Powering
the decade
of electrification
INTEGRATED
ACTIVITY REPORT
2021
2
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
Content
Powering the decade of electrification 3
Interview: Chris Peeters and Bernard Gustin 4
Our path to integrated reporting 10
The Elia group at a glance 13
Company profile 14
Key figures 16
Key achievements 18
The Elia group in a rapidly evolving environment 21
The four megatrends 23
Social and economic developments 24
Political developments 25
Regulatory frameworks 26
Our purpose and strategy 28
Our purpose 31
The cornerstones of our strategy 32
Our pillars of growth 32
Our strategic ambitions 33
Our business 38
Our core societal tasks 38
Our grid and our assets 39
Our value creation model 40
Business model:
how we create value for our stakeholders 41
Fostering stakeholder interactions 42
Materiality 45
#1. System planning –
We design the energy system of the future 46
#2. Infrastructure design and construction –
We deliver the appropriate infrastructure 53
#3. Grid operations and maintenance –
We operate safe and reliable infrastructure 63
#4. System operations –
We keep the lights on around the clock 70
#5. Market facilitation –
We facilitate the development of the electricity market 75
#6. Trusteeship –
We coordinate and process legal levy systems 80
#7. Additional services –
We create value for consumers and customers 83
#8. Corporate functions –
We enable our business activities 88
Our performance 95
Our top key performance indicators 96
Corporate bodies and governance 101
One-tier governance structure 102
Risk management 108
Risks 109
Opportunities 114
2022 Outlook 115
Appendix 117
Development of materiality matrix 117
Glossary 118
This is an interactive report - you can use the
navigation panel at the top of each page to jump
to different sections of this document.
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
2
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
3
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
We are in the midst of the golden age of electrification.
Thanks to the rise in alternatives to fossil fuels, a wide
range of opportunities lies before us, including the
mass adoption of electric vehicles and other e-mobi-
lity technologies and the use of electricity to warm and
cool our houses.
Many parts of society are being electrified. The con
-
sumer market is going to experience an explosion
of flexible assets that need to be integrated into the
energy system, controlled and optimised. At the very
heart of that system will be… consumers.
In my opinion, this is a pivotal moment for the energy
sector. The latter has been close to dormant for the last
30 to 40 years, focusing on production and relatively
easy grid management. However, consumers now find
themselves at the very heart of the energy transition.
Used to the ‘new normal’ in terms of technology, they
expect things to be easy, frictionless and relevant.
For me, this electric decade is not just about chal
-
lenges and threats; first and foremost, it is about cap-
turing the momentum of opportunities.
THIS IS A PIVOTAL
MOMENT FOR THE
ENERGY SECTOR. THE
LATTER HAS BEEN
CLOSE TO DORMANT
FOR THE LAST 30 TO
40 YEARS, FOCUSING
ON PRODUCTION AND
RELATIVELY EASY GRID
MANAGEMENT.
Peter Hinssen
PETER HINSSEN IS A SERIAL ENTREPRENEUR, ADVISER
AND KEYNOTE SPEAKER ON THE TOPICS OF RADICAL
INNOVATION, LEADERSHIP AND THE IMPACT OF ALL THINGS
DIGITAL ON SOCIETY AND BUSINESS. HE IS THE AUTHOR OF
FIVE BESTSELLING BUSINESS BOOKS.
Powering
the decade
of electrification
4
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
4
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
In short
• The grid infrastructure required to accelerate the
energy transition needs to be massively expanded. The
Elia group’s organic growth alone over the next 5 years
is going to be unprecedented.
• There are big challenges at the system level to address.
In this phase of transition, our advisory role is very
important.
• Over the next decade, several areas will reach a tipping
point and many elements will coincide. It is important
that we get everyone on board.
We embrace
the future
1
INTERVIEW WITH CHRIS PEETERS CEO AND
BERNARD GUSTIN CHAIRMAN OF THE BOARD OF DIRECTORS
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
5
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
The energy transition is accelerating and being
scaled up. How is the Elia group coping with this?
Chris Peeters:
The context in which we are operating is fairly
ambiguous, but the direction we need to go in is clear. It requires
a different mindset: one which allows us to see the opportuni-
ties rather than the barriers. Having a solid strategy in place will
ensure that we are prepared. The Elia group has always had a
forward-looking mindset which embraces the future. If we take
climate change seriously and want to drive the energy transition
forward, all areas and levels of society will be impacted - and the
changes will happen faster than we thought was possible until
now.
Bernard Gustin:
The energy transition is a modern-day Coper-
nican revolution. We have been pointing out the urgency of driv-
ing it for years in our reports and publications. Everyone is now
starting to understand it. Anyone who wants to remain relevant
in 10 to 15 years’ time will have to undergo a transformation. We
have been a visionary player in our sector: today, our strategy
seems logical, but three years ago, its relevance was not so obvi-
ous. Our biggest challenge, which is a common challenge for all
projects related to the energy transition, is that successful imple-
mentation depends on a holistic approach, which goes beyond
the Elia group’s own area of responsibility.
Chris Peeters:
As a system operator, our unique position allows
us to see and show others what’s coming: we have access to
information which allows us to provide our various stakeholders
with interesting insights. Whilst it is our societal responsibility to
share the results of our studies and vision with our stakehold-
ers, we also learn from the knowledge our stakeholders provide
us with. The conversations we have and information sharing we
undertake with regard to the context of the energy transition is
very much a two-way process.
What are the biggest challenges that you are
currently facing?
Chris Peeters:
The grid infrastructure required to accelerate
the energy transition needs to be massively expanded. This
expansion also needs to happen quickly; for example, Europe
wants to increase its existing offshore wind capacity from 15 GW
to 60 GW by 2030. What we have achieved over the past 20 years
now needs to be quadrupled in just eight. Without infrastruc-
ture development, the energy transition cannot be achieved.
The lead time for permits is such that today we need a lot of
foresight.
Bernard Gustin:
The timing is particularly tight - and then
you have the financing needs. Our organic growth alone over
the next 5 years is going to be unprecedented. Elia Group’s new
corporate structure is very important in this regard, since it is
The decade of electrification has begun. With large-scale
investments in infrastructure, digitalisation and sector convergence
being undertaken, we are at a turning point in terms of reaching
climate neutrality. The European Green Deal and the ‘Fit for 55’
package clearly lay out how big and complex the challenge is.
‘Business as usual’ is no longer feasible. As a company which
comprises two system operators, Elia Group is at the centre of these
changes.
AS A SYSTEM
OPERATOR, OUR
UNIQUE POSITION
ALLOWS US TO SEE AND
SHOW OTHERS WHAT’S
COMING. WE ARE THE
CANARY IN THE COAL
MINE.
Chris Peeters
6
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
Bernard Gustin:
We will not be able to build the skills of the
future on our own. This is partly because electrification means
there will be more and more overlap between our work and the
work being undertaken in other sectors. Partnerships - both in
terms of operations and equity - will become more important.
Ecosystems might also emerge, as part of which multiple part-
ners will work together in a more loosely connected way, just as
we are already doing as part of the Internet of Energy ecosystem
(IO. Energy).
Chris Peeters:
As a grid operator, we are in an interesting posi-
tion: we are able to anticipate some changes, but not all of them;
given this, we need to work with external parties. We already
cooperate closely with our suppliers - we couldn’t possibly run
our safety programmes without them. They do some of the
work on our sites, but we don’t outsource safety to them: we do
it together. The same goes for new technological developments
that are being integrated into our business. Thanks to our inter-
action with external stakeholders, we can think about specific
solutions early on.
There is a need for new infrastructure, preferably
as soon as possible. How will this affect local
communities?
Chris Peeters:
There will always be a certain amount of tension
when trying to balance the general societal need for infrastruc-
ture with the concerns of local communities. The energy transi-
tion is being undertaken in the interests of society as a whole,
but it will always entail local impacts. It is important that we
continue to engage in an open manner with local communi-
ties. Pressure groups and some parts of the media represent the
issue as a trade-off between the health of local residents and the
energy transition. However, both go hand in hand. As we design
every one of our projects, we seek to minimise their impact on
the surrounding environment. Where necessary, we undertake
mitigation measures.
perfectly set up to support this growth. We are an international
organisation with a very important societal mission, but, as a
private company, we also have financial objectives. Investors
increasingly look to Elia Group as a growth company. The quality
of our work and our know-how are unique. That’s why the mar
-
ket has confidence in our projects.
Chris Peeters:
In addition to building the required infrastruc-
ture and financing it, there are also big challenges at the system
level to address. The integration of renewable energy into the
system and the phase-out of thermal plants means there is less
flexibility on the production side. To keep the system in balance,
we need to find flexibility on the demand side, which is only pos-
sible through rapid electrification and digitalisation. Using this
flexibility will, for example, involve us shifting the consumption
times of electric vehicles and heat pumps. The fragmentation
of supply and demand, combined with the high variability of
renewable production, will require a system that is able to man-
age this complexity.
Bernard Gustin:
Furthermore, the European electricity system
is one single integrated system. This means that electric mobi-
lity, market design and the development of infrastructure do not
just require a Belgian or German approach, but a European one.
I am not sure if all European system operators are as visionary in
their thinking as the Elia group. However, it is important that we
move at the same pace together.
What about human capital?
Chris Peeters:
We are learning by doing: the knowledge we
have built up over the past five years through our offshore
projects is immense; indeed, we built the world’s first hybrid
interconnector and, today, we are developing the world’s first
energy islands. Because of the problems Belgium is facing with
regard to nuclear availability, we have also built up an incredible
amount of knowledge about security of supply. We will always
be a very technical company that is full of engineers. There is
also an increasing need for digital skills, for core skills to manage
change, for employees who are specialised in regulation, etc.
We are anticipating that change. We are training our existing
employees so that we can create change within the group: skills
development is therefore also an opportunity that we embrace.
WE HAVE BEEN A
VISIONARY PLAYER
IN OUR SECTOR.
TODAY, OUR STRATEGY
SEEMS LOGICAL, BUT
THREE YEARS AGO, ITS
RELEVANCE WAS NOT
SO OBVIOUS.
Bernard Gustin
7
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
Are grid operators the canary in the coal mine?
Chris Peeters:
Yes, that’s correct. We point out the impact of
certain choices. That’s why we published a mobility study back
in 2020. It addressed how to integrate millions of electric cars
into the electricity system. We pointed out the benefits of sector
integration and how the automotive industry and energy sector
can strengthen each other, rather than work against each other.
In 2022, we will be publishing a study which will focus on the
decarbonisation of industry.
Why are the next 10 years so crucial for the energy
transition?
Chris Peeters:
Over the next decade, several areas will reach a
tipping point. Our infrastructure will need to be expanded in a
massive way in order for large amounts of renewable energy to
be integrated into the system. Moreover, the electrification of
mobility and heating is underway, and industry is decarbonising
on a much larger scale. To keep the system in balance, we will
need to undergo a digital transformation. Many elements will
coincide. As a network operator, we are ready. We see a lot of
opportunities - but these need to be acted on now. It’s impor-
tant that we get everyone on board. Otherwise, we will run up
against multiple barriers.
Bernard Gustin:
Our society has to create conditions that
encourage investment like a solid regulatory framework. The
new reality demands that governments and regulators think
about their models. The current regulatory frameworks and
legislation are not in line with what is needed to accelerate the
transition. If the energy sector doesn’t manage to scale up its
activities in the next 10 years, we won’t succeed in driving the
energy transition forward.
The Elia Group’s ActNow programme was launched
in 2021. Why was it only launched last year?
Chris Peeters:
We didn’t want to engage in window dressing
or greenwash our activities for the financial markets. ActNow is
an integrated plan which addresses the environmental, social
and governance (ESG) dimensions of sustainability. We want
to achieve our goals through projects that are actually feasible.
Behind ActNow lies a fundamental transformation of our busi-
ness - a transformation that every company and every sector
has to go through. We are evolving from a model under which
we looked purely at shareholder value to a ‘stakeholder capi-
talism’ model, under which we stand within a society and take
total responsibility for all our activities and their impact. Indeed,
moving towards integrated reporting - a journey which this very
annual report is a part of - forms part of this process and was
therefore an obvious choice for us to make.
All over Europe, flexible thermal capacity is
disappearing. To what extent does that push the
system to its limits?
Chris Peeters:
Today, system control is much more complex. In
the past, we were used to having a buffer to rely on somewhere
in the system. Today, there are times when we need to put in a
lot of effort to keep the lights on. Our governments are respon-
sible for security of supply, but as grid operators, we have a legal
duty to provide reports regarding adequacy and flexibility. In this
phase of transition, our advisory role is very important. We do
not take sides about the phase-out of coal or nuclear power, or
geopolitics more widely. Those are political issues. Our adequacy
studies always look 10 years ahead. The very nature of our busi-
ness means we are used to taking into account the impact of
uncertainties. We provide facts and figures for political debates.
IN OCTOBER 2021, ELIA CELEBRATED
ITS 20TH ANNIVERSARY. A MAJOR
EVENT WAS ORGANISED FOR OUR
STAKEHOLDERS, DURING WHICH WE
WELCOMED DISTINGUISHED GUESTS
SUCH AS THE FEDERAL MINISTER OF
ENERGY TINNE VAN DER STRAETEN
AND THE GERMAN AMBASSADOR TO
BELGIUM MARTIN KOTTHAUS.
8
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
To what extent does the stock market preoccupy
you?
Bernard Gustin:
Elia Group’s share price remains attractive. On
several occasions in the past, our shares have continued to per-
form strongly when the market has experienced difficult times.
Our share profile reflects our ambitions to grow; in addition to
our strong existing infrastructure, we are operating in a seg-
ment where investment opportunities will continue to present
themselves. Our share price reflects this healthy mix of growth
and resilience. Compared to other players in our sector, we are
also much more diversified. We are not dependent on one sys-
tem or one regulator. That way, we are able to better spread our
risks out.
Chris Peeters:
Relevance is ensured because you are doing the
right things, not because you are constantly focusing on the
stock price. To me, the stock price is like your body temperature.
Do you want to be healthy? You should therefore focus on liv-
ing a healthy life and not on taking your temperature every day.
In terms of mental health, that would be rather unhealthy. We
want to build a healthy company that responds to the opportu-
nities brought about by the energy transition, by bringing them
to our shareholders in a relevant way.
Looking back on 2021, who do you have a special
word of thanks for?
Chris Peeters:
First and foremost, I would like to thank our staff.
Without exception, progress on all our projects was secured. This
included the launch of the Capacity Remuneration Mechanism
(CRM), which is helping Belgium to cope with the phasing out of
nuclear power; it was a particularly complex file, both technically
and in terms of stakeholder engagement.
Bernard Gustin:
Several of our ActNow ambitions are aligned
with the EU Taxonomy and the European Commission’s ‘Fit for
55’ package, with the latter making important climate goals
legally binding for member states. This shows that acceleration
is no longer a ‘nice to have’, but an absolute must. The ESG regu-
latory landscape is changing quickly. Our ESG ambitions and our
accelerated embedding of them into our day-to-day operations
anticipates these changes.
With Elia Grid International
1
and re.alto
2
, the
Elia group’s portfolio now includes its first non-
regulated activities. Will these be expanded?
Chris Peeters:
During this phase of the energy transition,
boundaries are being redrawn. Only looking at your own activi-
ties within your own segment can kill you in the end. For exam-
ple, re.alto has taught us a great deal about digitalisation. By
exposing our staff to non-regulated environments, they have
learnt to deal with competitive processes. Interacting with the
outside world has broadened their view. We are now open to
exploring additional opportunities - ones which might emerge
in sectors such as the oil industry or in markets which are further
afield, such as the United States.
Bernard Gustin:
Our know-how is unique: it allows us to make
our core business more resilient and decrease our risk exposure
through diversification. We therefore need to build on it - why
shouldn’t we look beyond our main activities or even outside
Europe if there are interesting opportunities there? To that end,
we have recently modified our corporate structure. Today, Elia
Group comprises two main subsidiaries - Elia Transmission Bel-
gium and 50Hertz - which contribute in an almost equal way
to our bottom line. Within the next five years, via our offshore
strategy or further developments in terms of our international
projects, we hope to add additional subsidiaries to Elia Group.
SHARE PRICE IS LIKE
BODY TEMPERATURE.
DO YOU WANT TO BE
HEALTHY? YOU SHOULD
THEREFORE FOCUS ON
LIVING A HEALTHY LIFE
AND NOT ON TAKING
YOUR TEMPERATURE
EVERY DAY.
Chris Peeters
1 The group’s consultancy; see ‘Company profile’ in the chapter entitled ‘The Elia
group at a glance’
2 The digital marketplace for energy and data services which we launched; see
‘Company profile’ in the chapter entitled ‘The Elia group at a glance’
9
ELIA GROUP ACTIVITY REPORT 2021
9
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Chris Peeters: In 2021, we took huge steps
forward. Very positive moves towards in-
ternationalisation, digitalisation and the
further shaping of our organisation were
made. Great projects were realised. How-
ever, I cannot deny that the fatal accident
involving one of our employees in Zele (Bel-
gium) continues to stay with me. We made
a commitment that everyone would go
home safe and sound every day. We did not
succeed in ensuring that last year.
Bernard Gustin: 2021 was a turning point.
We are never going to go back to what we
had before. We are still facing COVID-19 and
all the difficulties it entails. If you look at
the news, items about the effects of glob-
al warming are on the rise. Climate change
is a major topic. This is a big change com-
pared with a few years ago. With today’s
high energy prices, everyone now realis-
es how important energy is. Energy is no
longer just a commodity – it is a strategic
asset and is high on the political agenda. As
a group which comprises two transmission
system operators (TSOs), the Elia group is
a key player in the energy value chain. We
are always involved, whether the issue con-
cerns security of supply, infrastructure pro-
jects or technological developments.
Chris Peeters:
On a final note, I would like to
express my gratitude for the resilience that
our employees have shown in the face of
COVID-19 and the flooding in Wallonia. Our
staff volunteered of their own accord to re-
build the damaged high-voltage substations
following the floods. Some even returned
from their holidays to help. This shows that
we have a strong corporate culture which
leads our staff to feel very responsible for the
Elia group’s societal mission.
Looking back
at 2021
VIDEO REPORT
ON THE FLOODS
IN WALLONIA,
BELGIUM
Bernard Gustin:
As Chairman, I can say that we have a strong
corporate culture. Our people are very aware of our societal role
as a grid operator. Both in Belgium and Germany, there has
been good cooperation with the authorities, the regulators and
the energy sector in general. Finally, I would like to thank the
Board of Directors for their solid input. I would like to thank Luc
Hujoel and Jane Murphy in particular, since they will be leaving
us in 2022.
THE ESG REGULATORY
LANDSCAPE IS
CHANGING QUICKLY.
OUR ESG AMBITIONS
AND OUR ACCELERATED
EMBEDDING OF THEM
INTO OUR DAYTO
DAY OPERATIONS
ANTICIPATES THESE
CHANGES.
Bernard Gustin
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
nd strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
10
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
A successful energy transition for a
sustainable world
In 2021, the Elia group continued to grow, progressing along its
path towards becoming a leading European energy company
which provides critical electricity infrastructure and a reliable
electricity system for society. Through large-scale investments
in infrastructure, digitalisation, and sector coupling, we are con-
tributing to Europe’s great and complex ambition of becoming
climate-neutral by 2050, as outlined in its Green Deal.
Amidst a fast-changing environment which is driven by the
need to decarbonise the economy, our vision remains clear: “
a
successful energy transition for a sustainable world
”. As the
production of renewables and decentralised generation sources
continues to increase and electrification needs rise, our mis-
sion is to
drive the energy transition
forward, helping Europe
reach net zero by 2050 by
delivering the power infrastructure
it needs and appropriately
shaping its markets
.
This report tells the story of our strategy and how we create value
for society. It explores our progress over the past year, provid
-
ing our investors and other stakeholders with details and de-
dicated stories about our activities, projects, performance and
governance. We are accelerating the development of both our
onshore and offshore grid infrastructure, supporting the imple
-
mentation of consumer-centric markets and capacity remuner-
ation mechanisms, and publishing pragmatic research for our
stakeholders - such as our recent ‘Roadmap to net zero’ paper,
which was published in November 2021 (see the section entitled
‘System planning’ in the chapter on ‘Our value creation model’).
Whilst the latter is relevant for Europe as a whole, it focuses on
Germany and Belgium in particular to support policymakers as
they take decisions about shaping future pathways to decarbon-
isation. Moreover, 2021 also saw the launch of our group-wide
corporate ESG programme - ActNow - which is being embed-
ded across all our business activities. Our strategy, which guides
all of these activities, is firmly aligned with the needs of society,
allowing us to create both financial and non-financial value for
our stakeholders; indeed, in 2021, Elia Group joined the BEL 20
again and its share price increased by 18% over the year, reaching
€115.7 per share on 31 December.
Our path
to integrated
reporting
This report is one of the primary ways we communicate with
our stakeholders. It aims to provide a balanced, transparent
and integrated overview of the Elia group’s activities and
relationships. It is the result of close working between several
of the group’s departments, including Strategy, Sustainability,
Investor Relations, Communication and Finance.
2
11
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
Starting on our integrated thinking and
reporting journey
2021 marked the start of the Elia group’s conscious adoption
of an integrated thinking approach. We strongly believe it will
allow us to enhance cross-departmental cooperation, allocate
capital in an efficient and productive manner and strengthen
our appraisal of our business model, strategy, and how we oper-
ationalise it - not only from an ‘inside-out’ perspective but also
from an ‘outside-in’ one, considering the genuine interests and
needs of all our stakeholders. We are also convinced that includ-
ing financial and non-financial information in our decision-mak-
ing processes supports long-term value creation and connects
people, planet and prosperity together.
Delivering on our promise of being a leader in sustainability
and transparency, we began exploring the best ways to com
-
municate how our strategy, governance, risk and performance
management processes create, preserve, or erode value in the
short, medium, and long term for our stakeholders. We therefore
began our journey towards fully aligning our reporting with the
Integrated Reporting Framework (<IR> Framework
3
): its core ele-
ments and guiding principles were considered as we prepared
this report. Consequently, this report constitutes our first step in
our adoption of integrated reporting, and we are convinced that
the latter will deliver both value and innovation for the stake-
holders and communities we work for.
Reporting boundaries and frameworks
This report provides information about Elia Group, including all
of its subsidiaries (see the section entitled ‘Company profile’ in
the chapter entitled ‘The Elia group at a glance’), and covers the
fiscal year starting on 1 January 2021 and ending on 31 December
2021. It outlines our main achievements that are material to our
stakeholders, highlighting how these achievements are creat-
ing value for our stakeholders and how they are contributing to
tackling climate change, in line with the European Green Deal. It
also clearly outlines the challenges that we are facing and how
we intend to overcome them.
To ensure consistency and comparability over time, we chose to
structure the report around our eight business activities, which
together form our value chain. The chapter entitled ‘Our value
creation model’ addresses each of these eight activities in turn,
outlining the resources and relationships (known as the six ‘cap
-
itals’ under the <IR> Framework; see ‘Glossary’) that these activ-
ities rely on, and the effect they have on them. Each subsection
also outlines how our activities contribute to our strategy and
the UN Sustainable Development Goals (SDGs); how they ena-
ble us to create value; and what risks and opportunities they are
linked to.
A step-by-step approach
In order to make our transition to integrated reporting as
smooth as possible for our stakeholders, we decided to adopt
the approach for our annual activity report first. Our two other
annual reports (the Sustainability Report and Financial Report)
remain unchanged for the moment. As integrated reporting
involves concise communication about an organisation’s gov-
ernance, strategy, business model and performance, we include
references to our Sustainability and Financial reports throughout
this document, in sections where more detailed explanations
can be found in these. It is our intention to continue improving
and increasing our adoption of the <IR> Framework over time;
this will include seeking feedback from stakeholders and apply-
ing this in our reporting.
Since this transition to integrated reporting modifies the way we
have traditionally disclosed information, we chose to include a
chapter entitled ‘Our performance’ in this report. This chapter
mirrors the information we have used in previous annual reports:
it focuses on our main key performance indicators and how they
relate to our strategic ambitions.
It should be noted that this report has been prepared in accord
-
ance with the Global Reporting Initiative (GRI) Standards, the
first global standards for sustainability reporting. The applicable
GRI Standards performance indicators are highlighted through-
out the report wherever the Elia group’s economic, environmen-
tal or social impacts are reported. Please see the GRI Index on
page 102 of the Sustainability Report for a full overview.
Board Approval
The Elia Group Board of Directors acknowledges its responsibil-
ity for ensuring the integrity of this report.
3 The <IR> Framework was developed by the International Integrated Reporting Council (IIRC),
which merged with the Sustainability Accounting Standards Board to form the Value Reporting
Foundation in June 2021. In November, it was announced that the Value Reporting Foundation would
be consolidated with the Climate Disclosure Standards Board and the IFRS Foundation to form the
International Sustainability Standards Board.
12
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
Value chain elements / societal core tasks
Grid management (System planning,
Infrastructure design and construction,
Grid operations and maintenance)
System operations
Market facilitation
Trusteeship
Additional services which create value for
consumers
Coporate functions
Stakeholders
Consumers (from
industry to households)
Electricity System
Operators
Energy producers
Shareholders &
debt investors
Employees
Suppliers
Local communities
Government and public authorities
(including regulators)
Press & general public
Federations, NGOs
& academics
6 Capitals
Financial
Assets
Employees &
Subcontractors
Intellectual
Natural
Social &
Relationship
For ease of reading, we have used the following icons through-
out this report. Each icon denotes a value chain element, stake-
holder or capital; they appear alongside the main text, clearly
indicating which areas they hold relevance for.
Please note, the following distinction is made throughout
this report:
Elia Group SA/NV
and
Elia Group
are used to refer to the
holding company.
The Elia group / the group
is used to refer to the different
subsidiaries which are owned by Elia Group SA/NV.
13
ELIA GROUP ACTIVITY REPORT 2021
3
13
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
at a glance
The Elia group
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
14
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
14
Elia Group acts as a holding company which owns two TSOs: Elia Transmission Belgium SA/NV and 50Hertz Trans-
mission GmbH in Germany. The separation and ringfencing of the Elia group’s regulated activities in Belgium from
its non-regulated activities and its regulated activities outside of Belgium was undertaken to ensure that its future
activities in Belgium and Europe would be aligned with its growth strategy. In 2021, this allowed the group to pursue its
organic growth and has set the foundations for future inorganic growth.
REGULATED ACTIVITIES
Elia Transmission Belgium (hereafter referred to as Elia) is the Belgian TSO
for high-voltage (30 kV to 70 kV) and extra-high-voltage (110 kV to 400 kV)
electricity. It has a natural monopoly as Belgium’s only TSO. It develops, builds
and operates a robust electricity transmission system (both on- and offshore)
and is responsible for devising services and mechanisms which support the
development of electricity markets at national and European levels.
Elia Transmission Belgium is part of the Nemo Link joint venture with National
Grid, the British electricity and gas utility company. Nemo Link is the first sub
-
sea interconnector to link Belgium to Great Britain, so allowing the trade of
electricity between both countries: traders can buy up to 1,012 MW of capacity
in auctions over a number of time frames.
The building of Nemo Link marked a crucial step in the integration of the elec
-
tricity grids of continental Europe and the UK. The interconnector was com-
missioned on 30 January 2019, and operates in line with its specific regulatory
framework.
50Hertz Transmission (hereafter referred to as 50Hertz) is a TSO which holds
a natural monopoly in the north and east of Germany and is a crucial player
in the realisation of the German ‘Energiewende’ - or energy transition. Its grid
runs across a distance of around 10,325 km, supplying electricity to 18 million
people in the states of Brandenburg, Mecklenburg-Western Pomerania, Sax
-
ony, Saxony-Anhalt and Thuringia, and the city states of Berlin and Hamburg.
In 2021, around 56.1% of electricity consumption in the 50Hertz grid area came
from renewable sources; it aims to make this 100% by 2032. The shareholders
of 50Hertz are Elia Group (80%) and the German state-owned investment and
development bank KfW Group (20%).
EGI offers consultancy and engineering services related to energy market
development, asset management, system operation, grid development and
RES integration. As a wholly owned subsidiary of Elia Group and 50Hertz, EGI
is able to harness the expertise of two large European system operators, each
with a solid track record in delivering high-quality projects and many decades
of experience. Its clients are mainly comprised of TSOs, but EGI also supports
regulators, public authorities and private developers.
In September 2020, Elia Group announced the official launch of re.alto, its very
own corporate start-up and the first European marketplace dedicated to the
exchange of energy data and services. The start-up enables the exchange of
energy data through its innovative Application Programming Interface (API)
platform, so enabling the energy industry to take a huge digital leap forward
towards a more widespread adoption of Energy-as-a-Service business models,
ultimately hastening the establishment of a low-carbon society.
Elia Group’s newest legal entity, WindGrid, will focus on offshore develop-
ment outside of its current regulated perimeters. In February 2022, the Board
of Directors approved the formation of this new subsidiary, solidifying the
group’s commitment to accelerating the energy transition in the interest
of society both in its home countries and abroad. WindGrid will deliver and
unlock further revenue streams for the group, whilst enabling it to remain at
the forefront of offshore wind development and maintain its relevance in the
long term.
NONREGULATED ACTIVITIES
Our non-regulated business activities are allowing us to develop the key com-
petencies we need to ensure a successful energy transition. They are helping
us to embrace innovation, develop sustainable energy markets and shape
growth opportunities that increase our societal relevance.
Company profile
Transmission Belgium
Transmission
15
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
Legal structure
Shareholder structure
Other free float
40.89%
Publi-T
44.82%
Publipart
3.32%
Katoen Natie Group
6.15%
Belfius Insurance
1.04%
Interfin
3.78%
12.9%
of outstanding shares are held
by institutional investors
3.2%
of all investors are ESG
focused funds
100%
Eurogrid
GmbH
80%
Elia Group
SA/NV
Economic entity
Eurogrid
International
SANV
100%
50Hertz
Offshore
100%
energy
SRL/BV
100%
20%
50%/50%
JAO
4.0%
HGRT
17.0%
Coreso
15.8%
Publi-part
3.32%
Publi-T
44.82%
Free float
51.86%
energy
GmbH
100%
Transmission
100%
EGI
Pte. Ltd.
Singapore
100%
EGI
GmbH
Germany
100%
EGI LLC
Saudi
Arabia
100%
Coreso
7.9%
JAO
4.0%
EEX
5.4%
TSCNET
Services
GmbH
6.7%
Elia
Engineering
100%
Elia Re
100%
Elia Asset
SA/NV
99.99%
Elia Transmission
Belgium SA/NV
99.99%
100%
Nemo
Link ltd
50%
Belgian regulated entities
German entities
Non-regulated entities
*
* Incorporation of WindGrid is planned
in Q2 of 2022
16
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
16
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Key figures
Environmental
15,807
Scope 1 emissions
(tCO
2
e)
1,092,151
Scope 2 emissions
(tCO
2
e)
60%
of Scope 3 emissions are accounted
on the basis of mature (primary)
data (see ‘Our performance’)
363 km
Lines
commissioned
99.99%
Grid reliability
(onshore, 150 kV and above)
79%
Forest corridors
managed ecologically
60%
HV lines critical to birds
equipped with bird markers
CLIMATE
ACTION
ENVIRONMENT
& CIRCULAR
ECONOMY
FINANCIAL
KEY PERFORMANCE INDICATORS
€328.3 million
Adjusted
Net Profit
7.56%
ROE (adj.)
1
€10.3 billion
Regulatory
Asset Base
2
€1.75
Gross dividend
per share
1 Determined as the result attributable to ordinary shareholder/equity attributable to owners
of ordinary shares adjusted for the value of the future contracts (hedging reserve)
2 Includes 80% of 50Hertz; does not include Nemo Link
NONFINANCIAL
KEY PERFORMANCE INDICATORS
€376.7 million
Belgium
Grid Investments
€850.9 million
Germany
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
17
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
17
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
3 Corresponds to health rate (1-x)
4 Calculated as: (the number of work accidents with and without lost time)*1,000,000 /
(The total number of working hours over the year); excludes subcontrators - they will
be included from 2022 onwards
5 Composition of the indexes available on our website
* The survey is performed once every two years. It aims to collect feedback from
employees about their views and general level of satisfaction with regard to Elia and
50Hertz as workplaces; the Index is made up of 7 questions.
Social
Governance
6.3
Group
TRIR
4
69*
Employee commitment
index
22.2%
Women in total
workforce
68
Public info-dialogue sessions
related to grid projects
5/12
Compliance
Index
5
3.0%
Absentee
Rate Group
3
4/12
ESG
Governance Index
5
HEALTH &
SAFETY
GOVERNANCE,
ETHICS &
COMPLIANCE
DIVERSITY,
EQUITY &
INCLUSION
37
Nationalities
Please see the chapter entitled ‘Our performance’ for an
explanation of the indicators outlined above.
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
18
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
Key achievements
ELIA GROUP BACK
IN THE BEL 20
On 22 March 2021, Elia Group rejoined the BEL 20
index, the benchmark index of Euronext Brussels. Its
return to the index demonstrates the market’s confi
-
dence in its growth and strategy.
Elia Group has been listed on Euronext Brussels
since 2005 and was previously included in the BEL
20 between March 2012 and March 2017. In January
2021, Elia Group received the BelMid Company of
the Year 2020 award, in recognition of the fact that it
had achieved the greatest relative growth in terms of
market capitalisation in 2020 on Euronext Brussels.
ACTNOW: THE ELIA
GROUP’S SUSTAINABILITY
PROGRAMME
In April 2021, the Elia group’s ActNow programme was
launched. ActNow defines concrete and measurable
objectives which aim to drive the decarbonisation of
the power sector and the group’s own activities.
The ActNow programme focuses on five key dimen
-
sions which are aligned with the United Nations’ SDGs.
As of October 2021, Elia Transmission Belgium
received an Environmental, Social and Governance
(ESG) Risk Rating of 9.9 from Sustainalytics and was
assessed to be at negligible risk of experiencing
material financial impacts from ESG factors. Elia’s
ESG Risk Rating places it first in the electric utilities
industry assessed by Sustainalytics. It also shows that
ActNow has inspired confidence from the financial
markets.
Read more about ActNow in the chapter
entitled ‘Our purpose and strategy’.
BELGIUM’S FIRST CRM
AUCTION ORGANISED
In late October 2021, Elia announced the results of
the first CRM auction for the 2025-26 delivery year.
During the auction, market players bid to provide
electricity capacity in 2025-26. The CRM was estab
-
lished by the Belgian Federal Government to secure
the supply of electricity following the legally required
nuclear phase-out which is due to be completed
by 2025. Elia organised the first CRM auction at the
request of the Belgian Minister of Energy and with
the approval of the European Commission.
EXPANSION OF THE GERMAN
OFFSHORE GRID
Important steps were taken throughout 2021 as part
of the realisation of the Ostwind 2 project, which
involves two new offshore windfarms in the Baltic
Sea being connected to the German electricity grid:
Arcadis Ost 1 and Baltic Eagle. The first two of three
220 kV cable sections have now been installed along
the seabed. Land cables have also been successfully
laid. To limit the environmental impact of the works,
underground protective pipes were installed using
horizontal drilling.
More information on this project can be
found in the section entitled ‘System
planning’ in the chapter on ‘Our value
creation model’.
FILM
ACTNOW
19
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
MCCS: 50HERTZ’S NEW
DIGITAL GRID CONTROL
SYSTEM
50Hertz has been developing a new digital grid con-
trol system to ensure that its grid will be able to rely
on 100% renewable energy. The Modular Control
Center System (MCCS) will maintain the balance
between generation and consumption around the
clock, despite the increased complexity of an electric
-
ity system which includes many decentralised and
intermittent renewable energy sources (RES). In 2021,
50Hertz celebrated a significant technical milestone:
performance data from ongoing operations was pro
-
cessed for the first time by the MCCS and displayed
via its user interface. The development of the digital
tool will continue throughout 2022.
More information about this project can be
found in the section entitled ‘System
operations’ in the chapter on ‘Our value
creation model’.
CONSUMERCENTRIC
MARKET DESIGN
In June, the group published a white paper outlining
a new market model and calling for collaboration
amongst players from across the energy sector. The
proposed Consumer-Centric Market Design (CCMD)
aims to give consumers a more active role in the elec
-
tricity system and the energy transition.
More information about this report can be
found in the section entitled ‘Market
facilitation’ in the chapter on ‘Our value
creation model’.
IMPROVED INSIDE
INFORMATION PLATFORM
AND CUSTOMER SERVICES
During the summer, the group launched an improved
Inside Information Platform, which includes data
visualisations about the unavailability of electricity
supply in the high-voltage grids operated by Elia and
50Hertz. In July, the Elia Portal Interface for Custom
-
ers (EPIC) and Open Data Platform were launched.
These offer Elia’s customers and stakeholders a suite
of innovative services which address gaps in its pro
-
vision of private and public data relating to its grid.
With these upgraded data platforms, the group is
bolstering its commitment to digitalisation, con
-
sumer centricity and transparency in the interest of
society.
More information about EPIC can be found in
the section entitled ‘Additional services’ in
the chapter on ‘Our value creation model’.
ROADMAP
TO NET ZERO
Our vision paper, ‘Roadmap to net zero’, sets out key
insights and describes key areas to focus on for ensur
-
ing an efficient energy transition by 2050. Launched
during a livestreamed event with a live audience in
November 2021, the paper takes an in-depth look at
the energy balance, flexibility and security of supply
of Belgium, Germany and Europe.
More information about the publication can
be found in the section entitled ‘System
planning’ in the chapter on ‘Our value
creation model’.
20
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
CONTRACT FOR
SUEDOSTLINK
CONVERTER
STATIONS AWARDED
The contract for the building of two converter sta-
tions for the SuedOstLink has been awarded to Sie-
mens. The SuedOstlink will be 50Hertz’s most impor-
tant onshore grid expansion project in the coming
years. This direct current (DC) connection will run
from northern Germany, where there is a great deal
of wind power, to major consumption centres in the
south of the country. The two converter stations are
needed to convert the electricity into alternating cur
-
rent (AC).
More information about this project can be
found in the section entitled ‘Infrastructure
design and construction’ in the chapter on
‘Our value creation model’.
ENERGY HUB ON
BORNHOLM ISLAND
50Hertz signed a collaboration agreement with
Energinet in preparation for the building of a second
hybrid interconnector in the Baltic Sea: the Bornholm
Energy Island project. During the first phase of the
project, a high-voltage direct current (HVDC) inter
-
connection will be built between both countries (run-
ning over a distance of 400 km). As part of the second
phase of the project, Danish wind farms being built
off the coast of Bornholm Island will be connected to
the interconnector using hybrid technology.
More information about this project can be
found in the section entitled ‘Infrastructure
design and construction’ in the chapter on
‘Our value creation model’.
TRITON LINK
INTERCONNECTOR
TO GO AHEAD
Elia and Energinet (Denmark) signed a new coop-
eration agreement to continue collaborating on the
implementation of what could become a world first:
a subsea connection between two artificial energy
islands. The Triton Link project will facilitate the
exchange of power between the two countries and
at the same time transport electricity from offshore
wind farms to Belgium and Denmark using hybrid
technology.
More information about this project can be
found in the section entitled ‘Infrastructure
design and construction’ in the chapter on
‘Our value creation model’.
50HERTZ GETS ACCESS TO
THE GERMAN NORTH SEA
50Hertz and its German counterpart TenneT signed
a cooperation agreement for the realisation of a
so-called ‘multi-terminal hub’ in the area of Heide
(Schleswig-Holstein) and an onshore DC cable (which
will run over a distance of 200 km). The multi-termi
-
nal hub will also be linked to two offshore DC cables
and will have a converter connected to it. The pro
-
ject is included in Germany’s Grid Development Plan
2035 (2021), which has been approved by the German
Federal Network Agency (the Bundesnetzagentur, or
BNetzA).
More information about this project can be
found in the section entitled ‘Infrastructure
design and construction’ in the chapter on
‘Our value creation model’.
21
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
21
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
In short
• The four megatrends - decarbonisation,
decentralisation, supranational coordination and
digitalisation - are both challenges and opportunities.
• Social, economic and political developments like
the European Green Deal are the foundation of our
ambition to accelerate the energy transition.
• The regulatory environments we operate in are
changing; we must ensure we are still able to drive the
energy transition under these.
4
The Elia group
in a rapidly evolving
environment
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
22
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
As the Elia group continues to grow into a leading European
energy company, our vision remains clear: “a successful
energy transition for a sustainable world”. Indeed, given
that the European Green Deal aims to make Europe the
world’s first climate-neutral continent by 2050, the swift
decarbonisation of the energy sector will play a major role in
ensuring that the energy transition is a success - as outlined
in a joint paper we published with seven other European TSOs
last July (entitled ‘Decarbonising the energy system - The role
of Transmission System Operators’).
We have the mandate, skills and capabilities to
develop and operate the infrastructure of the
future, run a safe and reliable power system
and design solutions for a renewables-based
electricity market. Responding to social and
political demands for the decarbonisation of
the energy sector, we are harnessing innova-
tion across all our activities to deliver on our
mission of integrating renewables into the sys-
tem and so providing all consumers with relia-
ble, sustainable and affordable energy.
Fulfilling our mission will not be without its
challenges, however, since the energy land-
scape is undergoing a fundamental trans-
formation. Important shifts - social, political,
economic and technological - are underway,
leading to the identification of four relevant
megatrends.
ACCESS THE JOINT
PAPER HERE:
23
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
THE DECARBONISATION OF
SOCIETY
This trend, triggered by social and political
objectives to counter climate change, is being
driven forward by the integration of increasing
amounts of renewables into the energy system
and the spread of electrification across soci-
ety. Under the European Climate Law, which
entered into force in July 2021, all member
states are bound to take necessary measures
at EU and national levels to meet the target of
reaching net zero greenhouse gas emissions
by 2050. The key role of sustainable finance in
delivering this policy objective has been recog-
nised, leading to the creation of the EU Taxon-
omy (see the section entitled ‘Political devel-
opments’ below). However, the steep increase
in renewable energy generation and additional
electricity needs are having important reper-
cussions: the need for (long-distance) electric-
ity transmission is increasing (as areas with
substantial RES are often remote) and areas
with different and complementary produc-
tion patterns need to be connected. The mix of
renewables and higher levels of electrification
offer up flexibility to the system, and so new
opportunities to steer and stabilise it.
The four megatrends
THE DECENTRALISATION OF
ELECTRICITY GENERATION
AND NEW PLAYERS
In line with the decarbonisation of society, the
move towards more dispersed, smaller and
local generation sources - which are mainly
connected to lower voltage grids - will likely
persist, even though larger renewable instal-
lations such as offshore wind farms are also
set to play a major role in the future system.
Prosumers will continue to emerge, empow-
ered by digital technologies that allow them
to adopt a more prominent role in the energy
system. New technologies, increasing electrifi-
cation and sector coupling will also stimulate
the emergence of new players, such as ser-
vice providers targeting end consumers. This
means consumers (both industry and house-
holds) will be providing the power system with
additional flexibility. They will therefore actively
participate in the energy sector whilst benefit-
ting from increased value and comfort.
SUPRANATIONAL
COORDINATION
This trend is largely a consequence of the
previous two. The increasing share occu-
pied by renewables in the energy mix, the
move towards more decentralised generation
sources with a much higher number of play-
ers, and the coupling of the electricity with
other sectors such as gas, heating or mobility,
are making the behaviour of the power sys-
tem more variable and complex. In addition,
all over Europe, grid development is lagging
behind rapid changes in renewable genera-
tion. This is causing congestion problems (and
their related costs) in some countries. Given
the already high degree of interconnectedness
and integration of the European power system
and markets, responding to these challenges
often requires a supranational approach. This
approach can occur across European regions,
such as through Regional Security Coordina-
tion Initiatives, or across the entire continent, as
is the case for the Ten-Year Network Develop-
ment Plan (TYNDP) prepared by the European
Network of Transmission System Operators
(ENTSO-E). Such an approach allows comple-
mentary regions to benefit from each other,
ensuring that demand and supply for renewa-
ble energy can be matched, and provides Euro-
pean citizens and industry with a more cost-
efficient and resilient power system.
THE DIGITAL
TRANSFORMATION
The digital transformation, and the digitali-
sation of the energy sector specifically, is well
underway: new technologies (such as electric
vehicles, home batteries and heat pumps) are
rapidly changing the way we produce, trans-
port and consume electricity. This is acceler-
ating our transition to clean energy, enabling
market players to offer consumers services
that they want whilst delivering the benefits
of the energy transition to them, since (for
example) they can better align their consump
-
tion patterns with moments when there are
high amounts of renewable energy available
on the grid. In addition, system operators are
better able to manage a low-carbon energy
system, thanks to the increasing contribution
of distributed consumer flexibility. New digital
developments such as big data, cloud comput-
ing, artificial intelligence (AI) and blockchain
are already commonly used across our sector;
the challenge here is keeping pace with these
digital developments. An additional challenge
presents itself in terms of facilitating appropri-
ate access to data whilst ensuring that effective
consent management and data security prac-
tices are in place.
24
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
Climate change has become an increasing area of focus, with
social movements such as the ‘Fridays for Future’ campaign
pressuring policymakers into addressing the issue in their deci-
sion-making. Their concerns are reinforced by the increasing
number and impact of environmental disasters, including the
Social and economic developments
floods in Belgium and Germany and the forest fires in the Med-
iterranean region that took place during the summer of 2021.
This has led political leaders to call for the decarbonisation and
electrification of society, in turn making onshore and offshore
grid expansion indispensable.
As we work towards these goals, the needs of two of our stake
-
holders - industry and smaller end consumers - must be kept in
mind.
On the one hand, industrial players are striving to quickly decar
-
bonise, in line with the European Green Deal. This includes the
chemical, steel, automotive and oil and gas sectors. As these
large customers are directly connected to our transmission grid,
we play an important role in linking them to RES, enabling inno-
vative processes to be adopted and encouraging sector cou-
pling (and so advancing the production of green steel or gas). In
order to support such players and find quick and easy solutions
to their decarbonisation needs, we are committed to undertak-
ing real stakeholder dialogue, for example through the organisa-
tion of industry roundtables.
On the other hand, households and smaller consumers are
slowly transforming into prosumers who want to play an active
role in energy markets by producing their own energy (through
their home solar panels) and injecting it back into the grid. These,
and the owners of flexible appliances such as electric vehicles
and heat pumps, will become important providers of flexibility
for the grid: they will be able to charge their appliances when
there are high amounts of renewable energy available and will
be able to inject electricity back into the grid when it needs it.
Moreover, consumers are increasingly expecting to interact with
the energy system in the same way and with the same level of
ease that they are enjoying in other sectors: they are interested
in having more control over their household consumption and
in tracing the origin of the electricity they use. Digitalisation is
making this possible.
A reliable grid infrastructure is
essential for strong industry.
However, sector coupling is
becoming just as important. We
see this already happening in the
automotive industry, which is one of
Germany’s biggest industries. Our
interactions with the electricity grid
will change and will become more
intense and complex. Therefore, it
is important that we can count on
reliable system operators to support
industry in their management of
energy, delivering green electricity
whenever and wherever it is needed,
whilst focusing on affordability at
the same time.
Holger Lösch, Deputy Director General
at the Federation
of German Industries (BDI)
25
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
Political developments
Recognition of the need to fight climate change has increased
over the past few decades and political decision-makers are
focusing on action plans at international, regional and national
levels. We are actively responding to these changes, not least
because they are presenting us with further opportunities for
growth. We have placed sustainability at the centre of our busi-
ness strategy, making associated changes to the way we develop
our grid assets and carry out system operation and market facil-
itation activities. Our corporate activities support European and
national political objectives. Given the urgency with which cli-
mate change must be tackled, we will need to deliver the neces-
sary infrastructure and integrate renewables even faster into the
system than we have been doing until now. Along with all our
stakeholders, we are committed to delivering on these decar-
bonisation goals in the best interests of society.
International developments
In 2021, the UN’s International Panel on Climate Change (IPCC)
called for “strong, rapid and sustained reductions”
4
in GHG emis-
sions. Moreover, the outcomes of COP26 in Glasgow included a
wide-ranging set of decisions and resolutions that reflected the
interests and aspirations of the 197 Parties in attendance. The
Parties agreed to strengthen their emission reduction ambitions
in order to align their national climate pledges with the 2015
Paris Agreement and limit the rise in the average global tem-
perature to well below 2°C (preferably 1.5°C) above pre-industrial
levels. For the first time in the history of the Conference of the
Parties, the role of fossil fuels was explicitly mentioned, along-
side a commitment to “phase down” coal power.
European developments
In July 2021, the European Climate Law entered into force, writ-
ing into law the goals set out in the European Green Deal. The
law set a legally binding target of net zero greenhouse gas emis-
sions by 2050 for member states, with an intermediary target
of reducing net emissions by at least 55% by 2030 compared
to 1990 levels. To translate these goals into concrete steps, the
European Commission introduced an impressive package of
legislative proposals during the same month called ‘Fit for 55’.
Moreover, the European Commission has made it clear that
sustainable finance has a key role to play in meeting its policy
objectives - indeed, the EU Action Plan on Financing Sustainable
Growth (which was published in 2018) led to the creation of the
EU Taxonomy. The latter is a classification system for sustainable
economic activities that can be used by companies, investors
and policymakers to help shift financing towards environmen
-
tally sustainable undertakings through the provision of clear
metrics. The EU Taxonomy encompasses four conditions that
activities must successfully meet in order to be considered as
‘aligned’ with it. Following this, the link between these activities
and related turnover, CAPEX and OPEX must be disclosed.
National developments
Political developments in Germany and Belgium are also sup-
porting decarbonisation. A new coalition government took office
in Germany in November 2021, and, under the slogan ‘Dare More
Progress’, it outlined its plans to accelerate the energy transition
and modernise Europe’s biggest economy. Key points included
in its programme are the phasing out of coal by 2030 and the
speeding up of renewable energy development, so that it occu-
pies an 80% share of the energy mix by 2030. The Government
has also committed itself to reaching 30 GW of offshore capacity
by 2030 and 70 GW by 2045; 200 GW of photovoltaic capacity by
2030; and allocating 2% of the country’s area to onshore wind. It
also wishes to deploy gas capacities to secure the system and
speed up permitting procedures for grid projects - particularly
those which involve DC lines.
The autumn 2020 coalition treaty of the Belgian Government
also focuses on climate and energy issues. It supports the cli
-
mate ambitions outlined in the 2015 Paris Agreement and the
European Green Deal and includes ambitious targets related to
RES development, in particular (offshore) wind and solar gen-
eration.
EU Taxonomy
eligible activities
99.94%
Turnover
99.92%
CAPEX
100%
OPEX
4 Intergovernmental Panel on Climate Change, ‘Climate change widespread, rapid, and intensifying’ - IPCC, https://www.ipcc.ch/2021/08/09/ar6-wg1-20210809-pr/
26
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
Regulatory frameworks
Most of our business activities are regulated and we have strict
corporate governance rules to follow, since we hold a monop-
oly on the operation of the transmission grid in Belgium and a
regional monopoly in the north and east of Germany. Our TSO
licences in these two countries mean that Elia, 50Hertz and
Nemo Link are subject to the European regulatory system and
to different legal and regulatory systems at local levels. As regu-
latory risks are of high importance to us, operating under differ-
ent regulatory regimes enables us to diversify our regulatory risk.
At a European level
At the European level, ENTSO-E defines common technical
standards like the European Network Codes to facilitate the
harmonisation, integration and efficiency of the European elec-
tricity market. Additionally, through close consultation with
national TSOs and in order to better shape a fully interconnected
European grid, ENTSO-E publishes a TYNDP every two years. The
organisation also provides a transparency platform, which pro-
vides all European market participants with free access to Euro-
pean electricity market data. Moreover, the European Agency for
the Cooperation of Energy Regulators (ACER) helps to ensure
that the single European gas and electricity markets function
properly, taking action at EU level for the benefit of all EU cit-
izens. It assists national regulatory authorities with their func-
tions at the European level and, where necessary, coordinates
their work.
At a national level
At a national level, Elia Group’s subsidiaries must adhere to dif-
ferent national regulatory frameworks. In Germany, 50Hertz’s
activities are overseen by the BNetzA; in Belgium, Elia’s extra-
high-voltage activities (110 kV to 400 kV) are regulated by the
Belgian Federal Commission for Electricity and Gas Regulation
(the CREG). Additionally, the high-voltage sections of Elia’s grid
(30 kV to 70 kV) are subject to regulations set by regional regu-
lators: the VREG in the Flemish region; the CWaPE in the Wal-
loon region; and BRUGEL in the Brussels-Capital Region. Nemo
Link is subject to a cap and floor regulatory regime, which was
developed by the Office of Gas and Electricity Markets (Ofgem)
in the UK and the CREG. The regime provides regulated revenue
at the floor to limit the downside of the investment. Consumers
in Great Britain and Belgium have to compensate for the differ-
ence if the revenue falls below the floor. At the same time, con-
sumers are protected through the cap, which ensures that high
returns are passed back to them.
27
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
Regulatory developments in Germany
The regulatory framework in Germany is based on incentives to
increase productivity and reduce costs in order to avoid any neg-
ative socioeconomic impacts. This compensates for the lack of
competitive pressure on grid fees due to the regional monopoly
50Hertz holds.
• For every regulatory period, a revenue cap is calculated for
50Hertz, which is based on costs during the base year. This
serves as an incentive for reducing the actual costs below the
cap in order to generate a corresponding additional profit.
• The return on equity (ROE) ensures an adequate return on
50Hertz’s investment in and operation of the network; this is
currently fixed at 5.64% post-tax (it stands at 6.91% including
corporate tax).
Given that the fourth regulatory period will run from 2024 to
2028, the current regulatory framework and relevant regulatory
parameters are expected to change. In October 2021, the BNetzA
set the ROE for the next regulatory period at 4.13% post-tax (or
5.07% including corporate tax) for most grid assets (those built
since 2006), which represents a significant reduction compared
to the current ROE. Further parameters, such as the individual
efficiency factor that is subject to a national TSO benchmark
and the general sector productivity factor, have yet to be deter
-
mined. In 2022, the BNetzA will start assessing the cost of the
base year (2021), which will serve as the basis for the revenue cap
during the fourth regulatory period.
With regard to the regulatory framework as a whole, the Ger
-
man Bundesrat and the Federal Government confirmed an
amendment to the Incentive Regulation Ordinance in July 2021.
This amendment will introduce a new regime from 2024 to refi-
nance investment cost - the so called “Capital Cost Adjustment”.
Under this regime, there will be no distinction between invest-
ment measures and replacement projects, and total asset values
will be updated on an annual basis. During a transition period
which will cover the next regulatory period, specific arrange-
ments such as the right to continue ongoing projects under the
current regime and a fixed adder (socket) for specific assets will
be in place. Moreover, an incentive mechanism for redispatching
costs was introduced for the four TSOs.
Belgian tariff methodology: preparations
underway for upcoming negotiations with the
regulator
Although most regulatory regimes across Europe are based on
a revenue cap mechanism, Elia is operating under a cost-plus
model. Profit is determined by a fair remuneration mechanism
and supplemented by incentives. The incentives include those
for cost efficiency, market integration quality of service, innova-
tion and continuity of supply.
The Belgian tariff methodology includes different types of tariffs:
connection charges; charges for access to the network; balanc
-
ing fees; and tariffs for public service obligations or other taxes,
levies, additional surcharges and contributions.
Negotiations between Elia and the CREG regarding changes to
the regulatory framework and the tariff methodology for the
next regulatory period (2024-27) started in early 2022. We expect
the new tariff methodology to be set by the end of June 2022.
The new regulations for 2024-27 should reflect the elements
which are imperative for Belgium to undergo a successful energy
transition, such as: the further development of infrastructure in
order to integrate more RES into the system; an increase in the
number of interconnectors to protect consumers against price
peaks and encourage system resilience; the development of a
consumer-centric market design to unlock decentralised flex
-
ibility provided by end consumers; innovation along the value
chain and the digital transformation of our organisation; and any
additional necessary activities to manage this additional com-
plexity.
28
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
28
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
5
Our
purpose
and strategy
In short
• In the interest of society, we drive the energy transition
and fulfil our core societal tasks: grid management;
system operations; market facilitation; and trusteeship.
• In order to successfully deliver our strategy, we are
embedding 6 key behaviours across the whole of the
group to strengthen our core business, grow beyond
our current perimeter and develop new (digital)
services.
• Sustainability lies at the heart of our strategy and
our long-term sustainability objectives are set and
operationalised via our ActNow programme.
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
29
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
The Elia group’s strategy opens with our purpose, which explains the
future we aspire to build and why we exist. Our strategy comprises
three pillars of growth - outlining how we intend our activities to
remain relevant in the interest of society - which are broken down into
four strategic growth ambitions and four strategic enabling ambitions.
These provide focus for our business, helping us to prioritise projects
and activities and allocate resources accordingly.
OUR VISION & MISSION
How we see the future and what we are working to achieve
BUSINESS PLAN & STRATEGIC PROJECTS
Combining all elements to shape a concrete plan for the next 5 years
BUSINESS ROADMAPS & STRATEGIC ANALYSES
Translation of the group’s strategy into our business activities
PILLARS OF GROWTH & STRATEGIC AMBITIONS
Our approach and priorities for success
BUSINESS ACTIVITIES & PROJECT EXECUTION
Running the core business and carrying out projects
Define
strategy
Operationalise
strategy
Implement
strategy
30
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
Our annual strategic cycle, which involves translating our strat-
egy into roadmaps and business plans, enables us to imple-
ment our strategy via our everyday activities: it ensures that our
approach to and execution of our activities are aligned with our
strategic priorities. Moreover, this cycle, and the processes asso-
ciated with it, also ensure that our approach to the operational-
isation and implementation of our strategy will remain consist-
ent over time - and that our activities will remain aligned with
the interests of society.
Figure 1 above outlines the stages that form part of our annual
strategic cycle. The first of these, which comprises the defini-
tion and updating of our strategy, is based on findings collected
from the use of three tools: our strategic radar; disruption analy-
ses; and strategic environmental analyses. Their results feed into
the work undertaken by Senior Management and the Execu-
tive Management Board as they define our strategic ambitions,
before these are validated by the Board of Directors.
• Our strategic radar involves the monitoring and analysis of
relevant national and international trends, developments and
events and their potential impact on the group. It is shared with
staff across the group as an internal newsletter on a monthly
basis.
• Our yearly disruption analyses involve exploring the impact
of radical but unlikely changes to energy policy or the energy
value chain. These exercises allow the group to remain alert to
early signs of shifts in the sector and remain ahead of, and resil
-
ient to, these.
• Our yearly strategic environmental analyses involve evaluations
of the political, legal, social and technological contexts the
group operates in.
Once updates to our strategy have been made, it is operation-
alised by business managers along our value chain through our
business roadmaps: these provide a high-level overview of our
focus areas for the following five-year period, alongside tangible
objectives and milestones which should be reached. Concrete
and detailed plans about how we will execute our projects are
then outlined in our business plans. We prioritise our projects
based on their contribution to our strategy and their impact in
terms of finance and sustainability.
