17/18. TenneT Today. Powering society for 20 years. Electricity at your fingertips, 24/7. Delivering power over land and sea TENNET TODAY 1

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1 17/18 TENNET TODAY 1 TenneT Today Powering society for 20 years Electricity at your fingertips, 24/7 Delivering power over land and sea

2 Let there be LIGHT WE ARE TENNET Can you imagine a world without light available at the flick of a switch? Or one without power available at your fingertips, whenever and however you need it? These are the things we take for granted in our modern, always-on society. But few of us stop to think of the work required to keep the electricity flowing, 24 hours a day, 365 days a year. It s a massive responsibility that we at TenneT are proud to shoulder. We operate the electricity grid for the Netherlands and large parts of Germany, carrying power from where it is made including wind, solar and biomass, as well as fossil and nuclear fuels to 41 million people. As renewable energy becomes more mainstream, we need to carry electricity over longer distances from wind farms far out at sea, or solar panels on people s homes. We carry it across borders, over ground, underground and under the sea, providing the power on which we all depend. Many people have never heard of us. That s fine. We d rather be the power behind the scenes, keeping the lights on, no matter how much the wind blows or the sun shines. But if you do want to know a little more about us, read on. We are TenneT welcome to our world.

3 TENNET TODAY 3 41mln people connected in the Netherlands and Germany HOW DO WE STAY PLUGGED IN? We pride ourselves on the reliability of our grid, with power available 99.99% of the time.

4 AT A GLANCE 2017 Getting electricity to wherever you need it is a complex business. Here s a quick summary of the many things we depend on to do our work. Grid availability SECURE SUPPLY % We work tirelessly to avoid power outages, by investing in and maintaining our grid. Stakeholder meetings (public events) ,573 km High-voltage lines. Grid area: The Netherlands and a large part of Germany. Long enough to reach more than half way around the world. STAKEHOLDER MEETINGS

5 Interconnectors 13 A recent survey showed that our reputation is good to very good. Investments in 2017 (EUR million) 1,770 OUR REPUTATION Biomass Gas Coal Number of employees 3,187 Solar Energy mix Nuclear Water Wind 10 YEARS OFFSHORE 10 years ago we started connecting offshore wind farms to the onshore grid.

6 WHAT DO WE DO? MAINTAIN TRANSPORT CONNECT

7 TENNET TODAY 7 We keep the power on A key part of our job is to maintain a safe and secure balance between the supply and demand of electricity, making sure that power is at your fingertips, whenever you need it. We bring the power to you We ensure that electricity is delivered from its various sources to you, the user. We do this across thousands of kilometres of high-voltage grid and infrastructure, which we maintain and expand to keep the power flowing as efficiently and safely as possible. We connect across borders Electricity knows no borders, and we believe north-west Europe is better served by an integrated electricity market. Therefore, we connect our electricity grid with the countries around us. This way we can establish a single market that guarantees a reliable electricity supply at a fair price.

8 At TenneT we have a clear and critical task: to keep the lights on for 41 million people across the Netherlands and Germany, 24 hours a day, 365 days a year. This is what we call security of supply and it is at the heart of our business. In our busy modern lives, we depend on electricity in almost everything we do. From using a computer or smartphone, to watching TV, cooking, or buying our groceries, electricity literally powers our lives. Making sure this power reaches users reliably and safely underpins everything we do. It s no easy task, requiring us to deliver electricity across 22,573 kilometres of high-voltage cables, above and below the ground, across land and sea. As we use more and more renewable energy, the challenges of maintaining this secure supply increase. After all, the wind doesn t always blow and the sun doesn t always shine. Keeping you PLUGGED IN So, for us, security of supply isn t simply a question of building more lines or laying more cables. It s about integrating all of these different types of energy into the system, while ensuring that we continue to serve society 24/7. Although very occasional outages can occur, we are proud to be one of the most reliable grid operators, keeping the power on for 99.99% of the time. To keep this up, we need to invest more in the maintenance and expansion of our grid, while devising increasingly ingenious ways to bring power to our consumers, with minimum disturbance to the environment and local communities.

