03 Gasunie’s profile

Gasunie is a leading European energy infrastructure company, whose core activities are gas transport and gas storage. We serve the public interest and facilitate the energy transition by providing integrated infrastructure services. We focus on value creation for our shareholder and other stakeholders and apply the highest safety and business standards used in the sector.

We believe in a sustainable future with a balanced energy mix and a lasting role for diversified gas. We believe that we serve our customers best with innovative gas and related infrastructure solutions.

In the Netherlands and the northern part of Germany, Gasunie operates infrastructure for the large-scale transport, storage and conversion of gas. At the moment, this is mainly natural gas, but the energy transition is increasingly bringing about a shift towards hydrogen. We also work on the construction and operation of heat and CO₂ grids and we facilitate the feed-in of green gas into our natural gas grid.

Our task is to provide safe, reliable, affordable and sustainable energy infrastructure services, ensuring that everyone has access to energy, always. This is of crucial importance to the economy and society. Our infrastructure, services and geographical position mean that we are at the heart of the north-western European gas market.

Gasunie is a connecting factor in the energy value chain

We develop, manage and maintain energy infrastructure, i.e. gas transport networks, international transit pipelines, gas storage facilities, gas conversion installations and LNG infrastructure, as well as virtual gas trading platforms. In some cases we do this in joint arrangements.

Our transport and infrastructure services connect energy producers to energy consumers. We give third parties non-discriminatory access to our services. Most of our activities are regulated. Regulatory authorities ACM (in the Netherlands) and BNetzA (in Germany) set our revenue cap and, by extension, the tariffs every year.

Our infrastructure functions as an international hub for the supply and transit of gas in north-western Europe. This enables us to contribute to a liquid, competitive and reliable European energy market.

We invest in projects relating to hydrogen, heat, CCS, green gas and natural gas/LNG. We work to accelerate climate-neutral energy supply by developing sustainable energy supply chains. We do so by striking up new joint arrangements and creating new business models.

The Dutch state is our sole shareholder. Our employees are spread over more than thirty locations in the Netherlands and northern Germany, with delegations in Brussels, Berlin and Moscow. Our headquarters are in Groningen (Netherlands), and our main German office is located in Hanover.

Gasunie has three business units, two of which operate a gas transport network. The latter two business units, Gasunie Transport Services (GTS) in the Netherlands and Gasunie Deutschland (GUD) in Germany, are network operators that offer their services in a transparent manner and sell the available capacity on non-discriminatory terms.

Gas can be fed into the network at entry points, and customers can draw gas from the network at exit points. Customers enter into contracts to reserve capacity at specific network entry or exit points over a specific period (year, quarter, month or day). The tariffs that GTS and GUD charge their customers and the resulting revenues are regulated by the Authority for Consumers & Markets (ACM) in the Netherlands and by the Bundesnetzagentur (BNetzA) in Germany.

Our third business unit, Participations, offers energy infrastructure and related services that are not subject to regulation (unregulated or exempt). Customers buy capacity, which entitles them to use the relevant infrastructure during a certain period. The services are open access. The tariffs for these services are non-discriminatory and mainly determined by supply and demand. Our Participations unit’s operations support the functioning and liquidity of the energy market in the Netherlands and Germany.

The transport networks operated by our GTS and GUD business units and the principal subsidiaries of our Participations business unit

We see rapidly declining natural gas production in Europe. This decrease is happening faster than the desired decrease in natural gas demand and the desired increase in the production of renewable gas. The European demand for natural gas is decreasing by 0.5 to 1.3% per year.* Dutch natural gas demand will fall by 20% or more* between now and 2030, depending on energy-saving measures, electrification and the cross-border demand for electricity from gas-fired power stations. The demand for natural gas in Germany will remain stable in the medium to long term.

The phasing out of production from the Groningen field makes additional imports from Russia and the supply of LNG essential and increases dependence on these sources. Despite the armed conflict in and with Ukraine, Russia is expected to continue to supply half of Europe’s demand for imported natural gas. The global volume of LNG is enormous, comparable to the total demand for gas in the whole of Europe. More than two thirds of this volume goes to the Asian market, which is almost completely dependent on LNG. This means that changes in the Asian market have a major impact on the availability of LNG for Europe. The market share of LNG in Europe could rise from 20% now to 25% in 2030*, as long as importers remain willing to compete with Asia in terms of the price they are willing to pay. In a broad market (such as in 2020), cheap LNG is imported to Europe; especially in summer. In a narrow market (such as in 2021), expensive LNG is imported to Europe; especially in winter. Long-term contracts remain unpopular with importers.