Once validated, these plans are then implemented by all depart
-
ments. Of importance to note is that our ActNow programme
ensures that sustainability is embedded throughout our strat-
egy, strategic cycle and across all our business activities - it is not
just relegated to being monitored through a specific, narrow set
of goals. See the section below entitled ‘Our sustainability pro-
gramme - ActNow’ for further information.
Q1
Updated
Strategy
Deliverables Business
roadmaps
Project
portfolio
Business
plan
Operationalisation
ImplementationValidation
Prioritisation
Operationa-
lisation
Strategy
Definition
Strategy
Definition
Initiatives/
Projects/
Products
Q3 Q1Q2 Q4 Q2
FIGURE 1: OUR ANNUAL STRATEGIC CYCLE
31
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
Our purpose
Our vision inspires us, guiding us as we develop our strategy and business plans. Our
mission is what the Elia group staff want to achieve together. Our mission statement
serves as a filter to separate what is important from what is not, and clearly explains
who we serve, what we deliver and how.
Our vision
“A successful energy transition for a sustainable
world”
Decarbonisation is one of society’s most pressing challenges. As
a system operator, the group’s activities are central to overcom-
ing this challenge: our grid forms the backbone of the energy
transition. We are strengthening our on- and offshore transmis-
sion grid to facilitate the integration of increasing amounts of
renewable energy into the system. We are also furthering digi-
talisation and sector convergence and shaping energy markets,
so supporting new market players to become active participants
in the energy sector. As a driver of the energy transition, there-
fore, we are contributing to the establishment of a sustainable
world.
Our reason for being
“In the interest of society, we make the energy
transition happen to decarbonise Europe by
delivering the needed power infrastructure and
shaping the European markets. We keep the lights
on by operating a reliable and sustainable system
and innovate to meet evolving consumers’ needs
in an efficient way and to protect people’s safety.
We create further value for society in the changing
energy landscape.”
Building and operating the grid is, and will remain, our core
business - just as sustainability and innovation will continue to
be part of our DNA, so we can keep driving the energy transition
forward.
However, with the world around us changing, we also need to
adapt our way of working and thinking. The goal of net zero is
already presenting society with a great number of opportuni
-
ties. In order to harness these, we are therefore looking beyond
our current activities to find areas through which we can deliver
additional value to society. See the section entitled ‘Company
profile’ in the chapter on ‘The Elia group at a glance ’ for an over-
view of our non-regulated activities.
32
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
The cornerstones of our strategy
Our strategy consists of three pillars of growth, which
are translated into eight strategic ambitions that mutu-
ally reinforce each other. These are the cornerstones that
ensure our long-term success and help us to prioritise our
business activities and projects.
Our pillars of growth
Our three pillars of growth outline how, by continuously improv-
ing our activities to deliver excellent services, products and pro-
jects, we are both fulfilling our societal mission and increasing
our relevance in a rapidly changing environment. These pillars
ensure that the Elia group keeps working in the interest of soci-
ety, even though the latter’s needs continuously evolve.
As outlined in Figure 2 below, the bottom pillar relates to our
core business as a TSO, whilst the top two pillars relate to how
we are expanding our activities beyond this to create additional
value for our stakeholders.
Deliver the infrastructure of the future & develop
and operate a sustainable power system
As reflected in our first pillar, the Elia group is committed to keep-
ing the lights on around the clock, designing, delivering and oper-
ating the transmission infrastructure of the future and enabling
the energy transition - not just in our home markets of Belgium
and Germany, but also at a European level. Our CAPEX projects,
which we are dedicated to delivering on time, within budget and
to a high standard of quality with a maximum focus on safety,
actively contribute to shaping solutions that meet our stakeholder
needs and create value for wider society. For example, the onshore
and offshore interconnectors we build allow renewable energy
to be shared between countries that have excess RES and those
that have RES deficits, so contributing to the strengthening of the
internal European energy market.
Grow beyond current perimeter to deliver
societal value
Our second pillar aims to further expand our activities beyond
their current perimeter in order to deliver additional societal
value. Through our consultancy, EGI, we have developed a solid
understanding of international markets and both detect and
attract appealing business opportunities. Leveraging both this
expertise and the experience we have gained through our reg-
ulated activities in offshore renewable development, we are
actively shaping new growth opportunities. Areas we are explor-
ing include offshore development beyond the maritime bound-
aries of Belgium and Germany in the North and Baltic Seas
respectively, as well as equity participation that creates addi-
tional value in combination with our current portfolio.
Develop new services creating value for
customers in the energy system
Through our third pillar, we are ready to continuously change,
delivering new services which create value for energy customers
and digital tools which benefit the international energy ecosys-
tem. We aim to achieve this by utilising and driving the digitali-
sation of the power sector and spurring innovation. Leveraging
our experience with consumer centricity as part of our regu-
lated activities, we are exploring and contributing to fostering
a range of new opportunities - from sector coupling through to
the provision of new digital services with partners like re.alto, the
start-up we launched in 2019. Ultimately, these activities will fur-
ther hasten the energy transition.
FIGURE 2: OUR THREE PILLARS OF GROWTH
BE RELEVANT
TODAY AND
TOMORROW
33
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
Our strategic ambitions
Our strategic ambitions translate our three pillars of growth into
concrete goals for the business. They act as a framework which
helps us to select and prioritise our projects during the business
planning process. Our four growth ambitions relate to what we
want to do and how we want to improve, whereas our four ena-
bling ambitions relate to the means through which we will be
able to deliver our growth ambitions.
The following sections focus on three group-wide initiatives
(Make A Difference, our digital aspirations and ActNow) and our
so-called Moonshots - five innovative projects. As central strate-
gic initiatives which were identified during our business plan-
ning process, each of these is directly linked to fulfilling one of
our strategic ambitions (presented in Figure 3). Additionally, our
Moonshots focus on optimising our tools, processes, assets and
activities along the value chain.
Strategic Ambitions
Enabling Growth
Design, deliver and operate
the future transmission
grid infrastructure
supporting RES integration
Be a leader in health and safety & evolve our culture and talent
Realise our digital transformation
Finance our future
Increase efficiency, realise synergies & optimise resource allocation
Further shape the
(European) markets &
ensure high
security of supply
Ensure sustainability
in the way we operate our
business
Strengthen the group’s
position through inorganic
growth & expand into new
business areas
FIGURE 3: OUR STRATEGIC AMBITIONS
34
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
The first central initiative relates to encouraging a shift in our
internal organisational culture. In order to successfully deliver
our strategy, we are embedding 6 key behaviours across the
whole of the Elia group. Known collectively as our ‘Make A Differ-
ence’ behaviours, these represent the corporate culture we wish
our staff to embody, so that they form the basis for the ways in
which we all approach our work - both internally (across teams
and departments) and externally (with partners and stakehold-
ers outside of the group).
The MAD behaviours are a prerequisite for our delivery of our
vision and mission, continued positive influence on stakehold
-
ers, and successful delivery of impact along the energy value
chain.
We have organised workshops and information sessions to cre
-
ate awareness about MAD and encourage staff to adopt the
MAD behaviours in their daily work. 2021 focused on ‘Simplifi-
cation’.
Feedback
We give feedback to and ask for
feedback from colleagues at all
levels of the Group. In this way,
we show appreciation for their
work and strive for continuous
improvement.
Co-creating the future
We are aware of the radical changes
occurring in our sector (such as
digitalisation and decentralisation)
and play an active role in shaping
them.
Simplification
We consider the ways in which
projects can be simplified,
eliminating unnecessary
complications in what is already a
very complex environment.
One company
Each employee’s responsibilities
transcend the boundaries of
their own job or department. All
members of staff consider issues
from a company-wide perspective
and support the choices made by
Elia Group as a company.
One Voice
We have open and constructive
debates before taking a decision.
Once a decision is taken, everyone
commits to it fully and is united
in their understanding of and
communication about it.
Impact
We carry out our work and
projects in the best possible way
by focusing on the actions that
make a difference and have a
tangible impact on areas including
safety, the system, society, the
environment, and our performance.
1
The culture we need
35
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
Our digital transformation
The second central initiative involves the digital transformation
of our business. We seek to remain efficient throughout this
transformation as we: master the growing complexity of our
core business; speed up our activities; develop new solutions for
a fully decarbonised system; work as part of ecosystems to bet-
ter understand and serve the needs of consumers; and lay the
foundations for expanding our role and the services we provide
across the energy value chain.
Figure 4 below outlines this digital journey. The left-hand side
of Figure 4 depicts the technological steps which we need to
take: the technology, processes and tools that need to be grad
-
ually developed and disseminated across the group, leading us
to eventually becoming ‘digital beyond the core’. Just as impor-
tant as these technological steps, however, are 6 shifts in mind-
set that our digital transformation must encompass - these are
depicted on the right-hand side of Figure 4. These technological
steps and accompanying shifts in mindset are complementary:
both must occur in tandem for the Elia group to become truly
digital.
2
Digitisation
Digital at
its core
New
regulated
services
Digital
beyond
the core
• Natural adoption
of digital tools
within the
company,
without changing
processes
• Improved
processes and
ways of working
• New interactions
with outside world
• Extending our role
in the energy value
chain
• Meeting new
customer needs
• Start of ecosystem
• Possible new
business model
• Extended
ecosystem
1 – 3 years 3 – 5 years 5 – 10 years
Responsive to customer needs
Gathers and analyses data
Intelligently
Adapts quickly to a changing
landscape
Manages compliance, risk and
security
Engages employees to innovate
and collaborate
Monitors and manages business
performance in real time
A digital Elia Group
100%
Digital embedded in Elia Group
FIGURE 4: OUR DIGITAL TRANSFORMATION JOURNEY
In order to ensure our business remains future-proof, our digital
transformation is organised around three specific areas:
1. The urgent need to transform our core business along each
part of the value chain to efficiently master the volume of
tasks, complexity and risks we are facing.
2. The need to correctly connect, understand, assess and antici
-
pate future needs to do and build what matters.
3. The need to generate future additional business (via solutions
and digital products that are also useful for external partners).
We recently established a Digital Transformation Office (DTO)
to support our core business as it undergoes this tech-enabled
transformation. The DTO will enhance staff skills, embed flexibil
-
ity and agility across the group’s culture, revamp the foundation
of our technology platforms and ensure value creation remains
focused on and aligned with our strategy.
Our digital strategy addresses how we will achieve this trans
-
formation. It includes five transformation objectives, which are
shown in Figure 5 and must be reflected in our business road-
maps to deliver our strategy.
FIGURE 5: OUR DIGITAL STRATEGY
Objective
1
Fulfill customer demand for decarbonisation with focus
on electrification
2
Develop reliable system with high RES integration
3
Develop infrastructure faster
4
Reduce our assets‘ total cost of ownership
5
Increase impact of value adding support activities and
efficiency of transactional support functions
36
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
Our sustainability programme - ActNow
Sustainability lies at the heart of our strategy and our ActNow
programme, which was developed and published in 2021, sets
out our long-term sustainability objectives. These are guided by
the UN SDGs, demonstrating that our organisational goals are
explicitly linked to global goals, and are implemented through
our business roadmaps and plans.
As outlined in Figure 6 below, each objective is assigned to one
of five dimensions: Climate Action; Environment & Circular Econ
-
omy; Health & Safety; Diversity, Equity & Inclusion; and Govern-
ance, Ethics & Compliance. For a closer look at each objective,
and how we aim to achieve them, please see the recording of
our 2021 Capital Markets Day event.
Our biggest contributions to sustainability as a company which
owns two TSOs lies in the development of the power grid and
the enhancement of electricity market design, which in turn
enable the integration of rapidly growing amounts of RES into
the system and allow the further electrification of society to
occur. These efforts are consolidated in the first objective of
Dimension 1: enabling the decarbonisation of the power sector.
However, as a socially responsible company, our commitment
to sustainability reaches far beyond this: from reducing our own
carbon footprint to embedding circularity in our core business
processes to ensuring equal opportunities for all staff, ActNow
is firmly embedded in our core business via our business road
-
maps and plans.
Our commitment to sustainability is mirrored in the fact that
we have sound governance arrangements in place at Executive
Management Board and Senior Management levels to monitor
its anchorage across the entire group; as part of this, a Group
Sustainability Office (GSO) was established. Supported by local
sustainability boards, both Elia and 50Hertz contribute to fulfill-
ing our group-wide objectives via their ActNow roadmaps, which
are adapted to the local environments in which they operate. We
have also started tracking and reporting relevant sustainability
KPIs to better shape our group-wide ambitions; please see the
chapter entitled 'Our performance' for further information.
We were able to achieve some major ActNow milestones in 2021.
For example, we developed a Code of Ethics, which provides staff
with guidance about how to behave in an ethical, responsible
and transparent manner in their everyday work. In addition, we
published a Diversity, Equity & Inclusion Charter, which outlines
the management team’s commitment to ensuring that the Elia
group provides an inclusive and supportive work environment
for all staff. In 2022, we are aiming to phase out the use of her
-
bicides and achieve an ISO 14001 certification for 50Hertz’s envi-
ronmental management system (certification for Elia is due to
follow in 2023).
3
FIGURE 6: OUR ACTNOW PROGRAMME
1 Climate Action
• Enabling decarbonisation of the power sector
• Carbon neutrality in system operations by 2040
• Carbon neutrality in our own activities by 2030
• Transition to a carbon-neutral value chain for new assets and construction works
3 Health & Safety
• Going for zero accidents
• Build our safety culture
• We are all safety leaders
• We strive for heath and wellbeing of our staff
4 Diversity, Equity & Inclusion
• Inclusive leadership across the organisation and engaging all staff
• Inclusive recruitment and selection practices in hiring processes
• Equal opportunities for all staff
• Open and inclusive company culture and healthy work-life balance
• Recognition of societal DEI role
5 Governance, Ethics & Compliance
• Governance: Accountable rules & processes
• Ethics: Sustainable mindset & behaviours
• Compliance: Conformity with external & internal rules
• Transparency: Openness & meaningful stakeholder dialogue
FOR A SUSTAINABLE WORLD
5 Dimensions
Environment
Social
Gover-
nance
2 Environment & Circular Economy
• Preserve and strengthen ecosystems and biodiversity
• Embed circularity in our core business processes
• Ensure compliance with environment performance standards
B
u
s
i
n
e
s
s
P
l
a
n
n
i
n
g
Group Action Plan
Dashboard incl. joint KPIs
Local Roadmaps
Milestones & Approach
B
u
s
i
n
e
s
s
R
o
a
d
m
a
p
s
FOR A SUSTAINABLE WORLD
›
›
›
›
37
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
Five innovative projects: our Moonshots
As a driver of the energy transition, we must continuously
innovate, optimising our tools, processes, assets and activities.
As part of this, we are working on five key innovative projects:
our Moonshots. These are visionary and ambitious and support
our commitment to making quick progress on our value chain
activities. Over the coming years, our Innovation Team will work
with specialists from different departments to research, test and
develop each of these projects under real conditions.
Our five Moonshots relate to the five topics shown in Figure 7,
each of which is linked to the Elia group’s activities along the
value chain.
System operations
→
Please see the section
entitled ‘System
operations’ in the
chapter on ‘Our value
creation’
Infrastructure
→
Please see the
section entitled
‘Grid operations and
maintenance’ in the
chapter on ‘Our value
creation’
Asset management
→
Please see the
section entitled
‘Grid operations and
maintenance’ in the
chapter on ‘Our value
creation’
Offshore
→
Please see the section
entitled ‘System
operations’ in the
chapter on ‘Our value
creation’
Consumer centricity
→
Please see the section
entitled ‘Additional
services’ in the
chapter on ‘Our value
creation’
FIGURE 7: OUR FIVE MOONSHOTS
4
38
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
Our business
Our core societal tasks
Working in the interest of society, the Elia group aspires to ena-
ble a successful energy transition, establishing a fully decarbon-
ised and reliable, sustainable and affordable energy system in
the process. Indeed, in order to meet the targets of the European
Green Deal, the full harnessing of renewable energy and wide-
spread electrification of society will be necessary.
Our subsidiaries in Belgium (Elia) and the north and east of Ger
-
many (50Hertz) operate 19,192 km of high-voltage connections,
in line with their legal responsibilities as regulated businesses.
Through them, we ensure that production and consumption are
balanced around the clock in order to supply around 30 million
people with electricity. We achieve this by ensuring that our grid
maintenance and expansion investments are made on time and
within budget, with a maximum focus on safety. We manage
our stakeholders proactively by establishing two-way commu-
nication channels with all interested parties very early on in the
development process and offer up our expertise to partners
across the energy sector, including policymakers and relevant
authorities, to ensure the success of the energy transition.
Moreover, in order to successfully manage and shape an increas
-
ingly complex energy system, we develop innovative system-
and market-related solutions to facilitate the rapid integration
of intermittent renewable energy and other decentralised gen-
eration sources into our grid. This includes the construction and
operation of interconnectors, which promote decarbonisation
since they allow countries to share the excess renewable energy
they produce across borders and further reinforce the intercon-
nectedness of the European grid. It also includes encouraging
the role of new market players and technologies such as electric
vehicles, batteries and power-to-X (PtX). In addition to our TSO
activities, we hold 50% of the joint venture Nemo Link; provide
consultancy services for international customers through EGI;
provide a European digital marketplace for energy data and ser-
vices through re.alto; and recently launched a new entity - Wind-
Grid.
Grid management –
We deliver and operate
infrastructure
We develop, build and maintain our trans-
mission grid in accordance with society’s
long-term needs. We invest heavily in the integration of RES, the
development of a meshed offshore grid and the construction
of interconnectors to facilitate the integration of the European
energy market. We are therefore driving the transition to tomor
-
row’s energy system.
Please see the first three sections of the chapter
entitled ‘Our value creation model’.
Market facilitation –
We facilitate the
development of the
electricity market
The Elia group makes its infrastructure avail-
able to all market players in a transparent, non-discriminatory
way. Digitalisation and technological developments are offering
players new opportunities to optimise their electricity manage
-
ment by (for example) allowing them to sell their surplus energy
or temporarily reduce their consumption. We develop services
and mechanisms allowing the market to trade on different plat
-
forms, which promotes economic competitiveness, and so the
wellbeing of society. We promote the integration of the Euro
-
pean energy market and support local markets to enable a new
consumer-centric approach, as exemplified by our exploration of
new closer to real-time products and flexibility sources, such as
balancing services provided by electrical vehicles.
Please see the section entitled ‘Market facilitation’ in
the chapter on ‘Our value creation model’.
System operations –
We keep the lights on
around the clock
Operating the electricity system is becom-
ing increasingly complex due to the sharp rise
in renewable energy, the continuous arrival of new players and
technologies and the increase in supranational coordination. As
part of this, we monitor the electricity system in real time, requir
-
ing specialist knowledge and the use of sophisticated tools and
processes, and work with other European TSOs and distribution
system operators (DSOs) to ensure a reliable energy supply and
efficiently manage our grid.
Please see the section entitled ‘System operations’ in
the chapter on ‘Our value creation model’.
Trusteeship – We deliver
independent and reliable
trusteeship services related
to renewable levy systems
The legal responsibility for coordinating and
processing national levy systems that promote the integration of
RES into the energy system lie with Elia in Belgium and 50Hertz
in Germany. Our two TSOs therefore collect these levies as trus
-
tees in their respective countries, administrating them and coor-
dinating their distribution. If the electricity which is generated
from RES is not marketed directly, we sell this electricity on the
power exchange.
Please see the section entitled ‘Trusteeship’ in the
chapter on ‘Our value creation model’.
39
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
Our grid and our assets
Our electricity transmission grid forms the backbone of a suc-
cessful energy transition. The voltage range of our grid is 30 kV to
400 kV in Belgium and 150 kV to 400 kV in Germany. It includes
onshore and offshore installations and both AC and DC lines.
Characteristics of our grid
1. Alternating current and direct current
AC, which is used in most lines across the European electricity
grid, allows electricity to be easily switched and transformed
into other voltages, in turn allowing meshed grids with strong
redundancy to be built. DC connections, whilst still rare, are
growing in importance since they allow a better steering of
grid flows and permit large volumes of electricity to be trans
-
ported over long distances with fewer losses. We have built
up a strong amount of expertise in building DC connections
through our involvement in different DC projects.
2. Electricity connections: underground cables and
overhead lines
We optimise the use of existing infrastructure as much as pos-
sible when developing our grid; for example, if transport needs
along existing overhead lines increase, we reinforce them via
additional or restored conductors. This bolsters sustainability,
reduces duplication and ensures that the impact of our grid on
the environment is minimised. When new electricity lines are
needed, we investigate whether underground cables or over-
head lines are best suited to the demand, considering factors
such as cost, environmental impact, reliability and operations.
The voltage level of the project also plays a major role: it is bet-
ter to install new low-voltage AC connections underground
and new high-voltage AC connections (380 kV) as overhead
lines. The German Government has decided to prioritise
underground cabling for DC corridors.
3. Interconnected European electricity system
The Elia group is helping to establish a connected European
electricity system by building interconnectors with countries
across the continent, in turn facilitating the sharing of renew-
able energy amongst member states and some of their neigh-
bours. Our portfolio of interconnectors includes the Kontek
subsea cable, which was built in 1995 and links Germany with
Denmark; the ALEGrO interconnector, which was completed
in 2020 and links the Belgian and German systems together;
the Kriegers Flak Combined Grid Solution, which is the world’s
first hybrid offshore interconnector, linking wind farms in the
Baltic Sea to the Danish and German grids; and Nemo Link,
an interconnector which stretches between Great Britain and
Belgium. We are currently working on a number of additional
projects that will contribute to this European grid; please see
the sections entitled ‘Infrastructure design and construction’
and ‘System planning’ in the chapter on ‘Our value creation
model’ for further information.
The Elia group has an ambitious investment plan; our key pro
-
jects over the next few years are included in the map in Figure 8.
1
Energy Island: this extension of the Modular Offshore Grid
(MOG) will involve the development of new offshore grid
infrastructure, including a multifunctional artificial island
with a capacity of 3.5 GW, allowing new wind farms in the
Belgian part of the North Sea to be linked to the onshore
grid.
2
Nautilus: this subsea hybrid interconnector will run between
Belgium and the UK via an energy island which will be con
-
nected to wind farms in the North Sea.
3
Ventilus and Boucle du Hainaut: these two projects are
essential for the reinforcement of the internal backbone of
the Belgian onshore grid. They will ensure Belgium’s secu
-
rity of supply and enable wind energy generated in the
North Sea to be integrated into the system.
4
Offshore projects Ostwind 2, Ostwind 3 and Gennaker:
these three projects will link different offshore wind farms in
the Baltic Sea to 50Hertz’s onshore transmission grid, con-
necting a capacity of approximately 2 GW of energy to the
German grid by 2028.
5
HVDC corridors - SuedOstLink & SuedOstLink+:
the
SuedOstLink will transport renewable energy from the
north and east of Germany to load centres in the south
of the country. The SuedOstLink+ project will double the
capacity of the SuedOstLink route to 4 GW by extending the
latter to the North.
Please see the section entitled ‘Infra-
structure design and construction’ in the chapter on ‘Our
value creation model’.
1
2
3
4
5
FIGURE 8: OUR KEY PROJECTS
5,575
Kilometres of
overhead lines
3,292
Kilometres of
underground/
submarine lines
809
Number of
substations
and HVDC
converters
9,672
Kilometres of
overhead lines
658
Kilometres of
underground/
submarine lines
76
Number of
substations
and HVDC
converters
40
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
40
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
In short
• The Elia group is responsible for connecting centres of
generation to centres of consumption and integrating
increasing amounts of intermittent green electricity
into the system while keeping the grid in balance
around the clock.
• Our value chain is the bond that ties our different
subsidiaries together; we are able to leverage the
knowledge gained across these different entities to
speed up the energy transition.
• We deliver and operate infrastructure; keep the lights
on around the clock; facilitate the development of the
electricity market; deliver independent and reliable
trusteeship services related to renewable levy systems
in Belgium and Germany; and deliver additional
services for consumers.
6
Our value
creation
model
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
41
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
Business model:
how we create value for our stakeholders
Figure 9 uses the <IR> Framework to summarise our business model. We rely on six capitals (outlined below)
as inputs for our business activities, so creating value four our stakeholders. In return, these activities and
their outputs influence our capitals, affecting our ability to maintain a sustainable business model over time.
INPUTS
Financial: We receive grid fees for our
operation of the electricity grid and sys-
tem; we also depend on financial inves-
tors to upgrade and build our grid and
assets as we have a large CAPEX pro-
gramme ahead of us.
Assets: We rely on our onshore and
offshore assets including lines, cables,
substations, interconnectors and equip-
ment and tools. We maintain and
operate a secure and reliable system
through our regional operations centres
and system control centres.
Employees & Subcontractors: Collec-
tively, our staff are resilient and have a
sound knowledge of legal and regula-
tory frameworks, energy markets, and
system operations; technical exper-
tise (including in-depth knowledge of
health and safety practices); skills linked
to digital transformation; strong com-
munication skills; and proficiency in the
areas of performance and project man-
agement.
Intellectual: Our TSO licenses form the
basis of our activities. Our access to and
understanding of market, system and
asset data, and use and development of
software, reinforces our staff knowledge
and skills.
Natural: Our activites use and affect
the environment, landscape, fauna and
flora.
Social & Relationship: We manage our
stakeholders proactively by establish-
ing two-way communication channels
between all relevant parties in a trans-
parent way. We interact with interested
parties at a very early stage in our grid
projects and incorporate external
knowledge into our studies, research,
project planning and design.
OUTCOMES
Financial: We can build on our regula-
tory returns and the returns from our
non-regulated activities, as well as the
financial backing from our investors
(shareholders and bondholders).
Assets: Our grid is growing and becom-
ing more and more complex. Therefore,
we improve our assets, control systems
and our equipment and tools in order to
maintain and operate the grid and run
a secure and reliable electricity system.
Employees & Subcontractors: We con-
tinuously further the knowledge of our
staff and subcontractors and improve
their working conditions as workforce
resilience and health and safety is a top
priority.
Intellectual: We constantly enhance
our organisational processes and
knowledge, including the ways in which
we collect, analyse and use the data we
have access to for decision-making.
Natural: We address our impact on the
environment, flora and fauna through
the use of different mitigation and eco-
logical compensation measures which
aim to encourage biodiversity and
reduce our emissions.
Social & Relationship: Our early and
regular involvement of stakeholders
in relation to changes to our grid, the
system and the market, enhances trust,
cements our relationship with them,
and provides us with a range of valuable
information, data, suggestions and con-
structive feedback.
BUSINESS ACTIVITIES OUTPUTS KPI
GRID MANAGEMENT
System planning
We design the energy
system of the future
Based on our market and grid studies and simulations, we work on the Belgian
and German grid development plans and the Europe-wide TYNDP. We develop
roadmaps for the realisation of the future energy system beyond 2030.
CAPEX plan
2022-2026
€4 billion
Belgium
€5.6 billion
Germany
(1)
Infrastructure design
and construction
We deliver the infrastruc-
ture of the future
Based on our system analyses and interactions with stakeholders, we design
and build state-of-the-art assets which fulfil societal needs and facilitate the
integration of the European system and energy market.
363 km
Lines commissioned
Grid operations and
maintenance
We operate a safe and
reliable infrastructure
We operate the transmission grid in a safe, cost-efficient, consumer-friendly
and environmentally sound manner while ensuring that our employees and
subcontractors can work in a safe and effective way.
79%
Forest corridors
managed ecologically
60%
high-voltage lines criti-
cal to birds equipped
with bird markers
System operations
We keep the lights on
around the clock
We maintain the balance between demand and supply in real time and keep
the voltage and usage level of all technical assets within their technical band
-
widths. We ensure that the necessary system services (including frequency
control, voltage control, congestion management and grid restoration) are pro
-
vided and activated where necessary to maintain system reliability.
99.99%
Grid reliability
(onshore, 150 kV
and above)
Market facilitation
We facilitate the devel-
opment of the electricity
market
We develop solutions at national and European levels to increase the efficiency
and liquidity of the different electricity markets (wholesale, ancillary services,
reliable capacities, etc.). We are committed to delivering more consumer com
-
fort and value the contribution of parties who provide flexibility.
30 million
end users
Trusteeship
We coordinate and pro-
cess legal levy systems
We collect legal levies which promote environmentally friendly technologies
as trustees in Belgium and Germany, administrate these efficiently and coordi
-
nate their distribution to their recipients.
Additional services
We create value for
consumers and customers
We are working on the development of consumer-centric services to unlock
new, decentralised flexibility provided by assets such as heat pumps, electric
vehicles and batteries and are facilitating their ability to participate in the mar
-
ket and provide grid support services - benefiting both consumers and the
system.
Corporate functions
We enable our core
activities
Our corporate functions form the foundation of our activities. They enable safe
and sound working environments; determine the strategic development of
our business; provide sufficient financing for operating the grid and the sys
-
tem and delivering our ambitious CAPEX plan; provide human and material
resources for our activities; ensure that sound governance processes are in
place and that we comply with relevant regulations and laws; support the pri
-
oritisation of investment and activities; and foster innovation and our digital
transformation.
7.56%
(2)
ROE (adj.)
6.3
(3)
Group TRIR
22.2%
Women in total
workforce
FIGURE 9: OUR VALUE CREATION MODEL
(1) Elia Group owns 80% of 50Hertz; numbers represent 100% of 50Hertz
(2) Determined as the result attributable to ordinary shareholder/equity attributable to owners
of ordinary shares adjusted for the value of the future contracts (hedging reserve)
(3) Calculated as: (the number of work accidents with and without lost time)*1,000,000 / (The
total number of working hours over the year); excludes subcontrators - they will be included
from 2022 onwards
42
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
P
U
B
L
I
C
A
N
D
S
O
C
I
A
L
S
T
A
K
E
H
O
L
D
E
R
S
F
I
N
A
N
C
I
A
L
S
T
A
K
E
H
O
L
D
E
R
S
O
P
E
R
A
T
I
N
G
A
N
D
B
U
S
I
N
E
S
S
E
N
V
I
R
O
N
M
E
N
T
Employees
Electricity System
Operators
Local communities
Government and
public authorities
(including regulators)
Consumers
(from industry
to households)
Energy
producers
Shareholders &
debt investors
Suppliers
Press & general public
Federations,
NGOs & academics
Fostering stakeholder interactions
Engaging with our stakeholders is key to successfully creating value and delivering our strategy. We regularly interact with all our
stakeholders and foster two-way communication channels with them. These stakeholder interactions form the basis for our iden-
tification of material topics (please see the section entitled ‘Materiality’ below). More information on the variety of our stakeholder
engagement activities can be found in our Sustainability Report.
43
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
WHY DO WE INTERACT WITH EACH STAKEHOLDER? HOW DO WE CREATE VALUE? FURTHER INFORMATION
To strengthen cohesion, encourage co-creation, cooperation and crea-
tivity, we hold team meetings, performance management and informa-
tion sessions, workshops, training sessions and employee events (daily,
weekly and monthly, depending on the interaction)
We hold regular staff events and communicate on a regular basis with
employees through various internal channels about opportunities for
skills and knowledge development, activities being undertaken across
the group, and wellbeing initiatives and local community projects; in
doing so, we are creating a safe and productive workplace (see ‘Corpo-
rate functions’ below)
20 years of Elia celebration: October
2021
Statement from Alexander De Croo,
Prime Minister of Belgium - 20 Years
of Elia
To drive the energy transition forward both within our home countries
and across Europe and ensure that our activities are communicated to
and aligned with the activities of DSOs and TSOs across the continent,
we interact with other system operators to co-develop solutions for the
grid, system and market
We write and/or contribute to national and European grid development
plans (see ‘System planning’); we operate a reliable system (see ‘System
operations’); we develop joint grid projects, including interconnectors;
we develop solutions to trigger changes in the electricity market (see
‘Market facilitation’); we hold information sessions, conferences, visitor
sessions and networking meetings
ENTSO-E: Ten-Year Network Develop-
ment Plan
Elia’s Federal Development Plan
2020-2030
German Grid Development Plan
website
To deliver high-quality projects which are on time and within budget,
we regularly acquire goods and services from suppliers and cooperate
with them/hold information sessions with them to develop tools which
enhance our activities and support our staff, ensuring the highest stand-
ards of safety are adhered to; we hire subcontractors who work closely
with our own teams and contribute to our activities
We efficiently acquire goods and services from suppliers with clear con-
tracts in place that ensure quality and safety; we provide safe work envi-
ronments for all staff which use innovative tools and equipment; we trig-
ger technical innovation and the development of new goods and services
to meet the needs of the future system (see ‘System planning’)
Elia’s Federal Development Plan
2020-2030
German Grid Development Plan
website
To ensure system reliability, increase market liquidity and encourage
socioeconomic prosperity through access to renewable energy, we are in
regular contact with energy producers
We build direct grid connections to energy sources; we interact with
partners to provide ancillary services and undertake congestion man-
agement; and co-develop specifications and products to facilitate access
to and participation in the electricity market (see ‘System operations’,
‘Market facilitation’)
To undertake our regulated activities and act as a trusted advisor for pol-
icymakers, we have meetings with and produce regular reports for local,
national and European authorities
We write and/or contribute to national and European grid development
plans (see ‘System planning’); we have trusteeship responsibilities in Bel-
gium and Germany (see ‘Trusteeship’, ‘Corporate functions’); we take
part in negotiations regarding regulatory frameworks; we provide trans-
parency relating to grid and system activities and fair operating practices;
we hold consultations regarding our grid development
Elia’s Federal Development Plan
2020-2030
German Grid Development Plan
website
‘Together. Faster. Climate-Neutral.’
initiative in Germany and the group’s
‘Roadmap to net zero’ publication
(please see ‘System planning’)
44
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
WHY DO WE INTERACT WITH EACH STAKEHOLDER? HOW DO WE CREATE VALUE? FURTHER INFORMATION
To fulfil consumer demand for decarbonisation and meet customer
needs, we are in regular contact with industrial customers; we encourage
connections to RES for these and wider society and focus on electrifica-
tion; as part of this, with our direct customers, we undertake customer
surveys and hold regular working group meetings about transmission
services and fair operating practices
We ensure a reliable system by lowering the barriers to market access,
unlocking and valorising additional flexibility (including from households,
prosumers and industry), increasing market liquidity, and providing bet-
ter control to customers in terms of their consumption (including facili-
tating energy tracing) (see ‘Market facilitation’, ‘Additional services’); we
connect industry to RES, and facilitate sector coupling (see ‘System plan-
ning’, ‘System operations’)
Consumer-Centric Market Design White
Paper (please see ‘Market facilitation’)
To deliver the necessary infrastructure and secure future growth, we reg-
ularly interact with financial investors through the production of financial
reports, quarterly reports and investor calls; we provide regular contact
with our Investor Relations experts; we also hold events such as our Cap-
ital Markets Day and analyst events for the presentation of our half-year
and full-year results
We have a sound CAPEX plan to deliver the needed infrastructure for
driving the energy transition (see ‘Infrastructure design and construc-
tion’, ‘Corporate functions’); we also secure green Investments to ensure
future growth (see ‘System planning’)
2021 Financial Report
2021 Sustainability Report
Elia Group’s Capital Markets Day 2021
Elia Group EU Taxonomy Case Study
(see ‘Corporate functions’)
Elia Group’s full-year results 2021
Elia Group’s Investor Relations web-
site
To enhance our projects and mitigate the impact of our activities on the
environment, we regularly interact with local communities about our
projects
We enhance our grid project planning and design thanks to external
feedback from local communities which we collect during consultation
sessions, site visits, workshops and meetings; we undertake compensa-
tion measures with local partners (see ‘Infrastructure design and con-
struction’, ‘Grid maintenance’)
Elia’s project website
50Hertz’s project website
50Hertz Dialogmobil (German only)
To drive the energy transition, we regularly communicate in an open and
transparent manner with the general public and the media about our
projects and our research (using in-person, print and digital channels,
including social media, our website(s), brochures and publications, press
conferences and livestreamed events)
We contribute our research and knowledge to public debates related to
the decarbonisation of society
Elia Group website
Elia Group press releases
Elia Group YouTube channel
To further the energy transition, we regularly interact with external
experts when preparing our research and publications (including NGOs
and academics); contribute to research and studies carried out by exter-
nal stakeholders; have partnerships with higher education institutions;
are members of different associations (which facilitate the exchange of
information and best practice); and have signed different voluntary com-
mitments (for example, we are members of the Renewables Grid Initia-
tive, the Roundtable for Europe’s Energy Future [of which our CEO was
appointed as Chair] and the World Energy Council; and are a signatory of
the United Nations Global Compact); we have also established a Scien-
tific Advisory and Project Board in Germany
We share knowledge and analysis about the future electricity grid, sys-
tem and market and work with external experts during the production
of reports and publications (see ‘System planning’, ‘Market facilitation’,
‘Infrastructure design and construction’); we invite stakeholders to par-
ticipate during consultations related to new projects (see ‘Infrastructure
design and construction’)
Scientific Advisory and Project Board
50Hertz’s contribution to the dena
Grid Study III
Renewables Grid Initiative
Roundtable for Europe’s Energy
Future
World Energy Council
UN Global Compact
45
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
Materiality
The annual development of our materiality matrix - which serves
as a guide for strategic decision-making, the setting of priority
areas for the Elia group, the management of our ESG issues and
the transparent reporting we carry out - has been undertaken
since 2019.
Our 2021 matrix (Figure 10) was based on the sources outlined
below.
1.
Results from the 2020 internal survey we carried out regarding
material topics. Managers from across both Elia and 50Hertz
were asked to rate the importance of a number of topics from
their own point of view and from the point of view of the
group’s external stakeholders.
2.
The identification of topics which demonstrate ‘double mate-
riality’ - which cover both the impacts the Elia group has
on the external environment and the impacts the external
environment has on the Elia group. These topics were iden-
tified following the design and rolling out of our ActNow pro-
gramme: in 2021, we identified the SDGs which our five Act-
Now dimensions were most closely aligned with. Once these
were identified, we used the results of an analysis carried out
by S&P Trucost to identify which Goals demonstrated double
materiality.
3.
The results of an external consultation that we undertook
with our stakeholders in Belgium at the end of 2020. Different
stakeholders - who were selected based on their experience
with the energy sector and their different interactions with
our business - were selected for this. They included stakehold-
ers that we regularly engage with, including public authori-
ties, direct clients, suppliers, sectoral federations and envi-
ronmental associations. We ensured that these stakeholders
represented diverse voices in terms of the language(s) they
spoke; the size of the organisations they represented; where
their organisations were based; and whether their organisa-
tions were from the public or private sector.
4.
The results of a series of roundtables organised in 2021 with
different types of German stakeholders (policymakers, indus-
try, non-governmental organisations, academia) to discuss
the most material elements to successfully decarbonise Ger-
man society.
5.
The results of a survey which was carried out following the Elia
group’s first Capital Markets Day in April 2021, which aimed to
collect the views of our financial stakeholders. Note that all
topics displayed in the 2021 matrix were identified as material
by our financial stakeholders in this survey.
6.
The results of studies such as the World Energy Council’s World
Energy Issues Monitor and other recognised frameworks
(such as the Global Reporting Initiative Sector Supplement
for Electric Utilities) were considered to ensure completeness.
In the future, we will continue to monitor international studies
of this kind to make sure our materiality matrices stay up-to-
date.
The X axis and Y axis include three possible values which each
topic is assigned, based on their importance for the group and
our stakeholders (respectively): ‘medium’, ‘high’ and ‘critical’. The
chart above reflects the topics that contribute directly to one or
more of the UN’s SDGs.
Please see the appendix for further information regarding the
assignment of X and Y axis values to each topic.
In future, our annual stakeholders’ day will be used as an oppor
-
tunity to systematically gather external stakeholder feedback on
the importance of each topic, whilst an internal survey of Senior
Management will be used to update the X axis values assigned
to each topic.
Moreover, our Group Sustainability Office (GSO; see the chapter
entitled ‘Corporate bodies and governance’) will from now on
oversee the identification and monitoring of new topics to be
considered for inclusion in our matrices.
FIGURE 10: OUR MATERIALITY MATRIX
Level of importance for stakeholders
CriticalHighMedium
CriticalHigh
Network availability & reliability
Medium
3 2
4
14
6
7
10
11
12
9
1
8
13
15
16
5
The matrix only includes material topics.
All the topics above were assigned an average score of >8/10 in the survey undertaken
after our Capital Markets Day event on 27 April 2021
1
Operational environmental protection
2
Climate-relevant emissions and climate adaptation
3
System and market integration of RES
4
Customer orientation and satisfaction
5
Technology development and access
6
Risk management
7
Employee Health, Safety and wellbeing at work
8
Transparency and openness
9
Cost and process efficiency
10
Legal and regulatory environment
11
Corruption & bribery
12
Real stakeholder dialogue
13
Biodiversity
14
Employment creation and skills development
15
Diversity and equal opportunities
16
Topics which are related to environmental concerns
Topics which are related to social concerns
Topics which are related to governance concerns
Topics which carry the most importance for
our stakeholders and the Group
Level of importance for the business
46
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
#1. System planning –
We design the energy system of the future
The Elia group is responsible for developing the infrastructure of the future which will secure the electricity supply
Europe needs to decarbonise. The foundation for this is the adoption of efficient and demand-oriented measures
that support network optimisation and grid reinforcement and expansion. Each of these measures are identified
based on energy scenarios that we feed into our market and grid simulations. The results of these simulations are
integrated into the Belgian and German grid development plans and the Europe-wide TYNDP. We develop roadmaps
for the realisation of the future energy system beyond 2030 while considering the patterns of change occurring both
in neighbouring electricity systems and in other sectors such as transport, gas, building and industry.
HOW WE DRAW ON AND AFFECT THE CAPITALS:
INPUTS AND OUTCOMES
Employees
& Subcontractors
Our staff carry both crucial technical and market knowledge
and skills. When coupled with their knowledge of the Belgian,
German and European regulatory and market frameworks and
societal and policy changes, this produces one of our unique
selling points: the ability to understand, develop and enhance a
reliable and decarbonised electricity system which supports the
decarbonisation of other sectors in society via sector coupling. In
turn, our system planning activities facilitate the development
of our staff, enabling them to become skilled in developing sce-
narios, running market simulations and energy system model-
ling, anticipating needs and making sound proposals about the
system’s optimisation and development. At the same time, our
staff develop their ability to interact with external stakeholders
throughout our research process - from soliciting their input and
feedback to communicating our findings to them by contextu-
alising our conclusions and articulating their repercussions in a
clear manner.
Intellectual
Our use of past studies and research (published by our own
teams or by external stakeholders) enables us to produce
up-to-date national grid development plans and contribute to
ENTSO-E’s TYNDP, in turn reinforcing the research we produce
which forms part of our organisational intellectual property. Our
inclusive process and approach to defining scenarios and run
-
ning market and grid simulations, the tools and methods we
explore and employ to undertake these and the knowledge we
gain as we develop our published plans represent important
organisational benefits. These allow us to gain a better under-
standing of the system as it stands, of the interdependencies it
shares with other energy sectors, what the system of the future
could look like and what needs to change to establish it.
Social
& Relationship
We adopt a systematic approach to scenario development and
market and grid simulations, which involves maintaining con-
tinuous contact with a wide range of stakeholders (including
other TSOs, DSOs, civil society, energy producers, consumers,
technology suppliers, local authorities, politicians, academia and
experts from other sectors such as industry and the gas, building
and transport sectors). Soliciting their input allows us to incor-
porate external knowledge and information into our planning
and ensures that the studies we produce are cross-sectoral in
nature: our partners provide us with insights into their respec-
tive business areas and plans, including the technologies they
are developing and their future projected needs for electricity
as they decarbonise. Moreover, our associates in academia and
research institutes help us to develop our simulations, including
the methodology and tools we employ. Our early involvement of
stakeholders throughout the process enhances trust, cementing
our relationship with them and providing us with a range of reli-
able sources who can provide us with information, data and con-
structive feedback and additional developments and system fea-
tures to consider. This, in turn, enhances the group’s reputation.
|
Corporate functions
|
Additional services
|
Trusteeship
|
Market facilitation
|
System operations
|
Grid operations and maintenance
|
Infrastructure design and construction
|
System planning
|
47
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
47
STRATEGIC CONTRIBUTION
Deliver the infrastructure of the future &
develop and operate a sustainable power system
The planning and design of a sustainable power system provides clear reasoning for our
delivery of the infrastructure of the future. We carry out our system and grid planning
activities in our home regions of Belgium and Germany as well as at a European level.
Grow beyond current perimeter to deliver societal value
System planning allows us to grow beyond our current perimeter, sharing our plan-
ning and simulation skills and knowledge while identifying grid projects which deliver
societal value outside of our regulated perimeter.
OUR PERFORMANCE
Please see the chapter entitled 'Our performance'
for further information
RISK MANAGEMENT
Most relevant
opportunities
Offshore evolution; Digital transformation;
Relevant role played in the energy transition
leading to a sustainable futurer
Most relevant
risks
Changing/new regulatory conditions; Early
termination of TSO licences; Balancing;
Adequacy; Contingency events and business
continuity disruption; Climate change and the
energy transition
Please see the chapter entitled 'Risk management' for an
explanation of these
CAPEX plan 2022-2026
(4) Elia Group owns 80% of 50Hertz; numbers represent 100% of 50Hertz
€4 billion
Belgium
€5.6 billion
Germany
(4)
|
Corporate functions
|
Additional services
|
Trusteeship
|
Market facilitation
|
System operations
|
Grid operations and maintenance
|
Infrastructure design and construction
|
System planning
|
48
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
Material
topics
Our regulators and respective governments check and approve our grid development plans, which we develop in line with national policy. Our scenarios and conclu-
sions also feed into policymaking: in Germany, for example, they support the government with defining a path for the phasing out of coal, integration of ever-increasing
amounts of renewable energy into the grid and strengthening of connectivity with neighbouring countries, so enabling the country to become climate-neutral by 2045.
In Belgium, our work informs political decisions to phase out nuclear power, unlock additional system flexibility and, where efficient, build additional interconnectors to
facilitate imports of renewable energy from abroad.
The system and market integration of renewable energy and the efficiency and guarantee of system reliability is key in this regard. This translates into ensuring that the
system of the future can be relied upon around the clock, increasingly depending as it will on distributed intermittent renewable energy (which experiences daily, weekly,
and seasonal fluctuations).
1
4
10
Our plans, which are developed following regular and transparent interactions with our stakeholders (including with national regulators and governments), form the
basis of the design and delivery of our own grid in line with the interests of society, and indicate to our shareholders and debt investors where our areas for growth lie and
what our investment needs are.
Factors which have a significant influence on the development of our plans and scenarios include delivering on the goals of the European Green Deal, encouragingthe
widespread electrification of society, and enabling consumers to maximise their benefits from the energy transition by capitalising on their flexibility. Whilst developing
our grid infrastructure in an affordable and cost-efficient way is vital, access to and the deployment of the right technology across the grid are also of great importance.
This includes assets and devices that can assume the role that traditional power plants have played in providing system inertia (and therefore stability) and the develop
-
ment of infrastructure which supports the efficient long-distance transportation of renewable energy across regions and borders to consumption centres.
10
Our plans allow other system operators, energy producers and industrial partners to ensure their plans for development are in line with the system we are developing, by
considering factors such as future capacity and flexibility needs and the speed at which decarbonisation will happen.
Our European neighbours are also able to use our scenarios, plans and conclusions about the nature of the future energy systems in Belgium and Germany in the prepa
-
ration of their own system plans, assessing how developments in our homecountries will influence their own security of supply and how the integrated European energy
market can be encouraged.
Moreover, research institutes and think tanks rely on our contributions to make their analyses more robust. Similarly, suppliers and manufacturers across the energy value
chain are able to identify future technological needs, permitting them to focus on the development of products which will help to fill these.
1
4
5
6
10
Our system plans - which we develop by undertaking regular, inclusive and transparent discussions with our stakeholders - inform members of the public, the media,
public authorities, non-profit organisations and energy professionals about possible ways our energy system could develop, and allows them to understand how aligned
their aspirations are with different pathways for reaching carbon neutrality. Our inclusive and transparent approach to their development enables us to secure public
acceptance for the development of the energy system.
9
13
|
Corporate functions
|
Additional services
|
Trusteeship
|
Market facilitation
|
System operations
|
Grid operations and maintenance
|
Infrastructure design and construction
|
System planning
|
HOW WE DELIVER VALUE
49
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
DECARBONISING INDUSTRY
Throughout 2021, 50Hertz and the Mining,
Chemical and Energy Industrial Union (IG BCE)
organised a series of roundtables with impor-
tant players from industry, politics and the busi-
ness world under the slogan “With new energy
for strong industrial workplaces”. Given that the
industrial sector is responsible for over 30% of
Germany’s primary energy consumption and
45% of the country’s electricity consumption,
facilitating its decarbonisation is crucial.
The roundtables were attended by minister
presidents, ministers, state secretaries, indus
-
trial company directors and representatives
from leading energy and business compa-
nies and think tanks. Participants agreed
that a decisive start to climate-neutral indus-
trial production is now necessary, with the
expansion of renewable energy and associ-
ated grid infrastructure (aided by a suitable
regulatory framework which enables sec
-
tor coupling) being indispensable for this.
50Hertz and the IG BCE published the results
of the roundtable discussions and presented
them to representatives from politics and busi
-
ness in the autumn of 2021.
Given that Europe has
set more ambitious
climate protection
targets, new and
unusual alliances are
needed to advance
the decarbonisation
of industry and the
economy.
STEFAN KAPFERER,
CEO OF 50HERTZ
ABOVE:
THE FIRST ROUNDTABLE 
50HERTZ AND THE IG BCE.
RIGHT:
50HERTZ CEO STEFAN KAPFE
RER AND IG BCE CHAIRMAN MICHAEL
VASSILIADIS IN CONVERSATION WITH
KERSTIN MARIA RIPPEL, 50HERTZ’S
HEAD OF COMMUNICATIONS & PO
LICY, CONCLUDING THE SERIES OF
ROUNDTABLES.
TOGETHER. FASTER. CLIMATENEUTRAL
In October 2021, 50Hertz launched a new initia-
tive entitled ‘Together. Faster. Climate-neutral.’,
which it developed alongside a range of stake-
holders from science, the business world and
NGOs. Under this slogan, 50Hertz published a
catalogue of pragmatic proposals for advanc-
ing the expansion of renewables, the electricity
grid and sector coupling.
These proposals are aimed at helping the new
German Federal Government to accelerate the
energy transition and pave the way to climate
neutrality – which the 2021 Climate Protection
Act aims to ensure Germany will achieve by
2045.
In its coalition agreement, the new Govern
-
ment also stressed that 80% of Germany’s elec-
tricity demand needs to be covered by renewa-
ble energy by 2030.
Germany wants to be climate-neutral by 2045. This can
only be achieved if many players pull together - and we
must all work with the same goals in mind. As part of our
‘Together. Faster. Climate-neutral.’ initiative, very different
stakeholders have come together and have agreed on a
whole bundle of measures. Germany’s transformation and
the establishment of a climate-neutral economy will only
succeed if citizens are given a voice in discussions and are
given the opportunity to participate in value creation and
growth.
STEFAN KAPFERER, CEO OF 50HERTZ
|
Corporate functions
|
Additional services
|
Trusteeship
|
Market facilitation
|
System operations
|
Grid operations and maintenance
|
Infrastructure design and construction
|
System planning
|
50
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
USING GREEN ELECTRICITY TO SUPPLY HEAT
Throughout 2021, 50Hertz built a number of
power-to-heat (PtH) units - which convert
green electricity into heat - across its grid area.
In September, construction of one of the larg
-
est PtH plants in Germany was officially started
in the town of Wedel (near Hamburg). The unit
will have a capacity of 80 MW and will enable
27,000 families to heat their homes through
the use of excess wind energy from the winter
period of 2022-23 onwards.
50Hertz also commissioned three PtH units as
the year came to a close. Two of these were in
the state of Mecklenburg-Western Pomerania:
the first, a 2 MW unit in Parchim, serves 3,000
households; the second, which was jointly com
-
missioned by 50Hertz and the German utility
company SWS Energie GmbH, is a 6.5 MW unit
which converts wind energy that cannot be
connected to the grid (due to congestion) into
green district heating. The third unit, commis
-
sioned in November, provides 7,000 flats in the
large housing estate of Mümmelmannsberg (in
Hamburg) with heat, whilst also being available
for use by 50Hertz to ensure grid stability.
LEFT:
THE PTH PLANT IN PARCHIM IS OFFICIALLY
OPENED BY DIRK BIERMANN 50HERTZ CHIEF MAR
KETS AND SYSTEM OPERATIONS OFFICER, DIRK
KEMPKE MANAGING DIRECTOR OF STADTWERKE
PARCHIM AND MAYOR DIRK FLÖRKE.
RIGHT:
OFFICIAL LAUNCH OF THE CONSTRUCTION
WORKS FOR THE P2H PLANT IN WEDEL WITH
FROM LEFT TO RIGHT: CHRISTIAN HEINE, WÄRME
HAMBURG MANAGING DIRECTOR; DR. FRANK
GOLLETZ, CHIEF TECHNICAL OFFICER OF 50HERTZ;
JENS KERSTAN, HAMBURG’S SENATOR FOR THE
ENVIRONMENT; AND DR. MICHAEL BECKEREIT,
TECHNICAL MANAGING DIRECTOR OF WÄRME
HAMBURG.
PARTNERSHIP WITH BESIX TO GIVE SMART BUILDINGS AN ACTIVE
ROLE IN THE ELECTRICITY SYSTEM
Elia is working with BESIX, the international
construction company, to make buildings
more energy-efficient and energy-smart.
Smart buildings are becoming increasingly rel-
evant, since they enable flexible energy man-
agement: their energy consumption can be
matched to the variable generation of energy
produced from renewable sources.
Buildings account for 40% of Belgium’s energy
consumption. The construction and real estate
sectors are not yet widely digitalised. However,
as technology becomes increasingly accessi
-
ble, digitalisation and automation in these sec-
tors will grow, so facilitating the role that smart
buildings will be able to play in the electricity
system.
By working with external partners and using
our combined expertise, we can test applica
-
tions that will later be used in private homes.
|
Corporate functions
|
Additional services
|
Trusteeship
|
Market facilitation
|
System operations
|
Grid operations and maintenance
|
Infrastructure design and construction
|
System planning
|
51
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
ROADMAP TO NET ZERO: THE GROUP’S VISION ON THE
ENERGY SYSTEM IN 2050
In a vision paper entitled ‘Roadmap to
net zero’, which the Elia group pub-
lished in November 2021, the group
sets out key insights and describes
key areas for Belgium, Germany and
Europe to focus on in order to ensure
they can reach net zero by 2050.
Launched during a livestreamed event
with a live audience, the paper takes
an in-depth look at the continent’s
energy balance, flexibility and security
of supply.
The paper calls for an efficient use of
Europe’s renewable energy potential,
a focus on international partnerships
and maximum electrification. It high-
lights that an investment framework
that is capable of tripling the speed
of renewable energy expansion is
needed and also explores the ‘lock-in
effects’ that could make decarbonisa-
tion less efficient.
WATCH A
RECORDING
OF THE
LIVESTREAMED
EVENT HERE
|
Corporate functions
|
Additional services
|
Trusteeship
|
Market facilitation
|
System operations
|
Grid operations and maintenance
|
Infrastructure design and construction
|
System planning
|
52
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
52
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
The ‘Roadmap to net zero’ study addresses the
right issues regarding innovation and digitali-
sation. It also addresses some very important
questions about using green molecules. We
do need molecules quite a bit, actually. We
don’t yet know where we will get them from,
so it is very important to optimise the system
in a way that we don’t try to use them for the
wrong purpose.
Andreas Kuhlmann, CEO of dena
What we now need to do in Germany, Bel-
gium and all over Europe is to triple wind
and solar installation rates and increase
electrification. The 2020s will be about the
expansion of renewables and direct electri-
fication.
Patrick Graichen,
Executive Director of Agora Energiewende
Collaboration is absolutely necessary
across borders and sectors. The Elia group
highlights the importance of international
collaboration and international exchange. I
highly appreciate that and look forward to
further collaborations with them.
Hilde Tonne, CEO Statnett
One of the key challenges that we are facing is adding very
big amounts of generation capacity to the system over
the next decade or two. We need to think in new ways to
make that happen at a fast pace. We need to review the
permitting rules that are currently in place and are slowing
down deployment. We need to take a fresh look at how to
involve local communities.
Kristian Ruby, Secretary General of Eurelectric
What I like about this study is that it explores two different
scenarios. One scenario involves widespread electrification
and the other involves a strong use of green molecules.
What is important for me to stress is that under both of
these scenarios, a rapid increase in renewable energy is
key. Direct electrification and the use of green molecules
will encourage a fast and high-capacity increase in the use
of renewables across Europe.
Kathrin Goldammer,
Managing Director of the Reiner Lemoine Institute
Stakeholder
reactions to
the study
|
Corporate functions
|
Additional services
|
Trusteeship
|
Market facilitation
|
System operations
|
Grid operations and maintenance
|
Infrastructure design and construction
|
System planning
|
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
53
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
#2. Infrastructure design and construction –
We deliver the appropriate infrastructure
Based on our system analyses, we design and build state-of-the-art assets which form a
grid that will allow the integration of the renewable energy that our home countries (and
so, Europe) need for decarbonisation. We prioritise infrastructure projects by considering
the current status of our assets and future needs. We undertake regular surveys, analyses
and discussions with local and regional stakeholders throughout the project design and
construction phases to identify the best possible solutions related to technology, routing
and integration into the surrounding landscape. We have solid project governance and
project management structures in place which ensure the health and safety of our staff
and subcontractors and help to anticipate any possible risks or delays, whilst enabling us
to deliver projects which are on time, within budget and of a high quality.
HOW WE DRAW ON AND AFFECT THE CAPITALS:
INPUTS AND OUTCOMES
Financial
We depend on financial investments to upgrade and build our
grid and assets. Once our infrastructure has been built and is in
operation, our investors receive a return on their financial back-
ing of the group’s ambition to drive the decarbonisation and
electrification of society and build a sustainable future.
Assets
Our design and construction activities (which involve the use
of tools, equipment and infrastructure) enable the constant
improvement of our grid and assets to make them fit for meet-
ing the new needs brought about by the energy transition: they
are enhanced and rendered more resilient, both so that they
can integrate rapidly growing amounts of renewable energy
into the system as conventional thermal power sources are
phased out and so that they become more robust in the face of
climate change.
Employees
& Subcontractors
Our skilled workforce, alongside the subcontractors we hire,
have technical expertise and a sound knowledge of project man-
agement, risk management, health and safety procedures and
the legal requirements that our assets should meet. Each pro-
ject we undertake enables the development of our staff, allow-
ing them to refine their technical knowledge and approach to
project and risk management. The group’s employment of sub-
contractors further encourages this, facilitating the exchange of
new skills and best practice. This knowledge and learning can
be shared across teams, departments, and Elia Group’s sub-
sidiaries, encouraging us to continuously adjust our processes
and protocols and adopt innovative approaches to infrastruc-
ture design and construction. In turn, this allows us to strive for
organisational maturity in our handling of project inherent risks
- providing the group with an excellent foundation to continue
developing our activities outside of our home markets.