9 TENNET TODAY 9 Powering the Randstad megalopolis The Randstad region in central-western Netherlands includes the four largest Dutch cities, the Port of Rotterdam and Amsterdam Airport Schiphol. Keeping electricity reliably and safely supplied to this densely populated and economically important area is critical. In 2017, we strengthened our ability to do this with the launch of the Randstad 380 kv high-voltage connection, and in the future this will also play an important role in linking offshore wind farms into the onshore grid. Carrying wind power from north to south in Germany In Germany, we have started work on a new 380 kv connection between Audorf/Sud and Hamburg/Nord, running for 69 km. This will be an essential artery for carrying wind energy generated in the north of Germany to consumers in the south of the country. Connections like this are becoming essential in Germany as we work to carry wind-generated electricity over long distances from offshore wind farms to onshore end-users.

10 What is the grid? HOW WE TRANSMIT ELECTRICITY The high-voltage grid is the backbone of the electricity supply system. It is used for the transport of large quantities of electricity over relatively long distances, mostly via high-voltage lines above the ground. Electricity generated at sea is transported via subsea cables and then connected to the high-voltage grid. Power plants Renewables Import In-feed Sources of electricity The electricity flowing through our grid is generated from both conventional and renewable fast-growing energy sources, including energy from wind, solar and biomass. The offshore wind power is transported to the shore via subsea cables, where it is fed into the transmission grid. Our high-voltage grid Because wind farms and power plants are often far away from where electricity is used, we need to carry it over large distances without major losses on the way. This is why we transport electricity at 110,000 volts and higher: up to 1,700 times higher than the electricity from your socket. Managing the grid The government entrusts us with building and managing the high-voltage electricity system. To do this, we work with many stakeholders: politicians, municipalities, communities, NGOs, regulators, regional operators and many more.

11 TENNET TODAY 11 Large industries High-voltage grid Transmission/ distribution Consumer/ prosumer TenneT Export WHAT DO YOU INVEST TO MAINTAIN THE GRID? We expect to invest around EUR 28 billion over the next 10 years in offshore and onshore grid infrastructure.

12 Providing a sustainable and secure supply of electricity to society is about more than volts, power lines and turbines. It s also about talking, listening and doing the right thing. ENGAGING with STAKEHOLDERS When we enable power to be delivered to your home, there is a significant amount of technology and infrastructure that needs to be in place, built over land and sea. As we do this, we are fulfilling our most important duty to power society but we must also do this responsibly. Whenever we plan new infrastructure, we are aware of the consequences for communities and the natural environment. However, our investments also bring progress, meeting consumers growing appetite for energy, delivered where and how they need it. So, there is a balance to achieve. A discussion to be had. That s why an open and honest dialogue with our stakeholders is so important. From the outset of any project, we engage with everyone affected, listening to their questions and needs. We make all the information everyone needs easily available, take concerns very seriously, and work hard to minimise the impact of our work. After all, it s good to talk. And it s even better to listen.

13 TENNET TODAY SuedLink/SuedOstLink in Germany In terms of cable length and the scale of investment, these are two of the biggest energy infrastructure projects in Europe. We set up a unique process of integrating stakeholders into the early stages of planning before work began, including the legal process. Using an online planning tool that shows the work of our environmental planners, stakeholders can share information, such as any potential obstacles to the routes we are investigating. Borssele Tilburg connection In 2017, we held many different stakeholder meetings to discuss the construction of the new high-voltage line between Borssele and Tilburg a rural area in the Netherlands. We listened carefully to the concerns of local residents and found ways to blend the overland connection into the landscape. After a process of extensive dialogue, challenging negotiations were settled harmoniously, with everyone accepting the process. 13

14 Looking back at 20 years of achievement in the European electricity market 2008 TenneT takes over management of the 110 kv and 150 kv grids from the Dutch regional grid operators. NorNed commissioned as world s longest HVDC subsea cable (700MW), linking Norwegian and Dutch markets TenneT is formed when the Dutch government formally appointed us to operate the country s national high-voltage transmission grid TenneT takes over the regional network operator B.V. Transportnet Zuid-Holland (TZH) TenneT starts to bring Europe s electricity markets together, as cross-border electricity trading and pricing begins for France, Belgium and the Netherlands.

