate Governance Code. In the ‘Corporate governance’, ‘Statement by the Management Board’ and ‘Other information’ sections, we provide more information on how risk management has explicitly been embedded in the organisation’s governance and decision-making procedures.

Risk appetite

To achieve the corporate objectives, we sometimes need to accept risks to a certain extent. The extent to which we are prepared to run risk in attaining our goals (i.e. our ‘risk appetite’) ranges from risk to risk.

• When it comes to the safety of our employees, our customers and our networks, we aim to keep risk to a minimum. We eliminate all risks where possible and realistic.

• Our risk appetite is low when it comes to compliance. We are expected to comply with laws and regulations, and are committed to acting in accordance with internal procedures and the Alliander code of conduct.

• Where strategic risks are concerned, we seek the right balance between the risks and our longer-term ambitions.

• We have a low appetite for financial risks. This ensures that we have a healthy financial basis and meet our key financial ratios.

Developments in top risks

Given the trends around us, the same topics have largely remained relevant to us. Both domestically and internationally, many relevant trends have continued, with shifting power relations, unrelenting pressure on the supply chain, rising defence spending and climate risks. Domestically, we are seeing that the formation of the new coalition government and their plans have brought uncertainty about progress in policy and legislation. Government priorities on a national level, as well as the public debate and our society becoming more intransigent are topical issues that impact our top risks.

Overall reflection on the total risk spectrum

We are facing major strategic challenges that we are working hard to overcome, but we are not yet where we want to be. At the same time, while there is indeed a growing focus on the main risk topics, these are often addressed through initiatives spanning several years that will only deliver results in the long term. The additionally implemented control measures are intended to bring down risk scores over the coming years. Here’s a run-down of our main risks:

The above table lists the risks in descending order. We will go into greater detail on the five highest-scoring risks below. Additionally, we will go into the new risk that we have identified, which is the uncertainty around the effects of climate change.

1. Inadequate completion of work package

The ‘Inadequate completion of work package’ risk continues to be our greatest risk. The volume of work, especially in the work package for electricity, continues to increase due to the energy transition and economic growth. The shortage of technical staff in the labour market, lengthy training and volatility in the forecasts concerning the type and volume of work make timely scaling up of capacity challenging. In addition, we are seeing certain materials becoming increasingly scarce on the market and, as a result, we are not able to complete all of our work package and some work is being postponed. This is compounded by the complexity of predicting system changes and planning for the emergence of new technologies and trends. The aim is for our adopted market approach, improved plan reliability and progress on our ‘Making better use of the network’ initiative to help us bring down this risk score. Risk management on this front is geared towards reducing the likelihood of this risk materialising.

2. Not meeting customer expectations

While the ‘Not meeting customer expectations’ risk diminished in terms of impact, it remains a very high risk. Due to the enormous demand, it is becoming increasingly difficult to meet customers’ expectations. The shortage of transmission capacity is worsening and waiting periods for connections are getting longer. Interaction with customers is increasing too. All this has an impact on our customers and requires good, timely personal communication. At the same time, our customers have ever higher expectations concerning transparency and service provision. National and regional media are focusing more attention on network operators. The growing network capacity issues are impacting our customer rating.

We are better able to manage customer expectations on the front end and customer communications have improved over the past year, but it is still a challenge to meet growing demand from customers. In all our processes, we need to be aware of their impact on customers. The measures we have implemented are effective, and additional measures have also been defined.

3. (Cyber)security resilience

When it comes to the ‘(Cyber)security resilience’ risk, we are focusing heavily on containment. Geopolitical developments have led to a heightened threat level. Threats we have identified include espionage, sabotage, infiltration and disinformation. Security expertise is in short supply and the number of qualified staff we are managing to bring in and develop internally still falls short of the organisation’s needs. Strong organisational growth is having an adverse impact on social cohesion and, consequently, on our last line of defence, i.e. our workforce. Increased risk of unauthorised access or abuse of authorised access by insiders. New legislation in response to these challenges has already been passed in the form of the Cybersecurity Act and the Critical Entities Resilience Act, placing high demands on the security of Alliander’s organisation and processes.

We continue to prioritise keeping our business continuity management (BCM) plans and business impact analyses of critical processes up to date. New external threats are expected to keep risk at a high level over the coming years.

4. Uncertainty over the future energy system

Building energy infrastructure for a new energy system comes with uncertainty. There is a risk that the future energy system will develop in a different direction than what we currently think, which could create a mismatch with our investments. We may turn out to have invested too much, in the wrong sites, or in the wrong energy carriers, or to have created too much overlapping infrastructure (electricity, heat, hydrogen), or simply not enough infrastructure. This can lead to higher costs for society and damage to our reputation.

5. Accidents caused by unsafe situations

Safety features increasingly prominently and broadly on the agenda at all our organisational units. Our activities involve health and safety risks for our employees, contractors, customers and local communities. There are two types of safety risk: one is the risk of employees being injured on the job and the other is the potential for explosions, fire, suffocation, short circuit or other accidents that can occur as a result of an asset failure. Despite all the measures taken the risk of an accident always remains. The potential impact is huge.

While our LTIF rate is falling and Level 4 safety awareness is growing, we are seeing that we have not met our targets when it comes to the number of accidents and development of a safety culture. Given people’s growing risk awareness and increased readiness to raise concerns, the number of reported incidents has increased. We are pursuing targeted behavioural change, specific and measurable improvement measures and active leadership engagement to strengthen our foundation and achieve real improvement in our safety performance.

Uncertainty about effects of climate change (new risk)

A new risk that we have identified is the uncertainty about the effects of climate change. Climate change leads to challenges in the performance of our duties as a network operator. It impacts the condition of our assets and affects our operations and safety. While climate change does not have a major effect on us at this point, it is something we have to keep monitoring. In new-build projects, we take climate scenarios into consideration. We conduct regular risk assessments to assess whether our maintenance strategy is still adequate for our existing buildings.

Other risks – non-compliance with legislation

Besides the main risks set out above, we also face obligations under laws and regulations. Despite our commitment to compliance in our policy choices, processes and activities, there were instances of non-compliance with the Dutch Public Procurement Act and in the implementation of network codes in the past year. As far as procurement is concerned, Alliander reassessed a number of previously concluded contracts in 2025, like it had done in 2024. The original contracts had been concluded after a European tendering procedure, but they were not put out to tender again after reassessment. Alliander found itself obliged to amend the contracts for social impact reasons. This was done in complete transparency and the associated risks have been mitigated. When it comes to the network codes under the Dutch Energy Act, which network operators are required to implement, we found that measures and customer products intended to ensure more efficient use of networks were not yet implemented at all or only partly. Following a request from the Netherlands Authority for Consumers & Markets (ACM), an improvement plan has now been made to tackle the challenges.