Social
& Relationship
We undertake active discussions with a range of stakeholders
throughout the design and construction of our grid and assets,
especially with DSOs, producers and our direct consumers; we
also take care to incorporate feedback from local communi-
ties into our approach to enhance our activities. The delivery
of our infrastructure builds trust with wider society, since we
strengthen our ties with different societal actors through regu-
lar and transparent dialogue and fulfil our commitment to drive
forward the energy transition.
Natural
Our infrastructure projects affect land, landscapes and biodiver-
sity. The compensation measures and joint projects we under-
take with local environmental partners contribute to the restora-
tion of land and encouragement of ecological development. We
are also investigating new technologies to limit the impact of
our assets on the environment; examples include the reduction
of the use of SF
6
in our substations.
Intellectual
At an organisational level, our TSO licences in Belgium and Ger-
many give us the mandate to develop the grid in both countries,
whilst our processes ensure quality and uniformity in the way we
run infrastructure projects; the health and safety certifications
held by Elia and 50Hertz, for example, provide a useful measure
of our current practices. Our organisational know-how increases
as we work on projects, since they allow us to continuously refine
our approaches to the design and construction of our infrastruc-
ture.
|
Corporate functions
|
Additional services
|
Trusteeship
|
Market facilitation
|
System operations
|
Grid operations and maintenance
|
Infrastructure design and construction
|
System planning
|
54
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
STRATEGIC CONTRIBUTION
Deliver the infrastructure of the future &
develop and operate a sustainable power system
Our infrastructure design and construction activities allow us to fulfil the delivery of
the infrastructure of the future. In this pillar, we carry out these activities in our home
countries of Belgium and Germany.
Grow beyond current perimeter to deliver societal value
We have the ability to grow beyond our current perimeter to deliver societal value and
carry out these activities in other markets which are further afield through EGI, our con-
sultancy that also provides grid design studies for its clients, and will continue to do so
in the future through WindGrid, our new offshore entity.
OUR PERFORMANCE
Please see the chapter entitled 'Our performance'
for further information
RISK MANAGEMENT
Most relevant
opportunities
Offshore evolution; Digital transformation; Rel-
evant role played in the energy transition lead-
ing to a sustainable future; CAPEX realisation
Most relevant
risks
The COVID-19 pandemic; Changing/new
regulatory conditions; Early termination of TSO
licences; Contingency events and business
continuity disruption; Climate change and
the energy transition; Permitting; Suppliers;
Health and safety accidents
Please see the chapter entitled 'Risk management' for an
explanation of these
€376.6 m
Belgium
363 km
Lines commissioned
68
# Public info-dialogue sessions
related to grid projects
€850.9 m
Germany
99.92%
EU Taxonomy eligible CAPEX
Grid investments 2021
|
Corporate functions
|
Additional services
|
Trusteeship
|
Market facilitation
|
System operations
|
Grid operations and maintenance
|
Infrastructure design and construction
|
System planning
|
55
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
HOW WE DELIVER VALUE
Material
topics
Our construction projects connect production and consumption areas together whilst directly facilitating the decarbonisation of society, and are therefore aligned with
the aspirations of the general public, policymakers, regulators, industry, electricity producers and non-profit organisations which are working to achieve net zero. Our
projects also foster the integration of the European grid and energy market, further supporting the energy transition: the interconnectors we build with neighbouring
system operators enable the sharing of renewable energy across borders in an economically and ecologically efficient way.
A number of significant considerations arise as we design and construct our onshore and offshore infrastructure (which includes overhead lines, underground cables
and substations). We aim to deliver the infrastructure and assets that are both the most efficient and suitable for widespread electrification and decarbonisation. Where
a new need is identified, we seek to optimise and upgrade our existing infrastructure wherever possible first, before exploring reinforcements to our grid or adding new
parts to it. Cost, process efficiency and ensuring high quality are therefore key points of concern, alongside ensuring that the technology which is most suited to the
integration of high amounts of renewable energy is employed in a way that impacts the environment as little as possible.
3
4
7
10
11
We inform suppliers and manufacturers across the energy value chain of our technological and equipment-related needs, meaning they can then focus on producing
leading solutions for these - we are therefore contributing to the production of innovative tools and processes.
6
Ensuring the health of our employees and subcontractors as they work on our projects is essential, as reflected in our procedures. We create a safe work-
ing environment for our employees and subcontractors as our site work involves a high amount of risk. We update our safety protocols on a regular basis, adopt-
ing new standards and including feedback from staff as part of this, and ensure all our staff and subcontractors are aware of the measures and policies in place.
8
4
Whilst our design and construction activities can have impacts on local landscapes, fauna and flora, we endeavour to avoid or minimise the impact they have; where this
is not possible, we undertake compensation measures, often along with local non-profits or NGOs, which seek to redress the harm caused and encourage biodiversity.
In this vein, to ensure value can be preserved, we offer transparency and openness to our stakeholders from the very start of our infrastructure projects, inviting local
communities to take part in meaningful dialogue about their design, consequences and possible alternatives; we therefore use their feedback to develop projects which
are best suited to serving the interest of society, contributing to the restoration of land and encouraging ecological development.
9
13
14
|
Corporate functions
|
Additional services
|
Trusteeship
|
Market facilitation
|
System operations
|
Grid operations and maintenance
|
Infrastructure design and construction
|
System planning
|
56
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
OSTWIND 2 CABLING LAID
Good progress on the cabling for the Ostwind 2
project was made throughout 2021; this cabling
will connect two wind farms - Arcadis Ost 1 and
Baltic Eagle, which will generate a combined
output of 750 MW - to the German grid. 170 km
of 220 kV subsea cabling was successfully laid,
as were the land cables running between the
landing point (where the subsea cabling meets
the mainland) and the onshore substation of
Lubmin. To limit the environmental impact of
the latter, underground protective pipes were
installed using horizontal drilling.
Work on the Arcadis Ost 1 offshore platform
also progressed well. The offshore transforma
-
tion platform was transported from Gdansk
(Poland) to a shipyard in Aalborg (Denmark);
assembly of the electrical equipment has now
started there. The offshore installation phase
will start in 2022.
Five years ago, we announced
that we would complete the
two cable systems for Ostwind
2 in 2021. Today we can say
that we have delivered on our
promise: the project is right
on schedule. Given that many
projects are being undertaken
in the Baltic Sea in order
to transform it into an area
where offshore wind can be
generated in large amounts,
we set ourselves an ambitious
target in 2016. The fact that we
have now reached this crucial
milestone as planned shows
that 50Hertz can be relied
upon.
STEFAN KAPFERER, CEO OF 50HERTZ
50HERTZ TO OPERATE FIRST OFFSHORE WIND FARM PLATFORM
The Ostwind 3 project, which is still in its plan-
ning phase, will involve 50Hertz constructing
and operating both the grid connection and
transformer platform for a wind farm in the
Baltic Sea. The wind farm, which will be built
by Iberdrola, will be located to the north-east
of Rügen Island and will have an output of 300
MW: enough to supply 260,000 households
with renewable electricity.
The Ostwind 3 project team presented their
plans for the project to members of the pub
-
lic in September, focusing on the new substa-
tion which will be built near Greifswald and the
onshore section of the cable. The team also
developed a new information hub for local cit-
izens to use; this offers local people the oppor-
tunity to submit feedback about the trans-
former station and land and sea routes that
the cabling is due to run across. This feedback
will be evaluated by 50Hertz and may also be
included in the documents they submit to the
authorities when trying to secure planning
approval for the project.
|
Corporate functions
|
Additional services
|
Trusteeship
|
Market facilitation
|
System operations
|
Grid operations and maintenance
|
Infrastructure design and construction
|
System planning
|
57
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
SUEDOSTLINK AND SUEDOSTLINK+ CONNECTIONS
In 2021, Siemens was awarded the contracts for
building the converter systems which will link
both ends of the SuedOstLink to the rest of the
German grid. The connection will be key for
transporting green electricity from the windy
areas of northern Germany (where 50Hertz
operates) to areas of high consumption in the
south of the country (where TenneT operates).
The DC connection will therefore link Wolmirst-
edt near Magdeburg in Saxony-Anhalt to Isar
near Landshut in Bavaria, stretching across a
distance of 540 km. Moreover, a second con-
nection, SuedOstLink+, will transport electric-
ity from Klein Rogahn (located to the west of
Schwerin) to Isar, meeting the SuedOstLink in
the district of Börde in Saxony-Anhalt.
50Hertz carried out an information campaign
about the two connections throughout 2021:
the 50Hertz DialogMobil (or dialogue van)
stopped to inform local stakeholders about
their plans at 16 locations in the areas between
Thuringia, Saxony and Bavaria.
THE DIALOGMOBIL MAKES A
STOP AT THE WOLMIRSTEDT
SUBSTATION.
PLANNING APPROVAL FINALISED FOR HANSA POWERBRIDGE
In July, final approval for the land section of
Hansa PowerBridge, a 700 MW direct current
interconnector that will link Germany and Swe-
den together, was secured from the authorities.
50Hertz and its Swedish counterpart Svenska
kraftnät have been working on the project since
2015. The interconnector, which will run across
a distance of 300 kilometres and is due to be
commissioned in 2026, will link Güstrow in the
German state of Mecklenburg-Western Pomer
-
ania with Hurva in southern Sweden. This will
enable Germany to use the large storage vol-
umes in Scandinavia when necessary and allow
Sweden to access the European energy system,
which is characterised by a high proportion of
wind and solar power. The investment costs for
the project, which have been estimated at over
€600 million, will be borne by both TSOs.
|
Corporate functions
|
Additional services
|
Trusteeship
|
Market facilitation
|
System operations
|
Grid operations and maintenance
|
Infrastructure design and construction
|
System planning
|
SuedOstLink
Extension
SuedOstLink
58
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
50HERTZ AND TENNET TO BUILD OFFSHORE CONNECTION
IN GERMAN NORTH SEA
50Hertz and its Dutch-German counterpart
TenneT announced the launch of a joint pro-
ject which will facilitate the transportation of
wind power from the North Sea to the Ger-
man power grid. The two companies signed a
cooperation agreement which relates to the
realisation of a so-called ‘multi-terminal hub’ in
the area of Heide (Schleswig-Holstein) and an
onshore 200 kilometre-long DC cable, which
will run from the hub to Mecklenburg-Vorpom-
mern (in the area of Kleine Rogahn). In addition
to this onshore cable, the multi-terminal hub
will be linked to two other offshore DC cables
and will also have a converter connected to it -
this will convert DC into AC, which will then be
made available to the surrounding region for
onshore hydrogen electrolysers which are due
to be built there in future.
The project is included in Germany’s Grid Devel
-
opment Plan 2035, which was approved by the
BNetzA. The multi-terminal hub approach is
truly innovative: until now, DC connections at
sea and on land have been realised as point-to-
point connections only. However, the new mul
-
ti-terminal hub will bring together several DC
connections, so reducing costs and the use of
land. The approach will also help to make load
flows more flexible.
BERTIKOWPASEWALK OVERHEAD LINE APPROVED
In October, the BNetzA approved plans for a
new (replacement) 380 kV overhead line which
will run between the substations of Bertikow
(in Brandenburg) and Pasewalk (in Mecklen-
burg-Western Pomerania). This was the first
time the BNetzA had directly approved such
a project. The replacement line, which will be
able to transport more electricity than the cur-
rent one, is due to be switched on in 2023. As
part of the project, the Pasewalk transformer
station was reinforced at the beginning of 2021.
THE APPROVAL NOTICE IS HANDED
OVER TO 50HERTZ AT THE BNETZA IN
BONN. MATTHIAS OTTE HEAD OF THE
BNETZA GRID EXPANSION DEPART
MENT, DR BODO HERRMANN HEAD
OF THE BNETZA GRID EXPANSION
UNIT, ELKE KORN PROJECT MANA
GER AT 50HERTZ AND DR. FRANK
GOLLETZ CHIEF TECHNICAL OFFICER
AT 50HERTZ.
|
Corporate functions
|
Additional services
|
Trusteeship
|
Market facilitation
|
System operations
|
Grid operations and maintenance
|
Infrastructure design and construction
|
System planning
|
59
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
PYLON UNBENDING PROJECT
Given that electricity pylons are often at risk
of being damaged by farmers or agricultural
workers, the group’s Innovation Team has been
working on developing a device which will help
to quickly and efficiently repair pylons which
have been bent out of shape.
Usually, the time spent on repairing pylons
which have been damaged by agricultural
activities can last up to three days. Addition
-
ally, if a deformed pylon is embedded in a con-
crete foot, the latter often has to be broken and
recast. The new device, which is being devel-
oped by the Innovation Team and the Open-
Hub (part of the University of Louvain), will
allow pylons to be unbent without the need for
them to be dismantled and without the need
to use a crane to reach them. The new device is
due to be launched in 2022.
HIGHPERFORMANCE STEEL
By 2030, the transmission capacity of the Bel-
gian high-voltage grid will have doubled due
to the massive increase in RES it will encom-
pass. To cope with this challenge, and ensure
that the grid can withstand higher loads, it
will need to be significantly upgraded and
expanded. This led Elia, the University of Liège
and ArcelorMittal to join forces and use a com-
bination of analytical, numerical and experi-
mental approaches to develop design rules for
using stronger S460 steel in the construction of
new pylons
and the reinforcement of existing
pylons
.
The use of high-performance steel in the con-
struction
and reinforcement
of pylons will fall
within the limits allowed by existing standards
and regulations and will not generate any addi-
tional negative visual impacts on the surround-
ing landscape. The new family of S460 steel
pylons will be able to safely carry the electricity
lines that will be capable of meeting the energy
needs of the future.
The project, known as the ‘Saeftinghedok pro
-
ject’, will be the first project of its kind to use
S460 steel. The project anticipates the con-
struction of the highest pylons in Europe,
which may be built across the proposed Saeft-
inghedok dock in the port of Antwerp.
PHASESHIFTING
TRANSFORMERS INSTALLED
IN HAMBURG
At the end of 2021, four phase-shifting trans-
formers (PSTs) were commissioned by 50Hertz
in the Hamburg East substation, which acts
as a key transition point between the 50Hertz
and TenneT grids. These PSTs enable the flow of
electricity in either direction to be better con-
trolled, so allowing congestion management
costs to be avoided.
TRANSFORMER STATION OPERATOR
TOMKE SCHUSTER IN FRONT OF THE
NEW PHASESHIFTING TRANSFOR
MERS BEFORE INSTALLATION IN
HAMBURG.
|
Corporate functions
|
Additional services
|
Trusteeship
|
Market facilitation
|
System operations
|
Grid operations and maintenance
|
Infrastructure design and construction
|
System planning
|
60
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
TRITON LINK INTERCONNECTOR TO BE BUILT
Elia and the Danish TSO Energinet signed a new cooperation
agreement to continue collaborating on the implementation of
what could become a world first: a subsea connection between
two artificial energy islands. The Triton Link project will facilitate
the exchange of power between the two countries and at the
same time transport electricity from offshore wind farms to the
mainland using hybrid technology. The new hybrid interconnec-
tor will be an innovative and challenging project, both because
of the distance it will cover (more than 600 km) and the technol-
ogy involved.
We need to move beyond the simple point-
to-point grid connection model we’ve had
so far. We need more hubs, platforms or
artificial islands such as the one that Elia will
build in the middle of the Princess Elizabeth
zone in Belgium. This will require very close
collaboration between TSOs, governments and
offshore wind farm developers.
GILES DICKSON, CEO OF WINDEUROPE
Triton Link will be an important first that will
determine the further development of the
European offshore electricity grid. For the first
time ever, two artificial energy islands will be
electrically connected via a cable that not only
exchanges power between the two countries
but also connects to large-scale wind farms in
the remote North Sea. This technological feat
will enable the Elia group, Energinet and all
the companies involved to gain an innovative
global lead.
CHRIS PEETERS, CEO OF ELIA GROUP
|
Corporate functions
|
Additional services
|
Trusteeship
|
Market facilitation
|
System operations
|
Grid operations and maintenance
|
Infrastructure design and construction
|
System planning
|
THE NEW COOPERATION AGREEMENTS BETWEEN THE ELIA GROUP AND ENERGINET WERE SIGNED
DURING THE ANNUAL CONFERENCE HELD BY WINDEUROPE IN COPENHAGEN IN NOVEMBER 2021.
MOREOVER, A PARTNERSHIP AGREEMENT WAS ALSO SIGNED BY THE BELGIAN AND DANISH ENERGY
MINISTERS, TINNE VAN DER STRAETEN AND DAN JØRGENSEN RESPECTIVELY.
61
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
SECOND HYBRID INTERCONNECTOR IN THE BALTIC SEA
50Hertz also signed a collaboration agreement
with Energinet in preparation for the building
of a second hybrid interconnector in the Baltic
Sea: the Bornholm Energy Island project. As
part of the first phase of the project, an HVDC
interconnection will be built between both
countries, stretching over a total length of 400
kilometres. From Bornholm Island, the subsea
cable will run west towards the Danish island
of Zealand and south-west towards the coast of
Mecklenburg-Western Pomerania in Germany.
As part of the second phase of the project, Dan-
ish wind farms being developed off the coast of
Bornholm Island (which have a total capacity of
2,000 MW) will be connected to the intercon-
nector using hybrid technology.
The project builds on the successful cooperation
between 50Hertz and Energinet that led to
the construction of the world’s first hybrid
interconnector in 2020: the Kriegers Flak
Combined Grid Solution. The energy hub on
Bornholm Island could lay the foundation for an
offshore power grid in the Baltic Sea.
STEFAN KAPFERER, CEO OF 50HERTZ
At Energinet, we are thrilled and enthusiastic
about cooperating with the Elia group on
what might become the world’s first energy
islands in the North and Baltic Seas. Personally,
I cannot stress enough how important these
are at this moment in Europe’s history. Having
countries come together as part of international
collaborations like ours and joining together
through a common dedication to paving the
way for new technologies and new solutions is
exciting. I am confident that we will enjoy a very
fruitful partnership in the years to come.
THOMAS EGEBO, CEO OF ENERGINET
|
Corporate functions
|
Additional services
|
Trusteeship
|
Market facilitation
|
System operations
|
Grid operations and maintenance
|
Infrastructure design and construction
|
System planning
|
62
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
GREEN LIGHT GIVEN FOR BELGIUM’S FIRST ENERGY ISLAND
On 23 December, Elia welcomed the Federal
Council of Ministers’ approval for the planned
extension of the Belgian offshore grid and the
integration of the future Princess Elisabeth
wind farm zone. This approval confirmed that
energy islands are the most appropriate solu-
tion for integrating additional offshore wind
energy into the system and bolsters Elia’s
efforts to ensure Belgium establishes strong
connections with other countries. In 2022, Elia
will continue analysing its plans for the artificial
island and will begin the tendering process for
its construction.
In October 2021, the Belgian government
announced it would expand the offshore wind
capacity of the Princess Elisabeth zone (which
will be Belgium’s second offshore wind zone)
from 1.75 GW to 3.5 GW. Belgium’s first offshore
wind zone, which has a capacity of 2.26 GW,
was completed in 2020.
STRENGTHENING THE BELGIAN BACKBONE
To strengthen Belgium’s electricity backbone,
several major infrastructure works were under-
taken along both its north-south and east-west
axes. Since the works were carried out on exist-
ing high-voltage lines, this required appropri-
ate planning to avoid compromising the coun-
try’s security of supply.
Of particular importance were the works car
-
ried out on the high-voltage lines of Zand-
hoven-Kinrooi and Avelgem-Avelin (France).
These are being equipped with a new type of
conductor (HTLS technology) that can trans
-
port more power without impacting the envi-
ronment.
These projects will allow Elia to better distrib
-
ute and transmit increased electricity flows
throughout the country and to its neighbour-
ing countries. The works are being undertaken
in phases across several years, with the con-
struction site shifting along the routes as each
phase of work is completed.
This energy island is an export
product in and of itself, because it
showcases our engineering skills
and those of Elia’s staff, who have
the guts and the talent to under-
take such a magnificent project.
Thanks to Elia, Belgium can be at
the forefront of the sustainable
revolution..
Alexander De Croo,
Prime Minister of Belgium
We will turn the North Sea into
one big, sustainable power plant.
We will position Belgium in the
middle of the energy transition
as the connecting country for
new energy factors, including
hydrogen. If we want to make the
energy transition a success, a sus-
tainable investment of one trillion
euros is needed over the next few
decades. Elia Group is a partner
who has proven to be visionary
and competent.
Tinne Van der Straeten,
Belgian Federal Minister of Energy
|
Corporate functions
|
Additional services
|
Trusteeship
|
Market facilitation
|
System operations
|
Grid operations and maintenance
|
Infrastructure design and construction
|
System planning
|
63
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
Assets
In carrying out our activities (using tools,
equipment and infrastructure), our grid and
assets are enhanced, optimised and regularly
maintained - ensuring that their availability is
maximised and that they are highly available,
more resilient and efficient, and have longer
life cycles.
Employees &
Subcontractors
The skills and knowledge of our staff are key
for monitoring the grid’s status and the run-
ning of planned and unplanned interventions
in a safe and effective manner, so ensuring
the highest possible level of grid availability at
all moments. As they carry out their tasks and
daily activities, their skills are expanded and
developed.
Intellectual
At an organisational level, our TSO licences in
Belgium and Germany give us the mandate to
operate and maintain the grid, whilst our poli-
cies and processes ensure staff approach their
work in a systematic manner. We keep refining
and enhancing these operational processes,
maintenance activities and incident response
times, so increasing our organisational know-
how and reducing our costs and impact on the
environment.
We operate the transmission grid in a safe, cost-effective, consumer-friendly and environmentally
sound manner. Our regional centres play an important role in securing the highest possible level of
grid availability for energy consumers through the maintenance of our overhead lines, underground
cables and substations. These tasks are becoming increasingly difficult, since the number and type
of assets linked to the expansion of our grid, the intermittent nature of RES infeed and volatility of
electricity flows are increasing. Innovative solutions such as the adoption of predictive maintenance
are key to enabling our employees to keep up with these developments whilst ensuring that their
work can be undertaken in a safe and effective way.
HOW WE DRAW ON AND AFFECT THE CAPITALS: INPUTS AND OUTCOMES
Social &
Relationship
We rely on close relationships with local con-
tractors to ensure sound maintenance prac-
tices are respected and quick response times
are secured to safeguard grid availability.
We therefore forge close relationships with
national, regional and local authorities and
communities to keep them informed when
impact on the environment or incidents which
cause disruption to the grid occur.
Natural
Our grid assets have impacts on the local envi-
ronment; examples include the use of oil or SF
6
gas in our substations; the fact that our over-
head lines can pose a danger to birds; the effect
our underground cables have on the land and
soil; and the noise and emissions our assets can
cause and release. However, we address these
through mitigation and compensation meas-
ures, often working alongside local partners to
ensure effectiveness.
#3. Grid operations and maintenance –
We operate safe and reliable infrastructure
|
Corporate functions
|
Additional services
|
Trusteeship
|
Market facilitation
|
System operations
|
Grid operations and maintenance
|
Infrastructure design and construction
|
System planning
|
64
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
STRATEGIC CONTRIBUTION
Deliver the infrastructure of the future &
develop and operate a sustainable power system
The operation and maintenance of our grid is directly reflected in our first pillar of
growth: we strive to operate a sustainable power system in a safe and cost-effective
manner to the benefit of our consumers whilst minimising our impact on the environ-
ment.
Grow beyond current perimeter to deliver societal value
We can use our knowledge from our core business in order to provide these services
also outside our core business, especially in operating and maintaining offshore grids
outside our home markets in Belgium and Germany.
OUR PERFORMANCE
Please see the chapter entitled 'Our performance'
for further information
RISK MANAGEMENT
Most relevant
opportunities
Digital transformation; Relevant role played in
the energy transition leading to a sustainable
future
Most relevant
risks
The COVID-19 pandemic; Early termination of
TSO licences; Contingency events and busi-
ness continuity disruption; Climate change
and the energy transition; Suppliers; Health
and safety accidents
Please see the chapter entitled 'Risk management'
for an explanation of these
€10.3 billion
Regulatory Asset Base
(5)
100%
EU Taxonomy eligible OPEX
0.12%
SF
6
leakage rate
79%
Forest corridors
managed ecologically
60%
HV lines critical to birds equipped
with bird markers
(5) Includes 80% of 50Hertz; does not include Nemo Link
|
Corporate functions
|
Additional services
|
Trusteeship
|
Market facilitation
|
System operations
|
Grid operations and maintenance
|
Infrastructure design and construction
|
System planning
|
65
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
Material
topics
Energy producers, electricity consumers and DSOs benefit from our near-constant
grid availability and reliability, regular high-quality maintenance activities and clear
and fast action on behalf of our staff should a more serious issue arise. We optimise
the use of our assets - reducing inefficiencies and making them and our grid resil-
ient so that they can withstand extreme weather events - whilst also addressing
wear and tear.
The use of enhanced risk management processes (and clear health and safety and
incident management procedures) optimises the operation of our grid and reduces
possible incidents and potential safety hazards during maintenance activities. Such
activities are undertaken by our regional centre staff. As shown in the map, they are
based in 6 centres across Belgium and 10 sites in Germany (these 10 sites are cov
-
ered by five onshore teams and one offshore team). They must be on hand around
the clock both to monitor assets and quickly intervene if needed.
Administrative centres
Service centres
The operation and maintenance of our grid is becoming more demanding: the
number and type of assets we operate and maintain is rising and the way they are
used is becoming increasingly dynamic, given the intermittent nature of wind and
solar power, which are the main renewable sources of electricity.
1
3
7
We address the environmental impacts our (ageing) infrastructure has on natural habitats in terms of emissions or leaks, which can affect the surrounding land-
scape and nature (and can trigger an associated need for broader maintenance works). We address these impacts through mitigation and compensation meas-
ures, which we often undertake by working alongside local communities and non-profits that have an environmental focus. Examples include the installation
of bird markers along our lines, ecological corridor management around our grid in forested areas, and the replacement of SF
6
with alternatives in our substations.
Our open and transparent communication with national, regional and local communities about disruptions to the grid and works is essential for maintaining the trust
we have built over the years. This is also crucial for being able to realise new infrastructure projects in these regions.
2
9
13
14
We adopt innovative tools and practices, such as the digitalisation of maintenance processes or the use of artificial intelligence in predictive maintenance (which means
we can better anticipate when our assets might be experiencing wear and tear) to help further optimise our asset use, increase cost and operational efficiency and
decrease environmental impacts - and ensure our staff are able to work in increasingly safe environments.
1
6
8
10
15
HOW WE DELIVER VALUE
|
Corporate functions
|
Additional services
|
Trusteeship
|
Market facilitation
|
System operations
|
Grid operations and maintenance
|
Infrastructure design and construction
|
System planning
|
66
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
USING MIXED REALITY FOR MAINTENANCE WORK
In 2021, the maintenance team for the Modu-
lar Offshore Grid (MOG) in the North Sea began
using mixed reality (MR) smart glasses to
improve their maintenance work. The MOG, a
switching platform which transports electricity
from four wind farms to the Belgian mainland,
permits the integration of renewable energy
into Elia’s electricity grid.
The MR smart glasses allow staff to share their
real-time view of the MOG with remote experts
and receive audio and visual assistance from
them at the same time: the glasses overlay this
digital content on top of the live feed of the
MOG.
Given the MOG’s remote location off the Bel-
gian coast, the use of smart glasses reduces
the time, costs and CO involved in using
external experts for help with its upkeep; they
have been particularly useful throughout the
COVID-19 pandemic, since travel across borders
has been difficult.
USING DRONES AND ROBOTS TO INSPECT ASSETS
Throughout 2021, the Elia group tested the use
of drones to inspect our electricity power lines
and pylons and the use of robots to inspect
the halls of our HVDC converter stations. The
inspection of such assets have traditionally
involved high costs and risks for our staff.
Indeed, helicopters, which are usually used to
inspect power lines and pylons, are expensive,
produce C0
2
emissions, and are dangerous and
time-consuming for staff to use. HVDC con-
verter halls, which have strong electromagnetic
fields, must usually be temporarily switched off
for them to be manually inspected by staff. The
replacement of such methods with drones and
robots will therefore improve the reliability of
our inspection practices, preventing outages
and minimising the rates of degradation of our
assets.
Beyond Visual Line of Sight (BVLOS) drones
carrying high-resolution and infrared cameras,
3D LIDAR laser scanning technology and pho
-
togrammetry were used to inspect and create
3D models of power lines in Belgium and Ger-
many. AI was subsequently used to analyse the
captured data, improving the identification of
potential issues and degradation.
The use of robots for the inspection of HVDC
converter halls was tested in switched off con
-
verter halls in Belgium and in a laboratory envi-
ronment. In November last year, we launched
a collaboration with three partners to develop
robots which have electromagnetic compati-
bility, allowing converter halls to be inspected
without the need to switch them off.
:z
WATCH A VIDEO OF
THE TEST FLIGHTS
IN BELGIUM HERE:
|
Corporate functions
|
Additional services
|
Trusteeship
|
Market facilitation
|
System operations
|
Grid operations and maintenance
|
Infrastructure design and construction
|
System planning
|
67
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
USING THE INTERNET OF THINGS IOT
TO MONITOR UNDERGROUND ELECTRICITY CABLES
In order to facilitate the early detection and
mitigation of oil leaks associated with self-con-
tained oil-filled (SCOF) cables, staff from Elia in
Belgium have been working with three exter-
nal partners to replace the manual monitoring
of such cables with digital and remote monitor-
ing technology.
The manual monitoring of such cables usu
-
ally only occurs once every quarter and is both
expensive and time-consuming. The use of
sensors, on the other hand, allows the pres-
sure of the insulation oil in SCOF cables to be
monitored on a continuous and remote basis:
the data collected by the sensors is sent to an
internal analytics platform, which provides staff
with long-term trends about it, notifying them
of any irregular or unstable patterns.
FASTER AND MORE ACCURATE
INCIDENT VERIFICATION:
ASSET MANAGEMENT MOONSHOT
As a TSO, we aim to get the most out of the
assets we have already built. Being able to
understand an incident as quickly as possible
after it has occurred will enable us to minimise
its impact. In 2023, we will be able to analyse
on- and offshore grid incidents within 10 min-
utes of their occurrence using highly accurate
fault localisation and visual information pro-
vided by drones, offshore robots, sensors and
digital modelling.
To improve quality and safety, we need to understand
incidents as quickly as possible in order to avoid them having
a high impact on the grid and consumers. With this near-
real-time information, staff who are responsible for analysing
and correcting incidents will be able to better prioritise their
work, focus on those incidents which are likely to have the
biggest impacts, and efficiently apply the right corrective
actions.
PATRICK DE LEENER, CHIEF ASSETS OFFICER AT ELIA
|
Corporate functions
|
Additional services
|
Trusteeship
|
Market facilitation
|
System operations
|
Grid operations and maintenance
|
Infrastructure design and construction
|
System planning
|
68
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
Destroyed Pepinster substation
rebuilt in record time
after heavy flooding
The human suffering caused
by the catastrophic flooding in
Belgium has touched me deeply.
The destructive power of the
floods is much worse than can be
communicated through images
on TV. I have witnessed firsthand
the hard work of our staff on the
ground. All the debris has been
removed and the rebuilding of the
substation is in full swing. Hats
off to everyone involved in this
project.
CHRIS PEETERS, ELIA GROUP CEO,
AFTER VISITING THE DESTROYED PEPINSTER
SUBSTATION
At the end of August, the Pepinster high-volt-
age substation in Belgium was restored after
being completely destroyed by floods in Wal-
lonia. In mid-July, several rivers burst their
banks following extreme rainfall; this caused
unprecedented damage in several areas in
Wallonia. The municipality of Pepinster was hit
the hardest.
Hard work was carried out to clear the sub
-
station following the floods and rebuild what
they destroyed. Our teams did their utmost
to ensure the supply of electricity was quickly
restored in the region.
68
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
|
Corporate functions
|
Additional services
|
Trusteeship
|
Market facilitation
|
System operations
|
Grid operations and maintenance
|
Infrastructure design and construction
|
System planning
|
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
69
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
ENSURING THE LONGTERM PERFORMANCE OF HVDC UNDERGROUND
CABLES: INFRASTRUCTURE MOONSHOT
Given that the number of HVDC underground
cables being installed across our grid is rising,
and the fact that these expensive assets cannot
be visually inspected by our staff, developing an
effective way to monitor and manage their per-
formance is key.
The Elia group will create so-called digital fin
-
gerprints for HVDC cables and their joints. The
fingerprints will enable us to identify cable-re-
lated patterns and predict things that might
go wrong with them, so allowing us to quickly
respond to potential failures
MAKING OUR ASSETS SF
6
 FREE
In 2021, the first emission-free circuit breakers
were commissioned as part of pilot projects
undertaken across Belgium and Germany.
This marks an important step in our journey
towards ensuring carbon neutrality across all
of our activities by 2045. Sulphur hexafluoride
(SF
6
) is a greenhouse gas which has a global
warming potential that is around 23,500 times
higher than that of CO*.
The Elia group uses SF
6
in the closed circuits of
electrical switchgear because of its excellent
insulation properties. Whilst our staff continu-
ously monitor the pressure vessels containing
the SF
6
to detect and minimise the impact of
potential leaks, a certain amount of leakage
occurs as part of the normal operation of our
assets, which is why we have been seeking to
replace the gas with better alternatives.
The first emission-free circuit breakers were
commissioned in 2021 across the parts of our
grid which operate at 70 kV and 123 kV levels.
Moreover, since no market-ready alternative to
SF
6
is yet available for use in switchgear at the
220 kV and 380 kV levels, 50Hertz is funding a
research project at the university of ETH Zurich
with a number of other partners. The research
programme will run over several years.
It is crucial for us to understand what happens
before and after the commissioning of a cable -
particularly in terms of its joints. Measuring their
partial discharge, noise and temperature are all
important. With this real-time information, we
can predict patterns. Through this project, we are
aiming to lower the expected downtime of cables
by more than 50%, so that their availability nears
the availability of our overhead lines.
DR. FRANK GOLLETZ, CTO 50HERTZ
*Fifth Assessment Report of the United Nations Intergovernmental Panel on Climate Change, IPCC 2014
|
Corporate functions
|
Additional services
|
Trusteeship
|
Market facilitation
|
System operations
|
Grid operations and maintenance
|
Infrastructure design and construction
|
System planning
|
70
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
Operating the electricity system is becoming increasingly complex due to the sharp rise in intermittent renewable
energy, the arrival of new players and technologies and the increase in cross-border coordination. In order to
keep the lights on around the clock for over 30 million people in Belgium and the north and east of Germany, we
apply specialist knowledge and use sophisticated tools and processes to maintain the balance between demand
and supply in real time, whilst keeping the voltage and usage level of all technical assets within their technical
bandwidths. As renewables come to dominate the energy sector, we ensure that the necessary system services
(including redispatching, voltage control and restoration) are provided and activated where necessary to maintain
system reliability. We also work with other European TSOs and DSOs to ensure a reliable energy supply and to
efficiently manage our grid.
HOW WE DRAW ON AND AFFECT THE CAPITALS:
INPUTS AND OUTCOMES
Employees &
Subcontractors
Staff knowledge and skills related to system operations - allow-
ing them to undertake a wide range of activities, including load
forecasting, performing grid security and stability analyses,
managing voltage and redispatching for congestion manage-
ment purposes - and their access to appropriate and advanced
technology and equipment are key. In carrying out our activi-
ties, both staff skills and knowledge and organisational capital
increase: our operational processes, constant planning and
monitoring and response to incidents are developed, refined
and improved. This is complemented by the Elia group’s access
to data, software licences and systems and procedures at an
organisational level.
Intellectual
We use a variety of tools (such as weather forecasting tools
and technology for frequency and voltage control) to carry out
these activities. Given that we are early adopters of technology,
our understanding and use of appropriate technology devel-
ops as we use it, and means that we are often at the forefront
of platform and software development. Indeed, the changes the
energy sector and industry are undergoing, and the speed at
which these are occurring, means that we are heavily involved
in the design and creation of software and tools that we need to
continue ensuring a reliable and secure system.
Social &
Relationship
We keep strengthening our relationships with DSOs and other
TSOs both within and outside of our home countries: close coop-
eration with these partners is key for ensuring the security of
energy systems across the whole of Europe and driving forward
the energy transition. Whilst our system operations activities
must be aligned, they also reinforce the close relationships we
have with these partners.
#4. System operations –
We keep the lights on around the clock
|
Corporate functions
|
Additional services
|
Trusteeship
|
Market facilitation
|
System operations
|
Grid operations and maintenance
|
Infrastructure design and construction
|
System planning
|
71
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
71
STRATEGIC CONTRIBUTION
Deliver the infrastructure of the future &
develop and operate a sustainable power system
Staff in our two control centres in Belgium and Germany work around the clock to main-
tain the balance between electricity demand and supply in real time and keep the sys-
tem both reliable and resilient. Through forecasting and monitoring demand patterns
and the stability and performance of the network, electricity flows can be dispatched
and directed across our grid whilst ensuring that the voltage and usage levels of all our
assets are kept within their technical bandwidths. Our system operations activities carry
a high level of societal value, ultimately ensuring that 30 million end users have access
to a secure and reliable supply of electricity.
RISK MANAGEMENT
Most relevant
opportunities
Digital transformation; Relevant role played in
the energy transition leading to a sustainable
future
Most relevant
risks
The COVID-19 pandemic; Early termination of
TSO licences; Balancing; Adequacy; Contin-
gency events and business continuity disrup-
tion; Climate change and the energy transi-
tion; Failure of information & communication
technology (ICT), data security and protection
measures
Please see the chapter entitled 'Risk management'
for an explanation of these
OUR PERFORMANCE
Please see the chapter entitled 'Our performance'
for further information
117g
CO/MWh (Belgium
(7)
)
1,054 t CO
2
e
CO footprint of grid losses
404g
CO/MWh (Germany)
99.99%
Grid reliability
(onshore, 150 kV and above)
Carbon intensity of electricity
production mix
(6)
(6) Own calculations
(7) Using direct emissions only
|
Corporate functions
|
Additional services
|
Trusteeship
|
Market facilitation
|
System operations
|
Grid operations and maintenance
|
Infrastructure design and construction
|
System planning
|
72
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
HOW WE DELIVER VALUE
Material
topics
We create value for energy producers, consumers (both industrial and household) and DSOs: our near-constant network availability and reliability means that generated
power is directed where it is needed and transported in a secure manner, ensuring that producers can run their businesses in a trusted technical environment and that
consumer demand for electricity is met.
We also offer support to national and international partners (including DSOs and other TSOs), since a high level of interconnectedness and interdependency exists across
the whole of the European energy system (which make it more efficient and reliable). We therefore provide mutual assistance to each other, aligning the measures we
undertake in situations when the system is experiencing periods of stress. By securing a reliable electricity system in the long run, we create economic and societal ben
-
efits by providing an attractive environment for industry and society to thrive in.
1
4
7
9
We also create value for software suppliers since we rely on their technology to undertake our activities, while they rely on us to identify and encourage the development
of the right software and tools for ensuring a reliable and secure system. Indeed, 50Hertz’s development of the MCCS in Germany is an example of innovative technology
which will facilitate the constant stability of system operations across its grid as its system is decarbonised (see the stories below for more details). The creation of such
software highlights the importance of ensuring that staff are supported to develop the right skills for mastering this technology and for taking appropriate decisions, just
as employee health, safety and wellbeing are paramount - system operations staff work in shifts to continuously make sure that demand and supply are kept in balance.
Risk management - both in terms of our staff and the operation of a sustainable system - is therefore also of ongoing consequence.
Of material importance to our system operations is the speed of change, the system and market integration of renewables in real time, and the rise in the number of
interventions which are needed to keep the system in balance. Running a system which is becoming progressively decentralised and increasingly reliant on intermittent
renewable energy while encouraging electrification (to help lower society’s carbon footprint) also requires the development of and access to the right digital technology
for handling this increasing complexity. This complexity is reflected in all our system operations activities, from forecasting (which involves planning hours, days, weeks
and months ahead by taking grid usage, weather patterns and maintenance work factors into consideration) to the optimisation of ancillary services (which involve the
use of capacity and flexibility from generators and, increasingly in Belgium, consumers).
1
4
6
7
8
10
15
|
Corporate functions
|
Additional services
|
Trusteeship
|
Market facilitation
|
System operations
|
Grid operations and maintenance
|
Infrastructure design and construction
|
System planning
|
73
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
SOLAR ECLIPSE IN BELGIUM AND GERMANY
On 10 June 2021, a partial solar eclipse cast a
shadow across much of Europe. This caused
the generation of solar electricity to drop by 15%
and 7% in Belgium and Germany respectively.
Given that the reliable operation of our grid
increasingly depends on RES such as solar
power, the impact of natural events like this
need to be appropriately anticipated and man
-
aged, so that the balance between supply and
demand can be maintained at all times. Both
Elia and 50Hertz undertook different measures
to ensure continuity of supply in their respec
-
tive countries, including securing the deploy-
ment of additional reserves and staff in con-
trol rooms. Market players were also informed
of the eclipse, ensuring they too were able to
respond to it appropriately.
MODULAR CONTROL CENTER SYSTEM:
100% RENEWABLE GRID SUPPORTED
BY NEW GRID CONTROL SYSTEM
In order to ensure that 50Hertz’s grid can rely
on 100% renewable energy, it has been devel-
oping a new digital grid control system: the
MCCS. Indeed, operating an electricity system
which relies entirely on many decentralised
intermittent RES will be highly challenging.
The MCCS will ensure that generation and
consumption are always balanced, despite the
increased complexity.
The MCCS will include different modules, each
of which will address one specific aspect of sys
-
tem operations - such as providing a forecast-
ing tool for wind power feed-in or a grid security
calculator. Each module will be connected to a
central integration platform and will be able to
interact with the other modules independently
of this platform. Developing the technology for
the MCCS within the Elia group is a completely
new approach for us.
In 2021, 50Hertz celebrated a significant tech
-
nical milestone as part of the project: perfor-
mance data from ongoing operations were
processed for the first time by the MCCS and
displayed via its user interface. Development of
the digital tool will continue throughout 2022,
during which the project team will work along-
side other TSOs, DSOs and market participants
to refine it.
|
Corporate functions
|
Additional services
|
Trusteeship
|
Market facilitation
|
System operations
|
Grid operations and maintenance
|
Infrastructure design and construction
|
System planning
|
BELGIAN FEDERAL ENERGY MINISTER
TINNE VAN DER STRAETEN VISITED
THE ELIA CONTROL CENTRE TO
LEARN HOW IT HANDLES UNUSUAL
SITUATIONS SUCH AS ECLIPSES
74
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
MASTER CONTROLLER TO REDUCE GRID CONGESTION AS THE SUBSEA
GRID IS DEVELOPED: OFFSHORE MOONSHOT
A sophisticated hybrid subsea electricity grid
needs to be built in order to support the inte-
gration of increasing amounts of offshore
RES into the system. Hybrid interconnectors
serve two or more functions simultaneously:
they link the electricity grids of two different
countries together while also integrating one
or more offshore wind farms. Since they carry
out multiple functions, such hybrid assets can
easily be overloaded. Therefore, the Elia group
has been developing an automatic optimiser
that will suggest the best operation scheme
for hybrid cables to follow, so maximising both
the efficient flow of electricity and the integra-
tion of offshore power. This so-called ‘plug and
play master controller’ will reduce congestion
across the grid and enhance security of supply.
ENSURING GRID STABILITY AS RES INCREASE:
SYSTEM OPERATIONS MOONSHOT
As large traditional power plants are taken out
of use and are replaced by numerous, more
dispersed renewable energy generators and
sources, grid stability is decreasing. The Elia
group will therefore test and demonstrate
new ways of keeping the grid stable through
the use of new electronic devices that can pro
-
vide the same level of stability as conventional
power plants.
Operating future offshore grids with DC transmission lines
and onshore and offshore converter stations will be a very
complex task. Based on the controller that was developed for
the Combined Grid Solution, the Elia group is developing a
new modular tool that will support the operation of offshore
grids. This new tool will be employed as part of the Bornholm
Energy Island project that we are developing with Energinet
(our Danish counterpart).
DIRK BIERMANN, CMO OF 50HERTZ
Since coal-fired power plants are
being replaced, we are exploring
new ways to keep the voltage
and frequency of our grid stable.
Converters with grid-forming
functionalities that are able to
mimic the stabilising effects of
traditional power plants form an
important area of exploration for
us.
DIRK BIERMANN, CMO OF 50HERTZ
|
Corporate functions
|
Additional services
|
Trusteeship
|
Market facilitation
|
System operations
|
Grid operations and maintenance
|
Infrastructure design and construction
|
System planning
|
75
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
As generation sources become increasingly volatile and decentralised, a continuous adaptation of the markets
is necessary. As a market facilitator, we are developing solutions at national and European levels to increase the
efficiency and liquidity of the different electricity markets (wholesale, ancillary services, reliable capacities, etc.).
To do so, we cooperate with other TSOs, power exchanges, traders, regulators and governments. Consumers
and their interests lie at the core of this - we make sure that we are creating additional value for society via
market instruments. We are committed to delivering more consumer comfort and fully recognise the valuable
contribution that consumer flexibility will play in establishing a fully decarbonised system.
HOW WE DRAW ON AND AFFECT THE CAPITALS:
INPUTS AND OUTCOMES
Employees &
Subcontractors
We employ the skills and knowledge of our staff as they oversee
the balancing of the market in real time, explore the use of new
digital tools and undertake research related to the changes that
are needed to enable the system to remain adequate and bal-
anced in the future. Our activities encourage the development
of our staff, as the latter further their skills and knowledge about
the Belgian, German and European energy markets.
Intellectual
Our TSO licences confer us with balancing responsibilities and
our know-how and access to data give us the means to under-
take research and provide industry, partners and policymakers
with research related to the energy transition. Over time, we
constantly enhance our organisational processes and knowl-
edge, including the ways in which we collect and use the data
we have access to.
Social &
Relationship
We keep improving and strengthening our relationships with
our stakeholders. We work closely with academia and energy
experts, industry and the regulators in our home countries,
designing and implementing an energy market that will val-
orise consumer flexibility, enhance their comfort, and support
the energy transition. Beyond working with these national part-
ners and stakeholders, we also work with other European TSOs
to calculate and allocate cross-border transmission capacities,
furthering the integration of the European energy market.
#5. Market facilitation –
We facilitate the development of the electricity market
|
Corporate functions
|
Additional services
|
Trusteeship
|
Market facilitation
|
System operations
|
Grid operations and maintenance
|
Infrastructure design and construction
|
System planning
|
76
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
STRATEGIC CONTRIBUTION
Deliver the infrastructure of the future &
develop and operate a sustainable power system
We are responsible for ensuring an efficient and transparent electricity market, so main-
taining the balance between supply and demand around the clock.
Develop new services creating value
for customers in the energy system
In line with our Consumer-Centric Market Design, we facilitate market participation and
the exchange of electricity on a closer to real-time basis and encourage the supply of
more flexibility for the system (including prosumers and the owners of electric vehicles).
OUR PERFORMANCE
Please see the chapter entitled
'Our performance' for further
information
RISK MANAGEMENT
Most relevant
opportunities
Digital transformation; Relevant role played in
the energy transition leading to a sustainable
future
Most relevant
risks
Changing/new regulatory conditions; Balanc-
ing; Adequacy; Contingency events and busi-
ness continuity disruption; Failure of informa-
tion & communication technology (ICT), data
security and protection measures
Please see the chapter entitled 'Risk management'
for an explanation of these
30 million
End users
|
Corporate functions
|
Additional services
|
Trusteeship
|
Market facilitation
|
System operations
|
Grid operations and maintenance
|
Infrastructure design and construction
|
System planning
|
77
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
HOW WE DELIVER VALUE
Material
topics
Having ultimate responsibility for the balance of demand and supply in Belgium and parts of Germany and procuring ancillary services benefits both energy producers
and consumers in Belgium, Germany and Europe more widely, since we are working towards the further integration of the European energy market.
Determinant factors which have a bearing on our facilitation of the market include ensuring cost and process efficiency whilst adhering to the legal and regulatory envi
-
ronments we organise markets in. To ensure the reliability of our grid and maintain security of supply, we organise a balancing market through which we can access the
flexibility offered by balancing service providers (BSPs), who offtake and inject electricity into the grid. Balancing responsible parties (BRPs) ensure the balance between
these offtakes and injections across a range of access points on a fifteen-minute basis. We also take ultimate responsibility for their work, meaning that if BRPs are unable
to fulfil their function, we oversee the procurement of ancillary services, which include securing extra flexibility or capacity from generators and consumers to reduce the
imbalance between supply and demand.
1
4
10
Our research into maintaining an adequate system and integrating new flexibility providers is of value to public authorities and regulators in our home markets: they use
this when taking decisions about the amount of capacity Belgium and Germany need, and who should be able to provide them, as both countries work towards net zero.
1
4
Our market facilitation activities also create value for wider society by encouraging the integration of renewable energy into the system. Indeed, as the latter shifts to
comprise a large amount of decentralised, intermittent RES, it needs a high amount of flexibility in order for balance to be maintained. Therefore, a well-designed energy
market which permits more short-term trading and a large number of new, smaller market players (including prosumers and the owners of electric vehicles) to take part
in it will help to meet this need; the rollout of smart meters will significantly contribute to understanding how these new flexibilities function.
As part of our pre-qualification responsibilities (which involve establishing clear technical parameters that players need in order to be able to participate in the market),
we undertake research and try to remove as many market barriers as possible, ensuring that every player is offered transparent, non-discriminatory access to the grid. We
also explore and develop new digital tools which facilitate market participation and the exchange of electricity on a closer to real-time basis and encourage the supply
of more flexibility for the system. These goals are outlined in our proposed CCMD (see following pages), which was published in 2021. It aims to place consumers firmly at
the centre of the market, allowing them to play a leading role in the energy transition through the valorisation of their flexibility whilst benefiting from consumer-centric
energy services - so ensuring customer orientation and satisfaction. In order to implement the CCMD, we are committed to real stakeholder dialogue and interaction
with academics and other market participants; at the same time, ensuring that our staff are skilled, knowledgeable and ready to lead the required change is also crucial.
1
4
5
6
13
15
|
Corporate functions
|
Additional services
|
Trusteeship
|
Market facilitation
|
System operations
|
Grid operations and maintenance
|
Infrastructure design and construction
|
System planning
|
78
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
78
White paper
on a Consumer-Centric
Market Design
In June 2021, the Elia group published a white
paper outlining a new market model and call-
ing for increased collaboration amongst players
from across the energy sector. The proposed
Consumer-Centric Market Design (CCMD) aims
to give consumers a more active role in the
electricity system and the energy transition.
As electrification spreads across society and
high amounts of renewable energy are being
integrated into the grid, electricity demand
must be matched to electricity supply; encour
-
aging consumers to adapt their behaviour
to the state of the grid is therefore necessary.
Whilst the CCMD aims to unleash better energy
services for consumers ‘behind the meter’, it
will also facilitate the energy transition.
Through the publication of its white paper, the
Elia group aims to open up discussions and fos
-
ter collaboration between stakeholders from
across the energy value chain and wider soci-
ety. As part of this, the group hosted its first
hackathon in October (see the section entitled
‘Additional services’).
Our energy system needs to adapt to respond to
the challenges of today and evolve and prepare
for those of tomorrow. We welcome any con-
crete initiative that could help us realise that,
and bring forward the flexibility, responsiveness
and liquidity required in our energy markets.
Catharina Sikow-Magny,
Director Internal Energy Market at the European
Commission’s Directorate-General for Energy
Today, we already have the necessary technol-
ogy and solutions that will take us to net zero.
But those are only half the story. Giving users full
control over their own energy usage, through
digitalisation, is just as important. The benefit of
this is obvious and immediate.
Max Viessmann, Co-CEO of Viessmann Group
The Consumer-Centric Market Design is a
creditable effort to shake up the market. Ques-
tions and issues surrounding it still need to be
addressed, as is always the case for innovative
ideas that bring about change.
Tinne Van der Straeten,
Belgian Federal Minister of Energy
We have learned that customer expectations
have fundamentally changed. Customers want
to be in control and expect fast, reliable and
individualised products and services without
any hassle. The potential held in this is huge, as
electric cars will soon dominate the market. So
let us work together and make this possible for
our customers.
Johan Thijs, CEO of KBC Group
THE WHITE PAPER WAS
LAUNCHED DURING A
LIVESTREAMED EVENT IN
JUNE  YOU CAN WATCH
IT HERE:
|
Corporate functions
|
Additional services
|
Trusteeship
|
Market facilitation
|
System operations
|
Grid operations and maintenance
|
Infrastructure design and construction
|
System planning
|
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
79
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
PRESS CONFERENCE REGARDING
BELGIUM’S NUCLEAR PHASEOUT
WITH FEDERAL MINISTER OF ENERGY
TINNE VAN DER STRAETEN AND PRIME
MINISTER ALEXANDER DE CROO.
ELIA GROUP CEO CHRIS PEETERS
ATTENDED THE NEGOTIATIONS WHICH
PRECEDED THE PRESS CONFERENCE,
LENDING HIS EXPERTISE TO THE
DISCUSSIONS.
BELGIUM’S FIRST CRM AUCTION
In late October, Elia announced the results of its
first CRM auction for the 2025-26 delivery year.
The CRM was introduced by the Belgian Fed-
eral Government to secure the country’s sup-
ply of electricity following the legally required
nuclear phase-out, which is due to be com-
pleted by 2025. Elia organised the first CRM
auction at the request of the Belgian Minister
of Energy and with the approval of the Euro-
pean Commission.
On 23 December 2021, the Belgian Govern-
ment settled on a compromise, whereby the
last existing nuclear power plant is due to close
in 2025. However, ministers left open the pos-
sibility of extending the life of two reactors if
security of supply has not been secured by that
point.*
Belgium’s phasing out of nuclear power will
begin with the closure of one reactor on 1 Octo
-
ber 2022.
|
Corporate functions
|
Additional services
|
Trusteeship
|
Market facilitation
|
System operations
|
Grid operations and maintenance
|
Infrastructure design and construction
|
System planning
|
*On 18 March 2022, the Belgian Federal Government announced that it would
extend the life of its two newest nuclear power plants by 10 years (the Doel 4 and
Tihange 3 reactors). The feasibility of this will be examined and worked out over
the coming months.
80
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
The German and Belgian legislators have transferred the responsibility for coordinating and processing legal
levy systems that promote environmentally friendly technologies to the transmission system operators in
their respective countries. Elia and 50Hertz therefore act as trustees, collecting these levies from consumers
in Belgium and Germany and coordinating their distribution to parties who integrate environmentally friendly
technologies into the grid. If the electricity generated from RES is not directly marketed, Elia and 50Hertz are
responsible for selling this electricity via the power exchange.
HOW WE DRAW ON AND AFFECT THE CAPITALS:
INPUTS AND OUTCOMES
Financial
We are responsible for collecting levies from consumers through
their energy bills and coordinating the distribution of these to
appropriate parties, so rewarding RES producers and encourag-
ing the integration of environmentally friendly technologies into
the transmission grids in our respective countries.
Social &
Relationship
We work closely with national authorities, regulators, other TSOs,
DSOs, consumers and energy producers to ensure the smooth
coordination of the legal levy systems in Belgium and Germany.
We reinforce our relationships with each of our stakeholders,
carrying out our responsibilities in an open and non-discrimina-
tory way and cementing their trust in us and our reputation as a
driver of decarbonisation in the process.
#6. Trusteeship –
We coordinate and process legal levy systems
|
Corporate functions
|
Additional services
|
Trusteeship
|
Market facilitation
|
System operations
|
Grid operations and maintenance
|
Infrastructure design and construction
|
System planning
|
81
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
STRATEGIC CONTRIBUTION
Deliver the infrastructure of the future &
develop and operate a sustainable power system
We play an active role in promoting the integration of environmentally friendly tech-
nologies into the transmission system by acting as trustees in Belgium and Germany.
RISK MANAGEMENT
Most relevant
opportunities
Relevant role played in the energy transition
leading to a sustainable future
Most relevant
risks
Changing/ new regulatory conditions; Early
termination of Transmission System Operator
licences; Cash flow
Please see the chapter entitled 'Risk management'
for an explanation of these
|
Corporate functions
|
Additional services
|
Trusteeship
|
Market facilitation
|
System operations
|
Grid operations and maintenance
|
Infrastructure design and construction
|
System planning
|
82
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
HOW WE DELIVER VALUE
Material
topics
We create value by coordinating and processing legal levy systems which are related to the integration of environmentally friendly technologies (including RES technol-
ogy) into the grid, in line with our legal responsibilities and political and social ambitions to further decarbonisation and reach net zero.
As part of our responsibilities, we oversee the selling of renewable energy in electricity markets in cases where producers do not do so themselves; we undertake this in
a transparent and non-discriminatory way.
In Germany, for example, the levies we coordinate include the Renewable Energy Sources Act (EEG) levy and the Combined Heat and Power Act (KWKG) levy. We collect
these levies from consumers and coordinate their distribution to appropriate recipients, so supporting the integration of RES into the grid and energy system.
Broadly speaking, the size of the levies paid by consumers depends on the difference between the revenues received by producers when they sell their RES on the market
and the subsidy amount set by governments to encourage the production of RES. Should a producer sell their renewable energy for less than the amount stipulated by
the authorities, the shortfall will be made up for by Elia or 50Hertz, who will pay them the difference by using the levies collected from consumers.
4
9
11
|
Corporate functions
|
Additional services
|
Trusteeship
|
Market facilitation
|
System operations
|
Grid operations and maintenance
|
Infrastructure design and construction
|
System planning
|
83
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
As the energy transition and the digitalisation of the sector are well underway, consumers are calling for
opportunities to benefit from energy services that bring them additional value and comfort. Fostering this
whilst ensuring that such products and services strengthen the electricity system forms part of the Elia group's
proposed Consumer-Centric Market Design (CCMD). This entails a paradigm shift: a movement towards a system
under which consumption patterns follow production. Our activities in this area therefore involve working
within ecosystems (in the regulated sphere via Elia and 50Hertz, in the non-regulated sphere via re.alto and in
foreign electricity markets via EGI) to design and deliver consumer-centric services. These services will enable
decentralised flexibility assets such as heat pumps, EVs and batteries to participate in the market and provide
grid support services - simultaneously benefiting both the system and consumers. The latter will be given the
opportunity to engage with different service providers at appliance level, granting providers access to their
regulated metered data as they see fit and relying on a trusted and secure digital infrastructure to do so.
HOW WE DRAW ON AND AFFECT THE CAPITALS:
INPUTS AND OUTCOMES
Employees &
Subcontractors
We rely on human capital, since the digital and technological
skills of our staff and their knowledge about the needs and
operation of the energy system are key. The development of
additional services - both through our regulated and non-reg-
ulated business activities, which complement each other -
enables the improvement of our staff: both their digital skills
and knowledge of the system are enhanced as they design and
deliver solutions which provide value for energy consumers and
our other market players.
Intellectual
We rely on intellectual capital: at an organisational level, we hold
collective energy and digital expertise and have access to large
amounts of grid and energy-related data. Our intellectual capital
is constantly enhancing, as we are actively shaping new technol-
ogy, software and digital tools.