15 TENNET TODAY TenneT acquires the German high-voltage grid from E.ON, making TenneT Europe s first cross-border TSO. Electricity market integration extends to central-western Europe, including Germany and Austria. BorWin1, the first DC offshore platform (400MW) goes into operation The Randstad 380kV Zuidring goes into operation, supplying electricity to the densest urban area in the Netherlands. The project sees unprecedented lengths of high-voltage cables laid underground TenneT is legally incorporated as an offshore electricity grid operator in the Netherlands. We conclude our first contract for subsea cables linking the offshore grid. We also introduce our vision for a North Sea Wind Power Hub, with the potential to serve wind power to tens of million Europeans by DolWin2, the most powerful grid connection for offshore wind farms, goes into operation (900MW) Opening of the first AC grid connection for the offshore wind farm Alpha Ventus. BritNed, a 1,000MW subsea electricity link between Great Britain and the Netherlands is commissioned. BritNed is a joint venture between TenneT and National Grid UK Electricity market integration extends to northwest Europe, including Great Britain, the Nordics and the Baltics, and southwest Europe, coupling the Iberian peninsula The 57-km 380 kv connection linking Doetinchem in the Netherlands with Wesel in Germany was commissioned, allowing further development of the north-west European electricity market. With 10 out of 13 planned grid connections in operation, TenneT provides more than 5,300MW transmission capacity in the German North Sea. TenneT opens an office in Berlin. We also opened an office in Brussels.

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17 17/18 TenneT Tomorrow Energy in a changing world Challenge of renewables Innovation for the future

18 As a grid operator, we have a very clear role and a big responsibility. We are driven by a burning desire to keep the lights on, ensuring that all of the Netherlands and a large part of Germany have a reliable, secure and high-quality electricity supply. This is our mission. Our MISSION Vision Values

19 TENNET TOMORROW 3 As security is our biggest concern, we feel it s safer and more reliable for our grid to be linked into the wider north-west European network. This doesn t only make the supply of power more reliable and stable, but also more cost-effective for you, the consumer. Encouraging this integration of the European market, and facilitating its evolution, is a core part of our vision. This is particularly important as more and more renewable energy flows into the grid. It makes the market more complicated to manage and design, requiring more innovation and cross-border collaboration. As our work is so essential to the smooth running of society, we hold ourselves to the highest values of quality and integrity. Quality requires the highest standards of safety in everything we do. Integrity means being open, honest and respectful in the way we serve society, particularly local communities, partners and employees. Our brand values The TenneT brand is built on our commitment to be responsible, engaged and connected. This is our promise to the outside world, describing how we serve our stakeholders and how we want them to see us. June 2018 TenneT Holding B.V. and TenneT TSO B.V. Mariëndaal Centre of Excellence, Utrechtseweg 310, 6812 AR Arnhem, The Netherlands, T +31(0) TenneT TSO GmbH Bernecker Straße 70, Bayreuth, Germany, T +49 (0) Concept & Design: DartGroup, Amsterdam, The Netherlands Copy: Stampa Communications, Amsterdam, The Netherlands

20 Engage with stakeholders DELIVER stakeholder value Lead NWE electricity integration Secure supply Innovating for the future

21 TENNET TOMORROW 25 5 As a grid operator, we have a big responsibility in society. To help us stay focused and committed to delivering value to our stakeholders, we have four strategic goals that will always be our main priorities. To keep the lights on at all times, a secure and reliable supply of electricity is our biggest concern. This not only means investing in the infrastructure needed to carry electricity from where it is generated to where our users consume it, but also safely integrating the growing amount of sustainable electricity into our grid. To achieve a truly secure supply, we consider it safer and more reliable for our grid to be linked into a cross-border European network, which is why we take a leadership role in the development of an integrated north-west European electricity market. As we invest, build and grow, we aim to minimise our impact on the environment and communities and we work closely with our stakeholders, talking to them and listening to their questions and needs. And as we invest for the future, innovation is central to everything we do, enabling our business to serve a fast-changing energy market and society s rapidly evolving needs.