Impact on Gasunie: external economic value creation The well-connected infrastructure facilitates a reliable energy supply for north-western Europe, the Netherlands and Germany. Underground gas storage facilities remain essential for handling peaks in supply and demand. The main gas network in north-western Europe is virtually fully developed, so the focus is on network optimisation, market integration, expansion of LNG import handling capacity, repurposing pipelines for hydrogen transmission, and connecting new industrial customers like electricity generators and process industries.

To reduce carbon emissions, the Netherlands and Germany are pursuing very ambitious hydrogen strategies that include converting existing infrastructure to transport hydrogen and expanding this where necessary. In Germany there is still no broad political support for CCS and limited possibilities for storing CO₂ under the sea, which is why cross-border collaboration, especially with the Netherlands, is crucial if Germany is to CCS to achieve the climate goals. Possibilities include collaboration with countries that do have storage options, such as the Netherlands and Norway, and a transfer point for CO₂ at the Port of Rotterdam.

With the increase in electrolysis capacity, the gas and electricity networks will be even more interconnected, bi-directionally as well. Electricity (surplus electricity in particular) will become a source of sustainable hydrogen. In the transition phase to a sustainable energy system, the methane system will initially become increasingly important to maintain the daily and hourly balance in electricity and hydrogen and to guarantee security of supply.

Impact on Gasunie: external social value creation Demand for and supply of hydrogen and green gas will increase. The future shares of these renewable gases in the energy mix are uncertain but promising. In the event of a high demand for hydrogen (exceeding the supply of green hydrogen we can produce in our region), the use of blue hydrogen (produced by separating natural gas and capturing and storing CO₂ emissions), supply of green hydrogen from other regions in the world, and a cross-border CO₂ transport and collection system will be needed.

Gasunie has been investing in natural gas infrastructure for nearly sixty years and in energy transition projects for more than ten. The knowledge and experience we have gained along the way now put us in an ideal position to scale up and contribute materially to the energy transition, while in the meantime we keep the current energy supply safe, reliable and affordable. Our people can make a difference in the current and in the new energy world.

Thanks to their unique location close to the relatively shallow North Sea, our core markets of the Netherlands and northern Germany are ideally suited for handling large volumes of offshore wind power. This wind power can be used to make hydrogen. Tankers can bring in LNG and later also liquefied hydrogen and hydrogen carriers to Europe from overseas, which can be easily unloaded at our seaports. Underground salt layers in certain locations in the Netherlands and northern Germany lend themselves well to building caverns to store gases. Depleted gas fields under the sea can be used to store CO₂.

Both in the Netherlands and Germany, our gas transmission networks interconnect major industrial hubs. With the closure of the Groningen gas field and the declining demand for natural gas, we can convert these networks in phases from natural gas to hydrogen relatively quickly and economically. We will develop hydrogen infrastructure in the industrial clusters and connect this up, also to storage facilities and to the networks in other countries, from 2025. We expect the first imports of hydrogen to Europe to arrive in 2025. Between 2026 and 2030 we want to develop four hydrogen storage caverns. Our know-how in the area of the transmission and storage of gas molecules makes us an interesting partner for the construction and operation of transmission networks for hydrogen, heat and CO₂ and for feeding green gas into the existing transmission network.

The climate goals are clear: in 2030 CO₂ emissions in Europe have been cut by 55% and in 2050 Europe is fully climate-neutral. Though many countries, companies and citizens are taking measures, we are not there yet – far from it. The reports of scientists and rulings of the courts are as plain as day.
 

Climate goals of the Netherlands, Germany and the European Union

And yet measures to cut carbon emissions on a truly large scale are often put on the back burner. Gasunie is committed to the Dutch, German and European climate goals and is prepared to invest ahead of the market curve and for the sake of growth. When making investment decisions, we look not only at financial objectives, but also at our contribution to society.

Though the final destination may be clear, the road to get there is labyrinthine and filled with uncertainties. To bring some structure to this, we have set our own strategy along three paths.
 