Social &
Relationship
We rely on our close links with stakeholders across the energy
value chain and in adjacent sectors, including end consumers
and direct customers (to better understand their needs), and
other sectors (often as part of ecosystems), in order to better
scope out new possibilities as electrification spreads across
society. Whilst energy consumers benefit very concretely from
increased comfort, value and traceability, energy market play-
ers benefit from improved access to data for the development
of their businesses, and other sectors benefit further from effi-
ciency gains linked to electrification, as we transition to a net-
zero society.
#7. Additional services –
We create value for consumers and customers
|
Corporate functions
|
Additional services
|
Trusteeship
|
Market facilitation
|
System operations
|
Grid operations and maintenance
|
Infrastructure design and construction
|
System planning
|
84
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
STRATEGIC CONTRIBUTION
Grow beyond current perimeter to deliver societal value
We provide consultancy services through EGI in order to help partners master the chal-
lenges of the energy transition through their grid management and system and market
operations.
Develop new services creating value
for customers in the energy system
As digitalisation spreads across society, and the energy transition is underway, we aspire
to deliver new digital interfaces and energy services to consumers and businesses
which are linked to the electricity system and power markets, increasing our relevance
as a Group and helping to further decarbonisation.
RISK MANAGEMENT
Most relevant
opportunities
Offshore evolution; Digital transformation;
Relevant role played in the energy transition
leading to a sustainable future
Most relevant
risks
Changing HR needs; Failure of information &
communication technology (ICT), data secu-
rity and protection measures; Suppliers; New
business developments
Please see the chapter entitled 'Risk management'
for for an explanation of these
|
Corporate functions
|
Additional services
|
Trusteeship
|
Market facilitation
|
System operations
|
Grid operations and maintenance
|
Infrastructure design and construction
|
System planning
|
85
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
HOW WE DELIVER VALUE
Material
topics
Our work in the area of consumer centricity creates value by placing consumers at the heart of the energy market. As outlined in European goals, this is crucial for ensur-
ing the success of the energy transition, since consumers will be able to deliver the additional flexibility that the system needs (as it becomes increasingly decentralised
and reliant on RES) whilst being rewarded for it. This new role will be facilitated by the development of new digital services - services which consumers are now expecting
from the energy sector.
On the one hand, our regulated work in this area involves implementing our CCMD (see section on ‘Market facilitation’ ) and providing our larger direct customers and
market players with improved access to data.
Our proposed CCMD includes two market changes that will help to place consumers at the centre: firstly, the development of a so-called ‘Exchange of Energy Blocks’ hub,
through which energy could be exchanged between consumers and other market parties on a fifteen-minute basis; secondly, the introduction of a real-time price signal,
which would give consumers a reference for their consumption and the value of services offered by third parties. Introducing these changes and hastening the arrival of
consumer-centric services would enable consumers to benefit from increased control over their energy consumption and bills, increased comfort, and more transparent
information about the source of their energy. At the same time, these services will offer them the opportunity to play an important role in theenergy transition, since they
will be able to actively participate and generate new business value by providing flexibility for the system or acting as prosumers (either individually or as part of energy
communities).
Moreover, by providing our direct customers with improved access to data, we are making them better informed and supporting them to make more efficient choices,
ultimately leading to enhanced services for end consumers (our new portal, the Elia Portal Interface for Customers, is an example of this; see stories below for further
information).
On the other hand, our work in unregulated spaces in this area involves directly encouraging the development of energy services such as energy-as-a-service, heat-as-a-
service or green tracking. Indeed, re.alto offers market parties easy access to data from decentralised energy sources (such as electric vehicles, solar panels, heat pumps
and batteries), so allowing them to use this as they develop and refine innovative services for residential and commercial clients.
As we work on these areas, the need for genuine stakeholder dialogue with consumers and as part of ecosystems with other industries (to encourage sector coupling) is
therefore clear. Access to and the development of the right technology are essential, which is why innovation and skills development for our staff is also key.
4
5
6
13
15
Whilst we need to ensure that the services we are developing in our home countries can actually be offered there in line with unbundling rules, we also offer consultancy
services in unregulated spaces through our consultancy, EGI. These services are related to grid operations and the integration of renewables into power systems and
markets outside of our home countries (mainly Europe, southeast Asia and the Middle East) and provide EGI’s customers with analysis regarding how to effectively deliver
their individual business models in line with decarbonisation targets.
1
4
5
15
|
Corporate functions
|
Additional services
|
Trusteeship
|
Market facilitation
|
System operations
|
Grid operations and maintenance
|
Infrastructure design and construction
|
System planning
|
86
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
ELIA PORTAL INTERFACE FOR CUSTOMERS EPIC LAUNCHED
In July, EPIC was launched, grouping Elia’s
direct customer services and historical data
together in one place - so streamlining their
interactions with the company.
Elia’s direct customers include industrial cli
-
ents who are connected to its grid in Belgium.
EPIC offers these customers a range of services
through the use of one login, including access
to metering data; a chance to review and com-
ment on invoices and contracts; and control
over how their information is shared with third
parties.
Before the launch of EPIC, these services were
only accessible through the use of different
websites. EPIC therefore offers Elia’s customers
convenience, transparency and the data they
need to take sound operational and commer
-
cial decisions.
HACKATHON: DESIGNING CONSUMERCENTRIC ENERGY SERVICES
In October, we hosted our first ever hackathon,
which focused on translating the group’s pro-
posed Consumer-Centric Market Design into
tangible, practical solutions. Over 100 partic-
ipants - including coding students and repre-
sentatives from start-ups and larger digital and
energy-related companies - took part in the
competition.
The winning team, Green Bid, was awarded
the opportunity to spend 14 weeks developing
their solution with the Elia group experts at The
Nest, our internal digital incubator. The hacka-
thon forms part of our commitment to foster-
ing collaboration between stakeholders from
across the energy value chain to ensure that
the energy transition is a success.
|
Corporate functions
|
Additional services
|
Trusteeship
|
Market facilitation
|
System operations
|
Grid operations and maintenance
|
Infrastructure design and construction
|
System planning
|
87
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
THE ELIA GROUP BEGINS PARTNERSHIP WITH OCTOPUS ENERGY
GROUP ON ENERGY SERVICES FOR CONSUMERS
At the COP26 climate summit in Glasgow in
November, the Elia group and Octopus Energy
(a British company specialising in renewable
energy) signed a memorandum of under-
standing which bolsters their joint commit-
ment to placing consumers at the heart of the
energy transition. Both parties will be setting
up test projects over the next two years which
will involve close working between KrakenFlex
(Octopus Energy’s real-time software platform)
and re.alto, Elia Group’s digital marketplace for
energy data and services.
The partnership will make it possible for new
energy services to be offered to consumers
(such as the ability to charge their electric
vehicles and use their heat pumps when there
are large amounts of green electricity on the
grid) whilst helping to ensure that the grid is
kept in balance, so facilitating the transition to
a sustainable energy system.
CHARGE YOUR EV ACROSS EUROPE WITH ELECTRICITY FROM YOUR
SOLAR PANEL: CONSUMER CENTRICITY MOONSHOT
By 2024, the Elia group wants to have demon-
strated the use of a European e-mobility roam-
ing service to optimise self-consumption. This
means individuals will be able to charge their
EVs with electricity from their own home solar
panel no matter where they are across Europe.
The project is a practical application of con-
sumer centricity: placing consumers at the
heart of the energy transition, enabling the grid
to use their flexibility whilst offering them more
comfort and value.
A peer-to-peer, cross-border trading system
and virtual grid of charging stations will be
needed to support this project, which will give
the owners of solar panels full control over the
electricity they generate. We will first focus on
implementing this use case between Belgium
and Germany, which will then pave the way for
it to be used in other residential or industrial
settings.
For the Elia group, embracing
consumer centricity seems an
obvious choice. We want to focus
on developing and providing new
seamless services which are easy
to understand and provide added
value for consumers, allowing them
to actively participate in the power
sector and providing the grid with
decentralised flexibility assets.
FRÉDÉRIC DUNON, CHIEF CUSTOMERS,
MARKETS AND SYSTEM OFFICER AT ELIA
TRANSMISSION BELGIUM
We’ll combine the awesome
power of our unique
energy asset management
platform KrakenFlex with
Elia’s innovative technology
to unlock world leading
entech innovation, enabling
millions of customers to
use abundant, cheap green
energy to power their
appliances and drive down
their energy bills, all while
helping balance the grid
during intermittent energy
production – it’s a win-win
for everybody.
GREG JACKSON,
CEO AND FOUNDER OF OCTOPUS
ENERGY GROUP
|
Corporate functions
|
Additional services
|
Trusteeship
|
Market facilitation
|
System operations
|
Grid operations and maintenance
|
Infrastructure design and construction
|
System planning
|
USE THIS QR CODE TO WATCH
THE SIGNING CEREMONY
88
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
Our corporate functions - which include Legal and Regulatory Services, Human Resources, Strategy,
Communication & Reputation and Public Affairs, Finance, Digital and IT and Procurement - enable our business
activities to fulfil the group’s societal mission. They support the development of a highly skilled and healthy
workforce, a growing technical asset base and digital platforms and solutions for mastering growing complexity
and remaining efficient. They provide the necessary financial means for our business activities, verify that
activities comply with legal and regulatory conditions and facilitate regular dialogue with our stakeholders, so as
to be certain that we remain relevant and are indeed acting in the interest of society.
#8. Corporate functions –
We enable our business activities
Financial
A sound, long-term financial strategy and con-
trolling and accounting processes make sure
we use our resources in an efficient way and
create a maximum amount of value; in this
vein, we establish strong relationships with our
investors and secure green financing to ensure
that our business is sustainable. Our Finance
and Legal and Regulatory departments also
bolster our organisational processes, ensuring
they are efficient and aligned with national and
international requirements, in turn contribut-
ing to decent grid tariffs for consumers, pro-
viding our investors with clear financial returns
and the group with the means to reinvest in
and maintain our infrastructure in a reliable
manner.
Employees &
Subcontractors
Staff skills and knowledge are key to deliver-
ing the quality society expects in terms of our
responsibility for managing critical infra-
structure. Our HR teams ensure that our staff
feel supported and welcome and are given
the same opportunities to develop skills and
knowledge and progress within the group.
Intellectual
At an organisational level, our corporate func-
tions are supported through our TSO licenses
in our home countries; access to data and
software; protocols and processes; and health
and safety certifications. Our focus on digital
skills, tools and processes contributes to fur-
ther enhancing organisational processes, since
it also allows us to develop innovative solu-
tions in terms of making our workspaces and
infrastructure more efficient and sustainable,
speeding up the delivery of our grid, maintain-
ing a high level of grid and system reliability
and creating additional services for consumers.
HOW WE DRAW ON AND AFFECT THE CAPITALS:
INPUTS AND OUTCOMES
Social &
Relationship
The close ties we establish with our stakehold-
ers - who include consumers, energy suppli-
ers, local communities, other DSOs and TSOs,
manufacturers in the energy sector, financial
investors and policymakers - bolster our under-
standing of the environment we work in and
provide us with the social licence we need to
carry out our activities. Our communications
activities and the close ties we form with exter-
nal stakeholders keeps them informed of our
goals, enables them to use our information and
analysis for their own purposes and contributes
to furthering the energy transition by encour-
aging a sharing of research about different
paths leading to decarbonisation.
|
Corporate functions
|
Additional services
|
Trusteeship
|
Market facilitation
|
System operations
|
Grid operations and maintenance
|
Infrastructure design and construction
|
System planning
|
89
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
STRATEGIC CONTRIBUTION
Our corporate functions - which encompass teams focusing on our strategy, innovation,
internal and external communication, public affairs, digital and IT services, finance, risk
management, governance, legal and regulatory matters, health and safety, and human
resources – are important enablers of our business activities. These, in turn, allow us to
fulfil our three strategic pillars of growth.
Develop new services creating value
for customers in the energy system
RISK MANAGEMENT
Most relevant
opportunities
Digital transformation; Relevant role played in the energy transi-
tion leading to a sustainable future
Most relevant
risks
The COVID-19 pandemic; Early termination of TSO licences; Sus-
tainability of income; Failure of information & communication tech-
nology (ICT), data security and protection measures; Contingency
events and business continuity disruption; Negative changes in
financial markets; Cash flow; Legal disputes and liabilities
Please see the chapter entitled 'Risk management'
for for an explanation of these
(8) Determined as the result attributed to ordinary shareholders/equity attributed to owners
of ordinary shares adjusted for the value of the future contracts (hedging reserve)
(9) Calculated as: (the number of work accidents with and without lost time)*1,000,000 /
(The total number of working hours over the year); excludes subcontrators - they will be
included from 2022 onwards2
(10) Corresponds to health rate (1-x)
(11) Non BE/DE nationalities
(12) Composition of the index available on our website
(13) Composition of the index available on our website
* The survey is performed once every two years. It aims to collect feedback from employees
about their views and general level of satisfaction with regard to Elia and 50Hertz as
workplaces; the Index is made up of 7 questions.
OUR PERFORMANCE
Please see the chapter entitled 'Our performance'
for further informatione
€328.3 m
Adjusted Net Profit
7.56%
ROE (adj.)
(8)
€1.75
Gross dividend
per share
99.94%
EU Taxonomy
eligible turnover
6.3
Group TRIR
(9)
3.0%
Absentee Rate Group
(10)
22.2%
Women in total
workforce
22.1%
Women in leadership
positions
37
Nationalities
3.3%
of foreign nationalities
represented in workforce
(11)
69*
Employee commitment
index
4/12
ESG Governance Index
(12)
5/12
Compliance Index
(13)
Grow beyond current perimeter
to deliver societal value
Deliver the infrastructure of
the future & develop and
operate a sustainable
power system
|
Corporate functions
|
Additional services
|
Trusteeship
|
Market facilitation
|
System operations
|
Grid operations and maintenance
|
Infrastructure design and construction
|
System planning
|
90
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
HOW WE DELIVER VALUE
Material
topics
Collectively, our corporate functions operate as a facilitator for the rest of the group’s activities, supporting these as the group fulfils its strategic goals and drives the
energy transition. They create value by allowing the group to fulfil its strategy in a safe, legal and open manner, as outlined below.
- Our Legal and Regulatory Services Department
ensures that the group operates in keeping with our TSO licenses and in line with current regulatory frameworks in
Belgium and Germany, any legal obligations we have and legislation at national and EU levels.
- Our Human Resources Department
ensures that we are able to attract, recruit and retain the talent we need to keep succeeding as a driver of the energy transition. It
supports staff throughout their careers, providing a welcoming environment in which staff feel supported and are able to develop their skills through multiple training
opportunities.
- Our Health and Safety Department
ensures that we embed a high standard of safety across all activities, so that all our employees and subcontractors get home safely.
We continuously improve the safety measures in place and evaluate issues, concerns and incidents when they occur, making improvements where necessary.
- Our Strategy Department
sets the strategic ambitions for the group, in keeping with society’s interest, so securing the group’s relevance both now and in the future.
The definition and realisation of our strategy, is undertaken in line with the goals of other European system operators, political decision-makers, authorities, non-profits,
academics and other energy sector professionals, renewable energy producers, industry and energy consumers more widely.
- Our Communication and Reputation Department, Public and Regulatory Affairs Department and Community Relations Department
maintain open and
transparent two-way communication channels with external stakeholders: from the media through to members of the public, local communities, shareholders and
policymakers at national and EU levels. Our systematic engagement and dialogue is key for keeping our stakeholders informed, engaged and committed to our
work and how it is enabling decarbonisation. We clearly communicate how our activities are furthering the energy transition, so solidifying their cooperation with us.
- Our Internal Communication Department
ensures that staff are kept informed of group-wide activities, organise regular internal events for employees and foster
cohesion across different teams through initiatives such as the ‘Make A Difference’ behaviours (see chapter entitled ‘Our purpose and strategy’).
- Our Finance Department
ensures that the group has enough security with regard to the financing it needs to deliver its high-quality and innovative projects and
continue to facilitate the energy transition. We are committed to robust accounting, controlling and risk management practices to secure efficiency and value creation.
The cost-effective way in which we carry out our activities and the profits we make create value for our shareholders and financial investors and ensures that grid tariffs
remain fair for consumers.
- Our IT Department and new DTO
(see the chapter entitled ‘Our purpose and strategy’) provide staff with the licences and equipment they need to carry out their
daily tasks. They work with staff from across the business to develop easy-to-use solutions that raise business efficiency, lower complexity and enable data-driven deci-
sions to be taken; these include a group-wide digital backbone and digital platforms which are tailored to the needs of each team. Our digital transformation allows us
to develop new solutions with partners and innovate to better meet the future needs of consumers.
- Our Procurement Department
establishes the group’s purchasing policies and procedures, seeking efficiency and streamlining where possible and focusing on sup-
pliers who have signed our Supplier Code of Conduct. These sound practices translate into a timely acquisition of the products and services which are needed along the
whole value chain in a way that ensures quality, safety and a reduction in our carbon footprint.
7
8
9
10
11
12
13
15
16
|
Corporate functions
|
Additional services
|
Trusteeship
|
Market facilitation
|
System operations
|
Grid operations and maintenance
|
Infrastructure design and construction
|
System planning
|
91
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
91
THE ELIA GROUP'S ALIGNMENT WITH THE EU TAXONOMY
In November, we published a paper which
outlined our alignment with the EU Taxon-
omy, a classification system published by the
European Commission that defines a list of
economic activities which it considers to be
environmentally sustainable. The system pro-
vides a methodology that companies can use
to calculate how ‘green’ their turnover, CAPEX
and OPEX are.
Our paper outlines the metholodology we
employed to assess how far our activities are
aligned with the EU Taxonomy. In it, we esti
-
mate that 99% of our turnover, 100% of our
CAPEX and 99% of our OPEX is aligned with the
taxonomy for the year 2020. The methodology
will allow us to keep fine-tuning our own stra-
tegic ambitions to ensure that our activities are
firmly aligned with the ambitions of the Euro-
pean Green Deal.
UPDATED CODE OF ETHICS FOR GROUP STAFF
Our Code of Ethics provides staff with guidance
about how to behave in an ethical, responsi-
ble and transparent manner in their everyday
work. The Code summarises the Elia group's
vision, outlines a number of guiding principles
and covers the behaviour that is expected from
all staff in relation to the following areas: Integ-
rity and Compliance; Diversity, Equality and
Inclusion; Handling of Information.
Our Code of Ethics forms part of Dimension 5 of
our ActNow programme: Governance, Ethics &
Compliance. This highlights that good govern
-
ance and integrity in our work with contractors
and suppliers are essential for ensuring our
long-term success.
FIRST GREEN FINANCE FRAMEWORK PUBLISHED
In December, Elia published its first Green
Finance Framework, which outlines how it will
channel investments into projects which have
clear environmental benefits. The framework
confirms that Elia’s funding strategy is aligned
with its sustainability programme, ActNow.
As Europe aims to reach climate neutrality,
immense investments in the expansion and
reinforcement of our grid need to be made in
the coming years in order to successfully inte
-
grate increasing amounts of renewable energy
into the system. These investments will sup-
port important steps such as the integration
of offshore wind farms into our grid and the
cross-border exchange of surplus renewable
energy. The Green Finance Framework there
-
fore confirms that Elia’s funding strategy is fully
aligned with its role as a driver of the energy
transition and its sustainability programme,
ActNow.
|
Corporate functions
|
Additional services
|
Trusteeship
|
Market facilitation
|
System operations
|
Grid operations and maintenance
|
Infrastructure design and construction
|
System planning
|
92
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
ANNUAL INNOVATION WEEK: COCREATING THE FUTURE
WITH OUR ECOSYSTEM
The group’s 2021 Innovation Week was organ-
ised under the slogan of “Co-creating the
future with our ecosystem”. For the first time
in the history of the group’s annual Innovation
Week event, staff invited their external part-
ners to help present their 20 most innovative
projects to colleagues from across the group in
Berlin.
The projects in question were clustered around
the five following domains: System Operations;
Consumer Centricity; Infrastructure; Asset
Management; and Offshore. The week ended
with project leaders taking part in a virtual
panel discussion about the group’s Moonshot
projects (each of which relate to one of the five
domains above; see the chapter entitled ‘Our
purpose and strategy’ for more details).
ASSESSMENT OF OUR PROGRESS IN CHAMPIONING DIVERSITY,
EQUITY AND INCLUSION
As part of our sustainability programme, Act-
Now, we strive to establish an inclusive and
supportive work environment that ensures
equal opportunities for all and is a reflection
of the society we serve. We are conscious of
the fact that the energy sector has historically
been led by male technical expertise. However,
in order to be resilient and attract the right tal-
ent to drive the energy transition forward, we
need to implement unbiased recruitment and
selection processes, undertake career planning
which is based on equal opportunities and hire
staff with a diverse range of backgrounds.
In early 2021, we assessed our progress in terms
of diversity, equity and inclusion (DEI) through
the use of staff interviews and data analysis in
order to identify the issues we still need to work
on.
As a consequence, we developed a DEI
roadmap, which includes five focus areas:
establishing inclusive leadership across the
whole organisation and engaging all staff;
embedding unbiased recruitment and selec-
tion practices into our hiring processes; ensur-
ing equal opportunities for all staff in the
development of their careers; building an open
company culture and ensuring a healthy work-
life balance; and fully recognising the responsi-
ble role we play in the interest of society.
Moreover, over 20 Diversity Ambassadors
are supporting their colleagues internally as
the Elia group continues along its journey to
becoming diverse and inclusive.
We let our employees work out their own vision of the future
through specific initiatives that encourage innovation. A
large part of the energy transition still has to be defined.
This provides opportunities for people to contribute to
its progress. At Elia, there is plenty of scope for personal
initiative-taking. This is not just because we like to give our
people a lot of space, but also because it’s necessary. To
tackle something as complex as the energy transition, you
need a broad group of people to lean on. For this purpose, we
have developed a specific leadership programme.
CHRIS PEETERS, CEO OF ELIA GROUP
|
Corporate functions
|
Additional services
|
Trusteeship
|
Market facilitation
|
System operations
|
Grid operations and maintenance
|
Infrastructure design and construction
|
System planning
|
93
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
BRAZILIAN STARTUP TIDEWISE WINS THE GROUP’S 2021
OPEN INNOVATION CHALLENGE
The 2021 Open Innovation Challenge (OIC),
which focused on offshore wind integra-
tion, received participant applications from
78 teams across the world. Having made it
through to the competition final, 5 teams were
invited to pitch their solutions to the compe-
tition judges during an event which was lives-
treamed from Berlin in June.
Brazilian start-up TideWise was selected as the
winning team. They developed an unmanned
surface vehicle with advanced sensors which
allows offshore inspections to be performed
in situations where the risk and cost of having
humans on site are too high. The vehicle is able
to collect aerial, surface and underwater data
to carry out near real-time remote inspections
and surveys and uses AI for optimal control.
The group’s annual OIC aims to expand its part
-
nerships and harness external knowledge and
expertise to foster innovation in the areas it
works on as a system operator. Start-ups from
all over the world are invited to apply to take
part in the competition, and the winning team
is given the opportunity to develop their pro-
ject with staff from the Elia group.
COVID19 ANTIGEN TESTING AND VACCINATIONS FOR STAFF
Ensuring the protection of all employees as
they carry out their daily activities through-
out the COVID-19 pandemic has been a key
area of focus for the group. The COVID-19 sit-
uation in both of our home countries (and in
terms of staff contact) was constantly moni-
tored throughout 2021, with the group’s offices
ensuring that its staff followed the appropriate
social distancing and health and safety meas-
ures that had been put in place locally. For
example, staff were encouraged to work from
home as much as possible, so reducing direct
contact between employees and, therefore, the
risk of transmission.
Since the end of February 2021 (before the legal
obligation set in), staff in Germany have been
asked to take rapid antigen tests upon arrival
at work if their presence in the office has been
required. Additionally, 50Hertz employees
were able to book their COVID-19 vaccinations
through 50Hertz’s online portal from February
until June (with this portal being opened again
in November), after which they were able to
receive them at 50Hertz premises. Moreover,
Elia staff have been offered daily antigen tests
in its offices across Belgium when they have
been asked to attend in-person meetings.
|
Corporate functions
|
Additional services
|
Trusteeship
|
Market facilitation
|
System operations
|
Grid operations and maintenance
|
Infrastructure design and construction
|
System planning
|
94
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
The group’s exceptional
stakeholder engagement
during the COVID-19 pandemic
The Elia group adjusted to the reality of
COVID-19 measures extremely quickly and
organised 8 high-profile group-wide events
that were livestreamed throughout the pan-
demic. Alongside this, teams from across the
group engaged with local stakeholders about
specific projects in Belgium (led by Elia) and
Germany (led by 50Hertz) through different
digital means.
No other TSO held as many engaging
high-profile events as we did. We successfully
managed to keep our stakeholders informed
of our goals, vision, activities and publications -
including two studies which outlined recom
-
mendations for accelerating the integration of
renewable energy.
You can revisit the most important lives
-
treamed events of 2021 using the QR codes
below:
THE GROUP’S VERY OWN TV STUDIO
Given that hosting livestreamed events is very time-consuming
and expensive, the group has decided to build its own studio at its
headquarters in Brussels. This will enable the group to continue
interacting with stakeholders through regular broadcasts - particu-
larly international stakeholders.
Our own TV studio was used for the first time at the end of Decem-
ber 2021 for an internal staff event. After all, our own employees are
also important stakeholders who we want to keep committed to
both our vision and the energy transition.
94
|
Corporate functions
|
Additional services
|
Trusteeship
|
Market facilitation
|
System operations
|
Grid operations and maintenance
|
Infrastructure design and construction
|
System planning
|
ELIA GROUP’S CAPITAL
MARKETS DAY
TOWARDS A
CONSUMERCENTRIC
AND SUSTAINABLE
ELECTRICITY SYSTEM
ROADMAP TO NET ZERO
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
95
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
95
7
Our
performance
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
nd strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
96
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
All our activities within the Elia group take place along the same value chain. We use the
know-how we have acquired through our different subsidiaries and our interactions with
stakeholders to create value.
Good progress on our strategy was carried out in 2021 - we continued to deliver value in line
with the interest of society, driving the energy transition forward and so helping to decarbonise
the energy sector - and, ultimately, wider society. The progress we made in 2021 in terms of
fulfilling our strategy is reflected below in the set of top indicators (or KPIs), each of which is
clearly linked to one or more of our strategic ambitions (please see the chapter entitled ‘Our
purpose and strategy’).
These KPIs enable us to understand and track our progress over time and ensure comparability
with other players in the energy sector. More information about the financial KPIs can be
found in the Financial Report, whilst more information about the non-financial KPIs can be
found in the ActNow Dashboard on our website.
GOVERNANCE
Governance, Ethics
& Compliance
2019 2020 2021 Target 2024
ESG Governance Index
1
1/12 3/12 4/12 12/12
Compliance Index
1
5/12 5/12 5/12 12/12
(1) Composition of the indexes available on our website
In June, the Elia group published its new Group Code of Ethics, which provides staff with guidance
about how to behave in an ethical, responsible and transparent manner in their everyday work.
In addition to designing clear objectives regarding ethics and transparency, an Environmental,
Social and Governance (ESG) Governance Index was created to help us embed ESG factors across
our business activities and decision-making processes, including the variable remuneration of our
workforce. Next to the ESG Governance Index, a Compliance Index, which guides us in introducing
the right measures to ensure compliance with all relevant legal and regulatory requirements, was
created in 2021. As both indexes look forward, they are each composed of twelve commitments we
want to achieve by the end of 2024, which explains why our scores for them may appear low today.
So far, nine out of the twenty-four actions in these two indexes have been accomplished. Examples
include having more than 80% of our procurement budget spent on suppliers who have signed
our Supplier Code of Conduct or the introduction of specific governance arrangements for ESG
topics at the group and local levels. Please see the chapter entitled ‘Corporate bodies and govern-
ance’ for further information.
DESIGN, DELIVER AND OPERATE THE FUTURE TRANSMISSION GRID
INFRASTRUCTURE SUPPORTING RES INTEGRATION
Financial Performance 2019 2020 2021 Target
Regulatory Asset Base
2
(€ billion)
9.1 9.7 10.3 n.a.
Grid Investments
(€ million)
BE: 723.5
DE: 488.6
BE: 337.4
DE: 715.9
BE: 376.7
DE: 850.9
CAPEX plan
2022-2026:
BE: €4 billion
DE
3
: €5.6 billion
(2) Includes 80% of 50hertz; does not include Nemo Link
(3) Elia Group owns 80% of 50Hertz, numbers represent 100% of 50Hertz
Climate Action 2019 2020 2021 Target 2030
Lines commissioned
(km)
453 371 363 n.a.
Being a TSO, our biggest contribution to accelerating the energy transition is via the strengthen-
ing and expansion of the power grid, in order to facilitate the integration of renewable energy. As
demonstrated in the table above, we were able to make considerable progress in the commis-
sioning of new overhead lines and cables and successfully executed our investment programme
to ensure a reliable, sustainable and affordable energy system. Driven by this organic growth, we
increased the Regulatory Asset Base, which is an important driver for determining the return on
the invested capital in the TSO through regulatory schemes. With our ambitious investment plan
of €9.6 billion ahead of us for 2022 to 2026, we will continue to deliver this organic growth and con-
tribute to enabling the energy transition.
Our top key performance indicators
97
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
Governance, Ethics &
Compliance 2019 2020 2021 Target 2030
# Public info-dialogue
sessions related to grid
projects
75 79 68 n.a.
As outlined throughout this report, we establish two-way communication channels with all inter-
ested parties very early on in the grid development process and offer up our expertise to partners
across the energy sector, including policymakers and relevant authorities, to ensure the success
of the energy transition. Despite the global pandemic, we were able to hold 68 public information
sessions related to our grid projects in 2021. Additionally, we organised and participated in many
other discussions and exchanges with different stakeholder groups (for example, please see the
section entitled ‘System planning’ in the chapter on ‘Our value creation model’ for information
about the roundtables we held). We continue to involve all stakeholders as we carry out our activi-
ties, since this is essential for our success.
FURTHER SHAPE THE EUROPEAN MARKETS & ENSURE HIGH
SECURITY OF SUPPLY
Climate Action 2019 2020 2021 Target 2030
Grid reliability
(onshore, 150 kV
and above)
99.99% 99.99% 99.99% n.a.
With a grid reliability level of 99.99%, we provide society with a robust power grid, which is impor-
tant for socioeconomic prosperity. As the share occupied by RES in the energy mix is constantly
growing – as demonstrated in the chart overleaf – ensuring grid reliability is becoming more and
more complex. We are working on different innovative projects like the MCCS (see the section enti-
tled ‘System operations’ in the chapter on ‘Our value creation model’) in order to maintain a high
level of grid reliability in future.
98
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
Elia 50Hertz
Renewable
energy
39,585 MW
53,251
Megawatt (MW)
Conventional
energy
13,666 MW
Installed capacity
Biomass
2,071 MW
Hydropower
174 MW
Photovoltaics
16,355 MW
Onshore wind
19,875 MW
Evolution
2016 2017 2018 2019 2020 2021
70%
60%
50%
40%
30%
20%
10%
0%
Development of the RE share in electricity supply
in 50Hertz grid area
47.80%
53.40%
56.50%
60.00%
62.00%
56.10%
Photovoltaics
5,430 MW
Wind
4,979 MW
Hydropower
121 MW
Biomass
804 MW
Renewable
energy
11,334 MW
26,225
Megawatts (MW)
Conventional
energy
14,891 MW
Installed capacity
98
Evolution
2016 2017 2018 2019 2020 2021
15%
12%
9%
6%
3%
0%
4.01%
4.74%
6.79%
14.09%
15.07%
15.86%
Development of the RE share in electric supply
in Elia grid area
Offshore wind
1,093 MW
Other renewable
energies
(geothermal,
solar thermal, etc.)
17 MW
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
99
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
ENSURE SUSTAINABILITY IN THE WAY WE OPERATE OUR BUSINESS
Climate Action 2019 2020 2021 Target 2030
Scope 1 emissions
(tCO
2
e)
16,868 19,804 15,807
Carbon
neutrality
(including
offsetting
Scope 2 emissions
(tCO
2
e)
1,051,115 938,956 1,092,151
-28% for
grid losses;
carbon
neutrality for
own energy
consumption
(including
green pro-
curement
and offset-
ting)
Scope 3 emissions
(tCO
2
e)
60% of Scope 3 emissions are accounted for
on the basis of mature (primary) data; Scope 3
reduction target to be set by mid) 2020s
The combination of low amounts of wind and a shift towards hard coal and lignite (due to high gas
prices in 2021) in the 50Hertz control zone temporarily drove the CO intensity of electricity gener-
ation up. However, the combination of a small rise in renewable production and an exceptionally
reliable year in terms of nuclear energy in the Elia control zone resulted in a lower CO intensity
in 2021. This means the emissions from grid losses rose slightly in the 50Hertz control area in 2021
and decreased slightly in the Elia control area. Looking at our own activities, we were able to intro-
duce the first SF
6
-free installations in two of our substations through two proof of concepts: a 70
kV circuit breaker in the Marcourt substation in Belgium and the first alternative gas-insulated
switchgear in the Charlottenburg substation in Berlin were installed. Our group-wide SF
6
phase-
out strategy is well underway.
Environment & Circular
Economy 2019 2020 2021 Target 2030
Forest corridors
managed ecologically
75% 78% 79% 90%
HV lines critical to birds
equipped with bird
markers
52% 58% 60% 100%
As indicated in the previous table, our ecological aisle management and bird protection pro-
grammes are being solidly rolled out. Indeed, in 2021, we undertook ecological aisle management
across areas amounting to 29 hectares and 33 hectares in Belgium and Germany respectively.
Moreover, by the end of 2021, 60% of the Elia group's high-voltage lines identified as critical for
birds had bird markers installed along them, meaning that 10 additional kilometres of lines were
equipped with markers last year.
STRENGTHEN THE GROUP’S POSITION THROUGH INORGANIC
GROWTH & EXPAND INTO NEW BUSINESS AREAS
In 2021, we continued to strengthen the group’s position through our inorganic growth: we investi-
gated new business opportunities and prepared the establishment of a new subsidiary to expand
our international offshore activities. Through WindGrid, Elia Group will continue to expand its activ-
ities overseas, since large-scale investments are being planned to develop offshore electricity grids
in Europe and beyond. Indeed, the European Commission is aiming to quadruple Europe’s current
offshore wind capacity to 60 GW by 2030 and 300 GW by 2050.
BE A LEADER IN HEALTH AND SAFETY & EVOLVE OUR CULTURE AND
TALENT
Health & Safety 2019 2020 2021 Target 2030
Group TRIR
4
4.6
4
5.5
4
6.3
4
Below 6.5
Absentee Rate Group
5
3.3% 2.9% 3.0% Below 5%
(4) Calculated as: (the number of work accidents with and without lost time)*1,000,000 / (The total number of working
hours over the year); excludes subcontrators - they will be included from 2022 onwards;
(5) Corresponds to health rate (1-x)
Our track record in terms of safety in 2021 is overshadowed by a fatal accident that occurred as
maintenance activities were being undertaken on 29 September. An investigation into the acci-
dent was carried out and additional measures are being implemented to prevent such accidents
from reoccurring. The event has reinforced the group’s resolve to make sure that all of our employ-
ees return home safely every day.
In 2021, Elia adopted a new global prevention plan 2020-2025, which outlines its health and safety
strategy for the years to come: ensuring a solid approach to health and safety alongside enhancing
our safety culture, with visible and exemplary safety leadership demonstrated by each individual.
After the successful introduction of the Safety Culture Ladder certification system (SCL scale 1 to
100
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
5) in 2020, an intermediate audit was carried out in 2021. This confirmed that Elia’s safety practices
are aligned with a Level 3 on the SCL scale and included recommendations for the organisation as
it aims to reach a Level 4.
A second monitoring audit was carried out at 50Hertz in accordance with ISO 45001:2018. The audi
-
tor verified the effectiveness of 50Hertz’s occupational health and safety management system,
concluding that the organisation demonstrates a high level of occupational safety awareness. The
auditor observed no deviations from the required standards at the sites that they visited. Further-
more, 50Hertz focused on in-depth exchanges with its contractors. In July 2021, the managing
directors of all overhead line construction contractors working for 50Hertz were invited to a “Safety
Dialogue” in order to discuss accidents and their possible causes. Given the success of this initial
session, such discussions will now be held on a regular basis.
Diversity, Equity &
Inclusion 2019 2020 2021 Target 2030
Women in total
workforce
21.1% 21.9% 22.2%
Currently
being
defined
# Nationalities 27 32 37 n.a.
Employee commitment
index
n.a. 69 69*
Currently
being
defined
* The survey is performed once every two years. It aims to collect feedback from employees about their views and general
level of satisfaction with regard to Elia and 50Hertz as workplaces; the Index is made up of 7 questions.
The Diversity, Equity & Inclusion (DEI) KPIs related to the number of nationalities and women
included in our workforce have increased steadily over the past 3 years. Elia was assessed as having
made progress in the categories of ‘diversity and inclusion’ and ‘leadership’ by the Top Employer
Institute (who awarded Elia the ‘Top Employer’ label for the fifth year in a row for 2021); indeed, the
proportion of women who form part of our total workforce is increasing. Moreover, as our workforce
becomes more diverse in terms of the nationalities it includes, our decision-making and innovation
improve.
The Elia group published a DEI Charter outlining Senior Management’s commitment to further
embedding DEI across the organisation. In addition, in order to track and progress towards the
fulfilment of our DEI ambitions, the Elia group developed a DEI data dashboard. Moreover, as part
of the group-wide diversity and inclusion awareness campaign, a series of ‘blind conversations’
focusing on DEI were launched, which almost 100 colleagues participated in. To respond to some
of the topics raised during these conversations, a series of training modules for employees was
developed; these modules focus on challenging unconscious bias and encouraging an inclusive
culture and leadership practices.
REALISE OUR DIGITAL TRANSFORMATION
Achieving our digital aspirations is crucial for coping with the changing context we operate in. Part
of our digital transformation journey has involved the recent establishment of a Digital Transfor-
mation Office (see chapter entitled ‘Our purpose and strategy’).
FINANCE OUR FUTURE
Financial Performance 2019 2020 2021 Target Progress
Adjusted Net Profit
(€ million)
306.2 308.1 328.3 n.a.
ROE (adj.)1 7.66% 7.2% 7.56%
n.a
Gross dividend per
share (€)
1.69 1.71 1.75
n.a.
(1) Determined as the result attributable to ordinary shareholder/equity attributable to owners of
ordinary shares adjusted for the value of the future contracts (hedging reserve);
The adjusted net profit is used to compare our performance between years, while the ROE (adj.)
provides an indication of our ability to generate profits relative to our invested equity. In 2021, the
adjusted net profit went up by 6.6%, reaching €328.3 million, following Nemo Link’s very strong
performance and solid operations in Belgium which offset the reduced result in Germany, which
was driven by increased operational expenses. An increased dividend of €1.75 per share will be
proposed at the General Meeting of 17 May 2022. For detailed information on our financial perfor-
mance, please see our Financial Report and the livestreamed analyst call we organised regarding
the Elia group’s 2021 full-year results.
INCREASE EFFICIENCY, REALISE SYNERGIES & OPTIMISE RESOURCE
ALLOCATION
In order to successfully deliver our strategy, we want to encourage a shift in our organisational cul-
ture. We are therefore embedding 6 key behaviours (the MAD behaviours) across the group. Whilst
ensuring excellence in our work is key, focusing on ‘Impact’ while overcoming complexity and elim-
inating complications through ‘Simplification’ is also important. In order to increase our efficiency
and realise synergies, we depend on alignment and accountability across the whole group, in line
with the behaviours of ‘One voice’ and ‘One company’.
Please see the chapter entitled ‘Our purpose and strategy’ for further information.
101
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
101
8
Corporate bodies
and governance
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
102
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
One-tier governance structure
Elia Group has a one-tier governance structure which comprises a Board of Directors and an Executive Manage-
ment Board.
Luc Hujoel tendered his voluntary resignation as non-executive director of Elia Group
SA/NV as of 31 December 2021 (at midnight). To replace Luc Hujoel, the Board of
Directors, on 17 December 2021, co-opted Thibaud Wyngaard, upon the proposal of
Publi-T, as non-executive director as from 1 January 2022. The confirmation of the
appointment of Thibaud Wyngaard as non-executive director will be proposed to the
Ordinary General Meeting to be held on 17 May 2022.
Board of Directors
Elia Group is managed by a Board of Directors that is composed
of at least ten (10) and a maximum of fourteen (14) members
who are appointed for a maximum of six (6) years. All members
are appointed during General Meetings and may be dismissed
during these. These directors strive for consensus in their deci-
sion-making.
The Board of Directors consists exclusively of non-executive
directors. At least three (3) directors are independent directors
in line with the meaning of this term outlined in section 7:87 of
the Belgian Code of Companies and Associations. Moreover, at
least one third (1/3) of the members of the Board of Directors are
required to be of the opposite sex to the remaining members
(the minimum number required is rounded off to the nearest
whole number). When renewing the directorship of each mem
-
ber, care is taken to ensure that a linguistic balance is achieved
with regard to directors who hold Belgian nationality.
Currently, the Board of Directors is composed of fourteen (14)
non-executive members, of which seven (7) members are inde
-
pendent directors and seven are non-independent directors
appointed in line with proposals from Publi-T. The composition
of the Board of Directors is based on seeking to achieve a good
balance in terms of the diversity and complementarity of the
skills, experience, knowledge and gender of each of its mem-
bers. All directors comply with the unbundling requirements
vis-à-vis the production or supply of electricity.
1
Bernard Gustin
2
Claude Grégoire
3
Geert Versnick
4
Michel Allé
5
Luc De Temmerman
6
Frank Donck
7
Cécile Flandre
8
Luc Hujoel
9
Roberte Kesteman
10
Jane Murphy
11
Dominique Offergeld
12
Pieter De Crem
13
Rudy Provoost
14
Saskia Van Uffelen
1
3
2
4
7
5
5
9
8
10
14
13
12
11
103
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
The Board of Directors assumes responsibility for and recog-
nises it is the guardian of corporate governance, meets all legal
requirements and applies/adheres to the following pillars:
· the (Belgian) 2020 Corporate Governance Code, which Elia
Group has adopted as its benchmark code;
· the (Belgian) Code of Companies and Associations;
· Elia Group’s Articles of Association.
The Board of Directors is collectively responsible to strive for the
long-term success of the Company by providing business lead
-
ership and ensuring that risks are anticipated and managed. In
this regard, the Board of Directors must decide on the values
and strategy, risk profile and key policies of the Company. The
Board of Directors must ensure that Elia Group has the financial
and human resources necessary to achieve its objectives.
The Board of Directors is supported by four (4) advisory commit
-
tees: the Remuneration Committee, the Audit Committee, the
Nomination Committee and the Strategic Committee.
Remuneration Committee
The
Remuneration Committee
is (among others) responsible
for making recommendations to the Board of Directors regard-
ing remuneration policy and the individual remuneration of
members of the Executive Management Board and of the Board
of Directors.
Our Board of Directors’ composition, diversity and tenure is
based on balancing gender, skills, experience and knowledge to
ensure effective leadership.
The Remuneration Committee met six (6) times in 2021, with an
attendance rate of 100%. In 2021, it prepared, amongst others,
the remuneration report 2020 for presentation to the Ordinary
General Meeting and reviewed Elia Group’s remuneration pol
-
icy and the compensation model of the Executive Management
Board of Elia Group as from 2022. A new remuneration policy
2022 will be presented to the Annual General Meeting on 17 May
2022.
Audit Committee
The
Audit Committee
is (among others) responsible for exam-
ining accounts and exercising control over the budget, monitor-
ing the effectiveness of the internal control and risk manage-
ment systems, and monitoring the statutory audit of the annual
accounts.
The Audit Committee met five (5) times in 2021, with an attend
-
ance rate of 96,00%. In 2021, it examined, amongst others, the
annual accounts for 2020, under both Belgian GAAP and IFRS
as well as the half-yearly results as at 30 June 2021 and the 2021
quarterly results, in accordance with Belgian GAAP and IFRS
rules. The Audit Committee also reviewed the yearly budget pro-
cess and the group Business Plan for 2022-2026. In addition, it
followed up the risk management activity and took note of the
internal audits carried out and the recommendations made. The
Audit Committee followed an action plan for each internal audit
carried out, in order to improve the efficiency, traceability and
awareness of the areas audited and thereby reduced the associ
-
ated risks and provided assurance that the control environment
and risk management are appropriate.
As from 2022, the Audit Committee will also contribute to the
preparation of Elia Group’s sustainability report and will monitor
the implementation of the group’s sustainability policy.
Nomination Committee
The
Nomination Committee
is (among others) responsible for
providing advice and support to the Board of Directors regard-
ing the appointment of the directors, the Chief Executive Officer
and the members of the Executive Management Board.
The Nomination Committee met nine (9) times in 2021, with an
attendance rate of 100%. In 2021, it dealt in particular with the
following matters: compliance with the requirements in the
area of full ownership unbundling concerning the non-execu
-
tive directors, proposal for the (re-)appointment of non-execu-
tive directors, follow up of future Board mandates to be renewed
in 2022, review of the Corporate Governance Charter, reports of
the Compliance Officer and preparation of the Corporate Gov-
ernance Statement 2021.
Strategic Committee
The
Strategic Committee
is (among others) responsible for
providing advice and recommendations to the Board of Direc-
tors on the business development activities and international
investment policy of the Company in the broadest sense, includ-
ing the method of financing.
The Strategic Committee met nine (9) times in 2021, with an
attendance rate of 95,24%. In 2021, it assisted the Board of Direc
-
tors by issuing recommendations and advices on the business
development activities, including the international investment
policy of Elia Group. As from 2022, the Strategic Committee will
also advice the Board on the sustainability policy of Elia Group as
well as on the reporting in view of the new European taxonomy
legislation.
DIVERSITY WITHIN BOARD OF DIRECTORS  AGE AND GENDER # OF DIRECTORS
-4 -2 0 2 4 6 8 10
Aged ≥ 55
Aged 35 < 55
Women
Men
104
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
The Executive Management Board (Collège de gestion journal-
ière/College van dagelijks bestuur) is responsible for the day-
to-day management of the company, including all commercial,
technical, financial, regulatory and personnel matters related
to this day-to-day management of the company, as well as for
the regular reporting to the Board of Directors on its operational
activities in the company and its policy in the key subsidiaries.
The composition of Executive Management Board is based on
gender diversity and diversity in general, as well as on the com
-
plementarity of skills, experience and knowledge. When search-
ing for and appointing new members of the Executive Manage-
ment Board, special attention is paid to diversity parameters in
terms of age, gender and complementarity.
The Executive Management Board generally meets at least
twice (2) a month.
Each quarter, the Executive Management Board reports to the
Board of Directors on the company’s / the group’s financial situ
-
ation (in particular on the balance between the budget and the
results stated) and all day-to-day management responsibilities,
in particular on the management by the group of the transmis-
sion system activities in the main Belgian and German affiliates
of the group (Elia Transmission Belgium / Elia Asset and 50Hertz
). In this context, it reported in 2021 on, amongst others, the fol-
low-up of the group’s investment programme (including the
monitoring and development of major investment projects), the
group’s infrastructure (including as to maintenance and oper
-
ations), the evolutions in the energy policy field (including the
main decisions taken by regulators and administrations), human
resources matters, safety and security issues and M&A/business
development matters. The Executive Management Board also
followed-up the most important group risks and their mitigation
measures as well as the recommendations of the internal audit.
The Board of Directors delegated the day-to-day management
to the Executive Management Board within the limits of the
rules and principles of general policy and the decisions adopted
by the Board of Directors of the company.
There is strong and continuous interaction between the Board
of Directors and the Executive Management Board. The Exec
-
utive Board reports to the Board of Directors on the company’s
financial situation and on the management by the group of the
transmission system activities in the main Belgian and German
affiliates of the group.
Executive Management Board
2
3
1
4
5
DIVERSITY WITHIN EXECUTIVE MANAGEMENT BOARD  AGE AND GENDER # OF EXECUTIVE BOARD MEMBERS
-1.5 -1 -0.5 0 0.5 1 1.5 2 2.5 3 3.5
Aged ≥ 55
Aged 35 < 55
Women
Men
1
Chris Peeters
Chief Executive Officer and
TSO Head Elia
2
Catherine Vandenborre
Chief Financial Officer
3
Stefan Kapferer
TSO Head 50Hertz
4
Peter Michiels
Chief Human Resources,
Internal Communication
Officer, Chief Alignment
Officer
5
Michael Freiherr Roeder
von Diersburg
Chief Digital Officer
105
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
The GSO sets sustainability targets and ambitions in close col-
laboration with the business, which is represented by Dimension
Leaders for each ActNow dimension. Progress made in line with
these targets is measured through joint KPIs that apply to Elia
Transmission Belgium and 50Hertz.
Local roadmaps are determined on an annual basis for Elia
Transmission Belgium and 50Hertz. These roadmaps, which
identify the activities that each subsidiary needs to focus on, are
adapted to their local environment and ensure that both sub
-
sidiaries contribute to meeting the Group-wide sustainability
objectives. The roadmaps are overseen by local sustainability
boards, which are established by the local sustainability man-
agers; they report to their local executive committees. The local
sponsors of ActNow are the Chief Community Relations Officer
at Elia Transmission Belgium and the CEO at 50Hertz.
For further details, see the Corporate Governance Statement
included in the 2021 Financial Report.
Culture and ethics
Integrity and ethics form an important part of our interactions
with internal and external stakeholders. The Executive Manage-
ment Board and senior management regularly communicate
both internally and externally about these principles to make the
rights and responsibilities of the Group’s subsidiaries and their
employees transparent and tangible.
These principles are described and listed the following docu
-
ments: the Code of Conduct, the Code of Ethics, and the corpo-
rate governance charter.
Going forward, we will add an anti-bribery and corruption policy.
Governance matters are highly important for Elia Group and are
fully embedded into the Dimension five of Elia Group’s ESG pro
-
gramme, ActNow.
Sustainability is fully embedded into our business strategy. Our
sustainability ambitions are consolidated at Group level and
overseen by the Group Sustainability Office (GSO), which con
-
sists of the Group-wide Strategy Department and local sustain-
ability managers from Belgium and Germany. The GSO reports
directly to the Elia Group Management Board via its sponsors:
the Group’s Chief Financial Officer, who oversees dimensions of
Climate Action and Environment & Circular Economy; and Elia
Group’s Chief Alignment Officer, who oversees the dimensions
of Diversity, Equity & Inclusion, Health & Safety and Governance,
Ethics &Compliance.
GOVERNANCE, ETHICS AND COMPLIANCE
Target Matrix
Governance, Ethics, Compliance & Transparency
Objective 1 (Governance)
Accountable
rules & processes
Objective 2 (Ethics)
Sustainable mindset
& behaviors
Objective 3 (Compliance)
Conformity with external
& internal rules
Objective 4 (Transparency)
Openness & meaningful
stakeholder dialogue
Key Result Areas:
- Adoption of international
best-practice approaches
to serve long-term
stakeholder interests
- Strategic perspective of
sustainability (longterm
ambitions)
- Effective internal controls
and external audits leading
to prompt actions
Key Result Areas:
- Clearexpected behaviors
with no tolerance for ethical
breaches
- Culture of speaking out and
simple procedures
- No links with any political or
religious activities
- Highest integrity towards
contractors and suppliers
Key Result Areas:
- Compliance with all relevant
legal and regulatory
requirements
- Prevention of fraud/abuse
- Detection of compliance
issues at early stages and
prompt corrective action/
consequence management
Key Result Areas:
- Full, fair, accurate, timely,
and understandable
provision of useful
information
- Reporting in accordance
with recognized
international standards
- Proactive stakeholder
dialogue
Mainly qualitative key results with some quantitative indicators (and ESG ratings scores)
Action plan Governance Action plan Ethics Action plan Compliance Action plan Transparency
106
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
Each subsidiary of Elia Group has risk guidelines in place which
outline how risks are systematically identified, recorded, assessed
and monitored throughout each financial quarter. A risk work-
shop is held once a year during which all division heads (second
management level) as risk owners and the Head of Group Inter-
nal Control and Risk Management discuss the most significant
risks and related topics with the Executive Management Board.
The processin place aims at identifying key risks, assessing
them, defining appropriate responses, communicating them
to the Board of Directors and monitoring the effectiveness of
mitigation actions. All the information collected by these pro
-
cesses is recorded in risk registers. Regular exchanges between
risk managers and risk owners allow these registers to be kept
up-to-date. The most important elements are summarised in
risk reports, which are presented to the Board of Directors and
Audit Committee four times a year.
Past risk analyses have contributed to highlighting Elia Group’s
vulnerability to climate change and the need to tackle this
through specific projects; for example, the floods which occurred
in July 2021 in Belgium led to new risks being taken into account
and ActNow was updated to include a new objective: climate
change resilient infrastructure.
For further details, see the section entitled ‘Risk Management
and Uncertainties’ included in the Corporate Governance State
-
ment in the 2021 Financial Report.
Remuneration
The remuneration of the directors consists of a base salary and
an attendance fee per meeting of the Board of Directors.
The remuneration of the members of the nomination commit
-
tee, the remuneration committee and the audit committee also
consists of a base salary and an attendance fee per meeting.
The members of the Strategic Committee are not remunerated,
with the exception of the Chairman, who is remunerated in the
same way as the Chairmen of the other advisory committees of
the Board of Directors.
The Remuneration Committee is responsible for the Remuner
-
ation policy defining the remuneration of the members of the
Executive Management Board. This remuneration consists of a
fixed remuneration and a variable remuneration.
The objective of Elia Group’s remuneration policy is to attract,
retain and motivate the best talent so that it can achieve its
short- and long-term goals within a coherent framework.
The total amount of remuneration paid out to the members of the
Executive Management Board in the 2021financial year has con
-
tributed to the long-term objectives and the sustainability of Elia
Group as the structure of the Executive Board’s remuneration is
designed to promote sustainable value creation by the company.
The level of the fixed remuneration ensured, on the one hand,
that the Elia group could rely on a professional and experienced
management, even in more difficult times, such as the Covid-19
crisis. The payment of the short-term bonus, on the other hand,
ensured the realization of the performance criteria that translate
the Elia group’s strategy. The long-term success of the company
was further stimulated by the long-term incentive plan, through
which the members of the Executive Board were also rewarded
in case of a.o. the realization of the energy transition.
Risk management and internal control
Elia Group closely monitors its main risks and opportunities in
order to undertake informed decision-making and efficiently
control their impact on its performance. The Elia Group Risk
Management framework is strongly aligned with the framework
developed by the Committee of Sponsoring Organizations of
the Treadway Commission (COSO), which includes best practice
related to the assessment of business risks. Each identified risk
is analysed in light of its potential impact on the different types
of capitals (see ’Glossary’) and its link with the 3 strategic pillars
(see chapter entitled ‘Our purpose and strategy’).
Elia Group is committed to avoiding risks that could potentially
harm its existence, to reducing risk positions as far as possible
and to optimising its risk-opportunity profile. In line with this,
Elia Group has appointed a Head of Group Risk Management,
who reports directly to the Group Chief Financial Officer.
GOVERNING BODY
Accountability to stakeholders for organizational oversight
RISK
MANAGEMENT
Governing body roles: integrity, leadership, and transparency
MANAGEMENT
Actions (including managing risk) to
achieve organizational objectives
INTERNAL AUDIT
Independent assurance
First line roles:
Provision of products/
services to clients:
managing risk
Second line roles:
Expertise, support,
monitoring and chal-
lenge on risk-related
matters
Third line roles:
Independent and objective
assurance and advice on all
matters related to the
achievement of objectives
Accountability, reporting
Delegation, direction,
resources, oversight
Alignment, communication
coordination, collaboration
EXTERNAL ASSURANCE PROVIDERS
KEY:
107
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
As both indexes look forward, they are each composed of twelve
commitments we want to achieve within the next 3-4 years. We
already made noteworthy progress on our roadmaps in 2021
with the accomplishment of nine actions out of twenty-four.
Examples include having more than 80% of our procurement
spent from suppliers who signed our Supplier Code of Conduct
or the addition of an executive-level responsibility for ESG topics
both at Group and local levels. We enter 2022 with a score of 4/12
for the ESG Governance Index and 5/12 for the Compliance Index.
Going forward: 2022
Improvement axes were identified, now that our ESG pro-
gramme Act Now is up and running, the objectives of this pro-
gramme were included in the variable remuneration both in
long-term and short-term collective targets.
Finally, in addition to designing clear objectives on ethics and
transparency, we also created an ESG Governance Index and a
Compliance Index that will guide the integration of ESG factors
into the heart of our business activities and decision-making
processes, including the variable remuneration of our workforce.
Both indexes, described in Figure 11 will be reported externally
twice a year.
0 or 1 Assign one Compliance coordinator in 50Hertz and Elia Transmission Belgium 0 or 1
Develop an ESG journey, including an annual sustainability governance workshop,
with the Board
0 or 1 Set-up an anti-bribery and corruption policy for all Group entities 0 or 1 Provide a bi-annual assessment of the risk situation in every Group entity
0 or 1 Write a conflict of interest policyfor all Group entitiesfor all Group entities 0 or 1 Add Sustainability aspects to charter of BoD Committees
0 or 1
% employees having followed the training on anti-bribery and corruption and
conflict of interest > 80%
0 or 1 Establish an annual Board performance review
0 or 1
% of the procurement spent from suppliers having signed the supplier Code of
Conduct > 80%
0 or 1 Have an ESG expert in the BoD
0 or 1 Report according to IIRC as from 2023 and TCFD from 2024 0 or 1 Create a remuneration Committee within Eurogrid GmbH
0 or 1
Is the% of timely implemented internal audit recommendations > 80%. If yes, 1;
else 0
0 or 1
Review and publish Severance pay policy for senior executives leaving the compa-
ny:(1) No specific termination clause, (2) just local regulation applies
0 or 1 No confirmed incidents of corruption and actions taken (GRI 205-3) 0 or 1
Add an Executive-level responsibility for ESG topics both at Group and local levels
(GRI 102-20)
0 or 1
No non-compliance with environmental laws and regulations notified by authori-
ties or certification body (GRI 307-1)
0 or 1
Ensure a minimum of 20% for the weight of ActNow objectives, CAPEX Delivery
excluded, in the variable remuneration of EXCO and EGMB members
0 or 1
No Legal actions for anti-competitive behavior, anti-trust, and monopoly practices
(GRI 206-1)
0 or 1
Set up annual local Exco meeting on how to embed Sustainability decision-mak-
ing process (Budgets, Strategic planning, orga)
0 or 1 No data breaches notified to the data protection authorities (GDPR violations) 0 or 1
Have all ActNow objectives in the Strategic Business Roadmaps of local entities
and allocate required resources (FTE and €)
0 or 1 Publication of a corporate tax disclosure 0 or 1
Bridge 90% of the gaps between Elia/50Hertz's operations and the preselected set
of ESG standards published by ratings agencies, investors and regulators
Compliance score ESG Governance score0...12/12 0...12/12
108
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
108
9
Risk
management
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
109
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
Risks
Link with our pillars of growth Impact on capitals Impact on value chain components
Risk Description Management of risk
Evolution of estimated
probability and impact
compared with FY2020
Deliver the infrastructure
of the future & develop
and operate a sustainable
power system
Develop new services that
create value for customers
in the energy system
Grow beyond our current
perimeter to deliver
societal value
Financial
Assets (Manufactured)
Intellectual
Employees &
Subcontractors
Social & Relationship
Natural
System planning
Infrastructure design
and construction
Grid operations and
maintenance
System operations
Market facilitation
Trusteeship
Additional services
Corporate functions
Changing
HR needs
The group's culture and skills
must be aligned with our
strategy. We are acting in an
environment which has increased
in complexity; this requires a
more agile, digital and innovative
mindset. Specific technical skills
(in offshore, digitalisation, intel-
lectual property…) are needed to
support the achievement of our
strategy - and these skills need to
be acquired despite the current
'talent war'.