22 ENERGY in a changing world The energy industry is going through a period of unprecedented change, with the clean power revolution accelerating faster than ever. To keep pace, TenneT must think carefully about how it can facilitate change while supporting a secure and stable energy market. Twenty years ago, wind and solar power accounted for a fraction of the energy market. Today, nearly two-thirds of the new power generation capacity added each year comes from renewable sources. Meanwhile, sales of electric vehicles are outpacing conventional cars by a factor of eight and the storage capacity of large battery systems that will be crucial to our new world of renewables is doubling each year. No wonder some observers are calling this the new industrial revolution. As we stand on the brink of a new energy era, now is a crucial time for TenneT. Being the first European cross-border grid operator, we need to think carefully about how we can accommodate this change in our system, while continuing to ensure a secure and stable energy market. When the sources of power reaching your home are changing so rapidly, we can t afford for the lights to flicker. You still need to depend on us when you reach for that switch. So what are the key factors in this ever-changing energy world?

23 TENNET TOMORROW Electricity can be generated anywhere, by anyone Energy from more sources is more complicated to deliver Countries will increasingly work together Technology and innovation are more important than ever For decades, society relied on a relatively simple electricity model, requiring it to be carried from where it is generated usually a fossil-fuel power station to where it is consumed. In today s world of renewable energy, electricity can be generated in any place where the wind blows or the sun shines, from wind farms far out in the North Sea, to solar panels on the roofs of homeowners. These prosumers are now contributing energy into the grid and helping to store energy in home batteries and electric vehicles. Our challenge is to connect all these varied power sources to the grid, bundle the electricity together and transport it reliably and safely across land and sea to you, the enduser. Compared to the old linear model, where one power station would serve a large area, this requires fundamentally different skills and poses new challenges. And it also costs more money: in the next decade we plan to invest heavily in onshore and offshore electricity infrastructure in the Netherlands and Germany. This energy revolution is not confined to the Netherlands or Germany it affects the whole of Europe, and beyond. After all, electrons, wind and sun do not respect borders. As Europe s largest cross-border grid operator, we can lead the way in helping all the players in this complicated story including other grid operators and governments work together to create a secure, stable integrated European energy market. To serve society in this challenging energy future, we need smart, innovative solutions, using the best modern technology. That s why we are using blockchain technology, to help us manage the unpredictable balance between demand and supply that the shift to renewable energy has created. We have joined forces with IBM, Sonnen in Germany and Vandebron in the Netherlands to create new solutions for managing our grid, including harvesting power from car batteries and home energy storage systems.

24 Connecting across BORDERS Electricity doesn t recognise borders. Nor do the wind and sun. Therefore, in an energy market dominated by sustainable electricity, it makes no sense to think on a national scale. To maintain the security of our electricity supply and integrate vast amounts of renewable energy into the grid, we are building an inter-linked, cross-border energy market in north-west Europe.

25 TENNET TOMORROW 9 Doetinchem-Wesel connection An example of our work to build cross-border electricity connections can be seen in a new interconnector we are building between Doetinchem in the Netherlands and Wesel in Germany. When completed in late 2018, the 57-km-long connection will carry 1,500 MW of electricity. This is our fourth high-voltage connection between the Netherlands and Germany, demonstrating our investment in the development of an integrated electricity market that can provide a stable and secure supply of electricity, wherever it comes from. NordLink: The green cable Our NordLink cable connecting the German and Norwegian grids is also known as the green cable. When fully operational in 2020, it will be the first direct connection between the two countries energy markets. With its capacity of 1,400MW, the interconnector can provide renewable energy for more than 3.6 million German households and carry electricity generated by approximately 466 wind turbines of 3MW each. This is comparable to the capacity of a large conventional power plant. This is another important example of how we are developing an integrated European electricity market, while helping to increase the supply of sustainable energy, like hydroelectric and wind power.