Accelerating the energy transition

Firstly, we are fully committed to accelerating the transition to carbon-neutral energy, through the use of, for example, hydrogen, green gas, heat grids and CCS. This calls for making use of existing and new knowledge and new collaborations. We use our experience to shape the market of tomorrow, together with partners.
 

Connecting Europe

Contributing to a well-functioning European market for natural gas and LNG is our second focal point. Natural gas will remain important in the coming decades, as a feedstock and as a source of energy. With the closure of the Groningen field, it is crucial that well diversified international natural gas flows find their way to our core area.

Optimising infrastructure

We ensure a good gas infrastructure in our core area. That’s our foundation. The energy supply in our core areas has an excellent track record in terms of safety and reliability. By working smarter, we keep the costs of energy transmission as affordable as possible.

We are ready to take on our new role. In fact, we’ve already started – sixty years ago, when the Netherlands switched from coal to gas. While the countries around us are now focusing on relatively clean natural gas to replace coal and nuclear energy, the Netherlands can look further ahead. This is a unique advantage. We can use our material capital (infrastructure, favourable geographical location) and intangible capital (knowledge and skills) to accelerate the energy transition and generate prosperity and employment. This capital will prove to be of great benefit as the new energy carriers make headway. Collaboration with the government, producers and customers, within the Netherlands and internationally, is crucial in this regard.

It is not yet clear exactly how the energy transition will proceed, but one thing is certain: Gasunie will play a key role. This will be a role in which our knowledge and expertise is our strength and our infrastructure serves as a connector. By constructing new, green infrastructures to which market parties have access at all times (open access) on equal terms (non-discriminatory), we are driving the emergence of new sustainable value creation chains, as can be seen in this hydrogen illustration.
 

Positive network effect through new infrastructure

In 2020, Gasunie captured its strategy in an outlook for the coming ten years: Vision 2030. By 2030, we will have transformed from a gas transmission company into a broad energy infrastructure company. By then, we will be storing and transporting natural gas, green gas, hydrogen, CO₂ and heat in a safe, reliable, affordable and sustainable way. We will play a key role in achieving the ambitious climate goals set in the Netherlands, Germany and the European Union.

Our Vision 2030 includes large-scale energy transition projects that are in line with our strategy and for which we intend to make an investment decision in the coming years. We expect most of these projects to immediately or gradually be made subject to regulation, meaning that we will market these assets at regulated tariffs and on the same contract terms. For each project we look at tailor-made solutions that will keep the development and operating risks under control.

In response to new insights, in 2021 we adjusted our Vision 2030 on several points. Our natural gas infrastructure takes demand-side management into account and is aligned with the dynamic nature of green energy. Transport of CO₂ and import of hydrogen are given a greater role and more concrete plans for this have been made. We will connect third-party plants for electrolysis and large-scale green gas production in good time and at the lowest possible cost, but we will not become a shareholder.  For the rest, our ambitions have not changed: Gasunie continues to be a connecting factor in the energy transition.

In 2030, we are working together with operators of transport and storage systems for electricity and heat to ensure that at all times energy consumption is accompanied by the lowest CO₂ emissions possible. Together with partners, we provide transparent, often real-time data through data platforms that allow third parties to accelerate the energy transition.

In order to realise our Vision for 2030, we have drawn up an extensive investment programme. For the main part, this investment programme is geared towards building a hydrogen transmission network that includes storage facilities, investing in underground CO₂ storage, and investing in heat transport. For the benefit of security of supply, the investment programme also includes investments with a relatively smaller size in LNG and gas storage and the replacement of parts of our existing natural gas transmission network.
 

Our Vision 2030 investment agenda (capital expenditures, in € million)

According to our current estimates, Gasunie’s total investments under its Vision 2030 investment agenda will amount to around € 7 billion (2021 cost level). This chart shows the investments (capital expenditures) we foresee for the various forms of energy in which we want to be playing a role in 2030. We want to carry out a number of projects with partners. Only Gasunie’s share in the investments is shown, and grants, for example, have already been deducted from this amount. There is a separate decision-making process for each project. The financing of the projects comes from various sources, such as capital market funding and cash flows. Depending on political and economic developments, the total investment figure and how this amount is distributed over the various forms of energy may change in the coming years.