- Culture change and leadership
programmes
- Launch of a Digital Transforma-
tion Office
- Talent management framework
- Training
- New Way of Working policies
- Diversity & inclusion initiatives
- Wellbeing initiatives
= x x x x x x x x x x x
Changing/
new
regulatory
conditions
Unplanned and/or inconvenient
changes to or misinterpretations
of regulatory or policy mecha-
nisms in Belgium or Germany
could clash with the group’s
existing and envisioned strategy,
causing severe financial and
organisational impacts.
- Regular contact with European
and national authorities
- Proactive anticipation of new
directives and regulations
- Membership of ENTSO-E, which
can provide advocacy related to
changes which are aligned with
our strategy
= x x x x x x x x x
The Elia group closely monitors the opportunities and risks it faces. We do this in order to
carry out informed decision-making and efficiently control their potential impact on the
relationships and resources we depend on to create value - and so, their impact on our
performance.
Whilst an opportunity is a possible positive development that is likely to generate an
increase in the value of the capitals we depend on, risks are possible negative developments.
The tables below provide an overview of: the main opportunities and risks we face;
management measures we undertake for each; a measure of their importance compared
with 2020; their link(s) to our 3 pillars of growth; and their potential impact on the capitals
and our value chain components. Note that some of these opportunities and risks relate to
the whole of our business, whilst others are specific to certain activities only.
Detailed information about each opportunity and risk and our approach to and governance
of risk management is provided in our Financial report.
110
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
Link with our pillars of growth Impact on capitals Impact on value chain components
Risk Description Management of risk
Evolution of estimated
probability and impact
compared with FY2020
Deliver the infrastructure
of the future & develop
and operate a sustainable
power system
Develop new services that
create value for customers
in the energy system
Grow beyond our current
perimeter to deliver
societal value
Financial
Assets (Manufactured)
Intellectual
Employees &
Subcontractors
Social & Relationship
Natural
System planning
Infrastructure design
and construction
Grid operations and
maintenance
System operations
Market facilitation
Trusteeship
Additional services
Corporate functions
The COVID-19
pandemic
The pandemic could impact sys-
tem operations (and, therefore,
continuity of supply) if minimum
staff numbers in critical depart-
ments cannot be guaranteed as
a result of COVID-19 infections
or quarantine measures (this
includes the impact of COVID-19
on the mental wellbeing of our
employees and on our
revenues).
- Regular surveys which check
the mental wellbeing of our
staff
- Reinforced safety and access
measures in control centres
- Antigen tests made available
on site
- Vaccinations provided at our
offices in Germany
- Dedicated COVID-19 taskforce in
Belgium
= x x x x x x x x x
Early
termination
of
Transmission
System
Operator
licences
An early revocation of the trans-
mission system operator licenses
belonging to Elia Transmission
Belgium SA/NV and/or 50Hertz
Transmission GmbH would have
an adverse material impact on
these entities and therefore on
Elia Group SA/NV.
- Safeguarding security of supply
and enhanced and accelerat-
ed CAPEX delivery are our top
priorities
- Strong governance processes in
place with a focus on compli-
ance
= x x x x x x x x x x x x x
Sustainability
of income
Changes to the regulatory
parameters could impact the
profitability of the
group.
- Ensuring that our strategy is
aligned with the interests of
society
- Maintaining and growing our
asset base
- Increasing efficiency in our
investment and asset mainte-
nance policies
- Regular and open dialogue with
our regulators
↗ x x x x x x x x x
Balancing
The growth in the number of re-
newable energy units connected
to distribution systems across
Europe and the number of con-
nections to large offshore wind
farms creates new challenges for
operational grid management,
particularly in terms of the in-
creased volatility of energy flows
across our network.
- Grid expansion and a higher use
of the grid
- National and international coop-
eration for grid control
- Reforms to market design to
unlock more flexibility (such as
our proposed Consumer-Centric
Market Design)
- Unlocking the potential held in
flexible load management
- Digital and customer centricity
initiatives
- Enabling new market players/
technologies
- Preparing an integrated balanc-
ing market at EU level
= x x x x x x x x x
111
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
Link with our pillars of growth Impact on capitals Impact on value chain components
Risk Description Management of risk
Evolution of estimated
probability and impact
compared with FY2020
Deliver the infrastructure
of the future & develop
and operate a sustainable
power system
Develop new services that
create value for customers
in the energy system
Grow beyond our current
perimeter to deliver
societal value
Financial
Assets (Manufactured)
Intellectual
Employees &
Subcontractors
Social & Relationship
Natural
System planning
Infrastructure design
and construction
Grid operations and
maintenance
System operations
Market facilitation
Trusteeship
Additional services
Corporate functions
Adequacy
The electrification of other sec-
tors across society will lead to a
growing demand for electricity;
the growth in renewable energy
sources may be too slow to cover
this increased demand.
- Adequacy and flexibility studies
- Providing useful information to
the authorities
- Capacity remuneration mech-
anism in Belgium to guarantee
the country's security of supply
in the longer term
- Dimension 1 of our ActNow
programme: accelerating the
decarbonisation of the power
sector
= x x x x x x x x x
Contingency
events and
business
continuity
disruption
Unforeseen events that alter the
smooth operation of one or more
infrastructure components are
a risk; examples of such events
include unfavourable weath-
er conditions, human errors,
malicious attacks, terrorism and
equipment failure.
- Implementation of IT security
measures
- Security screening of critical
operations/activities
- Limiting access to control rooms
and data rooms
- Redundancy of infrastructure
- Redundancy of critical tools
- Additional security layer for
critical infrastructure
- Risk preparedness plan for elec-
tricity sector
- Business continuity and restora-
tion plans
- Asset condition monitoring
= x x x x x x x x x x x x x x x
Climate
change and
the energy
transition
Changes to the climate and
the energy transition cause
uncertainties and challenges in
terms of the markets, system and
infrastructure.
- ActNow programme
- Infrastructure design / strigent
climate-related design condi-
tions
- Climate vulnerability assess-
ments
- Climate adaptation plan for our
existing infrastructure
↗ x x x x x x x x x x x x x x
Failure of
information &
communica-
tion
technology
(ICT), data
security and
protection
measures
A failure of our ICT systems and
processes or a breach of their
security measures could result in
losses for customers
and reduced revenues for the
group and its affiliates.
- Implementation of IT security
measures (e.g.: IT segmentation,
backups, failover mechanisms)
- Compliance with relevant regu-
lation (GDPR/network codes/NIS
directive/ISO27000)
- Employee awareness raising
and training
↗ x x x x x x x x x x x x x
112
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
Link with our pillars of growth Impact on capitals Impact on value chain components
Risk Description Management of risk
Evolution of estimated
probability and impact
compared with FY2020
Deliver the infrastructure
of the future & develop
and operate a sustainable
power system
Develop new services that
create value for customers
in the energy system
Grow beyond our current
perimeter to deliver
societal value
Financial
Assets (Manufactured)
Intellectual
Employees &
Subcontractors
Social & Relationship
Natural
System planning
Infrastructure design
and construction
Grid operations and
maintenance
System operations
Market facilitation
Trusteeship
Additional services
Corporate functions
Permitting
The need to obtain infrastructure
approvals and permits within
certain time frames represents
an important challenge. These
approvals and permits can be
challenged (in court), further
delaying projects.
- Transparent communication
and dialogue with local com-
munities
- Concrete and open stake-
holder management
- Working closely with local au-
thorities to achieve common
goals
= x x x x x x
Suppliers
Given the complexity of infra-
structure works, the increasing
demands on the market, and the
fact that factories have increasing
numbers of orders to
fulfil, the group may find it chal-
lenging to find enough suppliers
for its projects, may end up pay-
ing more for services or may have
to deal with
issues surrounding the quality of
products/services they purchase.
- Earlier placing of orders
- Improved capacity forecasts
- Widening the range of possible
suppliers
- Improved support for new
suppliers
- Encouraging increased trans-
parency across the supply chain
- Internal expertise related to crit-
ical technologies and tools
- Regular price revisions
↗ x x x x x x x x x
Health and
safety
accidents
Accidents, asset failure or ex-
ternal attacks may cause harm
to people which may lead to
liabilities.
- Promotion of a strong safety
culture (safety culture ladder)
- Active implementation of health
and safety policies
= x x x x x x x x
Negative
changes in
financial
markets
The ability of the organisation to
access global sources of financ-
ing to cover its financing needs
or repayment of its debt could be
impacted by the deterioration of
financial markets.
- Strong treasury risk monitoring
- Diversified financing sources
in debt instruments and good
balancing of maturities of its
funding
- Green financing
- Ring-fenced group structure
with seperate S&P credit rating
for ETB, Elia Group and Eurogrid
GmbH
↗ x x x x
113
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
Link with our pillars of growth Impact on capitals Impact on value chain components
Risk Description Management of risk
Evolution of estimated
probability and impact
compared with FY2020
Deliver the infrastructure
of the future & develop
and operate a sustainable
power system
Develop new services that
create value for customers
in the energy system
Grow beyond our current
perimeter to deliver
societal value
Financial
Assets (Manufactured)
Intellectual
Employees &
Subcontractors
Social & Relationship
Natural
System planning
Infrastructure design
and construction
Grid operations and
maintenance
System operations
Market facilitation
Trusteeship
Additional services
Corporate functions
Cash flow
Deviations between actual and
budgeted volumes of electricity
transmitted and between effec-
tively incurred and budgeted
costs/revenues (incl. interest
expenses) may have a negative
short-term effect on the financial
position of the group.
- Daily short-term liquidity man-
agement
- Availability of credit lines and
commercial paper programs
- Improvements in forecasting
(energy volumes)
- Involvement in the design of
regulatory mechanims and
tariffs
= x x x x x
New business
developments
Any negative results from new
business developments are
entirely borne by the group; they
represent an additional financial
risk and could impact its repu-
tation.
- Ring-fenced group structure
- Capped liabilities in contracts
- Strong governance and risk
management process for de-
cision-making regarding new
business developments
= x x x x x
Legal
disputes,
liabilities
The outcome of legal disputes
and lawsuits may negatively
affect business operations and/
or the organisation's financial
results
.
- Risk management process
aimed at avoiding legal disputes
as far as possible
- Capped liabilities in contracts
- Identification of appropriate
legal provisions
= x x x x x
114
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
Opportunities
Impact on capitals Impact on value chain components
Opportunity Description Response to opportunity
Impor-
tance of
opportunity
compared
with FY2020
Financial
Assets (Manu-
factured)
Intellectual
Employees &
Subcontractors
Social & Rela-
tionship
Natural
System
planning
Infrastructure
design and
construction
Grid operations
and
maintenance
System
operations
Market
facilitation
Corporate
functions
Additional
services
Trusteeship
Offshore evolution 
The Elia group has to sup-
port the harnessing of off-
shore capacity by coming
up with smart solutions for
planning and operations, as
well as the timely delivery
of onshore and offshore
infrastructure.
- Definition of the group's
offshore strategy, so the
organisation can play an
active role in offshore
development and help
Europe to reach its targets
in this area.
= x x x x x x x x
Digital transformation
The group must embed
digitalisation across all of
its activities in order to
drive its transformation;
better understand how
the world will evolve; and
develop its activities to
operate efficiently in
the interest of society.
- Digitalisation is an inte-
gral part of the group's
strategy
- The organisation of the
group has been adapted
to enable more digitali-
sation
- Launch of a digital trans-
formation programme
and a Digital Transforma-
tion Office
= x x x x x x x x x x x x
Relevant role played in
the energy transition
leading to a sustainable
future
The energy transition lies at
the heart of our vision and
Elia Transmission Belgium
and 50Hertz Transmission
aim to play an exemplary
role in this by integrating
sustainability into their
activities and be a trusted
advisor for the authorities.
- The interests of society
drive every decision taken
- Ambitious sustainability
targets included in the
ActNow programme
- Studies carried out to
anticipate impacts (e.g.
Roadmap to net zero /
Vision 2050, e-mobility
study)
- Climate change vulnera-
bility assessments
↗ x x x x x x x x x x x x x x
CAPEX realisation
The execution of its project
portfolio in a timely and
effective manner forms a
key part of the Elia group's
strategy. The group is
aware that this opportu-
nity is closely linked to its
ability to manage a much
larger portfolio than it ever
has before in a context of
operational constraints (see
risk section).
- Strong culture of high
performance and delivery
- Implementation of federal
development plans
- Risk management in
infrastructure projects
- Enhanced CAPEX delivery
- Efficiency and simpli-
fication through use of
behavioural standards
↗ x x x x
115
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
115
2022
Outlook
10
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
116
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
Strongly committed to the energy transition
As a company that comprises two system operators, we work in
close collaboration with local governments and regulators, who
create the conditions we need to deliver what society expects
from us: a reliable, sustainable and affordable energy system.
As outlined in our ‘Roadmap to net zero’ publication last year, in
addition to energy saving, direct electrification (of both house-
holds and industry) is the most efficient way to decarbonise soci-
ety. Accordingly, we are doing our utmost to develop high-qual-
ity infrastructure on time and within budget. Additionally, we
are encouraging changes in electricity market design and - by
harnessing digitalisation - are facilitating the participation of
many kinds of market players.
However, there is a mismatch between European climate tar
-
gets and the current pace at which developments are occurring.
To reach climate neutrality by 2050, RES development needs to
be sped up by a factor of three. We are therefore at an important
turning point: the next ten years will be crucial in terms of reach-
ing net zero. Policymakers at all institutional levels need to focus
on measures that create the right investment framework and
reduce the throughput time of RES expansion projects and the
realisation of the necessary grid infrastructure.
CAPEX plan of €9.6 billion for the next 5 years
In Belgium, our CAPEX plan amounts to €4.0 billion for the
next 5 years. The stable basis for this plan is formed by annual
investments dedicated to the replacement or reinforcement of
existing infrastructure to absorb the higher infeed of renewable
energy. From 2023 onwards, the further integration of the Euro-
pean electricity system and the decarbonisation of society will
drive a second wave of important investments marked by higher
CAPEX, mainly driven by the following projects: the Energy
Island; Nautilus; Ventilus; and Boucle du Hainaut.
In Germany, our CAPEX amounts to €5.6 billion over the next 5
years. The main drivers of this are the construction of new sub
-
stations, upgrades to several 400 kV overhead lines, the con-
struction of an HVDC corridor (the SuedOstLink) and additional
connections to offshore wind farms (including Ostwind 2, Ost-
wind 3 and Gennaker).
Electrification will unlock flexibility to
facilitate further RES integration
As RES expansion continues and electrification spreads across
society, there is a growing need for additional flexible assets
which can help to match the demand for electricity with pro-
duction patterns.
Today, industry is the provider of such flexibility (by increasing or
decreasing energy consumption or providing battery technolo
-
gies, for example). As outlined in our 2021 white paper, a con-
sumer-centric market design will open the door for consumers
to provide some of the flexibility the grid increasingly needs.
Such a design will allow more renewable energy to be efficiently
integrated into the system at the same time as allowing con
-
sumers to reap the benefits of their investments in flexible assets
(such as EVs, heat pumps and home batteries), so furthering the
decarbonisation of society.
Digitalisation in the name of efficiency and
decarbonisation
Enabling consumers to play a leading role in providing the grid
with flexibility can only be carried out through the widespread
digitalisation of flexible assets and different activities along our
grid. This will encourage the development of consumer-centric
services, which will deliver increased comfort to consumers and
enable them to optimise their energy costs whilst also encour-
aging a shift to a system under which the consumption of elec-
tricity is aligned with its production (rather than the other way
round).
If we are able to develop a digital electricity system and encour
-
age an adapted market mechanism which is in sync with the
arrival of additional grid infrastructure, we will be building an
industrial concept that is very future-oriented and a stepping
stone to the realisation of the Green Deal. This stepping stone
will strengthen our strong position in offshore wind and the
development of a new market design for the balancing market.
A sea of opportunities
In addition to the massive growth in offshore wind development
(both close and far offshore), additional subsea interconnectors
which will contribute to the further integration of the European
electricity grid will have to be built. Moreover, the development
of major projects in our control areas will be complemented by
many opportunities that will appear outside of our captive mar-
kets.
This is why we decided to establish a new subsidiary: WindGrid.
Its creation is a logical step in the further expansion of Elia Group
as an international energy company. WindGrid will be a reliable
partner for policymakers and authorities that want to proactively
build offshore grid infrastructure and for renewable energy
developers that are looking for solutions which will allow them
to connect their offshore energy assets to onshore electricity
networks. By building on the experience and know-how of the
Elia group and co-investing in international offshore grid infra
-
structure, WindGrid will make a key contribution to accelerating
the energy transition.
Challenges brought about by the energy
transition
Whilst uncertainty regarding the necessary policies and
roadmap for reaching net zero remains, some of the challenges
we are facing are clear. These must be addressed in time to
ensure decarbonisation is a success. In addition to securing suf-
ficient investment capital, speeding up our activities and trans-
forming into a truly digital company, we must attract and retain
the best talent with the right skills and expertise. Failure to
secure each of these could affect the speed at which we execute
our strategy and so the acceleration of the energy transition.
117
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
Development of materiality
matrix
Of the sources used to develop our current materiality matrix
(see the chapter entitled ‘Our value creation model’), sources (1)
and (2) determined the assignment of X axis values to each topic.
These remained largely unchanged compared with the values
assigned to each topic as part of our 2020 matrix (included in
our 2020 Sustainability Report). New material topics which were
identified following the introduction of our ActNow programme
(and which were not included in the 2020 matrix) were assigned
values by Senior Management.
Moreover, sources (3) and (5) determined the assignment of Y
axis values to each topic. Whilst the stakeholders we interviewed
were asked to rank the topics in order of importance for them,
our financial stakeholders were asked to assign a score to each
topic (between 1 and 10, with 10 indicating ‘high importance’).
Once we had received the results from each set of stakehold
-
ers, we aligned both approaches with each other: we assigned a
score to the topics which had been ranked by our stakeholders
who had been surveyed as part of (3). As an example, if a given
topic had been assigned an average score of 9.5 by our finan-
cial advisors, and this topic ranked second in terms of its score,
we assigned the score of 9.5 to the second most important topic
identified by our other stakeholders. This allowed us to calculate
an average score for each topic, which then led to their place-
ment along the Y axis.
SOURCES USED TO DEVELOP
OUR MATERIALITY MATRIX
1.
Internal survey undertaken in 2020
2.
Topics which were found to demonstrate
'double materiality'
3.
External consultation undertaken in 2020
4.
Roundtables undertaken in 2021
5.
Capital Markets Day survey undertaken in 2021
6.
International studies and frameworks
Appendix
11
118
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
Glossary
Whilst we aim to make our Annual Report accessible to every-
one, it does include technical terms and abbreviations. Below
are two lists, as follows: the first includes the most frequent
technical terms, each one accompanied by an explanation of its
meaning; please note that these explanations are not the legal
definitions of each term. The second list includes Integrated
Reporting terms, which aim to support our stakeholders as we
progress on our <IR> journey.
GENERAL TERMS
50Hertz Transmission GmbH (50Hertz):
One of Elia Group
SA/NV’s subsidiaries - a transmission system operator which
operates in the north and east of Germany.
Adequacy:
This is a measure of whether an electricity system
carries enough capacity to meet the demand for electricity
under normal conditions. A system is considered ‘adequate’ if it
has sufficient capacity; this capacity can come from generation
sources (such as a wind farm); electricity imports; and (increas-
ingly) flexibility assets.
Alternating current (AC):
AC is a type of electrical current
which regularly reverses its direction: the direction of the flow of
its electrons switches back and forth on a regular basis. A typical
household plug is usually an AC plug.
Balancing services:
One of the services that system operators
have to ensure in order to maintain the balance between supply
and demand in real time across the electricity system.
CAPEX:
Abbreviation of ‘capital expenditure’. This is the amount
a company spends on building or upgrading its assets; for the
Elia group, this includes our lines, pylons, and substations.
Carbon dioxide equivalent (CO
2
e):
A measure of how much a
gas contributes to global warming when compared with carbon
dioxide.
Carbon footprint:
This is a measure of the amount of green-
house gases produced as a result of an individual’s or organisa-
tion’s activities.
CCMD / Consumer-Centric Market Design:
This is the name
given to the Elia group’s proposed market design, which aims to
place consumers at the centre of the energy system, give them
a more active role in the electricity system and allow them to
benefit from better energy services. In turn, this is expected to
facilitate the energy transition.
CRM / Capacity Remuneration Mechanism:
This is one of sev-
eral measures that can be adopted to ensure a country’s secu-
rity of electricity supply. Such mechanisms provide payments to
electricity generators which guarantee that they will be available
for electricity generation if this is needed at some future point in
time. These payments are in addition to the earnings that power
plants make by selling electricity on the market.
Direct current (DC):
DC is a type of electrical current which
flows in one direction only. Household appliances that run on
batteries employ DC.
Driver (of the energy transition):
the Elia Group is a driver
of the energy transition: through our activities, we support the
decarbonisation of the power sector, of the economy, and, ulti-
mately, society. We are working towards ensuring that Europe
reaches net zero by 2050.
DSO / distribution system operator:
An organisation which
is responsible for the transportation of energy (gas or electricity)
across fixed infrastructure, generally on a regional level within
a country.
E-mobility:
Shortened term for electromobility, which is the
umbrella term for methods of transportation which are powered
by electricity.
Electrification:
This is the process of powering a system or
machine via the use of electricity (instead of another energy
source, which the electricity replaces).
Elia Grid International:
A wholly owned subsidiary of Elia Group
and 50Hertz: a consultancy which provides international clients
with services related to energy market development, asset man-
agement, system operation, grid development and the integra-
tion of renewable energy sources into electricity systems.
119
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
Elia Group (SA/NV):
This acts as a holding company which
owns a number of subsidiaries.
Elia group, the:
This expression refers to the different subsidiar-
ies which form Elia Group SA/NV.
Elia group’s grid:
This encompasses the network of transmis-
sion infrastructure and associated assets that we own and man-
age in Belgium and the north and east of Germany.
Elia Transmission Belgium SA/NV (Elia):
One of Elia Group
SA/NV’s subsidiaries - Belgium’s only transmission system oper-
ator.
End consumer:
An individual who buys and uses a product or
service. In the electricity sector, the term is generally used to
refer to household consumers.
Energy mix:
This is the breakdown of primary energy sources
(such as fossil fuels or renewable energy sources) used to pro-
duce secondary energy (such as electricity) for direct use by con-
sumers.
ESG / environmental, social and corporate governance
matters:
These are the three broad categories used to assess
the impact of a company’s practices on the external environ-
ment (beyond simply looking at a company’s profitability). Com-
panies are increasingly being expected to include ESG metrics in
their external reports.
Flexibility:
This is a measure of how much an energy system
is able to cope with short-term fluctuations in production and
consumption. These fluctuations are associated with the inte-
gration of increasing amounts of intermittent renewable energy
sources into energy systems. It is expected that flexibility assets
will play an increasing role in the stabilisation of the grid as RES
amounts rise.
Flexibility assets:
These are household-level assets - such as
electric vehicles and heat pumps - that are due to play an impor-
tant role in maintaining the balance between the supply of elec-
tricity and the demand for electricity. For example, the battery
of an electric vehicle can be charged and then be used to store
that energy temporarily, re-injecting it back into the grid when
needed.
Global Reporting Initiative (GRI) standards:
These voluntary
standards provide a framework for governments and organisa-
tions to use when carrying out corporate reporting related to
environmental and social performance issues.
Global warming potential (GWP):
this is a measure of how
much a particular gas contributes to global warming relative to
CO. The larger the GWP of a given gas, the more this gas warms
the Earth compared to CO over the same time period.
Green bond:
This is a type of debt instrument which is used to
channel investments into projects that have positive impacts on
the environment or on climate-related targets.
Greenhouse gas (GHG):
Gases that contribute to the warming
of the Earth’s temperature. GHGs which are produced as a result
of human activities include carbon dioxide, methane and sul-
phur hexafluoride (SF
6
).
GW:
Abbreviation of ‘gigawatt’, which is a unit of energy that
measures the amount of energy transferred each second. 1 GW
of electricity is roughly enough to power about 750,000 homes.
GWh:
Abbreviation of ‘gigawatt hour’, which is a unit of energy
that is equivalent to a steady power of one gigawatt running for
one hour.
HVDC:
Abbreviation of ‘high-voltage direct current’, which is a
type of current that allows power transmission across long dis-
tances and between AC transmission systems whose frequen-
cies are not matched.
Interconnector:
A high-voltage cable that connects the elec-
tricity grids of two countries together. Interconnectors enable
power exchanges to occur across borders, contributing to each
country’s security of supply.
Intermittency:
Volatility. Some renewable energy sources are
associated with high levels of intermittency, given that they are
affected by environmental, daily and seasonal factors.
Nemo Link:
The first subsea interconnection between Belgium
and the UK, which Elia built and now runs with National Grid, the
British electricity and gas utility company.
Net zero:
A term indicating balance being achieved between
the amount of carbon dioxide (CO) a country or region emits
into the atmosphere and the carbon it removes from the atmos-
phere.
OPEX:
Abbreviation of ‘operating expense’. These are a compa-
ny’s costs associated with the day-to-day running of its opera-
tions, such as grid maintenance, staff salaries, business travel
and rent for office space.
Power-to-X (PtX):
This term comprises the group of technolo-
gies that use electricity to generate heat (PtH), gas (PtG) or syn-
thetic fuels.
Prosumer:
An individual who both consumes and produces
value. In the energy sector, such individuals both consume elec-
tricity and produce it through the use of their own individual
power generators (such as a solar panel, for example). Prosumers
may also sell any excess electricity that they produce.
re.alto:
Elia Group’s corporate start-up, which is the first Euro-
pean marketplace dedicated to the exchange of energy and
data services.
RES / Renewable energy sources:
Energy which is generated
from natural processes or sources that are continuously replen
-
ished, such as wind energy, solar energy or hydropower. Some of
these sources - such as wind and solar energy - are intermittent.
ROE:
Abbreviation of ‘return on equity’, which measures the rate
of return that shareholders receive on the company stock that
they own.
SDGs / Sustainable Development Goals:
A collection of
17 global goals that were adopted by all United Nations (UN)
member states in 2015.
Sector coupling:
This refers to the use of renewable energy to
decarbonise different sectors of society, such as heating, trans-
port and industry. It includes, for example, the electrification of
devices in the areas of heating or transport, so that these electri-
fied devices can operate as flexibility assets; and the production
of green hydrogen for industrial use.
120
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
SF
6
:
Abbreviation of ‘sulphur hexafluoride’, a very powerful
greenhouse gas.
TSO / transmission system operator:
An organisation which
is responsible for the transportation of energy (gas or electricity)
across fixed infrastructure, generally on a national level within
a country. TSOs link generation sources with infrastructure
belonging to Distribution System Operators.
Value chain:
Term used to describe the whole range of a com-
pany’s activities that contribute to its delivery of a service or cre-
ation of a product.
WindGrid:
Elia Group’s newest legal entity, which is focused on
offshore development outside of the regulated perimeters of
Elia and 50Hertz in Belgium and Germany respectively.
INTEGRATED REPORTING TERMS
Business Model:
The system of transforming inputs through
business activities into outputs and outcomes to fulfil a organ-
isation’s strategic purpose and create value over the short,
medium and long term.
Capitals:
Resources and relationships that an organisation
depends on to create value. The Integrated Reporting Frame-
work includes six categories of capitals: Financial; Manufactured
(which we have termed 'Assets' throughout this report); Intellec-
tual (including organisational know-how and its brand and rep-
utation); Human (which we have termed 'Employees and Sub-
contractors); Social and Relationship; and Natural.
Inputs:
The six capitals which are transformed through business
activities into outputs and outcomes.
Integrated reporting:
An approach to corporate reporting that
provides a complete picture of how each of a company’s activi-
ties creates, preserves or erodes value for its stakeholders in the
short, medium and long term.
Materiality:
A term used in integrated reporting which refers
to the influence an issue has on an organisation’s ability to cre-
ate value. These topics are identified and ranked based on the
importance for our stakeholders. For example, the integration of
a high amount of renewable energy sources into the energy sys-
tem is a material issue for the Elia group.
Outcomes:
Internal and external consequences of our business
activities on the six capitals, which can be positive or negative.
Outputs:
Products and services coming from our business
activities, as well as any by-products and waste.
Performance:
Achievements relative to the strategic objectives
and outcomes in terms of the effect on the capitals.
121
ELIA GROUP INTEGRATED ACTIVITY REPORT 2021
Interview
Our path
to integrated reporting
The Elia group
at a glance
Our
environment
Our purpose
and strategy
Our value
creation model
Our
performance
Corporate bodies
and governance
Risk
management
2022
Outlook Appendix
Registered offices
The registered office of Elia Transmission Belgium and
Elia Asset is located at
Boulevard de l’Empereur 20
1000 Brussels, Belgium
The registered office of 50Hertz GmbH is established at
Heidestraße 2
D-10557 Berlin, Germany
The registered office of Eurogrid International is located at
Rue Joseph Stevens, 7
1000 Brussels, Belgium
The registered office of Elia Grid International is located at
Rue Joseph Stevens, 7
1000 Brussels, Belgium
Reporting period
This annual report covers the period from 1 January 2021 to
31 December 2021.
Contact
Group Communications and Reputation
Marleen Vanhecke
T + 32 486 49 01 09
Boulevard de l’Empereur 20
1000 Brussels
info@elia.be
Headquarters Elia Group
Boulevard de l’Empereur 20,
B-1000 Bruxelles
T +32 2 546 70 11
F +32 2 546 70 10
info@elia.be
Heidestraße 2
10557 Berlin
T +49 30 5150 0
F +49 30 5150 2199
in[email protected]
Concept and editorial staff
Communication & Reputation
Strategy
Sustainability
Investor relations
Finance
Graphic design
www.chriscom.be
Editor
Chris Peeters
Ce document est également disponible en français.
Dit document is ook beschikbaar in het Nederlands.
Reporting
parameters
We would like to thank everyone who contributed
to this annual report.
Powering
the decade
of electrification
SUSTAINABILITY
REPORT
2021
2
ELIA GROUP SUSTAINABILITY REPORT 2021
Content
Interview 4
1. The Elia group 9
1.1. Elia group companies 9
1.1.1. Structure 9
1.1.2. Business model 10
1.1.3. Size of the group 12
1.2. Grid 13
1.2.1. Length of lines 13
1.2.2. Substations and switches 13
1.3.1. Memberships 14
1.3.2. Values, principles and standards 15
1.3.3. Roles and responsibilities within the company 17
1.3.4. Legal and regulatory framework 19
1.3.5. Anti-corruption 20
1.3.6. Risk management 21
1.3.7. Political influence 21
1.3.8. Security and emergency management 23
1.3.9. Grid reliability 26
2. Strategy 28
2.1. Materiality and objectives 29
2.2. ActNow – Elia group’s sustainability programme 31
2.3. Green finance & EU Taxonomy 33
3. Energy – Market and integration of renewables 34
3.1. Introduction 35
3.2. Installed capacity in our control areas 35
3.3. Changes to the share occupied by renewable energy
in electricity consumption across our control areas 36
3.4. Energy imports and exports 37
3.5. Grid losses in our control areas 38
4. Human resources 39
4.1. Management approach 40
4.2. Headcount 40
4.3. Work-life balance 43
4.4. Employee surveys 45
4.5. Training 45
4.6. Remuneration policies and incentive systems 46
4.7. Social dialogue and co-determination 47
4.8. Diversity, Equity, Inclusion 48
5. Safety 52
5.1. Management approach 53
5.2. Health and safety training 55
5.3. Inspections 56
5.4. Accidents 57
6. Suppliers and human rights 58
6.1. Management approach 59
6.2. Suppliers and expenditure in the Eurozone 59
6.3. Human rights 61
7. Stakeholder engagement 62
7.1. Management approach 63
7.2. Community relations and public acceptance 65
7.3. Stakeholder dialogues 68
7.4. Cooperation and innovation 71
7.5. Community engagement 73
8. Environmental aspects 76
8.1. Management approach 77
8.2. Emissions 79
8.2.1. Greenhouse gas (GHG) emissions 79
8.2.2. Energy consumption 83
8.2.3. Electric and magnetic fields 84
8.2.4. Noise 84
8.3. Biodiversity and landscape 85
8.3.1. Mitigation and compensation measures 87
8.3.2. Ecological aisle management 89
8.3.3. Bird protection 90
8.4. Natural Resources 91
8.4.1. Water and soil 91
8.4.2. Waste 92
9 Reporting on EU Taxonomy Regulation 96
9.1 Context 97
9.2 Taxonomy-eligible and taxonomy non-eligible
economic activities 98
9.3 KPIs: Turnover, Capex and Opex 100
9.3.1 Turnover 100
9.3.2 Capex (Capital expenditures) 100
9.3.3 Opex (Operating expenditures) 100
9.3.4 Overview KPI’s 101
10. Reference Table 102
10.1 GRI Content Index 102
10.2 United Nations Global Compact Reference Table 108
11 Reporting parameters 109
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
3
ELIA GROUP SUSTAINABILITY REPORT 2021
GRI 102-50
This Sustainability Report provides transparency on
the Elia group’s performance in terms of sustainability
in 2021 and describes the integration of sustainability
into our strategy (see Section 2. Strategy).
This annual Sustainability Report has been prepared in
accordance with the Global Reporting Initiative (GRI)
Standards: Core option. GRI Standards serve as best
practice that can be used by organisations when carry
-
ing their public reporting about their economic, envi-
ronmental and social impacts.
Relevant GRI performance indicators are highlighted
throughout the report wherever Elia Group SA/NV is
communicating about its economic, environmental or
social impacts. Please consult the GRI Content Index
on page 102 for a full overview of these indicators.
It is Elia Group SA/NV’s fourth annual sustainability
report and it covers the period from 1 January 2021 to
31 December 2021.
Foreword
4
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
Our ActNow programme
that focusing on sustainability has become
second nature for us
In short
• Our sustainability programme, ActNow, focuses on
ensuring maximum impact across five dimensions.
• These dimensions are linked to our mission and to
internal changes that we are promoting across the
organisation.
• Sustainability is now embedded across all levels of the
company and has specific governance arrangements
attached to it.
• We want our own activities and the electricity system
to be carbon-neutral by 2030 and 2040 respectively.
INTERVIEW WITH CHRIS PEETERS AND
CATHERINE VANDENBORRE,
CEO AND CFO OF ELIA GROUP RESPECTIVELY.
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
4
ELIA GROUP SUSTAINABILITY REPORT 2021
5
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
Through our ActNow programme, Elia Group is aiming to undergo a
fundamental business transformation and establish an organisational
culture that has sustainability at its core. This will ensure that our
mission to work in the interests of society is further strengthened.
How is Elia Group ensuring that sustainability is
directly linked to its business activities?
Catherine Vandenborre:
Our main mission is to accelerate
the energy transition. Elia Group’s growth strategy is therefore
inherently linked to sustainability. However, that doesn’t mean
we don’t have to work on making our own activities more sus-
tainable. Via our ActNow road maps, we have identified both
concrete steps and actions to take in this regard.
Chris Peeters:
Our sustainability actions are not limited to
those we undertake in terms of our infrastructure. In our system
management activities, for example, we use fewer and fewer
assets that emit CO to keep the system balanced. Digitalisation
is allowing us to integrate battery technology into the system
and encourage demand response. We are also developing ideas
and services that will facilitate the decarbonisation of a number
of additional sectors. I am thinking here of the integration of
electric cars and smart buildings into our grid. In this way, we
are also supporting our partners to become more sustainable.
Catherine Vandenborre:
Our sustainability programme, Act-
Now, focuses on ensuring maximum impact across five dimen-
sions. These are linked to the Sustainable Development Goals
of the United Nations. They are: (1) Climate Action; (2) Environ-
ment & Circular Economy; (3) Health & Safety; (4) Diversity, Equity
& Inclusion; and (5) Governance, Ethics & Compliance. These
dimensions are linked to our mission as a transmission system
operator and are also linked to internal changes that we are pro-
moting across the organisation. After all, the financial markets
go beyond simply looking at CO emissions alone.
SUSTAINABILITY IS BECOMING
AN IMPORTANT DECISION
MAKING CRITERION.
INVESTMENT DECISIONS
WILL THEREFORE BE BASED
BOTH ON THE PRICE OF THE
INVESTMENT AND ALSO ON THE
ASSOCIATED CO
2
EMISSIONS.
Chris Peeters
GRI 102-14
6
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
Speaking of the financial markets, Elia Group
carried out its first audit regarding its alignment
with the EU Taxonomy for the year 2020. How
important is green financing?
Catherine Vandenborre:
Opting for green financing is a con-
scious choice. It gives us access to a larger group of investors.
Moreover, we are increasingly seeing that it also has a positive
financial impact of a few basis points. In the future, we want to
base our financing on green financial instruments such as green
bonds or instruments whose financial conditions depend on
sustainability performance indicators linked to Environmental,
Social and Governance (ESG) criteria. We carried out the audit
because we wanted to show the financial markets that our Act-
Now programme is more than just hollow words. We proved that
we are compliant with a number of regulations, including the
fact that our activities are considered environmentally sustaina-
ble according to the system laid out in the Taxonomy.
Chris Peeters:
There are financial reasons for it, but we also
want to support a culture of sustainability across the whole of
our organisation. We have integrated ActNow into our busi-
ness planning. That’s pretty new. In the past, we said we sup-
ported the energy transition; however, ActNow is now forcing
us to think about the things we do and how we do them. We
also occasionally do things that are a bit contrarian, like building
high-voltage substations which use SF6 (a powerful greenhouse
gas). We want such issues to be actively considered from differ-
ent viewpoints and for decisions to be made which strike a good
balance between technological progress and meeting a set of
goals.
Can you provide some examples of how ActNow
has led to changes in your business planning?
Chris Peeters:
Sustainability is becoming an important deci-
sion-making criterion. As part of our gridplanning activities, our
teams are working on producing a CO rating scale. If you opt
for a particular solution, it will have a cost and also an impact
in terms of CO emissions. Investment decisions will therefore
be based both on the price of the investment and also on the
associated CO emissions. We are also working on developing an
internal carbon price related to the choice of materials. We want
to test the carbon price this year in order to apply it from next
year onwards. By embedding these tools and processes across
the organisation, we are making everyone across the company
aware of the importance of sustainability.
Elia Group is facilitating the energy transition and
helping other companies to decarbonise. What
about dimensions such as diversity and security?
How far does their social impact extend?
Catherine Vandenborre:
We always act in the interest of soci-
ety. When selecting the five dimensions, we highlighted differ-
ent stakeholders for whom we want to do our best. One such
example is diversity. Our decision-making is influenced by want-
ing to be diverse and inclusive.
Chris Peeters:
Here, too, there is a cultural dimension. Within
Health & Safety, we have defined specific maturity levels as part
of our Go4Zero programme. Practical projects which keep our
organisation busy lead to our organisation maturing over time.
It’s not just about meeting targets. It has to become second
nature. Our maturity with regard to sustainability will continue
to increase over the next 10 years and will also gradually become
embedded into the ways of working of many of the subcontrac-
tors we employ.
Where does Elia Group want to be in 10 years with
regard to ActNow?
Chris Peeters:
We have defined where we want to be in 10 to 20
years for all dimensions of the ActNow programme. We want our
own activities and the electricity system to be carbon-neutral by
2030 and 2040 respectively. Now we are working on the best
way to realise that and how we can accelerate certain things if
necessary. Sustainability is now embedded across all levels of the
company and has specific governance arrangements attached
to it, including at the level of the Board of Directors.
IN THE FUTURE, WE WANT
TO BASE OUR FINANCING
ON GREEN FINANCIAL
INSTRUMENTS SUCH AS GREEN
BONDS OR INSTRUMENTS
WHOSE FINANCIAL CONDITIONS
DEPEND ON SUSTAINABILITY
PERFORMANCE INDICATORS
LINKED TO ESG CRITERIA.
Catherine Vandenborre
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
7
ELIA GROUP SUSTAINABILITY REPORT 2021
Company
profile
Elia group consists of several subsidiaries, including transmis-
sion system operators (TSOs) Elia Transmission Belgium SA/NV
(Belgium), 50Hertz Transmission GmbH (north & east of Ger-
many) and the joint consultancy company Elia Grid International
SA (worldwide).
Together, Elia Transmission Belgium SA/NV and 50Hertz Trans
-
mission GmbH operate 19,192 km of high-voltage connections
that supply power to around 30 million end users 24 hours a day,
365 days a year. Our group is one of Europe’s top 5 TSOs.
Any reference to Elia Transmission Belgium SA/NV in this report
refers to the following companies: Elia Transmission Belgium
SA/NV, Elia Asset SA/NV (EA) and Elia Engineering SA/NV (EE)
(unless expressly stated otherwise).
Any reference to 50Hertz Transmission GmbH in this report
includes the following companies: 50Hertz Transmission GmbH
and 50Hertz Offshore GmbH (unless expressly stated otherwise).
More information about the Elia group can be found in the 2021
Integrated Report and 2021 Financial Report.
The Elia group’s main responsibilities are developing and main-
taining the electrical grid, managing the balance between the
consumption and generation of energy, and facilitating access
to the market. The Elia group also develops innovative solutions
in order to better integrate renewables into the system, balance
the network and truly put the consumer at the centre of the
future energy system.
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
8
ELIA GROUP SUSTAINABILITY REPORT 2021
REGULATED ACTIVITIES
Elia Transmission Belgium (hereafter referred to as Elia) is the Belgian TSO
for high-voltage (30 kV to 70 kV) and extra-high-voltage (110 kV to 400 kV)
electricity. It has a natural monopoly as Belgium’s only TSO. It develops, builds
and operates a robust electricity transmission system (both on- and offshore)
and is responsible for devising services and mechanisms which support the
development of electricity markets at national and European levels.
Elia Transmission Belgium is part of the Nemo Link joint venture with National
Grid, the British electricity and gas utility company. Nemo Link is the first sub
-
sea interconnector to link Belgium to Great Britain, so allowing the trade of
electricity between both countries: traders can buy up to 1,012 MW of capacity
in auctions over a number of time frames.
The building of Nemo Link marked a crucial step in the integration of the elec
-
tricity grids of continental Europe and the UK. The interconnector was com-
missioned on 30 January 2019, and operates in line with its specific regulatory
framework.
50Hertz Transmission (hereafter referred to as 50Hertz) is a TSO which holds
a natural monopoly in the north and east of Germany and is a crucial player
in the realisation of the German ‘Energiewende’ - or energy transition. Its grid
runs across a distance of around 10,325 km, supplying electricity to 18 million
people in the states of Brandenburg, Mecklenburg-Western Pomerania, Sax
-
ony, Saxony-Anhalt and Thuringia, and the city states of Berlin and Hamburg.
In 2021, around 56.1% of electricity consumption in the 50Hertz grid area came
from renewable sources; it aims to make this 100% by 2032. The shareholders
of 50Hertz are Elia Group (80%) and the German state-owned investment and
development bank KfW Group (20%).
EGI offers consultancy and engineering services related to energy market
development, asset management, system operation, grid development and
RES integration. As a wholly owned subsidiary of Elia Group and 50Hertz, EGI
is able to harness the expertise of two large European system operators, each
with a solid track record in delivering high-quality projects and many decades
of experience. Its clients are mainly comprised of TSOs, but EGI also supports
regulators, public authorities and private developers.
In September 2020, Elia Group announced the official launch of re.alto, its very
own corporate start-up and the first European marketplace dedicated to the
exchange of energy data and services. The start-up enables the exchange of
energy data through its innovative Application Programming Interface (API)
platform, so enabling the energy industry to take a huge digital leap forward
towards a more widespread adoption of Energy-as-a-Service business models,
ultimately hastening the establishment of a low-carbon society.
Elia Group’s newest legal entity, WindGrid, will focus on offshore develop-
ment outside of its current regulated perimeters. In February 2022, the Board
of Directors approved the formation of this new subsidiary, solidifying the
group’s commitment to accelerating the energy transition in the interest
of society both in its home countries and abroad. WindGrid will deliver and
unlock further revenue streams for the group, whilst enabling it to remain at
the forefront of offshore wind development and maintain its relevance in the
long term.
NONREGULATED ACTIVITIES
Our non-regulated business activities are allowing us to develop the key com-
petencies we need to ensure a successful energy transition. They are helping
us to embrace innovation, develop sustainable energy markets and shape
growth opportunities that increase our societal relevance.
Elia Group acts as a holding company which owns two TSOs: Elia Transmission Belgium SA/NV and 50Hertz
Transmission GmbH in Germany. The separation and ringfencing of the Elia group’s regulated activities in Bel-
gium from its non-regulated activities and its regulated activities outside of Belgium was undertaken to ensure
that its future activities in Belgium and Europe would be aligned with its growth strategy. In 2021, this allowed
the group to pursue its organic growth and has set the foundations for future inorganic growth.
9
ELIA GROUP SUSTAINABILITY REPORT 2021
9
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
Elia Group SA/NV acts as a holding company
that owns Elia Transmission Belgium SA/NV
(the Belgian TSO), Eurogrid International SA
(which comprises the activities of 50Hertz
Transmission GmbH, one of Germany’s TSOs)
and Elia Grid International SA (the group’s
international consultancy branch). Its main
shareholder is the municipal holding Publi-T.
Elia Group SA/NV (formerly Elia System Oper-
ator SA/NV) has been listed on the regulated
market of Euronext Brussels since June 2005.
For more information, see page 16 of the 2021
Financial Report.
The Elia
Group
1
Eurogrid
GmbH
80%
Elia Group
SA/NV
Economic entity
Eurogrid
International
SANV
100%
50Hertz
Offshore
100%
energy
SRL/BV
100%
20%
50%/50%
JAO
4.0%
HGRT
17.0%
Coreso
15.8%
Publi-part
3.32%
Publi-T
44.82%
Free float
51.86%
energy
GmbH
100%
Transmission
100%
EGI
Pte. Ltd.
Singapore
100%
EGI
GmbH
Germany
100%
EGI LLC
Saudi
Arabia
100%
Coreso
7.9%
JAO
4.0%
EEX
5.4%
TSCNET
Services
GmbH
6.7%
Elia
Engineering
100%
Elia Re
100%
Elia Asset
SA/NV
99.99%
Elia Transmission
Belgium SA/NV
99.99%
100%
Nemo
Link ltd
50%
Belgian regulated entities
German entities
Non-regulated entities
*
* Incorporation of WindGrid is planned
in Q2 of 2022
1.1. Elia group companies
1.1.1. Structure
GRI 102-1, GRI 102-2, GRI 102-5
10
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
10
ELIA GROUP SUSTAINABILITY REPORT 2021
10
ELIA GROUP SUSTAINABILITY REPORT 2021
1.1.2. Business model
GRI 102-1, GRI 102-2, GRI 102-7, GRI 102-9, SDG9
The Elia group is a key player in electricity trans-
mission: it is one of Europe’s top five TSOs. In
order to successfully drive the energy transition
forward, the Elia group develops innovative
solutions for the system and market integration
of volatile renewable energies. The Elia group
ensures that generation and consumption are
balanced around the clock, supplying around
30 million end users with electricity. With
subsidiaries in Belgium and north and east
Germany, we operate 19,192 km of high-volt
-
age connections. The Elia group believes that
interconnectors, especially cross-border inter-
connectors which are also linked to offshore
wind farms, are necessary to achieve the goals
of the European Green Deal. Given the enor-
mous amount of electricity that will be needed
in order to decarbonise society, Europe must
harness all potential renewable energy sources,
including those which are located far off the
coasts of its member states. In addition to its
activities as a transmission system operator,
the group offers various consulting services for
international customers through its subsidiary
Elia Grid International SA (EGI), whose activities
include focusing on the integration of renewa
-
bles in countries outside of Belgium and Ger-
many.
We connect
generation &
distribution
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
11
ELIA GROUP SUSTAINABILITY REPORT 2021
11
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
GRI 102-3, GRI 102-4
ELIA IN BELGIUM
As the sole operator of the Belgian high-volt-
age grid, Elia Transmission Belgium SA/NV has
a natural monopoly and is therefore subject to
regulatory supervision. Its public mandate and
responsibilities are an integral part of the leg-
islation that regulates the Belgian electricity
market. It is overseen at the national level by
the CREG
1
, the federal regulator for the extra-
high voltage electricity grid (110 kV-400 kV),
and at a regional level by the VREG
2
, CWAPE
3
and BRUGEL
4
- the regional electricity market
regulators for the high-voltage electricity grid
(30 kV-70 kV). The regulatory system has a sig-
nificant impact on the organisation’s business
model. Elia Transmission Belgium SA/NV is also
part of the Nemo Link consortium, which oper-
ates the first subsea interconnector between
Belgium and the UK. Elia Transmission Bel-
gium SA/NV operates a modular offshore grid
in the Belgian North Sea which connects off-
shore wind production on an offshore platform
and transports it to the mainland.
1 CREG: Commission for Electricity and Gas Regulation.
2 VREG: Vlaamse Regulator van de Elektriciteits- en Gasmarkt.
3 CWAPE: Commission Wallonne pour l’Energie.
4 BRUGEL: Régulateur BRUxellois pour les marchés du Gaz et de l’ELectricité/BRUsselse
Reguleringscommissie voor de Gas- en ELectriciteitsmarkt.
50HERTZ IN GERMANY
50Hertz Transmission GmbH holds a regional
monopoly on the transmission grid in the north
and east of Germany. The company is the exclu-
sive operator of the extra-high-voltage electric-
ity grid (150 kV – 525 kV) in this area. 50Hertz
Transmission GmbH is therefore subject to
regulatory supervision by the national regula-
tory authority - the Federal Network Agency
(BNetzA). The German regulatory system deci-
sively shapes its business model. BNetzA also
sets 50Hertz Transmission GmbH’s revenue
cap when it comes to calculating its network
fees. In addition, 50Hertz Offshore GmbH oper-
ates the Kriegers Flak Combined Grid Solution
(CGS), the world’s first hybrid offshore inter-
connector. The CGS connects the German and
Danish electricity grids together whilst also
including connections to several offshore wind
farms. As a result, the CGS can transmit off-
shore wind power to either country whilst also
being used for cross-border electricity trading.
12
ELIA GROUP SUSTAINABILITY REPORT 2021
12
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
1.1.3. Size of the group
GRI 102-1
Breakdown by country, company and number of employees
TOTAL HEADCOUNT ELIA GROUP 2021 
1,600
1,400
1,200
1,000
800
600
400
200
0
27
194
867
6
5
397
50Hertz
Transmission
Eurogrid
GmbH
Elia Grid
InternationaI
Germany
Elia System
Operator
(ESO)
Elia
Transmission
Belgium
(ETB)
Elia Asset (EA) Elia
Engineering
(EE)
EGI
Belgium
Eurogrid
International
(EI)
21
6
1,382
Please note: three of Elia Transmission Belgium SA/NV’s chief officers and two other staff members occupy positions in both Elia Group SA/NV and Elia Transmission Belgium SA/NV, meaning they are
counted twice in the figure above.
13
ELIA GROUP SUSTAINABILITY REPORT 2021
13
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
1.2. Grid
G4-EUS-EU4
Elia Transmission Belgium SA/NV and 50Hertz Transmission
GmbH operate the extra-high-voltage transmission grids (110kV
- 525 kV) in Belgium and in the north and east of Germany, as
well as interconnectors to other extra-high-voltage grids. In
addition to this grid, Elia Transmission Belgium SA/NV operates
the high-voltage grid (30kV - 70kV) in Belgium. The operation of
these grids at different voltage levels means Elia Transmission
Belgium SA/NV and 50Hertz Transmission GmbH differ in terms
of the number of assets they oversee and in terms of the meas-
urement of the grid interruptions (see 1.3.9. Grid Reliability).
1.2.1. Length of lines
ELIA IN BELGIUM
2019 2020
2021
Voltage
Underground/
submarine
cabling (km)
Overhead
lines (km)
Underground/
submarine
cabling (km)
Overhead
lines (km)
Underground/
submarine
cabling (km)
Overhead
lines (km)
400 kV (DC) 70* - 70* - 70* -
380 kV 40 918 40 923 41 940
320 kV - - 49 - 49 -
220 kV 135 300 161 301 162 300
150 kV 628 1939 686 1935 717 1,926
110 kV - 8 - 8 - 9
70 kV 317 2,404 304 2,399 324 2,370
36 kV 1,917 8 1,915 8 1,865 8
30 kV 75 22 75 22 75 22
Total Lines/Cables 3,182 5,599 3,300 5,596 3,292 5,575
TOTAL 8,781 8,896 8,867
* The Nemo Link interconnector – total length 140 km – is a joint venture (50/50) between National Grid Interconnector Holdings Limited, a subsidiary company of the UK’s National Grid Plc,
and Elia.
.
50HERTZ IN GERMANY
2019 2020
2021
Voltage
Underground/
submarine
cabling (km)
Overhead
lines (km)
Underground/
submarine
cabling (km)
Overhead
lines (km)
Underground/
submarine
cabling (km)
Overhead
lines (km)
400 kV (DC) 15 - 15 - 15 -
380 kV 55 7,250 55 7,330 55 7,330
220 kV 293 2,607 293 2,397 293 2,342
150 kV 270 - 295 - 295 -
Total Lines/Cables 633 9,857 658 9,727 658 9,672
TOTAL 10,490 10,385 10,325
1.2.2. Substations and switches
ELIA IN BELGIUM
2019 2020 2021
substations ≥ 150 kV 300 299 300
substations < 150 kV 507 507 507
HVDC* Converter station 1 2 2
TOTAL 808 808 809
* HVDC: High Voltage Direct Current
N.B.: Please note an error has occurred in the reporting for year
2020, the number of HDVC Converter stations was 2 (instead of 1)
as mentioned in the above table.
50HERTZ IN GERMANY
2019 2020 2021
# substations 65 65 65
# switch gears 9 9 9
HVDC Converter station 2 2 2
TOTAL 76 76 76
14
ELIA GROUP SUSTAINABILITY REPORT 2021
14
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
1.3. Guiding principles
1.3.1. Memberships
GRI 102-12, GRI 102-13, SDG17
As outlined in the table below, the Elia group is a member of a
number of societies and associations and plays a role in differ-
ent initiatives linked to renewable energy, climate and environ-
mental protection, human rights and the harmonisation of the
European electricity market at global, European and local levels.
Energy Climate Environment Human rights Elia 50Hertz
World Energy Council
CIGRE - Conseil International des Grands Réseaux
Electriques
Go15 - Reliable and Sustainable Power Grids
( )
UNGC - United Nations Global Compact
Centre on Regulation in Europe
Roundtable of Europe’s Energy Future
Charge-up Europe
ENTSO-E - European Network of Transmission System
Operators for Electricity
Coordination of Electrical System Operators
RGI - Renewables Grid Initiative
Energy Web Foundation
The Shift
Synergrid - Fédération des gestionnaires de réseaux
électricité et gaz en Belgique
Osiris
Conseil des Gestionnaires des Réseaux de Bruxelles
Vlaamse Raad van Netwerkbeheerders
Powalco
BECI - Brussels Enterprises Commerce and Industry
FEB - Fédération des Entreprises de Belgique
UWE - Union Wallonne des Entreprises
VOKA - Vlaams Netwerk van Ondernemingen
AGORIA
Communauté Portuaire Bruxelloise
COGEN Vlaanderen
AVEU Arbeitgeberverband Energie- und
Versorgungswirtschaftlicher Unternehmen e.V.
[employers’ association of energy and utility companies]
BDEW – Federal Association of the Energy and Water
Industry
VDE-Elektrotechnischer Verein e.V. [electrotechnical
association]
Diversity Charter
FGW Fördergesellschaft Windenergie und andere
Dezentrale Energien e.V.
15
ELIA GROUP SUSTAINABILITY REPORT 2021
15
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
1.3.2. Values, principles and
standards
GRI 102-16, GRI 102-17, GRI 102-26
For Elia Group SA/NV, long-term success is defined by acting in
the interest of society. This is reflected in the company’s vision: “A
successful energy transition for a sustainable world”.
The Elia group is committed to ensuring it has solid corporate
governance practices in place, as outlined in its group-wide Code
of Ethics. The latter aims to ensure that staff and the group act in
accordance with the ten principles of the UN Global Compact in
the areas of human rights, labour standards, environmental pro
-
tection and anti-corruption. In line with this, Elia Group SA/NV
and 50Hertz Transmission GmbH have expressed their commit-
ment to responsible corporate governance practices by signing
the United Nations Global Compact (UNGC) – the leading U.N.
initiative which encourages businesses to adopt sustainable and
socially responsible policies that are aligned with the 2030 Sus-
tainable Development Goals. Both companies are also commit-
ted to and actively work on topics included in the 10 Principles of
the UNGC (see Section 2. Strategy).
Code of Ethics
Integrity and ethics are a critical aspect of our internal interac-
tions. The Board of Directors and the Executive Management
Board regularly communicate about these principles to clarify
the mutual rights and responsibilities of the company and its
employees. These rules are communicated to all new employ-
ees, and compliance with them is formally included in employ-
ment contracts.
The Code of Ethics (published in 2021) and all associated poli
-
cies define what the Elia group considers to be proper ethical
behaviour. They establish a set of clear principles which seek
to avoid any conflicts of interest. They also seek to ensure that
employees do not violate any laws regarding the use of privi-
leged information, market manipulation or suspicious activities.
Senior management consistently ensures that employees com-
ply with internal values and procedures and, where applicable,
takes appropriate action, as set out in company regulations and
employment contracts.
Acting in as honest and independent parties when interact
-
ing with all stakeholders is an important guiding principle for
all our employees. The Code of Ethics explicitly states that Elia
Group SA/NV prohibits bribery in any form, the abuse of prior
knowledge and market manipulation. Elia Group SA/NV and its
employees do not accept gifts or hospitality to gain any compet
-
itive advantages. Facilitation payments are not permitted by Elia
Group SA/NV. Disguising gifts or hospitality as charitable dona-
tions is also a violation of the Code of Ethics.
In addition, the Code of Ethics ensures that discrimination is not
tolerated within the organisation; it prohibits all forms of racism
and discrimination and promotes equal opportunities for all
employees through fair assessments of their work. This applies
regardless of an individual’s ethnicity, gender, religion, political
opinion, social origin, age, sexual orientation or physical ability.
Elia Group SA/NV’s internal policy on discrimination and equal
opportunities is based on the International Labour Organiza
-
tion’s Convention C111 on Discrimination. Lastly, the Code of Eth-
ics seeks to ensure that staff use and treat the IT systems and
data they have access to in a confidential manner, in line with
data protection requirements.