26 In our business, we can never stand still. The energy market, driven by changing social demands and new technology, is always challenging us to think far ahead. To keep the electricity flowing, innovation has never been more important. INNOVATING One of the challenges of renewable electricity is that it is, by nature, unpredictable. Although weather forecasting is becoming more sophisticated, we still don t know exactly how much the wind will blow, or the sun will shine. This means that the inflow of renewable electricity into the grid can be volatile, which doesn t meet society s demand for uninterrupted supplies of electricity 24 hours a day, 365 days a year. To achieve this, we need electricity reserves to balance the highs and lows. Traditionally, this has been provided by fossil fuel-burning power plants, but now TenneT is exploring innovative solutions, accessing green electricity from new sources, like home storage systems and electric cars.

27 TENNET TOMORROW German prosumers balance the grid As many prosumers use household batteries to store their solar-generated electricity, we are teaming up in Germany with the home energy battery manufacturer, Sonnen GmbH. Together, we are creating a network of linked home battery storage, capable of absorbing and emitting power in a matter of seconds, whenever required. Using the open-source software technology, blockchain, we can quickly view how much power is available in this network at any time. This is currently a pilot project, with around 6,000 German households signed up. Electric car pilot in Amsterdam Electric cars are perhaps the most visible symbols of society s green energy revolution. At TenneT we see possibilities of working with them that go beyond transportation. For example, in Amsterdam, we are conducting a pilot project with the energy supplier Vandebron to see how electric car owners can make the capacity of their car batteries available to help TenneT balance the grid. Although a few car batteries won t make a difference to a national electricity grid, several million could. Without compromising the availability of power in their car batteries, Vandebron s service allows excess capacity to be fed back into the grid, balancing fluctuations between supply and demand.

28 In the last 20 years we have seen a revolution in the energy market, as renewables have moved from niche to mainstream. The coming decades will see even more change, with ever-more ingenious solutions required to meet the needs of society. As TenneT marks its 20th anniversary, we stand at a crossroads. The last two decades have seen spectacular change in the energy market, as sustainable electricity has become a mainstream reality. We have transformed our business and invested in our infrastructure to accommodate and facilitate this change. Looking ahead, as countries strive to meet the CO 2 reduction targets set in the Paris Agreement, sustainable electricity production will hit new heights. To achieve this ambition, international cooperation, ground-breaking innovation and determination will be required. At TenneT, we already have an example of what this future could look like, with a vision of how to harness even more wind power from the North Sea and connect it into the grids of different European markets. This vision is called the North Sea Wind Power Hub (NSWPH).

29 TENNET TOMORROW 13 WHERE IS TENNET OPERATING CROSS-BORDER CONNECTIONS? Currently, we have three connections between the Netherlands and Germany, one with Great Britain, two with Belgium, two with Austria, one with the Czech Republic, one with Sweden, two with Denmark and one with Norway. Built on an artificial island far out in the North Sea, the NSWPH would be a hub for collecting wind power from the huge number of wind farms in the area, then sending it onshore to the North Sea-bordering countries via subsea power cables. When it s ready, the NSWPH could supply renewable energy to 80 million people across Europe by The size of this project involves partnership between many different players. TenneT, with its expertise in offshore power and cross-border energy markets, is one of the prime movers, working in a consortium that also includes Energinet, Gasunie and the Port of Rotterdam. The scale and ambition of this hub is unprecedented and clearly demonstrates the potential of the North Sea as a sustainable source of European wind power for many years into the future.