By 2030, Gasunie wants to have completed its transformation from a gas transmission company to an energy infrastructure company, and for some time now we have been expanding our activities to include heat, CO₂, hydrogen and green gas. These plans are described in our Vision 2030. The question is, are we doing enough to make a meaningful contribution to achieving the carbon emissions targets society would like to see met?

To provide insight into this, we have calculated the effect that the fossil and sustainable gases we expect to transport to Dutch end users up to 2050 will have on achieving the Dutch* carbon emissions targets.

Our influence on achieving the Dutch climate targets

Gasunie provides transmission and storage services. The emissions of the product we transport are not included in our Scope 1, 2 or 3 emissions, as defined in the GHG protocol. However, we can also and want to exert influence in the supply chain and provide a means for our end users to cut carbon emissions by offering infrastructure that can transport the cleanest energy carriers.

The expected CO₂ equivalent emissions in the Netherlands are on the decline. On the one hand, this is thanks to homes and buildings now being better insulated, equipment becoming more energy-efficient, and the share of green electricity increasing, while natural gas is being replaced by electricity. On the other hand, the expected emissions are falling thanks to network operators facilitating the transmission of fossil-free energy. We have determined what contribution the projects that are part of our Vision 2030 make to the reduction of CO₂ equivalents.

The analysis shows gases could contribute towards cutting around 37 megatonnes of CO₂e, half of what is needed in total. Of that amount, 21 megatonnes would be attributed to the use of blue and green hydrogen, residual heat and green gas and to the storage of captured CO₂, for which Gasunie wants to build the necessary transmission infrastructure. The remaining 16 megatonnes would come from the decline in demand for natural gas.

If we are facilitated in implementing all our Vision 2030 plans and the demand for natural gas decreases, the Dutch transition pathway from 2025 will be much more favourable. If this is the case, transmission through our pipelines will be CO₂-neutral in 2045 and the Netherlands will be able to be CO₂-neutral by 2050. That is more ambitious than the figure envisioned in the Dutch Climate Act of 2019, which targeted a 95% cut in emissions by 2050. It is also in line with the ambition of the new Dutch government, which wants to see a 100% cut in emissions by 2050 and which, at the time of writing, aims to amend the Climate Act accordingly.

This acceleration compared to the 2019 Climate Act could even go further. We are currently only considering the effects of our investments between 2020 and 2030. A new series of Gasunie investments for the period from 2030 to 2040 could lead to a steeper decline along the Dutch transition pathway.

To scale up, we need to see that we have long-term commitments from customers (industry, energy companies, greenhouse agriculture collectives) in the form of contracts, and from government bodies in the form of grants and additional policies. This will allow green energy carriers to compete with fossil energy carriers.

Although we do not know if we will be able to realise all our energy transition projects, momentum increased significantly over 2021. In 2022, we see almost all components of our strategy reflected in the coalition agreements of the new Dutch and German cabinets. And in 2021 we received substantial financial commitments from the former Dutch cabinet for the development of WarmtelinQ and the hydrogen backbone. The EU Fit for 55 package and the steps taken at the UN Climate Change Conference COP26 in Glasgow are resulting in increasing European support for economic recovery through investment in renewable energy, and in hydrogen in particular.

We finance most projects from our accumulated capital, by issuing bonds, and by arranging project financing, supported by government grants and other grants to mitigate early-stage risks and unprofitable gaps, and covered as much as possible by customer contracts. In projects that we develop in a consortium, partners also cover part of the capital requirement. We have earmarked a total amount of € 7 billion for our share of the investments required, spread out over the period from 2021 to 2030.

With our business activities, we strive to make the best possible contribution to the economy and society with the most positive impact possible on our stakeholders. How we do that is stated in our value creation model. This model makes clear:

• which sources we use;
• why (vision and mission) and how (activities) we use these sources;
• what we aim to achieve with this (strategy);
• which concrete forms of value we create through this for our stakeholders;
• which universal sustainable development goals (SDGs) we support with this.

We distinguish between four types of long-term value creation, each of which we explain in its own dedicated section in this annual report. In the coming years, we want to map out the actual (often positive, but sometimes also negative) value that we create for our stakeholders in more detail.

In the online version of the annual report the model below is interactive: clicking on an element opens the relevant section or sub-section.

* Material topics

I. Energy transition
II. Security of supply
III. Safety of the network
IV. Legislative and regulatory developments
V. Relationship with stakeholders and our communities: this theme is reflected in all topics