16
ELIA GROUP SUSTAINABILITY REPORT 2021
16
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
Code of conduct
Following the entry into force of European Reg-
ulation (EU) No. 596/2014 on market abuse, Elia
Group SA/NV amended its Code of Conduct,
which aims to prevent staff (including individu-
als with leadership responsibilities) from break-
ing any laws regarding the use of privileged
information and market manipulation.
The Code of Conduct lays down a series of reg
-
ulations and communication obligations for
transactions undertaken by staff in relation to
their Elia Group SA/NV securities, in accord-
ance with the provisions of the Market Abuse
Regulation and the Act of 2 August 2002 on the
monitoring of the financial sector and other
financial services. This Code of Conduct is avail-
able on the organisation’s website here.
Corporate Governance
Charter and internal rules
of procedure of the Board
of Directors, the Board’s
advisory Committees and
the Executive Management
Board
The Corporate Governance Charter and the
internal rules of procedure of the Board of
Directors, the Board of Directors’ advisory com-
mittees and the Executive Management Board
can be found in the organisation’s online docu-
ment library here.
The responsibilities of the Board of Directors
and of the Executive Management Board are
described in detail in the Articles of Association
of the company and are therefore not reiter
-
ated in the internal rules of the Board of Direc-
tors and the Executive Management Board.
In March 2021, Elia Group SA/NV finalised a new
version of the Corporate Governance Charter in
order to comply with the group’s new structure
and governance; these were changes under-
taken following the introduction of the new
Belgian Code of Companies and Associations
and the 2020 Corporate Governance Code.
Supplier Code of Conduct
All parties involved in procurement must com-
ply with Elia Group SA/NV’s Supplier Code of
Conduct and all related regulations. Elia Group
SA/NV’s Supplier Code of Conduct is published
both internally and externally (
Elia Transmis-
sion Belgium SA/NV
and
50Hertz Trans-
mission GmbH
) and is based on four pillars:
confidentiality; non-discriminatory treatment
of suppliers; transparency; and avoidance of
conflicts of interest. Employees involved in pro-
curement and payment processes are regularly
provided with training and awareness-raising
sessions related to these topics.
Cultural Behaviours
To encourage a shift in organisational culture,
the Make A Difference (MAD) programme was
launched. MAD includes six key behaviours,
which represent the corporate culture that
we want our employees to embody. They form
the basis for the way we all approach our work
- both internally (in teams and departments)
and externally (with partners and stakeholders
outside the Group).
The MAD behaviours are a prerequisite for
delivering on our vision and mission and for our
continued positive impact on our stakeholders
and the energy value chain.
These behaviours are modified and adapted
for staff at Elia Transmission Belgium SA/NV
and 50Hertz Transmission GmbH, in order to
accommodate local differences in culture. The
six core values reflect fundamental principles
that are deeply rooted across the Elia group.
These six behaviours form the basis or our Code
of Ethics, and the guidelines and principles that
drive all of Elia group’s activities.
Feedback
We give feedback to and ask for
feedback from colleagues at all
levels of the Group. In this way,
we show appreciation for their
work and strive for continuous
improvement.
Co-creating the future
We are aware of the radical changes
occurring in our sector (such as
digitalisation and decentralisation)
and play an active role in shaping
them.
Simplification
We consider the ways in which
projects can be simplified,
eliminating unnecessary
complications in what is already a
very complex environment.
One company
Each employee’s responsibilities
transcend the boundaries of
their own job or department. All
members of staff consider issues
from a company-wide perspective
and support the choices made by
Elia Group as a company.
One Voice
We have open and constructive
debates before taking a decision.
Once a decision is taken, everyone
commits to it fully and is united
in their understanding of and
communication about it.
Impact
We carry out our work and
projects in the best possible
way by focusing on the actions
that make a difference and have
a tangible impact on areas
including safety, the system,
society, the environment, and our
performance.
17
ELIA GROUP SUSTAINABILITY REPORT 2021
17
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
Setting Ambition Level & Evolution at Group Level
Strategy & Sustainability Comtmittee
Board of Directors
Local Business Implementation
Sustainability sponsorship: CCRO
Elia Transmission Belgium
Climate Action
Sustainability sponsorship (CFO & CAO)
Elia Group Management Board
Group Strategy
Local Sustainability Managers
Sustainable Finance,Integrated Reporting & Controlling,
Communications,ad-hoc other functions such
as EU Affairs, Risk Mgt, SoF...
Sustainability Manager
Sustainability Board ETB
(CCRO,department heads of relevant line
organisation)
Local Business Implementation
Sustainability sponsorship: CEO
50Hertz Transmission
Sustainability Manager
Sustainability Board 50Hertz
(CFO, CHRO, department heads of relevant
line organisation)
Group Sustainability Office
Environment & Circularity Diversity, Equity & Inclusion
Governance, Ethics
& Compliance
Health & Safety
Dimension Leaders
Local Level Group Level
ELIA IN BELGIUM
Elia fully complies with corporate governance requirements.
In addition, internal management systems based on recognised
standards such as early public acceptance are used in sustaina
-
bility areas which are material. In the area of health and safety,
Elia Transmission Belgium SA/NV holds a Safety Culture Ladder
Level 3 certification. In the area of information security manage-
ment, the organisation launched a programme in line with ISO
27001 with a view to obtaining ISO 27001 certification in 2022.
The existing environmental management system is currently
being aligned with ISO14001.
50HERTZ IN GERMANY
50Hertz Transmission GmbH expresses its commitment to
responsible corporate governance in its sustainability mission
statement and corporate charter. These state that in the areas
of human rights, labour standards, environmental protection
and anti-corruption, the company acts in accordance with
the ten principles of the UN Global Compact. Employees also
have access to comprehensive company documentation that
includes all valid guidelines, directives, work instructions, pro-
cess manuals and company agreements.
Furthermore, certified management systems (such as ISO 45001
in the area of health and safety and ISO 27001 in information
security management) or internal management systems based
on recognised standards, (like the framework of early public par
-
ticipation according to VDI 7000, for example), are used in areas
which are material . The organisation’s existing environmental
management system is currently being aligned with ISO 14001.
An audit of this is due to be carried out during the fourth quarter
of 2022.
1.3.3. Roles and responsibilities within the company
GRI 102-18, GRI 102-19, GRI 102-20, GRI 102-26, GRI 102-32, GRI 102-33,
GRI 103-3
Sustainability lies at the heart of our business strategy. The
group-wide sustainability programme ActNow reflects this.
ActNow defines five areas of focus: our so called dimensions of
sustainability management (see chapter 2 for more informa-
tion on ActNow). Our ambitions are consolidated at group level
and steered by the Group Sustainability Office (GSO), which is
part of the Group Strategy Department. The GSO reports (via its
sponsors) to individuals from the Executive Management Board
who are responsible for sustainability: the Group Chief Finan-
cial Officer oversees the ActNow dimensions of Climate Action
and Environment & Circular Economy; and the Group Chief
Alignment Officer oversees the ActNow dimensions of Diver-
sity, Equity and Inclusion, Health & Safety and Governance, and
Ethics and Compliance. The Group Sustainability Office works
closely with different business units and local sustainability
managers to set targets in line with the group’s sustainability
commitments.
The local entities of Elia Transmission Belgium SA/NV and
50Hertz Transmission GmbH implement these goals via local
action plans that define the activities they should focus on.
These local action plans are monitored and steered by local Sus
-
tainability Boards which meet several times a year. The sponsors
of these Boards are members of the executive management
committees in both countries. In addition, Dimension Leaders
were appointed to each of the five ActNow dimensions to mon-
itor and steer the development and implementation of the local
action plans in Belgium and Germany.
18
ELIA GROUP SUSTAINABILITY REPORT 2021
18
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
ELIA IN BELGIUM
Led by the Chief Community Relations Officer, the Environment
& Corporate Social Responsibility (CSR) Department has defined
a roadmap of measures that the organisation needs to follow as
it expands its sustainability reporting. All environmental report-
ing and sustainable communication with external stakeholders
is coordinated by the Community Relations Department.
The responsibilities linked to sustainability are clearly defined, as
outlined in the figure below.
SUSTAINABILITY
ENVIRONMENT
Chief Community Relations
Officer
Environment & CSR
SOCIAL
Chief Human Resources &
Internal Communication
Officer
Health & Safety,
Human Resources and
General Secretary
GOVERNANCE
Chief Finance Officer
Risk Management
50HERTZ IN GERMANY
Under the supervision of 50Hertz Transmission GmbH’s Chief
Executive Officer, the local CSR manager (who is part of the Cor-
porate Development Department) has defined a sustainability
roadmap for the implementation of ActNow; the Communica-
tions & Public Affairs Department has refined the associated
reporting processes.
The responsibilities linked to sustainability are clearly defined, as
outlined in the figure below.
RESPONSIBILITY FOR SUSTAINABILITY MANAGEMENT
CEO
Overall responsibility Sustainability
COMPANY DEVELOPMENT
Responsibility, sustainability
Management
Head
Quarters
Development Implementation Planning
CHRO
Responsibility Corporate
Governance
Head
Quarters
Corporate Security, ICS & Compliance, Risk management,
data protection, health protection & Occupational safety,
Strategic environmental protection
CTO
Responsibility for
environmental management
Head
Quarters
Quality assurance on construction sites offshore, construction
Ssite control, environmental protection, Nature conservation
Regional
Centres
Operational environmental and nature conservation,
Operational quality assurance
19
ELIA GROUP SUSTAINABILITY REPORT 2021
19
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
1.3.4. Legal and regulatory framework
The Elia group complies with all applicable legislation. Its busi-
ness activities are subject to numerous regional, national and
European laws and regulations. Elia Group SA/NV is subject to
the rules of good governance applicable to listed companies.
Additional relevant information can be found in the Corporate
Governance Statement in our 2021 Financial Report.
The Elia group actively monitors the emergence of European,
national or local regulations
A European Green Deal
In December 2019, the European Commission published its
European Green Deal, an ambitious package of measures that
aims to make the EU the first climate-neutral continent in the
world and is based on the Commission’s 2018 publication A
Clean Planet for all. This strategy is in line with the 2015 Paris
Agreement, which aims to keep the average global temperature
increase well below 2°C (preferably 1.5°C). All EU member states
have also agreed to reaching the goal of climate neutrality.
2021 was a particularly important year in terms of making the
Green Deal goals a reality, since in June 2021, the Commission
presented its so-called “Fit for 55” package. This aims to reduce
greenhouse gas emissions by at least 55% (compared with 1990
levels) by 2030. The package covers wide-ranging policy areas
– from renewables to energy efficiency, as well as alternative
fuels (for e-mobility), land use, energy taxation, effort sharing
and emissions trading. The Elia group in particular monitors the
Energy Efficiency Directive, the Renewables Directive and the
Alternative Fuels Infrastructure Regulation. An Elia group posi
-
tion paper on the “Fit-For-55” package is publicly available
5
.
In addition, in December 2021 the Energy Performance of Build
-
ings Directive was published, as well as a revision of the gas
package.
GRI 419-1
During the reporting year, the Elia group companies did not
receive any significant fines or non-monetary sanctions for fail-
ure to comply with social or economic legislation and regulations.
ELIA IN BELGIUM
One of the core principles of corporate governance laid down
by the legislation governing the electricity industry in Belgium
is the strict separation between the composition of and respon-
sibilities incumbent upon Elia Transmission Belgium SA/NV and
Elia Asset SA/NV’s Board of Directors and Executive Manage-
ment Board.
Additional information about the legislation and regulations
which are relevant to our business activities can be found on our
website (link).
In 2021, as required by law, Elia Transmission Belgium SA/NV
published its most recent biennial study on Belgium’s adequacy
and flexibility needs for the coming decade (2022-2032).
50HERTZ IN GERMANY
In the reporting year, the following laws were of particular note.
These have an influence on the integration of sustainability into
business activities.
• The amendment to the Climate Protection Act increases the
greenhouse gas reduction target from 55% to at least 65% by
2030 and 88% by 2040. The target year for reaching climate
neutrality was brought forward from 2050 to 2045. Concrete
measures to achieve the target will be ensured in future by indi
-
vidual laws and ordinances. These will also have a significant
influence on 50Hertz’s business activities.
• The Supply Chain Due Diligence Act describes requirements
regarding the due diligence obligations of companies. The aim
is to improve the protection of human rights in global supply
chains. The supply chain extends from a company’s own busi
-
ness operations to its direct and indirect suppliers. Important
components of the law include businesses being required to
carry out a risk analysis, implement risk management and
introduce a complaints mechanism and transparent reporting.
From 2024, the law will apply to companies with more than
1,000 employees.
• A jacket ordinance was passed in 2021 that recasts or amends
the Federal Soil Protection and Contaminated Sites Ordinance,
the Landfill Ordinance and the Gewerbeabfall Ordinance. The
ordinance will apply from 2023.
5 https://www.eliagroup.eu/en/publications
20
ELIA GROUP SUSTAINABILITY REPORT 2021
20
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
ELIA IN BELGIUM
In 2021, no relevant findings related to fraud were reported dur-
ing the specific fraud risk audits in the finance and purchasing
processes.
50HERTZ IN GERMANY
In addition to training being offered to staff about issues of com-
pliance, a web-based compliance training course was made
available to staff in March 2021 (almost 90% of staff completed
this course). The next round of regular training is scheduled for
spring 2023. Due to the increasingly close integration of govern-
ance, risk and compliance matters, internal control systems (ICS)
are also being continuously developed and increasingly linked
to risk management. Thus, during the course of regular risk
assessments, control mechanisms are also updated accordingly.
1.3.5. Anti-corruption
GRI 205-1, GRI 205-2
Due to their legal status as electricity TSOs, Elia Transmission
Belgium SA/NV and 50Hertz Transmission GmbH are subject
to a wide range of legal and regulatory rules in their respec-
tive countries, which stipulate three basic principles: non-dis-
criminatory behaviour; confidential treatment of information;
and transparency towards all electricity market participants for
non-confidential market information.
The Elia group companies have company charters, guide
-
lines and other documents regarding the behaviour which
is expected of our employees. These documents set out Elia
group’s understanding of correct ethical conduct and make it
clear that the company complies with the law and does not tol-
erate corruption. These principles flow are translated into organ-
isational measures that are binding throughout the company.
A policy defining and addressing bribery and corruption was
published as part of our Code of Ethics.
The reference framework for internal control and risk manage
-
ment, established by the Executive Management Board and
approved by Elia Group SA/NV Board of Directors, is based on
the COSO II framework. The framework has five closely linked
basic components, providing an integrated procedure for inter
-
nal control and risk management systems: control environment,
risk management, control activities, information and communi-
cation, and monitoring. The use and inclusion of these concepts
in Elia Group SA/NV’s various procedures and activities enables
the company to control its activities, improve the effectiveness
of its operations, optimally deploy its resources, and ultimately
achieve its objectives.
Elia Group SA/NV offers its employees the opportunity to express
their concern about an (alleged) breach of the Code of Ethics
without fear of sanctions and/or unfair treatment. In addition
to the existing reporting channels, an external system Ethic
-
sAlert for reporting integrity breaches has been implemented
that is compliant with the EU Whistleblowing Directive. Internal
employees as well as external stakeholders can report via this
platform their suspicions about possible breaches of the Code
of Ethics which may harm Elia Group SA/NV’s reputation and/or
interests in a protected manner.
Violations of these codes can be reported to the local manage
-
ment or HR, directly to the Compliance Officer or by using the
external system after which they will be handled objectively and
confidentially in line with the whistleblowing procedure.
Elia Transmission Belgium SA/NV and 50Hertz Transmission
GmbH compliance officers state that no such breaches were
reported by internal employees or external stakeholders in 2021.
For detailed information about these topics, please refer to sec-
tion Features of the internal control and risk management sys-
tems in the Financial Report.
21
ELIA GROUP SUSTAINABILITY REPORT 2021
21
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
1.3.6. Risk management
GRI 102-30, GRI 102-11, GRI 201-2
The Risk Management framework of Elia group is strongly
linked to COSO framework , which gathers best practices for
assessing business risks. In line with these guidelines, risk man-
agement takes place at different levels in the organisation (stra-
tegic, business/ operational, project…) and relies on Elia group’s
strategy and risk appetite, the level of risk our organisation is
prepared to accept in pursuit of its objectives. This risk appetite
is a guidance based on 5 matrices which capture financial, rep-
utational, health and safety and operational/societal risks and
impacts. Once a risk is identified as substantive based on the
corporate risk appetite, a dialogue takes place to make sure rele-
vant contextual factors are adequately taken into account in the
assessment. The most substantive risks are integrated into the
risk reporting and the evaluation of the adequacy between risks
and responses is then challenged up to the level of the Executive
Management Board and the Board of Directors. If the (aggre-
gated) risk is below the critical level defined by the risk appe-
tite, the risk is assessed as medium and a cost-benefit analysis
determines the use of control measures to reduce risks. For a few
cases where it facilitates decision-making, the risk appetite has
been translated into more operational criteria, which are used by
the operational entities.
There are processes in place which aim to identify and assess key
risks, define appropriate responses to them, communicate them
to the Board of Directors and monitor the effectiveness of miti
-
gation measures. All the information collected throughout these
processes is recorded in risk registers. Regular communication
between risk managers and risk owners allow these registers to
be kept up-to-date. The most important details are summarised
in risk reports, three of which were presented to the Board of
Directors and Audit Committee in 2021.
Since 2017, Elia Transmission Belgium SA/NV has been respond
-
ing to the CDP Climate Change Questionnaire that addresses
the company’s management of environmental impacts, cli-
mate-related risks and opportunities. Elia Transmission Belgium
SA/NV obtained a C score in 2021 for the year 2020.
In 2021, climate-related risks were assessed and integrated even
more firmly into risk management processes across all the Elia
group with a regulatory point of view but also taking physical
climate risks into account. Risk analyses highlighted the organi
-
sation’s climate change vulnerability and the need to tackle this
through specific projects. For example following the July 2021
floods in Belgium, new risks were taken into account and our
ESG programme ActNow was updated with the addition of a
new objective: climate change resilient infrastructure.
For detailed information about risk management, please refer to
section Risk management and uncertainties facing the company
in our Financial Report 2021.
1.3.7. Political influence
Laws and regulations have a strong influence on Elia Transmis-
sion Belgium SA/NV’s and 50Hertz Transmission GmbH’s oper-
ations. The different authorities at federal and regional levels
grant the Elia group companies their operating licence and con-
tribute to the determination of the legal framework according
to which the TSOs must realise their public mission. Regional
governments and authorities are responsible for granting per-
mission to build the transmission infrastructure. Regulatory
authorities determine the regulatory frameworks in which these
activities have to be undertaken.
In this context, Elia Transmission Belgium SA/NV and 50Hertz
Transmission GmbH act in compliance with all the regulations
that affect the operation of the transmission grid. The Elia group
companies are responsible for contributing to the political
debate and to the development of regulations. We carry out our
advisory role in a transparent manner. As legal monopolies with
public responsibilities, Elia group companies communicate their
viewpoints with the best interests of society in mind.
The Elia group is a trusted advisor regarding topics such as the
fulfilment of the energy transition, ensuring a secure supply of
electricity as renewable energy increases, and the expansion of
the grid.
As an increasing amount of energy policies that impacts the
activities of Elia Transmission Belgium SA/NV, 50Hertz Transmis
-
sion GmbH and the societies in which they operate is set at a
European level, a European Affairs Team at Group level was cre-
ated. The team monitors all relevant legislation and regulation
(see section on the Green Deal above) and participates in Euro-
pean public and political debates through the means of public
position statements.
Both Elia Transmission Belgium SA/NV and 50Hertz Transmis
-
sion GmbH are registered in the EU Transparency Register and
committed to its Code of Conduct.
22
ELIA GROUP SUSTAINABILITY REPORT 2021
22
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
ELIA IN BELGIUM
Part of the responsibilities of the Public & Regulatory Affairs and
External Relations Department includes communication with
political representatives. A Corporate Reputation Committee
composed of representatives from all internal departments that
have external contact with (political) stakeholders has been set
up to coordinate interactions with these stakeholders.
Elia Transmission Belgium SA/NV is an important player in Bel
-
gium that has a solid understanding of the national, regional
and local electricity systems. The organisation therefore occu-
pies a strong position from which to provide analysis, advice and
recommendations to the authorities so that informed decisions
can be made.
The Elia group’s Code of Ethics (see also section 1.3.2. Values,
principles and Standards) is applicable to all our employees. It
addresses relevant laws, conflicts of interest and professional
deontology. In 2021 (and as in the past), Elia Transmission Bel
-
gium SA/NV made no donations to politicians or political parties.
50HERTZ IN GERMANY
As the activities of those who pass laws or regulations have a
strong impact on 50Hertz Transmission GmbH’s business activ-
ities, the company publishes and makes position papers avail-
able to politicians in a transparent manner. The Communica-
tion & Public Affairs Department is responsible for this. When
developing viewpoints, we are committed to involving political
stakeholders and regulators as early in the process as possi-
ble. This gives all parties the opportunity to present their point
of view, improves the quality of information that is used and
builds trust between different parties. We ensure that employ-
ees who are active in societal and energy policy are guided by
clearly defined principles with respect to the way they com-
municate and act. For the 2021 federal elections, for example,
the Communication & Public Affairs Department published a
position paper entitled Doing more of the right things faster,
which provides an overview of the energy policy decisions
which urgently need to be addressed from the point of view of
a transmission system operator. As part of a roundtable initia-
tive with the General Works Council and the Mining, Chemical
and Energy Industrial Union (IG BCE), 50Hertz Transmission
GmbH held a number of discussions with stakeholders from the
world of politics, business and science about how the phase-out
of fossil fuels and climate-neutral management can succeed.
The results of this discussion are summarised in the summary
paper entitled With new energy for strong industrial jobs.
In addition, 50Hertz Transmission GmbH launched the initiative
“Together. Faster. Climate-Neutral” in 2021 and, together with
other grid operators, energy and industrial companies, devel-
oped concrete proposals and published them in December 2021.
These are aimed at accelerating the expansion of the electricity
grid so that is can transport higher volumes of electricity gen-
erated by renewable energy sources. Further information about
the initiative can be found here in German.
The company’s communication with political representatives
is conducted in a responsible and transparent manner; it does
not make any donations to political parties. Ethical principles
and guidance related to the representation of political interests
have been established, forming the basis of our interactions. A
detailed orientation guide, which applies to the whole company
and has been approved by senior management teams, explicitly
regulates staff conduct in political environments. It states that
50Hertz Transmission GmbH does not make any donations to
politicians or political parties and maintains a fair and impar
-
tial balance when sponsoring organisations or initiatives. The
responsibility for donations to party-affiliated foundations and
associations is centrally coordinated by the Communication
& Public Affairs Department. Through specific training pro-
grammes, 50Hertz Transmission GmbH ensures that its employ-
ees who contribute to social and energy policy align their com-
munication and actions with clearly defined principles. The
Lobby Register Act passed on 25 March 2021 came into force on
1 January 2022. The lobby register is intended to help strengthen
public trust in politics and the legitimacy of the decision-making
processes in parliament and government. The aim is to create
more transparency with regard to the influence of representa-
tives on this process. As soon as the entry in the German lobby
register is officially permitted, 50Hertz Transmission GmbH will
record its information on it.
In 2021, 50Hertz Transmission GmbH did not make any dona
-
tions to politicians or political parties.
23
ELIA GROUP SUSTAINABILITY REPORT 2021
23
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
1.3.8. Security and emergency
management
Critical infrastructure
For Elia group companies, security does not stop at the com-
pany’s boundaries. For example, staff are trained in crisis man-
agement and crisis communication with internal and exter-
nal stakeholders during regular crisis team exercises. Not only
are the existing structures, processes and reporting channels
reviewed and continuously improved, but crisis team members
and employees are also intensively trained in the skills needed to
deal with unexpected and high-stress events in a level-headed
manner and are also trained to take quick and appropriate cri-
sis management decisions. These and other measures serve to
continuously increase the resilience of the Elia group in a holistic
manner. In addition to the training offered to all members of the
crisis team, reviews are undertaken of property protection con-
cepts and general corporate security is further developed.
ELIA IN BELGIUM
Following the implementation of the framework related to
access screening for our most critical areas (National Control
Centres/Regional Control Centres/Data rooms), the Security
Department conducted a thorough analysis of all access rights
to these areas. Only those individuals who should have access
to these areas because of their specific role were retained and
included in a screening list. Files on each of the 549 individu-
als on this list were created and forwarded to the Belgian Fed-
eral Public Service (FPS) Economy. After a screening check was
conducted by the National Security Authority, these individuals
received a positive screening certificate. This means that since
September 2021, all individuals who have been granted access to
our most critical areas have been screened; moreover, a specific
process has been put in place for all new members of staff who
need to access these areas.
In order to ensure that our General Data Protection Regulation
protocol is adhered to in the best possible manner and to opti
-
mise operational efficiency, a new system has been developed
in concert with the FPS Economy that involves the automatic
forwarding of new digital files.
Based on criteria agreed upon with the FPS Economy in 2020
and in compliance with the legislation relating to critical infra
-
structure (EPCIP Directive), a list of potential new critical infra-
structures was officially handed over to the FPS Economy. This
list designates a total of 41 ‘Critical Infrastructures’, of which 19
are new. 3 pieces of infrastructure previously assumed to be ‘crit-
ical’ were not included in this list, since they did not meet the
relevant criteria.
In consultation with and in line with guidance from the Security
Department, both the FPS and Federal Agency for Nuclear Con
-
trol (FANC) carried out inspections of all of our Critical High-Volt-
age Substations in 2021. This involved verifying that the Oper-
ator’s Security Plan (OSP) complied with all relevant legislation
and reality in our substations. Aside from some minor areas that
were identified as needing improvement, all audit reports pro-
vided positive feedback about the processes in place. The items
that needed to be addressed were immediately dealt with or
included in an action list.
As part of the joint approach to the OSP related to Elia’s criti
-
cal infrastructure that is linked to the Doel nuclear power sta-
tion, Elia’s Security Department developed a specific protocol
with ENGIE, the nuclear power station; this defined the steps
to be taken and cooperation needed with regard to alerts and
incident management. In line with this, a security exercise was
conducted in 2021 which allowed us to improve our processes
according to the Plan Do Check Act (PDCA) principle. Further-
more, the process relating to requests for gaining access was
digitised.
The provisions included in the CAPEX plan were fully devel
-
oped in 2021. In addition, a special focus was placed on various
high-voltage stations which are of particular importance for
society (since they are related to the COVID-19 vaccination drive).
After having undertaken an in-depth benchmarking exercise
and an analysis of specific security systems, we identified three
possible security approaches for regular substations. Based on
these, a new security policy for these regular substations is due
to be developed in 2022.
Following the adoption of an online access control system for
Elia’s high-voltage substations, over 100 such substations were
equipped with this new system by December 2021. The Secu
-
rity Department conducted a study which involved replacing
the redundant access control system (Offline-Elkey-key) with
this new system. The aim of this switch is to ensure we have a
high-performing system at our disposal and to considerably
reduce our operational costs.
Due to the importance of Elia’s offshore activities, the Security
Department conducted a thorough study of the specific risks
and mitigating measures related to security in offshore installa
-
tions. In 2022, the Department will focus on the further develop-
ment of our public-private partnerships for this purpose (includ-
ing with the military).
The continuous development of our expertise in the field of
operational security resulted in the development of various pro
-
jects which aim to support transversal services. These include
the International SOS Travel App: an Elia Group app which offers
our employees maximum protection and support during their
business trips.
As part of the professionalisation of the alarm raising processes
and incident management, a new in-house Security Operations
Centre began to be constructed at the Elia headquarters in 2021.
The centre is due to be operational in early 2022.
In order to ensure that cooperation between the emergency ser
-
vices and Elia’s Security Department is maximised, roadshows
were organised for the relevant (local and federal) police districts.
These included explanations of our list of Critical Infrastructures
and related security measures.
24
ELIA GROUP SUSTAINABILITY REPORT 2021
24
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
IT
The further reinforcement of the robustness, security and pro-
tection of our IT and network systems is a key recurring compo-
nent in preserving the confidentiality of critical data.
One of the concrete measures taken in 2021 is the development
of a data classification model for Elia group: this enables data
owners to easily and correctly classify their data so adequate
security measures can be applied. One model for the Group
assures consistency.
Best practice and information are exchanged at a national level
in the utility sector as well as at a European level (ENTSO-E). We
evaluate the threat landscape and associated development to
be able to put the right risk mitigation measures in place.
ELIA IN BELGIUM
A number of concrete measures taken in 2021 in this field are
listed below.
• Monthly external scanning of Elia’s external perimeter (Elia’s
public IP addresses) in order to assess the potential vulnerabil
-
ities of Internet applications regarding possible cyber risks. In
the reporting year, no targeted cyberattacks against Elia were
recorded.
• Further development of the information security management
system (ISMS) programme launched in 2020, as part of good
governance and as an enabler to meet regulatory require
-
ments (NIS Directive, ENTSO-E): design, create and implement
an ISMS in line with ISO27001. The ISMS is a framework of poli-
cies and controls that aim to manage security and security risks
systematically across the entire organisation. The objective is to
obtain ISO27001 certification in 2022.
• Phishing campaign: human behaviour is key in countering the
threat of phishing. An awareness campaign was launched to
inform and warn staff of the risks of phishing mails.
• Successfully passing the external audit regarding compliance
with the MVS Security Plan: in the context of the OPDE/CGM
programme (the European Common Grid Model) ENTSO-E
requires TSOs to comply with a specific set of security measures
when exchanging information with other TSOs.
• Appointment of a Data Protection Officer (DPO) to ensure that
Elia processes the personal data of its data subjects (staff, cus
-
tomers, providers or any other individuals) in compliance with
the applicable General Data Protection Regulation (GDPR).
50HERTZ IN GERMANY
As an operator of critical infrastructure, 50Hertz is obliged by
the IT Security Act and the Energiewirtschaftsgesetz (EnWG) to
ensure that information is securely stored on systems that are
necessary for maintaining security of supply. In this context, the
processing, storage and communication of information must be
designed in such a way that the availability, confidentiality and
integrity of the information and our critical systems are ensured
to an appropriate degree.
The information security management system was recertified in
2020, in accordance with ISO 27001 “IT Security Catalogue pur
-
suant to Section 11 (1a) EnWG”. Through an established security
process, information security risks are systematically identified
and dealt with. In the reporting year, no targeted cyberattacks
were carried out against 50Hertz; moreover, no damage caused
by information security incidents occurred. In an independent
audit which evaluated and certified the operational security of
data centres (based on DIN EN 56000), the 50Hertz data centres
were designated as “highly available” at Level 3.
As part of the data protection management system (DSMS), the
existing e-learning programme was updated and internal and
external employees were sensitised and trained in this area.
25
ELIA GROUP SUSTAINABILITY REPORT 2021
25
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
Emergency and restoration
TSOs must regularly test their ability to restart the system. These
restart tests - also called black start tests - are part of the grid
reconstruction plans of TSOs, who must regularly test this capa-
bility in their respective grid areas so that the power supply can
be restored as quickly as possible after a power outage.
Simulation trainings and theoretical training sessions related to
emergency and restoration plans are provided for the operators
of the national control centre and the regional control centres.
ELIA IN BELGIUM
In the reporting year 2021, Elia Transmission Belgium SA/NV Elia
successfully conducted three black start tests and various emer-
gency exercises, including risk preparedness tests for crisis staff
(a.o. “Heatwave” with French TSO RTE) and ‘National Backup
Control Centre’ tests.
Due to the major floods in Wallonia during 2021 summer, the
Emergency plan has been activated in July 2021.
50HERTZ IN GERMANY
50Hertz Transmission GmbH regularly rehearses so-called black
starts in order to be prepared to restore the power supply within
a short time in the event of a blackout. Such training is under-
taken with different partners: both as part of simulations and
during network reconstruction tests under real conditions. This
ensures safety in the event of a crisis and is also required by law.
In the year under review, a network reconstruction was success
-
fully completed for the second time using a so-called start-up
grid. A start-up grid consists of a grid cluster with strategically
useful transformer stations, which are simultaneously electrified
by a black start unit, in this case a pumped storage power plant.
G4-EUS-DMA Disaster/ Emergency Planning and Response
Should an electricity crisis occur (as a result of natural disasters,
malicious attacks or a fuel shortage), Elia Transmission Belgium
SA/NV and 50Hertz Transmission GmbH have crisis manage-
ment procedures in place which consist of 3 main plans, as out-
lined below.
•
The crisis management plan
describes the roles, responsibil-
ities and processes related to crisis management. Emergency
management is planned for based on different emergency sce-
narios known as Standardised Emergency Preparedness Plans
(SEPPs). The emergency plans contain appropriate measures
which must be followed and the definition of reporting and
information processes.
•
The system defence plan:
this includes automatic and man-
ual measures which aim to prevent abnormal situations from
developing (including blackouts), to limit the impact of distur-
bances and to stabilise the electric power system when it is in
an ‘Emergency’ state. These measures aim to return the system
to a ‘Normal’ or ‘Alert’ state as soon as possible with minimal
impact on grid customers and society. In accordance with the
system defence plan, both Elia Transmission Belgium SA/NV
and 50Hertz Transmission GmbH have established load shed-
ding and other plans to be executed by themselves or related
distribution operators; these include demands which need to
be manually or automatically performed to prevent the wors-
ening of an electricity crisis.
•
The restoration plan:
this includes a set of actions that can
be used after a disturbance which has had large-scale conse-
quences (e.g. a blackout) which are intended to bring the elec-
tricity system back to a ‘Normal’ state.
Both Elia Transmission Belgium SA/NV and 50Hertz Transmis
-
sion GmbH regularly train their operator teams by organising
simulated exercises with relevant stakeholders and partners
(such as distribution system operators or generation compa-
nies). In general, system operators regularly practice handling
abnormal and crisis situations by undertaking theoretical and
practical training.
COVID-19
As soon as the COVID-19 virus was first located in Europe, task
forces were set up to closely monitor the spread of the virus and
its impact on Elia Transmission Belgium SA/NV and 50Hertz Trans-
mission GmbH. These task forces continue to monitor the situa-
tion. Measures that these task forces decide to establish are com-
municated immediately to all group employees.
26
ELIA GROUP SUSTAINABILITY REPORT 2021
26
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
1.3.9. Grid reliability
G4 EUS, DMA
In order to meet the demand for electricity at all times, both Elia
Transmission Belgium SA/NV and 50Hertz Transmission GmbH
must assure their customers that their grid is reliable. As TSOs,
Elia Transmission Belgium SA/NV and 50Hertz Transmission
GmbH provide infrastructure with adequate electricity intercon-
nections to enable the smooth functioning of markets and sys-
tems. This is the best guarantee of security of supply.
However, even where markets and systems function well and are
interconnected, the risk of a power outage still exists.
The actions established to cope with a large-scale power out
-
ages caused by exceptional events are described in the previous
section.
Grid availability and interruptions
ELIA IN BELGIUM
In order to assess the availability of the grid for a specific year,
the number of incidents for which we Elia Transmission Bel-
gium SA/NV are responsible and which have led to at least one
customer interruption that lasted for more than three minutes
(the international standard) is recorded. Any interruption caused
by customer errors, thunderstorms, third parties, birds, etc. and
considered as exceptional events, are not included in this record.
The major floods in the Belgian Province de Liège in July 2021
had a large impact on the grid. Due to rising water, an urgent
power outage was planned for, the flooding was considered as
a “force majeure” and naturally categorised as an exceptional
event.
GRID INTERRUPTIONS
40
30
20
10
0
number of incidents ≥150kV leading to long (>3’) inter-
ruptions with internal responsibilities
number of incidents <150kV leading to long (>3’) i
nterruptions with internal responsibilities
number of exceptional events
# interruptions
2019 2020 2021
26
31
20
8
6
14
Most interruptions take place along the local transmission grid
(< 150 kV), since most customers are connected to the local
(regional) transmission grid rather than the federal transmission
grid. When considering specific grid interruptions, the
average
interruption time
(AIT) is also calculated. This provides a meas-
ure of the interruption time that would have been experienced
if all the customers connected to the grid had experienced an
interruption at the same time. AIT is calculated as Energy Not
Supplied / Yearly Average Power.
The
maximum interruption
time is the reference value used for
calculating the Average Interruption Time (AIT) Incentive relat-
ing to continuity of supply by CREG, the Belgian federal regula-
tor. For the period 2020-2022, its value is 2.1 minutes.
AVERAGE INTERRUPTION TIME
3
2.5
2
1.5
1
0.5
0
Average Interruption time (minutes)
<150kV with internal responsibilities
Average Interruption time (minutes)
≥150kV with internal responsibilities
Maximum interruption time (minutes) 2017-2019
Maximum interruption time (minutes) 2020-2022
Time (min)
2019 2020 2021
0.7730 .933 0.85
0.933
0.787
0.85
2.04
0.85
0.34
Energy not supplied (ENS) refers to all energy not supplied to our
customers during outages of more than three minutes caused
by Elia’s internal problems. However, ENS does not take into
account the impact of major events.
ENERGY NOT TRANSPORTEDNOT SERVED
350
300
250
200
150
100
50
0
Energy (MWh)
2019 2020 2021
143.53
327.92
207.058
The ENS score achieved in 2021 was lower than last year when a
series of storms caused several technical failures.
27
ELIA GROUP SUSTAINABILITY REPORT 2021
27
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
Grid availability
Onshore availability represents the availability of the inter-
face points between the Elia grid and our customers’ grids. It
takes into account all the interruptions caused by intrinsic risks
(weather, third parties, animals outside a building, etc.) or by
internal Elia problems (e.g. material failure, human error) which
lasted for more than three minutes, but excludes interruptions
directly caused by Elia’s customers.
CALCULATION METHOD:
Onshore availability = 1 – AIT (internal Elia + intrinsic risk)
(# minutes in the year)
2019 2020 2021
Onshore grid availability
atconnection points
0.99999671 0.99999362 0.99999564
In 2021, onshore availability in Belgium remained at a very high
level (above 0.99999).
50HERTZ IN GERMANY
50Hertz Transmission GmbH operates the extra-high-voltage
grid in the north and east of Germany. Its reliability is demon-
strated through the occurrence of the number of faults per 100
km across the extra-high-voltage grid ( ≥ 150 kV) area of 50Hertz
Transmission GmbH. Faults include network and equipment dis-
turbances that result in transmission capability being restricted
or system conditions being violated. Grid disturbances include,
among other things, the effects of storms that cause an electri-
cal short circuit. Equipment faults are only taken into account if
network elements have caused a fault or have to be switched off.
Network elements are lines, transformers, chokes and busbars.
Disturbance Rate DE
(disturbance/100km)
2019 2020 2021
50Hertz 1.12 1.20 1.16
Average all German TSO 1.36 1.59 -
The disruption rate for all German TSO will be available in /July 2022
28
ELIA GROUP SUSTAINABILITY REPORT 2021
28
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
Strategy
2
28
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
29
ELIA GROUP SUSTAINABILITY REPORT 2021
29
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
GRI 102-15, GRI 102-29, GRI 201-2
2.1. Materiality and objectives
GRI 102-15, GRI 102-29, GRI 102-46, GRI 102-47, GRI 103-1
The energy transition is one of the greatest challenges society is
facing this century. With the vision “For a successful energy tran-
sition in a sustainable world”, the Elia group is making it clear
that it is an active driver of the decarbonisation of society and
industry. To this end, it is developing the grid, the system, and
the market of the future.
Definition of our main topics
The annual development of our materiality matrix - which serves
as a guide for strategic decision-making, the setting of priority
areas for the Elia group, the management of our ESG issues and
the transparent reporting we carry out - has been undertaken
since 2019.
Our 2021 matrix was based on the sources outlined below.
1.
Results from the 2020 internal survey we carried out regard-
ing material topics. Managers from across both Elia and
50Hertz were asked to rate the importance of a number of
topics from their own point of view and from the point of view
of the group’s external stakeholders.
2.
The identification of topics which demonstrate ‘double mate-
riality’ - which cover both the impacts the Elia group has
on the external environment and the impacts the external
environment has on the Elia group. These topics were iden-
tified following the design and rolling out of our ActNow pro-
gramme: in 2021, we identified the SDGs which our five Act-
Now dimensions were most closely aligned with. Once these
were identified, we used the results of an analysis carried out
by S&P Trucost to identify which goals demonstrated double
materiality.
Level of importance for stakeholders
CriticalHighMedium
CriticalHigh
Network availability & reliability
Medium
3 2
4
14
6
7
10
11
12
9
1
8
13
15
16
5
The matrix only includes material topics.
All the topics above were assigned an average score of >8/10 in the survey undertaken
after our Capital Markets Day event on 27 April 2021
1
Operational environmental protection
2
Climate-relevant emissions and climate adaptation
3
System and market integration of RES
4
Customer orientation and satisfaction
5
Technology development and access
6
Risk management
7
Employee Health, Safety and wellbeing at work
8
Transparency and openness
9
Cost and process efficiency
10
Legal and regulatory environment
11
Corruption & bribery
12
Real stakeholder dialogue
13
Biodiversity
14
Employment creation and skills development
15
Diversity and equal opportunities
16
Topics which are related to environmental concerns
Topics which are related to social concerns
Topics which are related to governance concerns
Topics which carry the most importance for
our stakeholders and the Group
Level of importance for the business
Understanding the matrix
Our materiality matrix consists of three categories: ‘medium’, ‘high’ and
‘critical’ materiality issues based on their importance for the group and our
stakeholders (respectively). The chart above reflects the topics that con-
tribute directly to one or more of the UN’s SDGs, and charts the level of
importance of each topic for our stakeholders and the group.
30
ELIA GROUP SUSTAINABILITY REPORT 2021
30
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
3.
The results of an external consultation that we undertook
with our stakeholders in Belgium at the end of 2020. Different
stakeholders - who were selected based on their experience
with the energy sector and their different interactions with
our business - were selected for this. They included stakehold-
ers that we regularly engage with, including public authori-
ties, direct clients, suppliers, sectoral federations and envi-
ronmental associations. We ensured that these stakeholders
represented diverse voices in terms of the language(s) they
spoke; the size of the organisations they represented; where
their organisations were based; and whether their organisa-
tions were from the public or private sector.
4.
The results of a series of roundtables organised in 2021 with
different types of German stakeholders (policy-makers, indus-
try, non-governmental organisations, academia) to discuss
the most material elements to successfully decarbonise Ger-
man society.
5.
The results of a survey which was carried out following the Elia
group’s first Capital Markets Day in April 2021, which aimed
to collect the views of our financial stakeholders. Note that all
topics displayed in the 2021 matrix were identified as material
by our financial stakeholders in this survey.
6.
The results of studies such as the World Energy Council’s World
Energy Issues Monitor and other recognised frameworks
(such as the Global Reporting Initiative Sector Supplement for
Electric Utilities) were considered to ensure completeness. In
the future, we will continue to monitor international studies
of this kind to make sure our materiality matrices stay up-to-
date.
The development of materiality
The materiality of each topic is analysed as part of a regular cycle.
In order to gain an even deeper understanding of our stakehold-
ers’ views, a survey of the group’s most important external stake-
holders is due to take place during the third quarter of 2022; this
survey will include interviews and workshops.
In the future, our annual Stakeholders Day will be used as an
opportunity to systematically gather external stakeholder feed
-
back on the importance of each topic, whilst an internal survey
of Senior Management will be used to update the X axis values
(importance for the group) assigned to each topic.
Moreover, our Group Sustainability Office (GSO; see 1.3.3. Roles
and responsibilities) will from now on oversee the identification
and monitoring of new topics to be considered for inclusion in
our matrices.
31
ELIA GROUP SUSTAINABILITY REPORT 2021
31
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
2.2. ActNow – Elia group’s sustainability programme
GRI 102-29, 103-2, 103-3
Sustainability lies at the core of the group’s business strategy.
The group’s ActNow programme, which was published in 2021,
sets out our long-term sustainability goals. These are aligned
with the UN SDGs, demonstrating that the group’s business
objectives are explicitly linked to global goals. They are imple-
mented through our business plans and operations. The group
reviewed its business units and processes in relation to the SDGs
and is improving its sustainability performance accordingly,
developing indicators and a roadmap that help us to track our
progress. Specific targets that are regularly reviewed and man-
aged have been set.
ActNow is organised around five dimensions: Climate Action;
Environment and Circular Economy; Health and Safety; Diversity,
Equity and Inclusion and Governance, Ethics and Compliance.
The electricity sector has a major role to play in the decarboni
-
sation of society and tackling of climate change. Electricity as an
energy carrier is already the most cost-efficient solution in most
sectors. Accordingly, further electrification based on the integra-
tion of renewable energy into the system is the most efficient way
to realise the energy transition. The Elia group is positioned at the
very centre of the energy system and is thus well-placed to iden-
tify the best methods for decarbonising the system. In addition
to developing the necessary grid infrastructure which will sup-
port the integration and transportation of additional volumes of
renewable energy across the grid, the Elia group is identifying
necessary sources of flexibility which will allow the grid to cope
with the variability of renewable energy and is preparing the mar-
ket and system to operate in a 100% renewable energy context.
With ActNow, the joint study Decarbonising the energy sys
-
tem – The role of Transmission System Operators published
with 7 other TSOs
10
, and 50Hertz’s strategic initiative From 60 to
100 by 2032 - new energy for a strong economy, we are mak-
ing an ambitious contribution to fulfilling European, national
and regional renewable energy and climate targets - as well as
decarbonising society - both internally and externally.
Our regular ESG ratings from ESG rating agencies like Vigeo Eiris
and Sustainalytics are also providing us with important input to
improve our sustainability performance. Further information
to Elia Transmission Belgium SA/NV can be found here and for
50Hertz Transmission GmbH can be found here.
The Elia group supports the European Green Deal through its
core business. The demand-driven grid development we under
-
take and our innovation programmes enable us to integrate
ever-increasing amounts of renewable energy into the system,
whilst the building and operation of interconnectors enables
cross-border European electricity trading to be undertaken. We
cover the high investments required for this - where this makes
economic sense - through green bonds that we place in the
European and international financial markets. We are therefore
committed to fully aligning ourselves with the EU Taxonomy to
make this market more transparent.
10 We worked with 7 other TSOs (Terna, RTE, TenneT, Amprion, Red Eléctrica, Swissgrid and
APG) to identify the main tools for decarbonising the energy system. These were outlined
in a joint paper that was published in July 2021: Decarbonising the energy system – The
role of Transmission System Operators.
32
ELIA GROUP SUSTAINABILITY REPORT 2021
32
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
1 Climate Action
• Enabling decarbonisation of the power sector
• Carbon neutrality in system operations by 2040
• Carbon neutrality in our own activities by 2030
• Transition to a carbon-neutral value chain for new assets and construction
works
Section 3. – Energy – Market & integration of
renewables
Section 8. – Environmental aspects
3 Health & Safety
• Going for zero accidents
• Build our safety culture
• We are all safety leaders
• We strive for heath and wellbeing of our staff
Section 5. – Safety
Section 4. – Human Resources
4 Diversity, Equity & Inclusion
• Inclusive leadership across the organisation and engaging all staff
• Inclusive recruitment and selection practices in hiring processes
• Equal opportunities for all staff
• Open and inclusive company culture and healthy work-life balance
• Recognition of societal DEI role
Section 4. – Human Resources
5 Governance, Ethics & Compliance
• Governance: Accountable rules & processes
• Ethics: Sustainable mindset & behaviours
• Compliance: Conformity with external & internal rules
• Transparency: Openness & meaningful stakeholder dialogue
Section 1.3. – Guiding principles
Section 7.3. – Public Acceptance and Stakeholder
dialogues
FOR A SUSTAINABLE WORLD
5 Dimensions Section
Environment
Social
Gover-
nance
2 Environment & Circular Economy
• Preserve and strengthen ecosystems and biodiversity
• Embed circularity in our core business processes
• Ensure compliance with environment performance standards
Section 8. – Environmental Aspects
For further details about the key performance indicators and tar-
gets which form part of our ActNow programme, please see the
section entitled ‘Performance’ in our 2021 Integrated Report.
33
ELIA GROUP SUSTAINABILITY REPORT 2021
33
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
2.3. Green finance & EU Taxonomy
Our vision “For a successful energy transition in a sustainable
world” requires immense investments to be made in the expan-
sion of the grid to support the integration of renewable energy
into the system. This expansion - which includes offshore wind
farm connections, the construction of new and necessary grid
infrastructure and the construction of cross-border interconnec-
tors - will support the sustainable electrification of society and,
ultimately, the achievement of climate neutrality by 2050, in line
with the European Green Deal.
Green Finance
The Elia group will increasingly finance these ‘green’ invest-
ments with green bonds. Appropriate frameworks have been
established for this purpose.
The publication of the Green Finance Framework and the Euro
-
grid membership of the Nasdaq Sustainable Bond Network
(NSBN) enable us to include this ‘green’ aspect in our financing
and accelerate the transition to net zero.
In 2020, Elia Transmission Belgium SA/NV signed a €650 million
revolving credit facility (RCF) agreement with a pricing mecha
-
nism linked to three sustainability performance targets.
50Hertz Transmission GmbH published its first Green Bond
Impact Report in 2021. The report is a mandatory component of
the first green bond issued in 2020 (which amounted to €750
million). It was used to finance projects including the grid con
-
nections to Ostwind 1 and 2 the connections leading to the off-
shore wind farms located to the northeast of the island of Rügen.
EU Taxonomy
Sustainable finance plays an essential role in achieving the EU’s
policy objectives. The EU Action Plan on Financing Sustainable
Growth led to the creation of the EU Taxonomy, a classification
system for sustainable economic activities. It was designed to
help identify businesses that contribute to climate neutrality.
An analysis of eligibility and alignment of Elia group’s activities
with EU Taxonomy was carried out and a case study has been
published in cooperation with the consulting and auditing firm
Deloitte.
For comprehensive reporting on the EU Taxonomy eligibility,
please refer to Section 9. Reporting on the EU Taxonomy Reg
-
ulation.
34
ELIA GROUP SUSTAINABILITY REPORT 2021
34
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
34
ELIA GROUP SUSTAINABILITY REPORT 2021
Energy –
3
Market and integration
of renewables
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
35
ELIA GROUP SUSTAINABILITY REPORT 2021
35
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
The key role we are playing in the decarbonisation of the power
sector is the best way we can contribute to meeting the Green
Deal targets. We see this as our societal challenge and this is
what we need to focus on.
We are enabling the decarbonisation of the power sector
through our grid development projects. The German and Bel
-
gian governments have set targets to ensure that renewable
energy covers 65% and 40% of the electricity mix in their respec-
tive countries by 2030. We will contribute to meeting these tar-
gets by expanding our grids, continuing to develop market prod-
ucts that facilitate the integration of renewable energy sources
into them and improving the operation of our systems, so they
are ready for a world led by green energy.
3.2. Installed capacity in
our control areas
Transmission System Operators (TSOs) operate and maintain
electricity grids and transport the electricity produced by the
different energy sources across their operating zones.
ELIA IN BELGIUM
Photovoltaics
5,430 MW
Wind
4,979 MW
Hydropower
121 MW
Biomass
804 MW
Renewable energy
11,334 MW
26,225
Megawatts (MW)
Conventional energy
14,891 MW
50HERTZ IN GERMANY
Conventional energy
13,666 MW
Hydropower
174MW
Biomass
2,071 MW
Offshore wind
1,093 MW
Photovoltaics
16,355 MW
Onshore wind
19,875 MW
Renewable energy
39,585 MW
53,251
Megawatt (MW)
Other renewable energies
(geothermal,
solar thermal, etc.)
17 MW
GRI 302-2, SDG7
3.1. Introduction
Installed capacity in our grids Elia Transmis-
sion Belgium SA/NV and 50Hertz Transmission
GmbH enable non-discriminatory access to the
transmission grid for all electricity generators.
36
ELIA GROUP SUSTAINABILITY REPORT 2021
36
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
3.3. Changes to the share occupied by renewable energy
in electricity consumption across our control areas
ELIA IN BELGIUM
CHANGE TO THE SHARE OCCUPIED BY RENEWABLE ENERGY
IN ELECTRICITY CONSUMPTION
2019 2020 2021
16%
14%
12%
10%
8%
6%
4%
2%
0%
15.6
14.09
15.07
50HERTZ IN GERMANY
CHANGE TO THE SHARE OCCUPIED BY RENEWABLE ENERGY
IN ELECTRICITY CONSUMPTION
2019 2020 2021
70%
60%
50%
40%
30%
20%
10%
0%
56.1
60.0
62.0
In 2021, an annual average of 56.1 percent of
electricity consumption in the 50Hertz grid
area came from renewable energies. This was
lower than the 62 percent figure from the pre-
vious year. The reasons for this were increased
electricity consumption in the 50Hertz grid
area with a significantly lower wind harvest.
Elia Transmission Belgium SA/NV and 50Hertz
Transmission GmbH enable non-discrimina
-
tory access to the transmission grid for all elec-
tricity generators.
37
ELIA GROUP SUSTAINABILITY REPORT 2021
37
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
3.4. Energy imports and exports
GRI 102-6, GRI 302-2
The electricity system and markets in Europe are already highly
interconnected and integrated. The resulting challenges there-
fore require a transnational approach. HVDC interconnectors,
which enable long distance transmission are required in order to
strengthen the European electricity market, facilitate the energy
transition and overcome the challenges associated with it. They
are essential links in the construction of an integrated European
electricity grid which facilitates the integration of renewable
energy into the system and improves the security of supply.
ELIA IN BELGIUM
Export in TWh
Import in TWh
7.32
5.22

7.74
5.12

0,06
1.15

 
7.16
0.14
2,56
1.81

Elia
grid area
Total export in 2021: 23.07 TWh
Total import in 2021: 15.20 TWh
Netto export in 2021: 7.88 TWh
The Nemo Link subsea interconnector, commissioned in Janu-
ary 2019, connects Belgium and United Kingdom.
ALEGrO, the first electricity interconnector between Belgium
and Germany was commissioned in November 2020 by sys
-
tem operators Elia Transmission Belgium SA/NV and Amprion.
ALEGrO posted good results for its first year of operation: 93% of
availability and exchanges totalling 4.5 TWh. The interconnec-
tor has made it possible to balance prices between markets and
boost societal wellbeing.
50HERTZ IN GERMANY
50Hertz
grid area


1.28
3.03


8.73
0.33

 
5.53
0.53


43.53
19.67
Total export in 2021: 59.07 TWh
Total import in 2021: 23.56 TWh
Netto export in 2021: 35.52 TWh
In October 2020, 50Hertz Transmission GmbH and Danish grid
operator Energinet jointly organised the inauguration of the
world’s first hybrid offshore interconnector, the Combined Grid
Solution (CGS). The CGS connects two substation platforms in
the Baltic Sea both to each other and to the existing land con-
nections of the offshore wind farms. This means that the CGS
can transmit offshore wind power to Denmark or to Germany
and can also be used for cross-border electricity trading.
38
ELIA GROUP SUSTAINABILITY REPORT 2021
38
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
3.5. Grid losses in our control areas
G4-EU12
When electricity is transported, part of the energy is converted
into heat, and is known as ‘grid loss’. Grid assets such as over-
head lines, underground cables, transformers, etc. all have a
small amount of electrical resistance which causes them to heat
up as soon as an electric current flows through them. Grid losses
are therefore the difference between the amount of electricity
entering the grid and the amount of electricity supplied. They
are unavoidable when transmitting electricity and depend on
the voltage of electricity and length of the transmission lines,
amongst other factors. The high-voltage direct current (HVDC)
technology used in some of the interconnectors is more suita-
ble than conventional three-phase alternating current technol-
ogy for transmitting large quantities of electricity with low grid
losses and optimal control over long distances.
When assessing the carbon footprint of a TSO in line with the
Greenhouse Gas Protocol, grid losses-related GHG emissions are
accounted for in its indirect GHG emissions (Scope 2).
The energy mix generated and fed into our system determines
our carbon footprint. A high integration of renewable energy
translates into limited GHG emissions.
The reduction of grid losses is not the only factor that should be
considered when developing our grid, since too narrow a focus
can lead to adverse effects and even slow down the integration
of renewable energy.
For further details on the group Carbon footprint, see Section
8.2.1. Emissions – Greenhouse Gas Emissions.
ELIA IN BELGIUM
In Belgium, there is a distinction between two categories of grid
losses:
• Grid losses monitored at federal level (≥ 150 kV) compensated
with kind in accordance with federal legislation;
• Grid losses monitored at regional level (< 150 kV)
In 2021, the grid losses of Elia Transmission Belgium SA/NV
totalled 1.5 TWh. Its transmission losses expressed as a percent
-
age of total energy (electricity transmitted) were: 2.03%.
Grid losses unit 2019 2020 2021
Federal level
(from 150 kV)
MWh 788,191 717,811 918,071
Regional level
(less than 150 kV)
MWh 547,383 539,061 558,922
Grid losses total MWh 1,335,574 1,256,872 1,476,993
The losses are calculated using the Energy Management Sys-
tems (EMS) State Estimator. The EMS models the entire Belgian
network, listing each network element. The State Estimator
will estimate the state of each network element on the basis
of measurements taken in real time and the system modelling
parameters.
50HERTZ IN GERMANY
In 2021, the grid losses of 50Hertz Transmission GmbH totalled
2.4 TWh. Its transmission losses expressed as a percentage of
total energy (electricity transmitted) were: 2.17%.
50Hertz Transmission GmbH has already planned the South-
East Link between Saxony-Anhalt and Bavaria, the first 525 kV
HVDC transmission line in its grid area. As mentioned above
this technology is more suitable than conventional three-phase
alternating current technology for transmitting large quantities
of electricity with low grid losses and optimal control over long
distances.
To be able to better predict the amount of losses and purchase
electricity for balancing out the grid more cost-effectively via the
electricity market, 50Hertz Transmission GmbH has developed
a new forecasting model based on artificial intelligence (AI). It
developed the grid loss model in cooperation with the Fraun
-
hofer Institute for Optronics, Systems Engineering and Image
Analysis (IOSB) in Ilmenau.
39
ELIA GROUP SUSTAINABILITY REPORT 2021
39
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
4
39
ELIA GROUP SUSTAINABILITY REPORT 2021
Human
resources
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
40
ELIA GROUP SUSTAINABILITY REPORT 2021
40
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
GRI 102-7, GRI 102-8, GRI 103-2, GRI 401-2, GRI 401-3, GRI 405-1, SDG5,
SDG8
4.1. Management
approach
The Elia group owes its success entirely to the success of its
employees. It is the group’s responsibility to help them develop
their skills, foster their health and commitment, involve them in
decisions and guarantee equal opportunities for all.
The Elia group complies with international guidelines which
extend beyond its collective agreements and company agree
-
ments, such as the core labour standards of the International
Labour Organization (ILO: C87, C98 and C135) and the worker’s
rights set out in the UN Global Compact.
The Elia group is committed to promoting diversity out of convic
-
tion and in accordance with ILO Convention 111 and strictly con-
demns any discriminatory action in all work-related situations.
All employees are equal regardless of their ethnicity, age, gen-
der, sexual identity, religious affiliation, political views, national
or social origin or other factors. The Elia group is committed to
valuing all employees and their abilities equally.
As part of our Sustainability programme ActNow, we have set
ourselves specific targets in the areas of “diversity, equal oppor
-
tunities and inclusion” and “occupational health and safety” (see
5. Safety). The maintenance and further development of our val-
ues-based, open and inclusive corporate culture as well as the
promotion of a healthy work-life balance are among the compa-
ny’s top objectives; they form the strategic basis for all staff-re-
lated decisions.
Within the senior management team, responsibility for staff
strategy issues lies with the Group Chief Alignment Officer and
the Group Talent Management Officer.
There were no reported cases of discrimination in 2021.
4.2. Headcount
GRI 102-7, GRI 102-8, GRI 405-1, GRI 401-1
ELIA IN BELGIUM
(subsidiaries included: Elia Group SA/NV, Elia Transmission Bel-
gium SA/NV, Elia Engineering SA/NV, Elia Asset SA/NV, Elia Grid
International SA/NV and Eurogrid International SA/NV)
2019 2020 2021
Total employees Elia 1,424 1,455 1,491
- full-time 1,295 1,333 1,347
- part-time 129 122 144
- men 1,150 1,170 1,198
- women 274 285 293
- below the age of 30 211 171 157
- between the ages of 30 and 50 828 882 925
- over the age of 50 385 402 409
2019 2020 2021
Men Women %women Men Women %women Men Women %women
Directors 5 3 37.50% 5 3 37.50% 5 3 37.50%
Senior Managers
28 5 15.15% 29 6 17.14% 33 7 17.50%
Line Managers 449 128 22.18% 474 140 22.80% 494 148 23.05%
Employees 668 138 17.12% 662 136 17.04% 666 135 16.85%
Subtotal 1,150 274 19.24% 1,170 285 19.59% 1,198 293 19.65%
Total 1,424 1,455 1,491
The average age of employees is 42.7 years.
41
ELIA GROUP SUSTAINABILITY REPORT 2021
41
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
50HERTZ IN GERMANY
2019 2020 2021
Men Women %women Men Women %women Men Women %women
Directors 4 0 0.00% 4 1 20.00% 4 1 20.00%
Senior Managers
38 5 11.63% 37 8 17.78% 32 9 21.95%
Line Managers 68 13 16.05% 86 14 14.00% 88 18 16.98%
Employees 763 249 24.60% 844 290 25.57% 922 313 25.34%
Subtotal 873 267 23.42% 971 313 24.38% 1,046 341 24.59%
Total 1,140 1,284 1,387
The average age of employees at 50Hertz has fallen slightly com-
pared to the previous year and is now 42.2 years.
42
ELIA GROUP SUSTAINABILITY REPORT 2021
42
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
New employee hires and employee turnover
ELIA IN BELGIUM
(subsidiaries included: Elia Group SA/NV, Elia Transmission Bel-
gium SA/NV, Elia Engineering SA/NV, Elia Asset SA/NV, Elia Grid
International SA/NV and Eurogrid International SA/NV)
NEW HIRES 2021
New Hires
2021
Unit 2019 2020 2021
Num-
ber
rate
(%)
Num-
ber
rate
(%)
Num-
ber
rate
(%)
132 9% 100 7% 96 6%
New hires
per gender
Men 107 81% 73 73% 78 81%
Women 25 19% 27 27% 18 19%
New hires
per age
category
< 30 year 51 39% 26 26% 38 40%
30 < 50
year
70 53% 55 55% 55 57%
≥ 50
year
11 8% 19 19% 3 3%
TURNOVER 2021
Employee
Turnover
2021
Unit 2019 2020 2021
Num-
ber
rate
(%)
Num-
ber
rate
(%)
Num-
ber
rate
(%)
Turnover 43 3.1% 47 3.2% 74 5.1%
Employees
who left
Elia per
gender
Men 34 2.4% 34 2.3% 63 4.3%
Women 9 0.6% 13 0.9% 11 0.8%
Employees
who left
Elia per age
category
< 30 year 9 0.6% 6 0.4% 10 0.7%
30 < 50
year
34 2.4% 23 1.6% 34 2.3%
≥ 50
year
0 0.0% 18 1.2% 30 2.1%
Remarks:
• New hires include all new employees within the planned
budget and all the employees that were recruited as additions
to the original budget. Changes in positions are not included.
• The number of leavers is determined based on all employees
leaving the company as a result of dismissal, retirement or
resignation from 1 January to 31 December of the reporting
year.
• Turnover rate = # employees who left (#employees begin of
year+#employees end of year)/2
50HERTZ IN GERMANY
(subsidiaries included: Eurogrid GmbH, 50Hertz Transmission
GmbH, 50Hertz offshore GmbH)
NEW HIRES 2021
2020 2021
Men Women Men Women
< 30 years 41 20 12 1
30 - 50 years 52 19 84 34
> 50 years 42 17 46 19
TOTAL 135 56 142 54
LEAVERS 2021
Men Women Men Women
< 30 years 2 3 10 4
30 - 50 years 18 4 20 7
> 50 years 13 2 21 5
TOTAL
33 9 51 16
43
ELIA GROUP SUSTAINABILITY REPORT 2021
43
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
4.3. Work-life balance
GRI 401-2
Elia group employees benefit from a family-friendly work envi-
ronment and the opportunity to enjoy a healthy work-life bal-
ance.
The early recognition and prevention of work-related illnesses
and the ability to remain employable are integral parts of occu
-
pational health and safety at Elia group (see also Section 5.
Safety). In order to achieve these goals, Elia Group implements
occupational health measures which focus on individual protec-
tion and the prevention of health risks. In addition, Elia Group
regularly provides medical consultations, vaccinations and
advice related to workplace ergonomics to all employees.
A confidential counselling service is available to employees in
the event that they should experience stress, conflict or suffer
from substance addiction. Employees are also invited to take
part in different public sports events.
In order to improve our working environment, an exit interview is
always carried out with staff who leave the organisation, in order
to better understand their reasons for departure.
Parental leave
GRI 401-3
ELIA IN BELGIUM
In Belgium, every worker has the right to take four months of
parental leave (either as full-time leave or part-time leave).
NOTE: It is not possible to report on the total number of employees at Elia Transmission
Belgium SA/NV who are or have been entitled to this type of leave, as they may have already
taken it whist working at another company.
PARENTAL LEAVE
2019 2020 2021
Num-
ber
Rate
(%)
Num-
ber
Rate
(%)
Num-
ber
Rate
(%)
TOTAL
Men 75 67% 111 66% 105 67%
Women 37 33% 58 34% 52 33%
Full-time
parental
leave
(≥1 month)
Men 39 - 34 33
Women 21 - 18 16
Total 60 54% 52 31% 49 31%
Parental
leave as a
deduction
of full-time
employ-
ment
Men 36 - 77 72
Women 16 - 40 36
Total 52 46% 117 69% 108 69%
50HERTZ IN GERMANY
A company agreement is in place which aims to improve the
work-life balance of mothers and fathers and support them
with their childcare needs. This outlines the company’s policy
on issues relating to parental leave, support services, flexible
working hours, special holidays and sabbaticals as well as career
advancement. The 50Hertz headquarters also houses a daycare
centre for the children of employees, which is also open to local
children from the neighbourhood. In addition, a parent-child
office exists for short-term childcare during the working hours
if necessary. In job advertisements at 50Hertz, the ‘Flexi-Com-
pass’ initiative provides candidates with information about pos-
sible part-time and flexitime positions. Employees who occupy
such positions are given more flexibility with regard to the way
they can organise their working hours (and the places they work
from), so supporting them to better be able to manage their
personal and professional responsibilities. Guidance about such
roles can be found in the document on “mobile working”. As a
result of the COVID-19 pandemic, parents who were affected by
the closure of schools and daycare centres were given suitable
working time arrangements in this reporting year to enable
them to care for their children at home.
PARENTAL LEAVE
2020 2021
Number of employees on parental and care
leave
9 14
thereof men 4 6
thereof women 5 20
Number of employees on parental leave
01.01.2021 - 31.12.2021
67 77
thereof men 47 49
thereof women 20 28
44
ELIA GROUP SUSTAINABILITY REPORT 2021
44
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
Retirement
G4-EUS-EU15
ELIA IN BELGIUM
2021 In 5 years In 10 years
Percentage of employees
eligible to retire
men wom-
en
men wom-
en
Directors 0% 0% 0% 0%
Senior managers 0.17% 0% 0.33% 0%
Line managers 1.67% 1% 3.34% 2%
Employees 5.59% 6.83% 7.93% 8.19%
Total (without directors) 7.46% 7.93% 11.99% 10.69%
50HERTZ IN GERMANY
2021 In 5 years In 10 years
Percentage of employees
eligible to retire
men wom-
en
men wom-
en
Directors 20% 0% 20% 0%
Senior managers 9.76% 0% 29.27% 0%
Line managers 1.89% 0% 11.32% 0%
employees 5.75% 1.70% 11.58% 3.48%
Total (without directors) 5.60% 1.50% 12.10% 3.10%
45
ELIA GROUP SUSTAINABILITY REPORT 2021
45
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
4.4. Employee surveys
Employee surveys are conducted every two years. In 2020,
the survey was organised at group level for the first time and
included questions on the topic of diversity in the section on
corporate culture. Both the answer rate (87% of employees took
part) and results of the survey were very high (commitment
index around 70), this demonstrates the high engagement of
our workforce.
The detailed results were discussed across the organisation:
company-wide fields of action and measures for individual
teams were decided upon. The main topics which were estab
-
lished as focus areas at Group level were change management,
cross-departmental collaboration and simplification.
Employees are able to share their views about the organisation
on a regular basis (see section on stakeholder participation). Ini
-
tiatives include the “Say it!” employee survey at 50Hertz, which
was conducted for the fourth time in 2020. The participation rate
was 91% (2017: 91%) and 50Hertz was once again able to achieve
an above-average employee commitment index of 71 (2017 sur-
vey: 68).
4.5. Training
GRI 404-1
To realise our vision and master the challenges of tomorrow, the
group needs motivated employees, since they are a key success
factor in times of constant change. In addition to training related
to the technical and safety skills which are required to perform
our core business tasks (training specifically focusing on safety
is detailed in 5.2. Health and safety training), Elia group employ-
ees are offered individually tailored further training and the
opportunity to complete relevant qualifications.
The increase of teleworking due to the COVID-19 outbreak has
also had an impact on the way training is provided, virtual train
-
ing sessions have been held in order to ensure training continu-
ity. The catalogue of available training has expanded to webinars
accessible by every employee of the Elia group.
Systematic succession planning ensures that sufficient numbers
of potentially suitable employees are available for all manage
-
ment positions and that vacancies can be filled internally wher-
ever possible. To this end, talent is identified and promoted - for
example through programmes for “young professionals” that
are jointly developed and offered across Elia group. Programmes
for upgrading employee skills and encouraging career transi-
tion also exist (this includes programmes related to innovation,
“intrapreunership”, leading the change and external education).
Elia group attracts qualified young talent via its own in-house
training programmes. These include a 24-month trainee pro
-
gramme, internships and students completing diplomas, bach-
elor or master’s degrees (in cooperation with a local universities).
An additional Elia group talent programme was launched in
the third quarter of 2020. Talent@Elia Group is one of the top
projects included in the Elia Group SA/NV Business Plan. This
project was established to ensure our organisation can succeed
in the ever-changing context of the energy transition and can
fulfil its digital transformation needs. The framework developed
as part of this project aims to enable our business strategy and
to create an attractive, motivating environment for the talent we
have and need.
In addition, managers can take specific training modules to
develop their own leadership skills.
ELIA IN BELGIUM
The average number of hours dedicated to training and further
education, excluding regular safety instructions, was 13.92 hours
per employee in the reporting year. The overall tendency is to
have shorter and impactful training sessions.
50HERTZ IN GERMANY
In 2021, a total of 108 student employees and 10 trainees were
employed at 50Hertz Transmission GmbH. Currently, 30 young
people are completing industrial or commercial training pro-
grammes at the organisation. The trainee ratio was therefore
2.1 percent. The average number of hours dedicated to training
and further education, excluding regular safety instructions, was
12.56 hours per employee in the reporting year. In addition, man-
agers can take part in specific training modules developed by
the organisation to develop their own management skills.
46
ELIA GROUP SUSTAINABILITY REPORT 2021
46
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
4.6. Remuneration policies and incentive systems
GRI 102-38, GRI 102-41
Elia group’s remuneration policy focuses on attracting and
retaining the best talent, rewarding performance and support-
ing a culture of feedback and continuous development where
possible.
Staff remuneration is aligned with job requirements and perfor
-
mance, regardless of gender, and is supplemented by extensive
social benefits and a company pension scheme.
We ensure equal pay for equal work via a mechanism of refer
-
ence salaries that are market benchmarked. Every job descrip-
tion is related to a salary category (which are discussed during
“weighing committees”).
In accordance with local legislation, Elia Group subsidiaries are
obliged to prepare a report which transparently outline staff
remuneration. The aim of this legislation is to ensure staff receive
equal amounts of remuneration when they carry out equal
amounts of work and, more specifically, it aims to ensure that
the gap is avoided.
The remuneration of employees includes success and perfor
-
mance-related elements that provide them with incentives to
achieve our collective corporate targets as well as their individ-
ual targets. All employees receive regular performance reviews
and career development sessions. Some collective targets also
relate to the environment of sustainable corporate governance,
such as compliance with occupational health and safety and, at
50Hertz Transmission Belgium, successful social dialogue.
In addition, with the Elia Group share programme, employees
have the opportunity to benefit from the business’ success dur-
ing the previous financial year. For the ninth time in 2021, every
employee was offered shares at a preferential price.
Elia Group SA/NV transparently discloses the total remunera
-
tion of each of the members of the Board of Directors and of
the Executive Management Board in its consolidated financial
statements; these include the fixed and variable total remunera-
tion of management staff as well as their company pensions and
other benefits. The basic features of the remuneration system
are explained and detailed in the corporate governance state-
ment included in the 2021 Financial Report.
ELIA IN BELGIUM
Elia negotiates collective agreements for its ‘non-exempt’ staff
11
with other organisations across the energy sector. For ‘exempt’
staff members, their salary is based on internal equity com-
bined with market competitiveness, their level of maturity, their
respect for corporate values and safety leadership, and perfor-
mance – all irrespective of gender.
In 2021, the Sustainalytics risk rating score has been added as a
new sustainability-related collective target to the variable remu
-
neration of the staff and Executive Management Board of Elia
Transmission Belgium SA/NV.
Elia transparently discloses the total remuneration of the mem
-
bers of the Board of Directors and of the Executive Management
Board of Elia Transmission Belgium SA/NV and Elia Asset SA/NV
in its consolidated financial statements; these include the fixed
and variable total remuneration that management staff receive
as well as company pensions and other benefits.
Elia is willing to disclose its annual total compensation ratio (as
is carried out by 50Hertz). We are working internally on the cal
-
culation method and making every effort to achieve this soon.
50HERTZ IN GERMANY
Fair remuneration for all employees is a matter of course for
50Hertz. Additional offers for retirement benefits and health
round off the offer they provide to staff as an attractive employer.
The remuneration policies will be further developed in line with
future requirements in order to ensure it remains as an attractive
employer. The Mining, Chemical and Energy Industrial Union
(IG BCE) negotiates collective agreements with the Employers’
Association of Energy and Utility Companies (AVEU). For the first
time since 2013, a separate collective agreement was negotiated
for 50Hertz in 2020 and the relevant parties decided to continue
discussions surrounding general working conditions (skeleton
wage agreement). Remuneration in line with requirements and
performance is supplemented by extensive benefits and a com-
pany pension scheme.
50Hertz discloses the total remuneration of its management in
its consolidated financial statements in a transparent and volun
-
tary manner; these include the fixed and variable total remuner-
ation of management staff, as well as their company pensions
and other benefits.
The pay ratio (which expresses the relationship between the
remuneration paid to the highest-paid employee and the
median salary of all employees) is 7.7.
11 non-exempt staff are entitled to be paid for the overtime work they carry out; exempt staff are not
paid for this overtime - they are compensated through other means
47
ELIA GROUP SUSTAINABILITY REPORT 2021
47
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
4.7. Social dialogue and co-determination
50HERTZ IN GERMANY
The Supervisory Board of 50Hertz Transmission GmbH is com-
posed of six members and is contractually required to comprise
equal numbers of employee and employer representatives
(this goes beyond legal requirements). In a total of four Super-
visory Board meetings were held in 2021; throughout these,
the Management Board informed and advised the Supervisory
Board about the current course of business, the organisation’s
economic situation and the status and development of risks. A
committee of spokespersons with information and consultation
rights represents the interests of senior executives. The Works
Council is responsible for representing employees at 50Hertz
who are covered by collective agreements and those who are
not. 50Hertz is committed to addressing employee concerns
through joint events such as those organised by the Electric
-
ity Industry Group Committee and the Netzer Working Group.
In addition, the company regularly sends guest speakers and
lecturers to IG BCE educational events. In order to promote
employee involvement in trade union affairs, taster courses on
co-determination are offered. A youth and trainee representa-
tive committee (JAV) looks after the interests of young people
at the company. The JAV works closely with co-determination
bodies.
GRI 407-1, 402-1
The Elia group is committed to freedom of association, collec-
tive bargaining and the protection of employee representatives.
Particular emphasis is placed on trust and constant cooperation
with all trade unions. A cross-company discusssion takes place
in Elia Group SA/NV’s European Works Council with representa-
tives from Elia and 50Hertz.
The company ensures that employment-related decisions are
impartial and non-discriminatory via this discussion process
(that involves monthly meetings and preliminary consultations
with union representatives) at local and Group levels.
ELIA IN BELGIUM
All employees are covered by collective agreements
Social consultation at Elia Transmission Belgium SA/NV involves
information provision, discussions and negotiation via the stat
-
utory consultative bodies, such as the Works Council, the Com-
mittee for Prevention and Protection at Work and the trade
union delegation. These bodies include employee and employer
representatives. Each body plays an advisory for certain matters
and a decision-making mission for certain matters.
In addition to these legal bodies, we involve our social partners
in social consultation and discussions via involvement in work
-
ing groups to jointly prepare the implementation of our strat-
egy. Via these consultations and discussions we want to involve
them early in the evolution of our activities and the changes and
opportunities this will bring for our organization and our way of
working.
48
ELIA GROUP SUSTAINABILITY REPORT 2021
48
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
Diversity, Equity & Inclusion
2019 2020 2021 Target
Women in leadership
positions
17.24% 20.43% 22.11% n.a.
Women in total
workforce
21.13% 21.93% 22.23% Currently
being
defined.
# Nationalities 27 32 37 n.a.
% Foreign nationalities
in total workforce
2.63% 3.02% 3.32% n.a.
Around 50 DEI ambassadors ensure the establishment of an
open and inclusive corporate culture across the company. To
this end, workshops to raise awareness of diversity and inclusion
issues were offered and held in the reporting year. The Diversity
Break, which encourages staff to discuss such issues together
and was developed in 2020, was further developed in 2021. For
example, new blind conversations took place which almost 100
colleagues participated in, during which employees were invited
to anonymously express their views regarding the topics of
equality, diversity and inclusion.
To respond to some of the topics raised during these conver
-
sations, a series of training modules for employees was devel-
oped; these modules focus on challenging unconscious bias and
encouraging an inclusive culture and leadership practices. The
format will be continued and evaluated in the coming year. An
awareness-raising event was also held for managers.
In 2021, a ‘Diversity & Inclusion Scan’ was launched to better
understand where we stand today in relation to these areas of
action. This will lead to the development of a roadmap which will
guide us as we improve in these areas.
Diversity within Board of Directors and
Executive Management Board of Elia Group
SA/NV
DIVERSITY WITHIN THE BOARD OF DIRECTORS
Number of directors as at
31 December 2021 2021
Men
Aged between
35 and 54 years
1
Aged 55 or older 8
Women
Aged between
35 and 54
2
Aged 55 or older 3
When searching for and appointing new non-executive direc-
tors, special attention is paid to encouraging diversity in terms of
age, gender and complementarity of skills.
DIVERSITY WITHIN THE EXECUTIVE MANAGEMENT BOARD
Number of Executive
Management Board Members as
at 31 December 2021 2021
Men
Aged between
35 and 54 years
1
Aged 55 or older 3
Women
Aged between
35 and 54
1
Aged 55 or older 0
When searching for and appointing new members of the Exec-
utive Management Board, special attention is paid to encour-
aging diversity in terms of age, gender and complementarity of
skills.
4.8. Diversity, Equity, Inclusion
GRI 405-1
As part of the group-wide ActNow programme, the Elia group is
committed to promoting diversity and providing equal opportu-
nities for all employees.
Elia Group published a Diversity, Equity & Inclusion (DEI) Char
-
ter outlining the management team’s commitment to further
embedding DEI across the organisation. In addition, in order to
track and progress towards the fulfilment of our DEI ambitions,
Elia Group developed a DEI data dashboard.
49
ELIA GROUP SUSTAINABILITY REPORT 2021
49
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
DIVERSITY WITHIN THE BOARD OF DIRECTORS AND EXECUTIVE
MANAGEMENT BOARD
Number of people on the Board of
Directors of Elia Transmission Bel-
gium SA/NV as at 31 December 2021 2021
Men
Aged between
35 and 54 years
1
Aged 55 or older 7
Women
Aged between
35 and 54
2
Aged 55 or older 4
In accordance with the Act of 29 April 1999 relating to the organ-
isation of the electricity market, the Code of Companies and
Associations and the Articles of Association of Elia Transmission
Belgium SA/NV, at least one third (1/3) of Board members must
be of the opposite gender to the remaining two thirds. This one
third rule is applied proportionately to the independent and
non-independent directors. In addition, the composition of the
Board of Directors is balanced in terms of each member’s gen-
der, complementarity of skills, experience and knowledge, in
accordance with the Code of Companies and Associations and
the internal rules of the Board of Directors.
Number of people on the Executive
Management Board of Elia Trans-
mission Belgium SA/NV as at 31
December 2021 2021
Men
Aged between
35 and 54 years
1
Aged 55 or older 4
Women
Aged between
35 and 54
3
Aged 55 or older 0
The composition of the Executive Management Board is bal-
anced in terms of each member’s gender, complementarity
of skills, experience, knowledge and native language. When
searching for and appointing new members of the Executive
Management Board, special attention is paid to encouraging
diversity in terms of age, gender and complementarity of skills.
ELIA IN BELGIUM
In 2021, Elia Transmission Belgium SA/NV received the Top
Employer label for the fourth time in a row; this label rewards
companies that offer their employees an excellent working envi-
ronment. Elia stood out in particular in the area of talent acquisi-
tion and for the work it has done on its corporate values.
The proportion of women in Elia’s overall workforce is 19.65% as
of 31 December 2021 (the proportion of women at every respon
-
sibility level is disclosed in 4.2 Headcount).
50
ELIA GROUP SUSTAINABILITY REPORT 2021
50
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
implementing and monitoring this agreement. In the reporting
year, the proportion of severely disabled employees and employ-
ees with equal rights in our workforce was 1.4 per cent. In the
year under review, a total of 23 employees with disabilities were
employed in the company.
In accordance with the job-specific requirements in different
commercial and technical areas, this number is due to be suc
-
cessively increased in the future. To this end, 50Hertz is coop-
erating with the Annedore-Leber-Berufsbildungswerk, a special
training centre that supports people with disabilities, to make it
easier for young people with disabilities to find a job. In the year
under review, two interns from the organisation were given an
insight into the job profiles at 50Hertz. One former trainee from
the organisation was hired by 50Hertz some years ago.
To strengthen governance arrangements related to diversity
and equal opportunity issues, an Equal Opportunities Officer
was appointed for the first time in the year under review. She
provides staff with an independent and anonymous reporting
channel that they can use to report cases of discrimination
through. There were no reported cases of discrimination in 2021.
50Hertz is a signatory of the Diversity Charter, an initiative which
aims to promote diversity in companies and institutions. 50Hertz
participated in the nationwide Diversity Day for the third time in
the reporting year and raised awareness about this amongst its
employees.
Furthermore, 50Hertz has an agreement in place with AfB
gGmbH. The organisation disposes of client IT hardware and is
a recognised inclusion company which offers disabled people a
job and contributes to the avoidance of additional GHG emis
-
sions by processing and marketing used IT equipment.
50HERTZ IN GERMANY
%
Share of women in management 20
Share of women on the Supervisory Board 33
Share of women at senior management 22
Share of women at line management 17
Share of women in total workforce 25
One of 50Hertz’s concrete targets includes increasing the pro-
portion of women in the total workforce (both in leadership
positions and in senior management positions) to at least 30%
by 2030. The proportion of women in the total workforce was
25% (the proportion of women at every responsibility level is dis-
closed in 4.2 Headcount).
In 2020, as an addition to the company-wide network called
“50:50 - the women’s network”, the “Women in Leadership” ini
-
tiative was launched. This aims to promote female junior staff.
This has already had a positive effect: in 2021, 50Hertz was once
again named “Best Employer for Women” by Brigitte magazine.
In addition, 50Hertz took part in “Girls Day” (a programme which
encourages young girls to study science, technology, engineer-
ing or mathematics) for the third time in the reporting year. Due
to the COVID-19 measures, around 20 girls were able to partici-
pate in a virtual business game on the energy transition. In addi-
tion, 50Hertz supports the “EnterTechnik” programme, which
involves young women taking part in three-month internships
with that have a technical focus.
Promoting diversity and equal opportunities at 50Hertz also
means giving people with health impairments the same oppor
-
tunities as staff without health impairments. An inclusion agree-
ment which was negotiated and signed by the Works Council,
the Speakers’ Committee and representatives with disabilities
outlines measures to support people with health impairments in
their working lives. An internal inclusion team is responsible for
51
ELIA GROUP SUSTAINABILITY REPORT 2021
51
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
BLIND CONVERSATIONS
A To ensure that our employees were given
an opportunity to discuss diversity, equity and
inclusion (DEI) in an open and safe environ-
ment, we organised almost 100 blind conver-
sations with staff from across Elia and 50Hertz.
For each conversation, two colleagues were
brought together virtually to chat anony-
mously about DEI and what they thought we
were doing well, what they thought could be
improved and what DEI actions we could take.
Each session was supported by a DEI expert.
We are now using the feedback from these dis-
cussions to inform our journey towards becom-
ing an inclusive organisation. Our areas of focus
include promoting gender equality and sup-
porting staff from different ethnic backgrounds
to feel supported. We want to provide staff with
an inclusive environment in which no form of
discrimination is tolerated and everyone feels
safe and comfortable to be themselves.
EXTERNAL INSPIRATION TO RAISE AWARENESS
What do Hassan Al Hilou, Hanan Challouki
and Ann Wauters have in common? Well,
they all shared their vision with staff from Elia
last year: they inspired our colleagues and
increased awareness about gender equality.
Hassan Al Hilou, an entrepreneur, spoke about
the strength held in diversity. Hanan Challouki
provided insights into developing an inclusive
work culture and Ann Wauters shared a per-
sonal story about her international career and
how diverse staff members can build strong
teams and deliver better results.
Diversity
and inclusion
52
ELIA GROUP SUSTAINABILITY REPORT 2021
52
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
5
52
ELIA GROUP SUSTAINABILITY REPORT 2021
Safety
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
53
ELIA GROUP SUSTAINABILITY REPORT 2021
53
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
5.1. Management approach
To make this happen, we have defined four strategic health and
safety objectives:
• We aim for zero accidents.
Elia Group is committed to making sure that everyone returns
home safe every day. This includes all of our employees, our sub-
contractors and individuals who work on or in the vicinity of our
infrastructure.
• We maintain a solid culture of safety.
Reaching our health and safety goal requires more than just pro-
cedures and guidelines. We actively work towards ensuring that
everyone is personally involved in ensuring their own safety and
the safety of their colleagues.
• We are all safety leaders.
The group’s transformation in this area requires visible safety
leadership at all levels of the organisation. Safety leaders show
exemplary behaviour and inspire others to do so too. Elia Group
is committed to actively developing ‘safety leadership’ in all of
its employees.
• We ensure and promote the health and wellbeing for
our staff.
The strategic roadmaps developed by both Health & Safety
departments (in Belgium and Germany) have been aligned with
these 4 strategic objectives.
In order to further raise employee and supplier awareness about
occupational health and safety issues, specific campaigns are
carried out on a regular basis across the organisation. The trans
-
lation of relevant documents and campaign content into other
languages (particularly for different suppliers who do not oper-
ate in any of the languages we use across the Group) is being
planned.
The early detection and prevention of work-related illnesses and
the preservation of employability are also important compo
-
nents of our approach to occupational health and safety. To sup-
port these, appropriate occupational health care, which focuses
on individual protection and the prevention of health conditions
is ensured. In addition, the Elia group provides its staff with reg-
ular medical consultations, flu vaccinations and advice regard-
ing ergonomics in the workplace for all employees. Confidential
counselling delivered by external, qualified therapists is available
for employees at any time in the event that they should suffer
from stress, conflict or suffer from substance addiction.
GRI 103-2, GRI 403-1, GRI 403-2, GRI 403-3, 403-6, 403-8
As high-voltage electricity transmission system operators, Elia
Transmission Belgium SA/NV and 50Hertz Transmission GmbH
operate assets and infrastructure where accidents, asset failure
or external attacks may cause harm to people. The safety and
welfare of all individuals (Elia group’s staff, subcontractors and
third parties) is a key priority for the group and its subcontrac-
tors. Elia Group’s subsidiaries have implemented a Health and
Safety policy, undertake regular safety analyses and promote a
culture of safety cross the organisation.
The Elia group has high safety standards in place which all of its
employees, subcontractors and everyone who comes into con
-
tact with its infrastructure are required to follow. An Elia Group
Safety Officer position was established in 2020.
The prevention of accidents and work-related illnesses is a top
priority for Elia Group’s subsidiaries. Occupational health and
safety measures are included in the corporate strategy. The lat
-
ter is underpinned by the Health and Safety at Work Guideline,
which is binding for all employees. Occupational health and
safety practices have been improved over the past few years.
These improvements have focused on the establishment of safe
and healthy workplaces and the strengthening of a culture of
prevention by making occupational safety a corporate value.
This ensures that aspects of occupational safety are anchored
in the thinking and actions of all employees and implemented
across all support and core functions.
Every employee is instructed to recognise hazards, report them
immediately, and submit suggestions for promoting safe and
healthy working conditions.
As part of our commitment to health and safety, considerations
related to occupational health and safety and injury and illness
prevention are integrated into our corporate strategy at group
level: they form part of the group’s ActNow programme. Our
group-wide ambition is to ensure that all our employees and
subcontractors arrive home safe and sound every day.
54
ELIA GROUP SUSTAINABILITY REPORT 2021
54
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
We also address risks related to the wellbeing of our employees
through the Care4Energy programme that ensures their wellbe-
ing by targeting their mental, physical, emotional and personal
development. A series of campaigns related to health and well-
being management were launched throughout 2021, leading to
high numbers of staff taking part in related activities.
Elia Transmission Belgium SA/NV performs psycho-social risk
analyses in a structured and proactive way to understand and
mitigate such risks with regard to its employees. Employees can
also take part in different public sports events.
COVID-19 pulse check surveys are carried out by Elia Transmis
-
sion Belgium SA/NV on a regular basis. As part of this, employees
have been invited to fill out surveys related to how they have
been coping with the pandemic and associated lockdowns, and
how the organisation can better support them.
50HERTZ IN GERMANY
Occupational health and safety are integrated into the corpo-
rate strategy. This is also underpinned by the health and safety
guideline, which is binding for all employees. Occupational
health and safety has been systematically developed in recent
years as part of a continuous improvement process. In addi-
tion to creating safe and healthy workplaces, the focus was on
strengthening a culture of prevention by integrating occupa-
tional safety as a corporate value. This ensures that the aspects
of occupational safety are anchored in the thinking and actions
of all employees and implemented in all support and core func-
tions. As part of the annual audit plan, eight internal audits were
conducted in 2021 to ensure the continuous development of the
health and safety management system. The implementation of
the requirements for the occupational health and safety man-
agement system (OH&S) in accordance with DIN ISO 45001:2018
was again confirmed in the reporting year in a supervisory audit
by an external auditor without any non-conformities. Health
protection and occupational safety topics are an integral part
of weekly meetings held by senior management and Eurogrid
GmbH Supervisory Board.
Furthermore, employees can participate in various public sports
events. Another service made available to employees is an app
that offers personalised coaching in the areas of exercise, mind
-
fulness and nutrition (including workouts, physio sessions, med-
itation and recipe ideas). Since July 2021, the app has provided
users with support for finding the right medical care and book-
ing appointments for specific medical concerns.
COVID-19: All employees were offered COVID-19 vaccinations on
site until June 2021. Initial and booster shots were also offered to
employees from November 2021 onwards. These measures have
helped to ensure that no major infection incidents occurred
amongst the workforce in 2021.
COVID-19
The COVID-19 pandemic has had - and continues to have - an
impact on the private and professional lives of Elia Group’s
employees. Over the past two years, the situation regarding the
virus and its spread has been constantly monitored and meas-
ures were implemented in accordance with the requirements
of the SARS-CoV-2 occupational health and safety regulation. In
addition, all employees have been able to undertake rapid anti-
gen tests at least twice a week since the end of February 2021. All
meeting rooms at company sites were equipped with measur-
ing devices to ensure regular ventilation.
ELIA IN BELGIUM
Our safety record for 2021 is overshadowed by a fatal accident
which occurred on 29 September as one of our members of
staff was carrying out maintenance activities. An investigation
into the incident has been completed and a series of preven-
tion measures are being put in place to avoid such incidents in
future. The event has truly reinforced our resolve to make sure
that everyone returns home safe every day.
Elia Transmission Belgium published its Global Prevention Plan
2020-2025 which outlines its health and safety strategy for the
years to come. It includes a solid health and safety framework
with the transformation we want to undergo, which will see
all staff members demonstrating visible and exemplary safety
leadership. After obtaining a Safety Culture Ladder level 3 cer
-
tificate 2020, an intermediate audit of our practices in this area
was carried out in 2021. The audit reconfirmed that Elia Trans-
mission Belgium’s practices are aligned with a level 3 on the
Safety Culture Ladder scale, included recommendations for the
organisation and indicated that the organisation was making
positive progress towards a level 4 certification. The use of the
Safety Culture Ladder is also being rolled out for our contractors
to use and adhere to.
In addition to sector-specific risks, we also address risks related
to road safety and raise employee awareness about risks and
good practice as road users (motorists, cyclists and pedestrians)
in professional and private settings.
55
ELIA GROUP SUSTAINABILITY REPORT 2021
55
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
The content of annual training related to overhead line pylons
and transformers is determined on the basis of the rescue
concept: a uniform level of knowledge is promoted amongst
employees, alongside the exchange of knowledge across sites.
Training related to rescuing people in distress at sea was carried
out in the reporting year. Both the rescue measures undertaken
by staff and the PPE they used proved to be effective.
5.2. Health and safety training
GRI 403-5, 403-7
The Elia group continuously trains its staff. Training for all
employees who work on technical sites is compulsory; this is
updated periodically. All employees are regularly instructed
about workplace-specific hazards and the measures they can
implement to avoid them.
The Elia group also provides training materials, training and tests
for subcontractors.
ELIA IN BELGIUM
In addition to refresher trainings for our operational teams,
we also ensure that such staff are continually informed about
changes to procedures and working methods, and that they are
able to learn from feedback.
Safety flashes are also sent out to our own staff and subcontrac
-
tors on an ad hoc basis; such messaging includes good practice
reminders or the identification of specific risks associated with
particular tools.
Due to the nature of our activities, even during the COVID-19
pandemic, training dates and schedules could not be altered.
Training sessions were therefore adapted to be delivered as
webinars or delivered on work sites with appropriate protection
measures in place.
50HERTZ IN GERMANY
Training for operational staff across our regional centres are
delivered on six days per year. Staff who work in administrative
settings are given training on at least once per year.
In cases where staff are required to wear personal protective
equipment (PPE) to protect them from falls from a height,
such staff must complete annual practical exercises related to
the use of PPE and rescue missions from heights and depths.
56
ELIA GROUP SUSTAINABILITY REPORT 2021
56
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
5.3. Inspections
Besides the safety-related visits for our own personnel Elia Trans-
mission Belgium NV/SA also has a dedicated Contractor Safety
team which performs at least 175 visits per year. The visits are
aligned with those performed with our own staff. The focus of
the visits points out the responsibility of the work leader and is
aiming to create real safety leaders.
50HERTZ IN GERMANY
50Hertz Transmission GmbH ensures that its suppliers comply
with the highest safety standards by having specially trained
staff carry out construction inspections.
Transparent and binding regulations for ensuring that occupa
-
tional safety measures are enforced by external companies work-
ing in 50Hertz Transmission GmbH’s control area are in place.
Quality assurance measures related to construction sites which
are used by subcontractors are included in all new contracts.
The latter include clauses stipulating that 50Hertz Transmission
GmbH has an unrestricted right to carry out inspections of these
sites. In the reporting year, 538 construction site inspections
were carried out (933 in 2020). Overall, the quality of construc
-
tion site inspections was improved and their number reduced.
This was achieved by introducing an IT-supported system and by
concentrating inspection tasks on the work of operational qual-
ity assurance officers at each individual site.
Safety and environmental protection incidents that involved
external companies working on behalf of 50Hertz Transmission
GmbH were analysed with the external companies concerned
in accordance with a defined process. Measures to avoid similar
accidents and incidents were defined, implemented and docu
-
mented following guidance of a central evaluation committee.
In accordance with this process, a total of 69 environmental inci-
dents, accidents, near-accidents and safety-related incidents
were evaluated in the year under review.
In July 2021, the managing directors of all overhead line con
-
struction companies working for 50Hertz Transmission GmbH
were invited to a “Dialogue on Occupational Safety” in order
to share their views about accidents and their possible causes
(including difficulties linked to dealing with subcontractors,
promoting a culture of safety and awareness-raising measures).
Further regular events of this kind are planned in future. In addi
-
tion, safety instructions from 50Hertz Transmission GmbH are
due to be distributed directly to its subcontractors; moreover, its
checks of subcontractors are due to increase.
GRI 403-2, GRI 403-3
Occupational health and safety protection is not limited to our
own employees.
Elia group’s stringent standards also apply to external subcon
-
tractors working across all of Elia group sites. During the con-
tracting process and later, every effort is made to ensure that
suppliers comply with Elia group’s strict safety requirements.
Both the Safety Team and management carry out inspections
on a regular basis.
ELIA IN BELGIUM
After the successful introduction of the Safety Culture Ladder
certification system in 2020, an intermediate audit of our prac-
tices in this area was carried out in 2021. The audit reconfirmed
that Elia Transmission Belgium’s practices are aligned with a
level 3 on the Safety Culture Ladder Scale, included recommen-
dations for the organisation and indicated that the organisation
was making positive progress towards a level 4 certification. The
use of the Safety Culture Ladder is also being rolled out for our
contractors to use and adhere to.Operational managers and the
Safety Team regularly visit our sites to observe how activities are
organised and carried out, both by our own teams and those of
our subcontractors.
Safety-related visits of our workplaces and staff behaviour are an
essential part of the dynamic risk management system. Listen
-
ing to and observing management allows methods and equip-
ment to be adapted. Moreover, management coaching allows
staff to be supported to properly implement the company’s
methods and behaviours.
We have adapted these safety-related visits to promote specific
behaviours that characterise a proactive safety culture through
-
out the company: Transparency and the Willingness to Learn.
In the reporting year, 1142 construction sites visits were carried
out.
57
ELIA GROUP SUSTAINABILITY REPORT 2021
57
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
5.4. Accidents
Safety is Elia’s number one priority; we therefore provide figures
for both our employees and subcontractors.
Our safety track record for 2021 is overshadowed by a fatal acci
-
dent on the 29th of September with one of our employees dur-
ing maintenance activities. The incident investigation has been
performed and a series of prevention measures are being imple-
mented to avoid reoccurrence. The event has truly reinforced
our resolve to make sure that everyone returns home safely
every day!
GRI 403-9, GRI 403-10
Our goal is zero accidents for our own employees, subcontrac-
tors, distribution system operators and anyone else who works
with our facilities.
ELIA IN BELGIUM
WORK PERFORMED
2019 2020 2021
8
7
6
5
4
3
2
1
0
Number of hours performed by subcontractors (Million)
Number of hours performed by Elia employees (Million)
4.86 4.53
5.33
2.19 2.21
2.09
Million hours
ELIA ACCIDENT STATISTICS
2019 2020 2021
Employees
#employees injured with at least 1 missed workday
Men 4 1 7
Women 0 0 1
#work related fatalities
Men 0 0 1
Women 0 0 0
Accident rate
(1)
1.9 0.5 3.6
Total recordable injury (TRI) rate
(2)
5.7 5 6.8
Accident severity
(3)
0.05 0 0.14
Fatal accidents Nr. 0 0 1
Contractors
#accidents (with & without lost time) Total 41 27 48
Accident rate
(1)
3.4 3.9 6
Total recordable injury rate (TRI)
(2)
7.7 5.5 10.6
Fatal accidents Nr. 0 0 0
50HERTZ IN GERMANY
There has been an increase in accidents involving subcontrac-
tors involved in overhead line construction from the middle of
the year onwards. In response, the “Dialogue on Occupational
Safety” (see 5.3 above) was launched. These subcontractor acci-
dents include 27 accidents that caused minor injuries (involving
reversible health damage; for example, minor cuts, bruises, etc.);
2 accidents that caused moderate injuries (involving probable
reversible health damage, such as bone fractures); and 1 acci-
dent that caused severe injuries (involving irreversible health
damage, such as the amputation of a limb).
Within the framework of ActNow, from 2022 onwards, reporting
relating to accident rates will be extended to include occupa
-
tional accidents experienced by subcontractors.
50HERTZ ACCIDENTS STATISTICS
2019 2020 2021
Work-related accidents at
50Hertz (with at least two
days of downtime)
0 6 8
Frequency rate
*
0.6 3.9 2.6
Severity rate
**
0.00 0.03 0.01
Number of accidents in
contracted companies
18 12 30
* Number of occupational accidents with lost time (≥1 day) x 1,000,000/number of hours
actually worked
** Number of days lost due to occupational accidents in calendar days x 1,000/number of
hours actually worked
(1) Number of work-related accidents with missed time (>1day) x 1,000,000/number of hours worked
(2) Number of work-related accidents x 1,000,.000/number of hours worked
(3) Number of missed days due to work-related accidents in calendar days x 1,000 / number of hours worked
58
ELIA GROUP SUSTAINABILITY REPORT 2021
58
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
6
58
ELIA GROUP SUSTAINABILITY REPORT 2021
Suppliers
human rights
and
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
59
ELIA GROUP SUSTAINABILITY REPORT 2021
59
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
6.1. Management approach
6.2. Suppliers and expenditure in the Eurozone
In 2018, a Supplier Code of Conduct which includes internation-
ally recognised principles regarding ethical conduct and health
and safety, environmental and social considerations, was pub-
lished. This code applies to each of Elia group’s suppliers and
is always included in documents alongside European procure-
ment procedures.
In order to use this set of principles as a way to have a positive
impact on the supply chain, we set up a risk-based approach.
We assess the risks linked to all purchasing categories based
on traditional supply chain risks and supply chain sustainability
risks. A matrix was drawn up to prioritise supplier engagement
activities. To rationalise resource and impact management, we
aim to focus on those suppliers who are most relevant from that
risk perspective.
Procurement outside of Eurozone countries is very limited
(below 5%) and the large majority of such procurement is related
to IT and consultancy services. The environmental impact of a
supplier is also considered in the awarding criteria. Elia complies
with the EU and Belgian standards in terms of environmental,
social responsibility and worker wellbeing considerations.
A specific evaluation of safety considerations is carried out sepa
-
rately since it is crucial to have suppliers on board that share the
same values when it comes to the importance of this area.
In order to improve our accounting of GHG emissions related to
our supply and value chain (the scope 3 of GHG emissions, please
also refer to section 8.2.1. Greenhouse gas (GHG) emissions)
related to new assets and construction work, we are improving
our CO accounting process in order to better identify sources of
emissions; this will enable us to focus our efforts on addressing
and reducing them. We will also transition from using internal
carbon pricing (ICP) on a case-by-case basis in our purchasing
decisions to integrating ICP into all parts of the investment deci-
sion-making process. Our CO Accounting Platform, which is
currently being developed, aims to provide our suppliers with a
tool through which they will be able to record the GHG emis
-
sions related to their goods and services, so enabling us to com-
pare different options available.
SDG 12, GRI 102-9, GRI 103-2, GRI 204-1, GRI 308-1, GRI 308-2, GRI 414-1
The Elia group is required to comply with European tendering
rules. Adherence to these rules and other internal guidelines
ensure that every supplier receives the same non-discrimina-
tory and transparent treatment and that the information sent to
them is treated confidentially. Suppliers are selected based on
an assessment of multiple criteria. Elements relating to sustain-
ability are included in contracts and general purchasing terms
and conditions, which are signed by our suppliers.
By embedding strong ethical principles into the procurement
process, the Elia group seeks to have a positive impact on the
wider environment in which it operates. It also aims to avoid risks
arising from non-compliance with certain supply chain rules
and norms. A Head of Group Procurement was hired in order to
enhance this process.
GRI 201-1, GRI 203-1, GRI 203-2 , GRI 204-1
ELIA IN BELGIUM
A Sustainability Supplier Self-Assessment questionnaire was
developed to be used as part of the procurement process for
specific purchasing categories in order to understand supplier
level of engagement in terms of ethical conduct, and social,
health and safety and environmental considerations.
In order to better estimate the GHG emissions related to our
works, we are carrying out the Green Works Initiative, we have
agreed with several of our contractors that they would gather
and provide us with detailed quantitative information during
the construction phase of a selection of projects.
60
ELIA GROUP SUSTAINABILITY REPORT 2021
60
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
50Hertz Transmission GmbH is committed to economic devel-
opment in the region within which it operates. Indeed, in 2021,
goods and services amounting to € 765 million were purchased
from companies headquartered in Germany. Of this, €304 mil-
lion went to companies headquartered in the 50Hertz Transmis-
sion GmbH grid area. This corresponds to a ratio of around 39.8%.
In the reporting year, 50Hertz Transmission GmbH approached
the WifOR institute and asked them to carry out an input-out
-
put analysis of its contribution to Germany’s gross domestic
product (in terms of direct, indirect and induced economic and
fiscal effects). Within the framework of above-average labour
productivity and a gross value added ratio of almost 50% (aver-
age energy supply 43%), the direct value added contribution
to the German GDP amounted to €710 million. The total value
added amounts to €1.9 billion if indirect effects (caused by the
demand for inputs) and induced effects (through the expendi-
ture of directly and indirectly generated income) are included.
In addition, almost 16,000 jobs in Germany were supported by
these spillover effects. Within its grid area, 50Hertz creates about
6,000 jobs, which amounts to 35%of the jobs created by 50Hertz
in Germany.
There were no legal disputes regarding tax issues in the year
under review.
Due to its stable economic situation, 50Hertz Transmission
GmbH has not claimed any financial support from the state
related to the COVID-19 pandemic.
50HERTZ IN GERMANY
SPLIT YEARLY SPEND EURO VS NONEURO SUPPLIERS
100%
75%
50%
25%
0%
Amount spent outside EU
Amount spent inside EU
0.3% 0.8%7.4%
92.6% 99.7% 99.2%
2019 2020 2021
As outlined in rules and regulations adopted by senior manage-
ment, 50Hertz Transmission GmbH pays its taxes on time and
in accordance with the law. In so doing, 50Hertz Transmission
GmbH is modelling behaviour that supports the sustainable
distribution of the value generated by the company. This ben-
efits structurally weak regions located in 50Hertz Transmission
GmbH’s grid area.
61
ELIA GROUP SUSTAINABILITY REPORT 2021
61
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
6.3. Human rights
50HERTZ IN GERMANY
Based on the human rights due diligence requirements
anchored in the German National Action Plan (NAP), 50Hertz
Transmission GmbH conducted an analysis of its direct and indi-
rect supply chains. As a result, four human rights risks were iden-
tified as a priority:
• Occupational health and safety;
• Environmental protection and health;
• Employment and working conditions;
• Freedom of association and expression.
50Hertz Transmission GmbH is examining these as part of an
in-depth analysis of the submarine cable value chain, which is
complex. Additionally, their construction requires high levels of
investment. This analysis includes interviews with 50Hertz Trans
-
mission GmbH ‘s direct suppliers in order to determine and track
the risk potential of steps along the value chain and to develop
suitable measures to address any issues along the latter.
In the spring of 2021, an intensive stakeholder discussion about
human rights in the submarine cable supply chain was held
with key production and construction suppliers. Suppliers adopt
a risk-based approach to mitigate the risk of human rights vio
-
lations across their supply chains (these include adhering to a
mandatory Code of Conduct, undertaking supplier assessments
and audits, and the use of a whistleblower system). 50Hertz
Transmission GmbH ‘s approach for determining risks in the
supply chain was shared during this discussion.
Sustainability-related changes will continue to be embedded
into the supply chain management process over the coming
years.
SEA CABLE SUPPLY CHAIN
Metal
Mining
(Aluminum/
Lead/
Copper)
Metal
Smelting
Raw
materials for
synthetic
material
Refined
plastics/
chemicals
Metal
Fabrica-
tion
Metal
Manufac-
turing
(Wires/
Rods)
Completion level
* Currently deprioritised due to non applicability
(end of product life cycle still unknown)
Hertz
Direct supplier (contract partner)
Indirect supplier
Increased risk level
Risk level
Logistics
Engineering
Sea cable
production
(incl.
insulation)
Cable
Installa-
tion
Cable
Operation
Recycling
and
Disposal*
GRI 414-1
The Elia group acknowledges its responsibility with respect to
human rights and respects the rights of its employees, cus-
tomers and consumers with regard to privacy, personal safety,
freedom of expression and property rights. The Elia group also
assumes responsibility for ensuring that social standards are
complied with along the supply chain. For this reason, Elia Trans-
mission Belgium SA/NV and 50Hertz Transmission GmbH are
not only members of the United Nations Global Compact, but
are also committed to the core labour standards of the Interna-
tional Labour Organization (ILO).
In order to ensure that our business partners also comply with
internationally binding rules on human rights - such as the pro
-
hibition of forced and child labour - sustainability and ethics are
essential components of our evaluation of suppliers and service
providers evaluation. Elia Group suppliers commit to a common
and binding Supplier Code of Conduct (SCOC), which is a key
part of all Elia Group supplier contracts. Suppliers must accept
the SCOC when submitting a bid and are obliged to comply with
it. Human rights are also included in the clauses of the General
Purchasing Conditions.
Further developments in this area are currently being discussed
at Group level. For example, in the future, suppliers will be asked
about their approach to sustainability, including human rights
due diligence, via an external service provider; their responses
will be recorded in a balanced score card. Initial proposals for this
are expected during the course of 2022. In addition, Elia Group
raises awareness of sustainable actions to take in regular discus
-
sions with stakeholders across the supply chain, furthering their
understanding of compliance with ethical principles and guide-
lines related to sustainable development.
All procurement at Elia Group is undertaken in accordance
with procurement guidelines. These state that procurement
(> €100.000) is carried out via the Purchasing Department. A
multi-level strategy prevents any misuse and increases control
over all procurement-related activities. The ‘ four eyes principle’
is guaranteed at all times. The procurement guidelines, pur
-
chasing manual and the General Purchasing Conditions form
a framework which aims to prevent corruption across all of our
locations.
62
ELIA GROUP SUSTAINABILITY REPORT 2021
62
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
7
62
ELIA GROUP SUSTAINABILITY REPORT 2021
Stakeholder
engagement
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
63
ELIA GROUP SUSTAINABILITY REPORT 2021
63
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
7.1. Management approach
ELIA IN BELGIUM
Within Elia Transmission Belgium SA/NV, a Corporate Reputa-
tion Committee was created, presided over by the Chief External
Relations Officer in order to follow up on links established by dif-
ferent departments with external stakeholders.
Elia Transmission Belgium SA/NV organises many stakeholder
discussions and events. The method and frequency of engage
-
ment for each stakeholder group and their links to the material
topics are summarised in the table below;
Stakeholder group Mode of Engagement Frequency Main topics / expectations
Employees
– Performance management
– Intranet
– Donations
– Regular
– Employees - Human development
– Employees - Wellbeing
– Community involvement
Customers
– Customer satisfaction survey
– Users’ Group / Working Groups
– Elia extranet
– Annual
– 4 to 6 times a Year
– Transmission services
– Environment
– Fair operating practices
Society
– Social events
– Engagement via own employees
– Regular – Community involvement
Shareholders – Shareholder meeting – Regular
– General corporate performance incl. the contribu-
tion tosociety
Regulators
– Reports
– Communication
– Regular – Fair operating practices
Elia Transmission Belgium SA/NV uses a wide range of different
means to ensure the encouragement of public participation and
feedback (further details are included about these in the next
section). A public reference framework exists which seeks to mit-
igate the impacts of new infrastructure projects (further details
about this are included in the next section).
GRI 102-40 GRI 102-42, GRI 102-43, GRI 103-2, GRI 413-1
Involving stakeholders upstream helps to improve their under-
standing of society’s need for a grid, and can optimise the associ-
ated processes. The Elia group regularly contacts and exchanges
information with different stakeholder groups.
The Elia group’s stakeholder environment is continuously ana
-
lysed and defined. Depending on the topic, Elia and 50Hertz
interact with public authorities, political parties, local citizens,
civil society (including organisations that represent environmen-
tal, economic, and agricultural or other interests) and clients
directly connected to their grid.
Hybrid and virtual event formats were increasingly used for dis
-
cussions with internal and external stakeholders throughout
2021. Examples include the 50Hertz Transmission GmbH round-
table discussions which led to the publication of the New energy
for strong industrial jobs paper and the Elia Group Stakeholders
Day, during which its Roadmap to net zero study was launched.
These discussions and events involved high amounts of partici-
pation (both in person and online). Furthermore, in cases where
internal communication was still being disseminated via phys-
ical channels, most messaging was digitalised. For example,
meetings for staff were held as hybrid or virtual events through-
out 2021.
64
ELIA GROUP SUSTAINABILITY REPORT 2021
64
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
FINANCIAL
SECTOR
ENVIRONMENT
SOCIETY
MARKET
DIALOGUE
OWN FORMATS
Shareholders
Investors
Rating agencies
German Federal Network Agency
Political decision-makers
Non-governmental organisations
Citizens‘ initiatives
Trade unions
Public
Media
Employees
Research and education
Suppliers
Generators
Distribution system operators
Major consumers
Transmission system operators
Reports
Press conferences
Telephone conferences
Co-determination
Information sessions
Conventions/conferences
Scientific advisory committee
Partnerships with higher education institutes
Research work
Network meetings for visitor groups
Visitor groups
Cultural events
Learning activities for children and teenagers
Media relations work
Outreach activities
Publications
FOREIGN FORMATS
Guest lectures
Committees
Work and network meetings
50HERTZ IN GERMANY
Internal, project-related guidelines regulate timelines and the
dissemination of information regarding project planning, ap-
proval processes, public participation and stakeholder manage-
ment. These guidelines also include best practice and recom-
mended courses of action based on past experience, enabling
the company to continuously develop its standardised public
participation toolbox. In addition, 50Hertz Transmission GmbH
often participates in wider public discussions regarding the
quality of public participation; for example, it is a founding mem-
ber of the RGI and a member of the DialogGesellschaft e. V and
the Bertelsmann Foundation’s Alliance for Diverse Democracy.
65
ELIA GROUP SUSTAINABILITY REPORT 2021
65
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
7.2. Community relations and public acceptance
ELIA IN BELGIUM
Elia Transmission Belgium SA/NV has made sure to involve
civil society and regional experts at an early stage of its two
most important projects in Wallonia and Flanders: Ventilus and
Boucle du Hainaut. The objective of such stakeholder engage-
ment is to ensure that the projects are developed in the best
way possible (and so are aligned with environmental, economic
and agricultural interests) through the solicitation of feedback
and expertise. This stakeholder engagement is ongoing and the
group of individuals and organisations involved has widened.
Specific reports related to the best types of technology to use as
part of the projects were delivered. For the project in Flanders, a
participatory approach was undertaken; as part of this a project
facilitator gathered a group of independent experts and citizen,
municipality and civil society representatives together in order
to answer all their questions and respond to different scenarios
proposed by local communities.
Elia Transmission Belgium SA/NV communicates and cooper
-
ates transparently with its stakeholders throughout the entire
project development process. In addition to holding legally
required preliminary public information meetings, we also
organise “info-markets”, which are information sessions for local
residents. During 2021, 18 information sessions linked to the offi-
cial permit process were organised. These information sessions
were supplemented by invitation letters; citizen information
packs; brochures; flyers; roll-ups; press conferences and press
releases; digital newsletters; Facebook posts; information videos;
telephone hotlines; and mailbox provision.
It is crucial for us to make sure interested stakeholders are able
to find our website and the information they need. Our website
includes a specific section which is dedicated to providing infor
-
mation about our current and future infrastructure projects [link
infra projects]. Moreover, two separate websites were created to
provide our stakeholders with information about our two most
important projects [boucle-du-hainaut and Ventilus].
GRI 102-21, GRI 102-29, GRI 102-43, GRI 102-44, G4 EUS Stakeholder
Participation
The Elia group is convinced that involving all stakeholders early
on in their projects is vital for ensuring the success of the energy
transition. Our approach is to contact and inform all parties of
upcoming projects in order to ensure their voice can be heard,
so establishing relationships of trust with them.
A transparent and consistent approach which aims to meet
societal requirements and community expectations signifi
-
cantly improves community acceptance of our projects. Further-
more, this approach must be clearly communicated to different
stakeholders from the outset of projects so that their concerns
and anxieties can be addressed. To achieve this objective, the
responsible departments in Belgium and Germany have devel-
oped a communication and public acceptance methodology;
this ensures that stakeholder engagement and communica-
tion is embedded into the grid development process. In turn,
this ensures that our costs are controlled, the timing of projects
can be adhered to and we are able to deliver necessary projects
which are aligned with the interests of society.
As a new project is being explored, discussions with relevant
stakeholders are held during the very early stages of project
planning. During the design phase of our projects, we mainly
work with civil society, local municipalities and representatives
from academia. Public consultations are also held regarding
grid development plans. As projects become more concrete, dis
-
cussions and information exchange are organised for local citi-
zens and communities.
Against the backdrop of the COVID-19 pandemic, we have
adapted how we inform citizens and local authorities of our
plans: we now use more digital communication channels,
including webinars and one-to-one consultations. Adapting our
communication methods in this way has helped us to maintain
strong ties with our stakeholders whilst complying with the rel
-
evant health and safety restrictions.
66
ELIA GROUP SUSTAINABILITY REPORT 2021
66
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
50HERTZ IN GERMANY
50Hertz Transmission GmbH follows best practice related to
public participation, such as Guideline 7000 of the Association
of German Engineers (2015), the quality criteria of the Alliance for
Diverse Democracy (2017) and the quality criteria published by
the Citizen Participation Network (2013).
When planning and implementing grid expansion projects,
50Hertz Transmission GmbH ensures that it adopts a partici
-
patory approach, undertaking regular discussions with stake-
holders. This is because the involvement of relevant stakeholder
groups plays an important role in sustainable grid expansion.
Regional and local stakeholder groups are identified along-
side any issues, questions and fears they might have regarding
projects in their area. This allows a participation roadmap to be
developed and implemented with stakeholders from the area;
this roadmap is aligned with sound early public participation
standards and with project-specific aspects. This is because the
information and participation needs of citizens vary across the
regions where existing capacities are reinforced or new sub-
stations and lines are being built. 50Hertz Transmission GmbH
would like to take its participatory approach one step further
by inviting stakeholders for discussions held where they live. It
is only in this way that the organisation will be able to further
improve its planning activities - such discussions will allow the
organisation to take local knowledge on board and apply it dur-
ing its project work.
Discussions with relevant stakeholders start at a very early stage
in project planning. Stakeholders are asked to provide their feed
-
back on the grid development plan and on grid reinforcement
and expansion projects. Such stakeholder engagement takes
place according to clearly defined specifications, which specify
the format they must embody. Throughout the course of the
COVID-19 pandemic, the company adapted the channels it used
in line with the measures that were being enforced: virtual com-
munication channels were employed and an additional space
for exchange with mayors, residents and representatives of asso-
ciations was created in telephone consultation hours previously
announced in the local press, which was actively used. Further-
more, digital communication channels and tools which facilitate
citizen participation were explored and employed, enabling the
We also communicate with our stakeholders via social media:
we have corporate LinkedIn and Facebook accounts and we run
a Facebook page entitled ‘Elia Projects’ which provides informa
-
tion about our infrastructure projects. We have also a YouTube
channel that we use to disseminate content about our activities
and projects.
Moreover, Elia Transmission Belgium SA/NV strives to limit the
impact of its projects on the areas we work in. In this vein, we
developed a public reference framework to mitigate the impact
of new infrastructure projects, preventive and compensatory
measures are adopted as part of this, based on the following
principles:
• transparency: the conditions are clear and available to every
-
one;
• non-discriminatory: the policies apply to everyone uniformly;
• proportional: the measures and compensations are propor
-
tional to the impact of the work;
• proactive: the organisation will notify individuals or organisa
-
tions which are impacted by the measures or are eligible for
compensation.
OUR APPROACH
AVOID REDUCE/REPAIR OFFSET
Avoid
residential
zones
Group existing
infrastructure
Financial
compensation
for owners
Avoid
protected
zones
Visual integration
of overhead lines
and substations
with vegetation
Pylon
types
Reforestation
Bird
markers,
nesting
boxes
Community
projects
Upgrade or
reuse existing
infrastructure
Architectural
integration of the
substations
Financial
compensation
for farmers
67
ELIA GROUP SUSTAINABILITY REPORT 2021
67
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
TARGET GROUPS
Policy and administration
Citizens‘ initiatives
Residents
Public interest bodies
NGOs
PARTICIPATION
World Café
Group conferences
Planning panels
Dialogue mobile
1:1 discussions
Advisory board
DIALOGUE
Work groups (across all Federal states)
Information market
*
Press talks
Hotline
Launches
Regional events
Project presentations
INFORMATION
Public relations
Newsletter
Printed material
Website
company to maintain regular contact with existing stakeholders
and reach new ones. Against this backdrop, user the company’s
website was evaluated in terms of its user-friendliness and the
behaviour it encouraged in new users; the structure and design
of the information it held was then adapted and improved in line
with the findings. During the reporting year, early public partici
-
pation was also used for construction activities, such as ecologi-
cal construction monitoring.
Due to the COVID-19 pandemic, information tours which had
been planned with the DialogMobil (a vehicle which is equipped
with information material about our projects) had to be post
-
poned during the first half of 2021. The first tour, which com-
prised eight stops and related to the Südharz grid connection,
started at the end of June. Further information tours relating to
the Mecklar-Vieselbach, SüdOstLink, Güstrow-Parchim-Süd-Per-
leberg and Hansa PowerBridge projects were then undertaken.
NEP-consultation
(4 transmission
system operators)
Planning
approval pro-
cess, planning
permission
Building
preparation
Economic
operation
Project
preparation
Regional plan-
ning procedure/
federal planning
Planning
preparation
Construction
 
* As part of the consultation on NEP, the 4 transmission system operators are holding information and dialogue events, where selected procedures,methods and used data will be presented
for the 1st draft of the NEP. Subsequent to this, opinions about it can be given.
68
ELIA GROUP SUSTAINABILITY REPORT 2021
68
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
7.3. Stakeholder dialogues
Elia Transmission Belgium SA/NV celebrated its 20th year anni-
versary in November 2021, the Full of Energy event.
50HERTZ IN GERMANY
The focus of many events throughout 2021 was the From 60
to 100 by 2032 - new energy for a strong economy initiative,
through which 50Hertz Transmission GmbH aims have 100% of
the energy demand in its grid area covered by renewable energy
by 2032.
Together, 50Hertz Transmission GmbH and the General Works
Council and the Mining, Chemical and Energy Industrial Union
(IG BCE) held a series of roundtable discussions with represent
-
atives from politics and business which culminated in a final big
event at the company’s headquarters and the publication of a
paper entitled New energy for strong industrial workplaces in
2021. Stefan Kapferer, the CEO of 50Hertz Transmission GmbH,
and IG BCE head Michael Vassiliadis invited several key figures
to these discussions, including several minister presidents,
state secretaries and ministers and senators responsible for
energy across the company’s grid area. The guests included Dr.
Reiner Haseloff (the Minister President of Saxony-Anhalt), Bodo
Ramelow (the Minister President of Thuringia) and Michael Kret-
schmer (the Minister President of Saxony), as well as the Federal
Government’s Commissioner for Eastern Germany Marco Wan-
derwitz. Additional guests included the heads of the Federation
of German Industries (BDI), the German Association of Energy
and Water Industries (BDEW), the Association of German Cham-
bers of Industry and Commerce (DIHK), the German Renewable
Energy Federation (BEE) and Germany Trade and Invest (GTAI).
The series of roundtables therefore included guests from ener-
gy-intensive industries from the chemical, steel, copper, glass,
paper and cement sectors in the 50Hertz Transmission GmbH
control area, but also new companies that are interested in sus-
tainable investment, such as companies from the automotive
industry, battery suppliers or the owners of large data centres.
Renewable producers, scientific institutes, think tanks and other
associations also took part in the discussions. In a joint summary,
50Hertz Transmission GmbH and IG BCE recorded the goals and
demands that were raised during the roundtable discussions.
50Hertz Transmission GmbH CEO Stefan Kapferer summarised
what politics and business will tackle together in future: 1. elec
-
tricity must become cheaper; 2. the expansion of renewables
and the needed grid infrastructure must be accelerated; and 3.
climate protection should be given priority in permit procedures
in future.
In order to further develop the strategic ambition, the initiative
“Together. Faster. Climate-Neutral.” was launched. Stakehold
-
ers from industry, associations and NGOs were called upon to
develop a catalogue of pragmatic proposals for action. The goal
was to accelerate the expansion of renewable energy and elec-
tricity grids - key factors for a successful energy transition. The
initiative included a consultation and analysis phase, as well as
an evaluation phase that was led by a panel of three experts
(Prof. Dr. Barbara Praetorius, HTW Berlin; Dr. Felix Matthes,
Öko-Institut; and 50Hertz CEO Stefan Kapferer). The catalogue
of measures that was produced is intended to serve as a basis
for the newly elected federal government to identify and work
on action areas which aim to speed up the energy transition. In
addition to 50Hertz Transmission GmbH, Aurubis, RWE Renew-
ables, TÜV Nord Systems, TenneT, Vattenfall Wärme, Wacker
Chemie and the major distribution system operators from east
Germany (who joined forces as part of the Arbeitsgemeinschaft
der Flächennetzbetreiber Ost, or ARGE FNB Ost), are also part of
the “Together. Faster. Climate-Neutral.” initiative
Over 600 guests took part in the second “Electricity Market
Forum”, a joint event which was held online by the four Ger
-
man TSOs: 50Hertz, Amprion, TenneT and TransnetBW. During
this cross-sector discussion that involved representatives from
industry and civil society, the challenges presented by the energy
transition and possible solutions to these were discussed by dif-
ferent expert panels. The topics included the acceleration of the
energy transition; shaping the market design so it is adapted to
the new challenges; joint ways to expand renewable energy; and
the building of the necessary infrastructure which will be able to
transport this energy.
GRI 102-21, GRI 102-44
Communication events
Despite the hygiene measures introduced following the COVID-
19 pandemic, regular contact between the Elia group and its
stakeholders continued. Communication methods and chan-
nels were adapted and expanded to include virtual and hybrid
events, and appropriate social distancing measures were fol-
lowed depending on the event type.
Elia Group SA/NV organised its first Capital Markets Day, a virtual
event relating to the Group’s offshore and sustainability strate
-
gies in April 2021.
The Elia Group Stakeholder Day was held for the second time as
a hybrid event in the year under review. It included panel discus
-
sions and presentations from different speakers. The Elia group
study Roadmap to net zero was presented throughout the
event. The latter focused on three key topics: the energy balance
(which explores how Europe will access the renewable energy it
needs to reach net zero); flexibility (which explores how a well-de-
signed renewable energy system will be able to manage fluctua-
tions in the energy supply); and adequacy (which addresses how
dispatchable capacity will be needed to cover longer phases of
low renewable energy infeed). The different energy scenarios
explored in the study, alongside the assumptions made as part
of them, were discussed throughout the event.
The Elia group also interacts with its stakeholders via two social
media platforms: Twitter and LinkedIn. The corporate LinkedIn
account has over 35,000 followers, while its Twitter account has
over 4,000 followers. Whilst stakeholders are able to be kept
informed about company developments via these channels,
stakeholders are also able to ask questions and provide the com
-
pany with feedback via them.
ELIA IN BELGIUM
A series of events (including stakeholder events and press con-
ferences) were held throughout 2021. Some of these were organ-
ised as in-person events, whilst others were digital or hybrid
events.
69
ELIA GROUP SUSTAINABILITY REPORT 2021
69
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
Elia’s User Group
ELIA IN BELGIUM
Elia Transmission Belgium SA/NV regularly organises User Group
meetings and working groups.
The User Group provides a platform that allows Elia Transmis
-
sion Belgium SA/NV to maintain an ongoing dialogue with its
main customers and partners. Every year, about four User Group
plenary meetings are scheduled to inform market participants
and stakeholders about important and strategic topics related
to our business.
User’Group Session Link to material topic
Plenary
meetings
23.02.2021
- EU Outlook
- Annual network
operation overview
2020
20210223
Meeting
(elia.be)
08.06.2021
- Overview Reserves
2020/2021 –
auction prices
20210608
Meeting
(elia.be)
25.06.2021
- Adequacy and flexibility
study for Belgium
2022-2023
20210625
Meeting
(elia.be)
28.09.2021
- Load development in BE
(CLIMACT)
20210928
Meeting
(elia.be)
13.12.2021
- The roadmap to Net
Zero
- CRM reorganization
20211213
Meeting
(elia.be)
Three working groups support these plenary meetings.
Working
Groups
System Oper-
ation and Eu-
ropean Market
Design
mainly addresses topics related
to the operation of the high-volt-
age grid and capacity calculation,
as well as initiatives and devel-
opments linked to the European
integration of the electricity
markets
Belgian Grid
addresses issues associated with
the grid and related mechanisms,
products and services that are of
interest to customers
Balancing
mainly addresses operational,
technical and market-related
issues in order to prepare for the
challenges Elia Transmission Bel-
gium SA/NV’s’s balancing market
will face in the coming years
The Balancing working group oversees two task forces. The task
forces are set up on an ad hoc basis to handle specific issues
when necessary.
Task
Forces
Implementation
of Strategic
Reserves
aimed at informing and consult-
ing market players and stake-
holders about all relevant issues
linked to the implementation of
strategic reserves
iCAROS
aims to discuss topics related
to future asset coordination
procedures with the relevant
stakeholders
Customer satisfaction survey
The Elia group companies regularly measure the customer satis-
faction level of their key stakeholders (including distribution sys-
tem operators, grid users, producers, access responsible parties,
user Groups, etc.).
The main objective of these surveys is to provide the organisa
-
tion with an overview of the Key Performance Indicators (KPIs)
related to the quality of services offered and the way these have
changed over time.
ELIA IN BELGIUM
250 stakeholders took part in the biennial stakeholder survey.
The KPIs measured by the Elia Satisfaction Index reflect how
stakeholders evaluate Elia Transmission Belgium SA/NV’s prod-
ucts and services. The Customer Effort Score reflects the ease
of doing business with Elia Transmission Belgium SA/NV, whilst
customer satisfaction relates to account management and
image. The overall aim of the survey is to identify the organisa-
tion’s strengths and weaknesses as perceived by its stakeholders
in order to further optimise its relationship with them.
Elia Transmission Belgium SA/NV’s Satisfaction Index was 69%,
reflecting the high quality of products and services it offers. The
majority of its stakeholders described collaboration with Elia
Transmission Belgium SA/NV as “easy”.
50HERTZ IN GERMANY
In 2020, a customer survey was carried out for the second time.
A total of 1,054 customers were asked to fill out an online evalua-
tion of the company; these customers included balancing group
managers (BKV), network and metering point operators and
customers who are directly connected to its grid.
70
ELIA GROUP SUSTAINABILITY REPORT 2021
70
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
In 2021, our contact centres received 81,796 requests.
Should the request via a contact centre arise, Elia Transmission
Belgium SA/NV offers information and free electromagnetic
field measurements to the owners of land and buildings located
near Elia Transmission Belgium SA/NV facilities. In 2021, we per
-
formed 50 measurements in Flanders.
Contact centers
ELIA IN BELGIUM
Elia Transmission Belgium SA/NV’s two contact centres receive
and handle requests for information from various sources,
including local residents, contractors, engineering firms, public
authorities, utilities and project developers.
Because of the specific risks involved in working near a high-volt
-
age facility, anybody wishing to carry out work close to high-volt-
age lines, high-voltage pylons, underground electricity cables or
high-voltage substations is required to report this to Elia Trans-
mission Belgium SA/NV. We can then provide them with maps
of the relevant facilities and instructions about the safety meas-
ures to take while working near them.
There are statutory time frames within which Elia Transmission
Belgium SA/NV must answer the requests (7 working days fol
-
lowing their receipt).
% OF REQUEST HANDLED BY OUR CONTACT CENTRE
2019 2020 2021
100
80
60
40
20
0
99.97% 99.97%99.95%
0.03% 0.03%
0.05%
Within
7 days
71
ELIA GROUP SUSTAINABILITY REPORT 2021
71
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
In October 2020, Elia Group SA/NV launched re.alto, its own cor-
porate start-up which aims to accelerate the digitalisation of the
energy sector. re.alto seeks to make energy data easy to access
and integrate, enabling the energy industry to take a giant dig-
ital stride towards a more widespread adoption of Energy-as-a-
Service business models, ultimately driving a low-carbon energy
future.
In the reporting year, the Elia group Innovation Week also took
place under the motto “Co-creating the future with our ecosys
-
tem”. As part of this, the most innovative projects from across
the organisation related to the five ‘Moonshot’ fields (which are
specific areas of focus for the Innovation Team) of system man-
agement, consumer centricity, infrastructure, asset manage-
ment and offshore were presented to staff. For the first time in
the Innovation Week’s history, external partners were invited to
take part in the event, helping to present their projects with staff
from the group.
In order to promote innovative thinking even more, the Elia
group has created another space, The Nest, in which innovative
projects are enabled and supported through prototyping and
testing of innovative ideas in an agile environment.
Given the spread of electrification, decentralisation and integra
-
tion of ever-increasing amounts of renewable energy into the
grid, the Elia group launched its own incubator in May 2020: The
Nest. Its aim is to encourage and develop digital transformation
projects in an agile manner and simplify company processes.
Furthermore, The Nest strives to develop new business models
and enhance the quality and efficiency of the company’s activi-
ties and internal processes.
ELIA IN BELGIUM
Belgium’s energy system operators teamed up with 60 compa-
nies, public bodies and academic institutions as part of Internet
of Energy (IO.Energy). The ecosystem was launched in February
2019 to bridge the gap between digitalisation and sustainability
and promote innovation in the energy sector. It aims to develop
7.4. Cooperation and innovation
Innovation
The Elia group continuously seeks solutions and new technolo-
gies which will support its teams in their daily activities, in line
with its top priorities: quality, efficiency, reliability and safety.
The annual Elia Group’s Open Innovation Challenge competition
involves start-ups from around the world presenting solutions to
the challenges system operators face.
In 2021, fifth Open Innovation Challenge focused on solutions
for offshore wind integration. The challenge sought innovative
solutions that would make offshore operations more safe, effi
-
cient, cost effective and sustainable. Of the 78 teams that origi-
nally applied to participate in the competition, five finalists pre-
sented their solutions and concrete projects to the international
audience and panel of judges during a livestreamed event in
Berlin. After five exciting pitches, the judges – which included
staff from Elia Transmission Belgium SA/NV and 50Hertz Trans-
mission GmbH and external offshore experts – selected the
young start-up company TideWise from Brazil as the winning
team. TideWise developed an unmanned surface vehicle with
advanced sensors that collects air, surface and underwater data
to perform remote inspections and surveys in near real-time. The
vehicle uses artificial intelligence for optimal control and ena-
bles offshore inspections in situations where the risk and cost of
deploying people on site is too high. In addition, the unmanned
TideWise vehicle can carry a drone.The company received
€20,000 and the opportunity to develop their project within the
Elia group.
In October 2021, Elia Transmission Belgium SA/NV hosted a
hackathon across the course of three days which aimed to sup
-
port the development of new energy services for consumers.
The hackathon involved start-ups, companies, professionals,
students, NGOs and other creative minds solving one of the five
proposed challenges. On the final day, a panel of judges selected
a winner.
SDG 11
For the Elia group, active lead management and participation
in research and development projects are an integral part of its
approach to innovation. Through cooperation with academic
and industry partners, the group mainly focuses on areas includ-
ing new technology and digitalisation; energy markets and sys-
tem security; the integration of renewable energy; the devel-
opment of the electrical system; and supporting industry to
decarbonise its processes.
We worked with 7 other TSOs (Terna, RTE, TenneT, Amprion, Red
Eléctrica, Swissgrid and APG) to identify the main tools for decar
-
bonising the energy system. These were outlined in a joint paper
that was published in July 2021: Decarbonising the energy sys-
tem – The role of Transmission System Operators
In 2021, Elia Group and Malaysian electric utility company
Tenaga renewed their cooperation agreement for exchange of
best practice, this agreement confirms their joint ambitions and
secures their increased cooperation on issues such as grid devel
-
opment, asset management, renewable energy integration and
market operations.
Along with various European environmental organisations and
other TSOs, Elia Transmission Belgium SA/NV and 50Hertz Trans
-
mission GmbH are founding members of the Renewables Grid
Initiative (RGI), which promotes grid expansion across Europe to
support the effective integration of renewable energy and dis-
seminates information about innovative participation practices.
72
ELIA GROUP SUSTAINABILITY REPORT 2021
72
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
Twenty-one of Germany’s most renowned scientists met twice
in the year under review as part of the newly established Sci-
entific Advisory & Project Board (SAPB). The latter addressed
strategic topics including the German government’s hydrogen
strategy and the challenges the country will face on the path
to climate neutrality. The SAPB also addressed topics including
concrete applications for 50Hertz Transmission GmbH ‘s every-
day business; these related, for example, to future energy sce-
narios and grid reconstruction projects in a world with more
and more renewable energy. In addition, the SAPB approved
two project outlines; these were developed with scientists and
50Hertz Transmission GmbH throughout the course of the year.
The results are expected to be made available in the first quarter
of 2022. In future, the SAPB will focus on the establishment of a
consumer-centric market design.
As a further component of the From 60 to 100 by 2032 - new
energy for a strong economy initiative, 50Hertz Transmission
GmbH is contributing its expertise as an associated partner
to three real laboratories for the energy transition. In addition,
50Hertz helped to construct a number of power-to-heat plants
in Hamburg, Parchim, Rostock, Stralsund and Neubrandenburg
(among other places) under the motto Exploiting instead of cur
-
tailing?”. Each of these projects focus on sector coupling or the
use of hydrogen.
In future, millions of electric cars are due to drive around Ger
-
many and will need to be charged regularly. In order for them
to also contribute to system stability, data exchange via a smart
metering infrastructure will be required. Therefore, in a joint pro-
ject with Elli and Bosch.IO (which are subsidiaries of Volkswagen
AG and Robert Bosch GmbH), the distribution system operator
Stromnetz Berlin and 50Hertz are investigating and testing what
type of data exchange will be required for this and how flexibility
can be provided by a network of electric cars. For 50Hertz Trans-
mission GmbH, this is an important part of its From 60 to 100 by
2032 initiative.
new services through the exchange of data between all sec-
tor players. The focus is on end users, who will be able to tailor
their generation and consumption to grid needs using a digi-
tal communication platform. In October 2020, the first project
‘sandboxing’ came to an end. Eight Belgian pilot projects were
completed.
We are constantly on the lookout for efficiency gains and new
technologies – be it in terms of system operation, grid develop
-
ment, infrastructure or maintenance. In line with this, a drone
helicopter was used for the first time to undertake long-range
power line inspections near Trois-Ponts in Wallonia, Belgium.
The images these drones took of high-voltage pylons could then
be analysed using artificial intelligence and compiled into a sta
-
tus report that points out areas for repair. This process renders
inspections safer and more efficient: lines remains in service and
staff are not required to climb the pylons. These beyond visual
line of sight (BLVOS) drones may ultimately replace helicopter
inspections.
Elia, alongside the 8 other Belgian electricity and gas system
operators and their federation, Synergrid, has been awarded the
title of SDG Voice 2021 by the Federal Minister for Climate, Envi
-
ronment, Sustainability and the Green Deal , Zakia Khattabi, and
her administration, the Institute for Sustainable Development
(IFDD).
50HERTZ IN GERMANY
Active consortium management and participation in research
and development projects is an integral part of 50Hertz Trans-
mission GmbH’s approach to innovation. Through different part-
nerships with both academic and industrial partners, the organ-
isation focuses primarily on the areas of new technologies and
digitalisation, energy markets and system security, the integra-
tion of renewable energy into the system (including the develop-
ment of the grid to support this) and supporting industry in the
decarbonisation of its processes. Its commitment to such areas
is reinforced through its Scientific Advisory & Project Board (see
below) and its work with industry and the science world.
73
ELIA GROUP SUSTAINABILITY REPORT 2021
73
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
7.5. Community engagement
Through this partnership, we are setting up a system under
which citizen projects are funded to compensate municipalities
for the impacts associated with the construction of overhead
lines.
The Be Planet Public Benefit Foundation is to ensure that the
funding is used in line with its objectives and that the citizen
projects which are chosen to receiving funding are carefully
selected. Each chosen citizen project must have a positive
impact on the ecological transition and must contribute to sus
-
tainable development.
We undertake a number of biodiversity measures with the eco
-
logical engineering consultant, Ecofirst (for further details, see
8.3. Biodiversity and Landscape integration).Major achieve-
ments which were carried out with Ecofirst in 2021 include the
selection of 28 projects that will be implemented with backing
from the landscape/biodiversity fund aimed at the towns and
cities affected by the Boucle de l’Est project.
Several of our project managers had the opportunity to share
their passion for technology by working with the Technical
Academy of East and West Flanders, delivering classes to 10- to
12-year-old students interested in the world of technology.
Donations
In 2021, 1.63 tonnes of our hardware (including laptops, docking
stations, printers, screens and carrying cases) were donated to
schools and non-profit organisations.
In the aftermath of the July 2021 floods that caused a large
amount of damage in the Belgian Province of Liège, Elia Trans
-
mission Belgium SA/NV provided financial and in-kind dona-
tions to two organisations which amounted to €20,000. Elia
Transmission Belgium SA/NV also donated €10,000 to the Red
Cross.
Given the COVID-19 pandemic, the yearly Sinterklaas party
(which is usually organised by the Social Fund for Employees)
has not been held for the last two years. The €50,000 budget
intended to be used for the 2021 party was donated to a non-
profit organisation that provides birthday presents for children
living in poverty.
GRI 413-1
The Elia group is committed to creating a sustainable future for
all of its stakeholders. This also means that we take our societal
responsibility seriously. That’s why Elia Transmission Belgium
SA/NV and 50Hertz Transmission GmbH support a wide range of
projects in the fields of culture, energy and environmental edu-
cation or youth and social affairs across their grid areas.
ELIA IN BELGIUM
Local added value / Supporting local
initiatives
In addition to undertaking compensation and mitigation meas-
ures, an additional approach was developed to compensate
local communities for any disruptions caused during works on
high-impact projects (such as building new overhead lines or
high-voltage substations).
Despite these measures, new infrastructure and assets do have
a lasting impact on the surrounding environment. By making
a financial contribution to community funds which are made
available to local communities affected by infrastructure works,
Elia Transmission Belgium SA/NV helps to improve the living
environment of residents.
The amount set aside for community funding associated with
some infrastructure projects is set at their beginning. Once the
necessary permits have been obtained, Elia Transmission Bel
-
gium SA/NV replenishes the fund. Since 2017, Elia Transmission
Belgium SA/NV has been collaborating with the Be Planet Foun-
dation to develop and support local citizen initiatives which facil-
itate the ecological transition. Elia Transmission Belgium SA/NV
has established a structural partnership with the public utility
foundation Be Planet to develop and support ecological transi-
tion initiatives by citizens in municipalities where Elia infrastruc-
ture projects are underway. The organisation, which has been
recognised as an organisation that works in the interest of the
general public, manages the funding.
74
ELIA GROUP SUSTAINABILITY REPORT 2021
74
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
ferent aspects of the energy transition in an engaging way. Some
parts of this exhibition (which are quite technical) can be used by
schools in their physics and biology lessons. In the future, the
exhibition will be adapted and made available in a digital format.
In addition, both partners are developing an online game
related to grid development and the energy transition. The
game involves young people playing different roles (such as
local residents, farmers, conservationists, tourism managers,
etc.) and considering different grid expansion possibilities. Using
a points-based system, players can explore and discuss the dif
-
ferent options, working together to find the best possible path
for such projects. The game will be released in 2022.
50Hertz Transmission GmbH also supports selected cultural
projects across its grid area. In 2021, the soprano Anna Prohaska
was supported as part of the renowned “Artist in Residence” pro
-
gramme series organised by the Konzerthaus Berlin. From the
2022 season onwards, we will focus on supporting the digitali-
sation of the concert hall’s activities. The Mecklenburg-Vorpom-
mern Music Festival was again supported by us in 2021.
As in previous years, 50Hertz Transmission GmbH was actively
involved in different sports-related initiatives throughout its grid
area in 2021. Examples include the Rennsteig-Herbstlauf run in
the Thuringian Forest, the Baltic Sea relay marathon in Dierha
-
gen, the junior division of the BR Volleys and activities organised
by a large number of local non-profit institutions.
50HERTZ IN GERMANY
50Hertz Transmission GmbH supports numerous projects
across its grid area which primarily relate to education in the
fields of culture, energy and the environment and youth and
social affairs. Clear management and organisational structures
are in place which facilitate our involvement in community and
social activities. The Communications and Public Affairs Depart-
ment is responsible for overseeing this - it coordinates with
senior management to set goals, coordinate activities and, if
necessary, investigate possible projects to get involved in, along-
side the Legal Department and the Compliance Committee.
Our internal guidelines for donations and sponsorship outline
the general principles staff should follow in terms of support
for different activities (these include assessment criteria and
the organisational process staff should follow, particularly with
regard to transparency). When providing donations to organ-
isations or sponsoring them, employees must ensure that the
relevant cause(s) are aligned with our corporate values and that
such support is geared towards sustainability, offers true added
value for society and the general public, and is given in line with
the above guidance.
50Hertz Transmission GmbH seeks to act as a good corporate
citizen, particularly in terms of the the area surrounding its head
-
quarters (also known as the 50Hertz Netzquartier): it seeks to
make the urban district residential and make the area attractive
for its residents. For example, the Energiebündel daycare centre
is open to the children of 50Hertz Transmission GmbH employ-
ees and also youngsters from the neighbourhood. In the report-
ing year, the organisation’s partnership with the Hamburger
Bahnhof Museum for Contemporary Art in Berlin was extended
by three years. As part of this, outstanding work carried out by
graduates from different art academies in the 50Hertz grid area
are exhibited on an annual basis. In the future, the Rundgang
50Hertz exhibition (as it is known) will be held digitally.
Educating children and teenagers about the energy transition
is of great importance for the organisation. An interactive exhi
-
bition called Energie gemeinsam wenden (‘Changing energy
together’), developed by 50Hertz Transmission GmbH and the
Unabhängiges Institut für Umweltfragen e.V. (Independent
Institute for Environmental Issues), teaches students about dif-
75
ELIA GROUP SUSTAINABILITY REPORT 2021
75
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
COOPERATION WITH ECOFIRST
AND BEPLANET
Elia and Ecofirst selected 28 projects to support
through Elia’s landscape and biodiversity fund.
The projects, which are based in the municipal-
ities and cities which are being affected by the
Boucle de l’Est project, include initiatives which
will focus on building resilient forests, build-
ing ponds and fish ladders, setting up nesting
boxes and planting orchards. The total amount
Elia will be committing to these projects is
€340,000.
MUNICIPALIA
Elia sees cities and municipalities as important
partners: we are highly committed to engag-
ing in productive discussions with them. In this
vein, in 2021, Elia participated in Municipalia,
a fair for local authorities in Wallonia. We wel-
comed attendees to our information stand, giv-
ing them the opportunity to explore our pro-
jects through the use of VR glasses.
INFORMATION AND PARTICIPATION
Elia believes it is important to give children a
taste of the wonderful world of technology at
an early age. In 2021, we organised a number of
projects to encourage this, as follows:
• In Mortsel, a playground was briefly trans
-
formed into one of our construction sites. We
designed a number of signs which were tai-
lored to the children at the playground, to give
them a flavour of what one of our construction
sites might look like. It was an original way to
encourage them to learn!
• Schools located near one of our sites can ask
to be taken on a site visit. For example, stu
-
dents from the Mosa-RT school visited the
Massenhoven-Van Eyck project site. Our staff
were on hand to deliver a fun and educational
visit for them.
• Elia developed a game about the energy
transition for young learners. Our ElectriCITY
educational kit contains a board game and
activities for students who are in primary and
secondary school. More than 1,000 kits were
distributed to schools across the country in
2021 - that’s a whole lot of educational fun!
• Along with the Techniek Academie, a number
of our project leaders visited schools in West
Flanders to provide them with information
about some of our projects. Our engineers
were asked a lot of interesting questions that
made them think hard!
76
ELIA GROUP SUSTAINABILITY REPORT 2021
76
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
8
76
ELIA GROUP SUSTAINABILITY REPORT 2021
Environmental
aspects
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
77
ELIA GROUP SUSTAINABILITY REPORT 2021
77
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
8.1. Management approach
and adapted. Laws are also in place which determine emissions
thresholds (such as those related to EMF or noise); these are
taken into account during the permitting phase.
Moreover, we adopt the precautionary principle of reducing
and avoiding possible negative impacts by conducting studies
(linked to electric and magnetic fields (EMF) or noise, for exam
-
ple), by calculating our carbon footprint, implementing mitiga-
tion measures and, most recently, by considering climate risks in
our risk management process.
The Elia group Supplier Code of Conduct contains additional
principles related to environmental protection and resource
conservation. The Elia group has developed a whole set of
measures to be introduced and compensations measures to
be granted (see 7.2. Community relations and public accept
-
ance, 7.4. Cooperation and innovation and 8.3.1. Environmental
aspects - Mitigation and compensation measures)
Further details and compensation policies available on our web
-
site.
The suppliers are obliged to specific quality and natural conser
-
vation measures by contract. This includes the precautionary
principle of environmental protection.
The further development of operational environmental protec
-
tion and energy management also includes raising awareness
and actively involving employees who are motivated to act in an
environmentally conscious and energy-efficient manner. To this
end, environmentally relevant briefings are held annually or on
an ad hoc basis in regional centres as well as in central and sup-
porting teams such as those which work in purchasing or facility
management.
The legal requirements regarding training related to waste,
water protection and the transportation of hazardous goods
are all met. In addition, annual training courses are held for
the group’s employees. Individual company departments are
trained as and when they need to be.
We also work on the supporting awareness of sustainability con-
siderations (including with regard to the environment and trans-
port) amongst our contractors during the construction phase of
a project by providing them with guidelines and specifications
regarding the quality that Elia group expects on its construction
sites.
The Elia group companies ensure that all relevant information
and all necessary resources for the fulfilment of strategic and
operational goals related to energy efficiency and environmen
-
tal protection are made available where necessary.
Commitments to ecological and social sustainability, environ
-
mental and climate protection and resource conservation are
integral parts of our corporate strategy. Under ActNow, the
group’s sustainability programme, Elia Transmission Belgium
SA/NV and 50Hertz Transmission GmbH have set themselves
clear ambitions related to climate protection, biodiversity and
circularity. The Elia group is going to focus on the energy effi-
ciency of our substations, eco-design and the enhancement of
biodiversity in and around them (avoidance of herbicides).
In 2021, a project focusing on circularity in procurement was
launched. Moreover, an internal carbon price (IPC) was intro
-
duced as an additional parameter which needs to be considered
in the procurement process (see also 6.1. Suppliers and Human
Rights – Management Approach).
We are aiming to be ISO 14001 certified by 2022 in Germany and
2023 in Belgium.
GRI 102-11, GRI 103-2
High-voltage transmission grids play an essential role in the
energy transition and the decarbonisation of society and indus-
try. Elia Transmission Belgium SA/NV and 50Hertz Transmission
GmbH are therefore developing their transmission grids in line
with long-term needs. 50Hertz Transmission GmbH is a pioneer
in the integration of renewable energy into the overall electrical
system: in 2021, an annual average of nearly 60% of electricity
consumption in the 50Hertz grid area was met by renewable
energy.
The Elia group is investing large sums in the development of
its onshore and offshore high-voltage grid in order to support
the integration of renewable energy into the system and in the
construction of interconnectors to facilitate the integration of
the European energy market. One of the biggest challenges we
face is maintaining and expanding this grid while ensuring that
our environmental impact is minimised. When developing and
building our grid, we always strive for socially acceptable and
economically efficient solutions. To this end, we try to limit the
construction of new infrastructure and prefer to optimise and
improve existing infrastructure wherever possible. We apply
the avoid-reduce-offset approach described in 7.2. Community
relations and public acceptance, which involves seeking to
ensure that our corporate and construction sites have the lowest
impact possible on the environment, local habitats and people.
The geographical areas we operate in as transmission system
operators, environmental impact assessments (EIA) are always
undertaken as part of permitting requests; these are conducted
in the early stages of infrastructure projects. They allow potential
environmental, social, cultural and health-related impacts to be
identified and analysed during both the construction and oper
-
ation phases.
The planning, operation, maintenance, conversion and expan
-
sion of the transmission grid in Belgium and in the north and
east of Germany are based on national and European frame-
work conditions and regulations related to the environment
and sustainability. These requirements are constantly updated
78
ELIA GROUP SUSTAINABILITY REPORT 2021
78
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
50HERTZ IN GERMANY
Environmental protection activities are documented internally
in our Annual Environmental Reports. The environmental report
for the reporting year 2021 will be available in March 2022. Given
this, some of the figures below are based on estimated values,
since they have not yet been confirmed; these are clearly noted
below.
The existing environmental management system is currently
being aligned with the internationally recognized ISO 14001 in
order to increase its level of maturity. Certification is planned for
2022.
Staff members dealing with waste, water protection and hazard
-
ous goods are all sufficiently trained. In 2021, environmental and
nature conservation specialists were trained on issues relating to
nature conservation during maintenance and repair work. Like-
wise, numerous employees were trained in the use of separator
systems. The Agreement on Quality Assurance on Construction
Sites is included in new contracts with suppliers. It includes,
among other things, the precautionary principle related to envi-
ronmental protection. Compliance with this agreement is regu-
larly checked as part of IT-supported construction inspections. In
the year under review, more than 500 construction inspections
were carried out.
Another step towards the consistent reduction of our environ
-
mental impact is the development of the compactLine mast
design. The latter is characterised by lower mast heights, nar-
rower lines and a full-wall mast with a smaller circumference.
In the future, the project should reduce the impact of overhead
lines on the landscape and nature in sensitive areas. The design
allows a new 380 kV line to be integrated into sections of existing
220 kV lines.
ELIA IN BELGIUM
The Community Relations Department is responsible for the
appropriate handling and implementation of all tasks relating
to environmental and nature conservation issues, quality man-
agement and the management of related tasks. Within this
department, the Environment & Corporate Social Responsibility
Team provides advice regarding process control and ensures
that the environmental and quality approaches are correctly
implemented.
A team member is involved in multi-functional teams for the
procurement processes for specific goods and services (e.g.
waste management, transformers).
The Community Relations Department informs and guides staff
about relevant environmental obligations. Ad hoc training is
organised in order to communicate such changes to staff and
ensure they have a solid understanding of environmental man
-
agement topics (e.g. noise management, electric and magnetic
fields (EMF), compensatory measures).
As the two new overhead high-voltage lines, Ventilus and Bou
-
cle du Hainaut, are being planned, Elia Transmission Belgium
SA/NV undertook a comparative study regarding pylons that
could be used to reduce the environmental impact (in terms of
visual impacts and the impact of EMF) of our work. This study
also considered the technical feasibility and costs of such pylons.
The study’s results confirmed that the current use of pylons is
most favourable; however, it also indicated that another pylon
type – the Wintrack pylon - could be considered from an envi
-
ronmental perspective.
79
ELIA GROUP SUSTAINABILITY REPORT 2021
79
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
8.2. Emissions
The key role we are playing in the decarbonisation of the power
sector is the best way we can contribute to meeting the Green
Deal targets. We see this as our societal challenge and this is
what we need to focus on. As part of our corporate challenge to
reduce our own GHG emissions, we are committed to operating
a carbon-neutral power grid by 2040, making our own activities
carbon-neutral by 2030, assessing and reducing the carbon foot-
print of our supply chain and setting up an internal carbon price
for our new investments.
For further details about the key performance indicators and
targets which form part of our ActNow programme, please see
the section entitled ‘Our performance’ in our 2021 Integrated
Report.
Carbon footprint:
our main GHG emission sources
We assess our carbon footprint by calculating our greenhouse
gas (GHG) emissions. We have identified the main sources of our
emissions.
SCOPE 1- Direct greenhouse gas emissions from owned
or controlled sources
These emissions are mainly caused by SF
6
gas leaks from our
installations; they are also linked (to a lesser extent) to the nat-
ural gas consumption for heating and fleet fuel consumption.
Sulphur hexafluoride (SF
6
) is used as insulation and switch-
ing gas in gas-insulated high-voltage switchgear. It has great
electrical properties, is non-toxic and is also very chemically
stable. However, the global warming potential of SF
6
is 23,500
times higher than CO.
There is currently no alternative to SF
6
for switchgear at 220
kV and 380 kV levels.SF
6
is therefore used in closed circuits in
switchgears, meaning emissions are very limited. The pressure
vessels are monitored on a regular basis to check for potential
leaks. Despite this, however, some leaks due to the seal technol-
ogy and the necessary gas handling cannot be avoided entirely.
Both Elia Transmission Belgium SA/NV and 50Hertz Transmis
-
sion GmbH fall under the loss rate to which SF
6
producers and
users are voluntarily committed (0.6%).
Additionally, the use of an alternative to SF
6
is being explored:
we are currently taking part in pilot projects with manufactur-
ers as part of this. Concrete steps regarding the GHG emissions
related to our fleet of vehicles have also been planned with a
concomitant impact on the related SOx and NOx emissions.
SDG 13, SDG7, GRI 201-2, GRI 302-3
N.B.: The transmission of electricity does not release effluents
or emit significant amounts of gases such as SOx and NOx. The
only SOx and NOx emission sources related to our activities are
associated with our fleet of vehicles, these are therefore de facto
integrated into our efforts to reduce related GHG emissions.
8.2.1. Greenhouse gas (GHG)
emissions
GRI 305-1, GRI 305-2, GRI 305-3, GRI 305-4, GRI 305-5, G4-EUS-EN15,
G4-EUS-EN15, G4-EUS-EN16, G4-EUS-EN21
The Elia group supports the EU’s carbon reduction targets as
well as those of the Belgian and German governments, mainly
by integrating large volumes of renewable energy into the sys-
tem via the development of its grid.
As part of the ActNow programme, we have set ourselves four
major goals which are aligned with the European Green Deal
and which guide our actions.
Our societal challenge Our corporate challenge
OBJECTIVE 1
Speed up decarbonization
of the power sector
OBJECTIVE 2
Reach carbon neutrality in
system operation by 2040
OBJECTIVE 3
Reach carbon neutrality in
own activities by 2030
OBJECTIVE 4
Move towards a carbon
neutral value chain for new
assets and construction
works
Our focus:
- Grid dev
- Market dev & system operation
- Electrification
Our focus:
- Grid losses
- Balancing and redispatch
Our focus:
- Offices and substations
- SF
6
- Mobility
Our focus:
- Procurement and technical
design
System Scope 2 Scope 1 & 2 & 3 Scope 3
80
ELIA GROUP SUSTAINABILITY REPORT 2021
80
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
In order to mitigate GHG emissions from employee commuting,
a new commuting programme called Orange is the New Green
was set up as part of ActNow:
• This new programme aims to transform staff understanding of
commuting and encourage associated behaviour changes. It is
in line with the group’s efforts to promote further soft mobility
and adapt working practices (such as the use of public trans
-
port, cycling and working from home) and electrify our fleet of
vehicles. Additionally, we have started offering mobility budgets
to our exempt staff instead of a company car (if they so wish).
• The new programme aims to ensure that 75% of commuting
undertaken by group staff will be low-carbon (i.e. undertaken
using public transport, bicycles, electric vehicles or some form
of shared mobility - or will be avoided, as staff will be working
remotely) by 2025; by 2030, we aim to ensure all of our vehicles
are electric.
50HERTZ IN GERMANY
50Hertz Transmission GmbH, along with 13 other companies, is
sponsoring a research project at ETH Zurich. The aim of this pro-
ject is to investigate the suitability of alternative gases which can
replace SF
6
as insulating and switching gases in switchgear. The
research programme will run for three years. In the year under
review, a 123 kV switchgear with an alternative gas mixture was
commissioned for the first time in the Charlottenburg substa-
tion. This reduces the greenhouse effect by 99% compared with
equivalent substations that use SF
6
. In addition, recycled SF
6
was
placed on an equal footing with brand new SF
6
and the organ-
isation has decided to use it in the future. In this way, 50Hertz
Transmission GmbH is making an important contribution to
reducing the amount of SF
6
which is actually produced. Accord-
ing to a voluntary commitment by SF
6
producers and users, the
loss rate measured against the total stock of SF
6
may only be 0.6
per cent in Germany - at 50Hertz Transmission GmbH this rate
was significantly lower at 0.14 per cent in the reporting year.
In addition to electricity consumption, our fleet of vehicles (which
are crucial for being able to quickly access different parts of our
grid area ) also have an impact on our carbon footprint. In 2021,
these vehicles produced 1,586 tonnes of CO. As part of ActNow,
50Hertz Transmission GmbH set itself the objective of achieving
a zero-emission vehicle fleet by 2030. For this purpose, the exist
-
ing fleet was analysed and a roadmap for the replacement of
vehicles was developed, including supporting measures, such
as the establishment of the required charging infrastructure
around our administrative sites.
ELIA IN BELGIUM
Elia Transmission Belgium SA/NV has developed an investment
and maintenance policy to minimise the risk of SF
6
leaks. Man-
ufacturers must guarantee a very stringent maximum percent-
age of SF
6
loss throughout the lifetime of the equipment they
build. Our maintenance policy aims to ensure that operations
involving compartments filled with SF
6
keep leaks to a mini-
mum. The total volume of SF
6
gas installed on the grid (36 kV to
380 kV levels included, excluding the Nemo Link substation) in
2021 was 150.921 tonnes. The consumption of SF
6
gas (replace-
ments and top-ups in the event of a leak) is closely monitored
using a system that tracks each cylinder of SF
6
. The SF
6
leakage
rate for all facilities was 0.10% in 2021.
Research on SF
6
-free high-voltage equipment (switchgear/cir-
cuit breakers) is currently being carried out: proofs of concept
have been included in new framework agreements with manu-
facturers.The first pilot project related to this was started in the
reporting year: a zero-emissions high-voltage circuit breaker
was installed in the Marcourt substation in the Walloon region.
Over the next three years, the performance and efficiency of the
new circuit breaker will be monitored by our Asset Management
and Engineering Primary Systems (EPS) staff in collaboration
with Siemens Energy. Its potential deployment on a larger scale
across our grid will also be considered.
A second project is also being prepared; this will involve the
installation of our first gas-insulated switchgear (HV GIS) substa
-
tion by 2024 using the same technology
With regard to the fleet of vehicles we use for technical interven
-
tions (small vans and trucks), we have started a testing phase for
small vans and aim to implement zero-emissions cars as from
2023, designing in parallel the necessary charging infrastruc-
ture. We are closely monitoring the market for such technology
for trucks, since the technology is not mature yet.
12 Source: IPCC Fifth Assessment Report, 2014 (AR5)
13 The innovation takes the form of a cut-off chamber comprising a vacuum interrupter in a
chamber containing pressurised dry synthetic air (80% nitrogen and 20% oxygen).
SCOPE 1
81
ELIA GROUP SUSTAINABILITY REPORT 2021
81
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
capital goods, and upstream emissions. We will also transition
from using internal carbon pricing (ICP) on a case-by-case basis
in our purchasing decisions to integrating ICP into all parts of
the investment decision-making process. The CO Accounting
Platform initiative, which is currently being developed, aims to
provide our suppliers with a tool which they can use to record
the emissions related to their goods and services, so enabling us
to compare different options available.
We have set ourselves the goal of establishing comprehensive
Scope 3 reporting by 2023 and setting Scope 3 reduction objec
-
tives by the middle of the decade.
ELIA IN BELGIUM
Elia Transmission Belgium SA/NV begun its journey of calcu-
lating the GHG emissions related to its infrastructure projects
through the Green Works Initiative: by calculating the GHG
emissions of a series of pilot projects, hot spots and reduction
measures are being identified and will guide our work in this
area over the coming years.
Elia Transmission Belgium SA/NV is legally required to carry out
regular mobility surveys (Plan de déplacements d’entreprise)
in order to report on the modes of transportation used by its
employees. As part of the Orange is the New Green initative,
the organisation therefore decided to invite all of its employ
-
ees to complete an online questionnaire about their commut-
ing patterns (which included new questions about the impact
of COVID-19 on their commuting patterns and which measures
they think would be effective for encouraging them to switch to
greener commuting). The results of this survey will help to guide
the organisation as it takes decisions regarding mobility.
50HERTZ IN GERMANY
Different means of transport are used for business purposes. Air
travel was responsible for 48.4 tonnes of CO equivalent in the
reporting year. In addition, employees used the long-distance
transport services of Deutsche Bahn. According to Deutsche
Bahn, long-distance transport can be considered to be CO neu-
tral. In 2021, all GHG emissions related to business-related air
travel were offset for the third year running.
SCOPE 2 - Indirect greenhouse gas emissions resulting
from the generation of purchased or acquired
energy consumed by the organisation (technical and
administrative consumption)
These emissions are mainly due to grid losses that are unavoid-
able when transmitting electricity and over which Elia Transmis-
sion Belgium SA/NV and 50Hertz Transmission GmbH have no
direct influence.
Power losses along lines and cables are an inevitable and inher
-
ent part of electricity transmission, as well as a source of CO
emissions related to grid operation. This will continue to be the
case until power generation is completely carbon-neutral. The
reduction of grid losses is not the only factor that should be con
-
sidered when developing the transmission grid, since too nar-
row a focus can lead to adverse effects and even slow down the
integration of renewable energy.
When evaluating the possible construction of new transmission
infrastructure, it is important to always consider the system per
-
spective and to take into account its impact on grid losses along-
side its impact on GHG emissions.
For more information, see section 3.5. Grid Losses in our control
areas.
SCOPE 3 - All other indirect greenhouse gas emissions
(not included in scope 2) that occur along the value
chain (outside the company), including both upstream
and downstream emissions and which are linked to our
activities through the purchase of goods and services,
staff commuting, business travel, etc.
Construction work and materials were unsurprisingly identified
as the main sources of emissions. Several steps were initiated
in 2021 in order to improve calculations regarding these main
sources and implement measures to reduce their emissions.
With respect to new assets and construction work, we are in
the process of improving the CO accounting process in order
to better identify the sources of emissions, enabling us to focus
our efforts on addressing and reducing them. In 2021, an initial
screening of Scope 3 emissions was undertaken on a spend-ba
-
sis, the main components were purchased goods and services,
82
ELIA GROUP SUSTAINABILITY REPORT 2021
82
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
companies, investors and cities. We answer their climate change
questionnaire, through which companies must outline how they
handle climate-related risks and opportunities and disclose their
carbon footprint.
The organisation’s carbon footprint corresponds to 1.604 tonnes
of CO equivalents per transmitted GWh including grid losses
and 0.298 tonnes of CO equivalents per transmitted GWh
excluding grid losses (basis: 72.75 TWh).
N.B. carbon intensity was expressed in CO2 equivalent per GWh in last year report: 1.65
tonnes of CO
2
equivalents per GWh transmitted including grid losses and 0.34 tonnes of CO
2
equivalents per GWh transmitted excluding grid losses (basis: 69.937 TWh).
50HERTZ IN GERMANY
GREENHOUSE GAS EMISSIONS T CO
2
EQUIVALENT
Direct (scope 1) Share 2019 2020 2021
SF
6
- Leakage 0.60% 4,257 8,300 5,984
Mains backup system* 0.00% 7 0 0
Fleet 0.16% 1,521 1,351 1,586
Gas 0.02% 147 145 151
Total direct emissions 5,932 9,797 7,721
Indirect (scope 2)
District heating* 0.03% 264 287 346
Electricity consump-
tion
0.17% 1,728 1,441 1,662
Grid losses 96.84% 922,080 812,520 959,904
Energy consumption
own facilities
2.18% 20,373 19,453 21,607
Total indirect
emissions
944,445 833,701 983,519
Total Scope 1 & Scope
2 emissions
950,377 843,498 991,240
* The values stated are estimated values as at 31.12.2021. The following calculation bases and
emission factors were used to determine the CO2 equivalents: SF6/IPCC 5th ARS, Fleat/
direct usage fuel, Energy Electricity, District heating, Gas)/Umweltbundesamt 2017 Scope
2 Guidance)
The scope of 50Hertz’s carbon footprint accounting includes
emissions by 50Hertz Transmission GmbH.
In the reporting year, direct (Scope 1) and indirect GHG emis
-
sions (Scope 2) were reported for the third time.
The total Scope 3 emissions were calculated on a spend-basis
for the first time in 2021, they amounted to approximately 397
kilotonnes CO equivalents for 2019 and to 421 kilotonnes CO
equivalents for 2021.
The calculated value of the carbon footprint corresponds to 9.05
tonnes of CO equivalent per GWh transmitted including grid
losses and 0.286 tonnes of CO equivalent per GWh transmitted
excluding grid losses (basis: 109.5 TWh).
N.B. carbon intensity was expressed in CO2 equivalent per GWh in last year report: 8.73
tonnes of CO
2
equivalents per GWh transmitted including grid losses and 0.31 tonnes of CO
2
equivalents per GWh transmitted excluding grid losses (basis: 105.7 TWh).
Mitigation and compensation measures
The Elia group is committed to the principle that GHG emissions
are primarily to be avoided and reduced. Offsetting should only
be applied if avoidance or reduction is impossible.
For the reporting year 2021, all GHG emissions resulting from air
travel were offset and the (small amount of) SF
6
losses were off-
set via service provider Atmosfair. The 2020 compensation pay-
ments will be used to support a photovoltaic system in Senegal.
The project is in line with the UN’s Sustainable Development
Goals (SDGs 1, 3, 7, 8, 9, 13 and 17).
Elia Grid International SA/NV (EGI)
Elia Grid International SA, the consultancy branch of Elia group,
was awarded a “CO-Neutral” label in 2020 by CO
2
logic (this label
is certified by Vinçotte).
The consulting activities of Elia Grid International SA/NV consist
of providing countries and companies which operate outside
of our regulated borders of Belgium and Germany with exper
-
tise relating to the optimisation of their grids, the integration of
renewable sources into their energy systems and the building of
interconnectors or offshore connections. A carbon assessment
of its activities was conducted in order to measure its impact
and reduce and offset it through support for a sustainable devel-
opment project. The programme which was supported is a
wind turbine project being carried out in the Karnataka, Andhra
Pradesh and Tamil Nadu regions of India.
Carbon footprint accounting
G4-EN15, G4-EN16
ELIA IN BELGIUM
GREENHOUSE GAS EMISSIONS IN T CO
2
EQUIVALENT*
Direct (scope 1) Share 2019 2020 2021
SF
6
leakage 2.92% 5,875.00 5,663.00 3,403.98
Fleet (diesel) 2.84% 3,815.47 3,156.61 3,309.52
Fleet (fuel) 0.38% 349.21 324.41 447.81
Heating (natural gas) 0.77% 782.14 632.67 900.16
Heating (fuel) 0.02% 43.23 34.92 25.25
Airco 0.00% 71.46 196.20 0.00
Total direct
emissions 6.93% 10,937.00 10008.00 8,086.72
Indirect (scope 2)
Regional grid losses 81.41% 93,055.11 91,640.37 95,016.74
Electricity
consumption 11.66% 13,614.93 13,614.93 13,614.93
Total indirect
emissions 93.07% 106,670.04 105,255.30 108,631.67
Total Scope 1 & Scope
2 emissions 100.00% 117,607.04 115,263.30 116,718.39
*The following assumptions have been made for this calculation:
- only regional grid losses are taken into account
- the consumption of the HV substations is the result of an estimate based on metering
data of 60 sample stations
The scope of Elia’s carbon footprint accounting includes emis-
sions by Elia Transmission Belgium SA/NV, Elia Asset SA/NV and
Elia Engineering SA.
In the reporting year, direct (Scope 1) and indirect GHG emis
-
sions (Scope 2) were reported for the fourth time.
The total Scope 3 emissions were calculated on a spend-ba
-
sis for the first time in 2021, they amounted to approximately
258 kilotonnes CO equivalents for 2019.
Since 2017, Elia Transmission Belgium SA/NV has been involved
in an initiative run by the CDP, an international, non-profit organ
-
isation which runs a global environmental disclosure system for
83
ELIA GROUP SUSTAINABILITY REPORT 2021
83
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
2020
MWh %
Electricity Non Core - Total
(green electricity)
2,73.84 3.15%
Electricity Core - Substations
with meters (green electricity)
3,288,03 3,78%
Electricity Core - Substations
with meters (ESTIMATE*)
77,350.00 88.98%
Heating - Natural gas 3,419.2 3.93%
Heating - Fuel 136.98 0.16%
Total 86,932.67 100.00%
N.B.: the figure related to the consumption of HV substations was calculated based on
metering data collected from a sample of 60 stations.
50HERTZ IN GERMANY
50Hertz Transmission GmbH supports the goals of the European
Union and the German government to reduce GHG emissions,
particularly through its grid expansion activities (which enable
the share of CO-free energy sources in the electricity system
to be increased) and through the optimisation of the compa-
ny-wide CO balance. Since the purchase of green electricity
to compensate for grid losses is by far the largest and currently
most effective measure for this, we are working to undertake
this in future. The focus in our administrative sites is on optimis-
ing the energy efficiency of buildings and facilities as well as the
purchase of green electricity for administrative consumption.
The second external energy audit in accordance with DIN EN
16247-1 was carried out as scheduled in 2019 in order to systemat
-
ically record the energy consumption of our facilities and admin-
istrative buildings. The 50Hertz Transmission GmbH Netzquar-
tier was awarded the internationally recognised Gold Standard
by the German Sustainable Building Council (DGNB) and the
American Leadership in Energy and Environmental Design
(LEED) standard. In new buildings, sustainable approaches to
construction are planned for and implemented where possible.
As shown in the chart below, the distribution of total GHG emis
-
sions shows the clear dominance of electricity (which occupies a
share of almost 90%). A noticeable reduction in the CO footprint
can only be achieved in this segment. The largest share of elec-
tricity consumption (55,497.65 MWh) is accounted for by 50Hertz
Transmission GmbH substations. All switching stations together,
in which only electrical energy is required, account for a total
share of almost 79%. The sites which carry out administrative
and control tasks (such as the headquarters, the regional centres
and the Control Centre), which also require thermal energy and
fuels, occupy a total share of around 21%.
ENERGY CONSUMPTION
 % t 
2
-
Electricity 63,627.87 89.82 34,168
District heating 1,182.55 1.67 331
Fuel (petrol) 808.28 1.14 163
Fuel (diesel) 0.16 0.00 0.04
Natural gas 5,219.39 7.37 1,388
Total energy consumption 70,838.25 100.0 36,050.04
Data source: External energy audit carried out in line with
DIN EN 16247-1 in 2019 for the year 2018
The energy audit revealed potential areas that could be opti-
mised. Measures to this effect have largely been implemented
or are in the process of being implemented. These include insu-
8.2.2. Energy consumption
GRI 302-1, SDG7, SDG13
The energy consumption of Elia Transmission Belgium SA/NV
and 50Hertz Transmission GmbH can be subdivided into two
categories, as follows:
• Core: energy used by all of the infrastructure which is directly
related to its business model e.g. all substations.
• Non-core: energy used by its support services and administra
-
tive centres.
Electricity consumption represents the biggest share of con
-
sumption.
Our newest administrative centres were built following interna
-
tionally recognised energy-efficiency standards.
Audits have been conducted in other buildings in order to iden
-
tify optimisation potentials in line with Best Available Technol-
ogy Not Entailing Excessive Costs (BATNEEC) principles. Associ-
ated measures are gradually being implemented.
ELIA IN BELGIUM
Elia Transmission Belgium SA/NV’s two most recent administra-
tive centres, Monnoyer in Brussels and Crealys in Wallonia, are
BREEAM
14
certified. As required by Belgian regional regulations,
energy audits were conducted of our administrative buildings
and service centres.
The “Green substations project” was started in 2021, a study sim
-
ilar to an energy audit was conducted of our substations and a
series of energy-efficiency actions were identified (changes in
behaviour, remote adjustment of ventilation, installation of heat
pumps and meters…). A selection of these measures have been
integrated into the standards related to the construction of new
assets.
14 Building Research Establishment Environmental Assessment Method - the British
standard for sustainable buildings
84
ELIA GROUP SUSTAINABILITY REPORT 2021
84
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
measurements of electric and magnetic fields via its Contact
Centre.
As projects undertaken by Elia Transmission Belgium SA/NV
are assessed, this process must include an analysis of magnetic
fields. In accordance with the precautionary policy established
in Flanders and Brussels, Elia assesses future exposure to such
fields by means of specific calculations (modelling); mitigation/
reduction measures are applied where necessary.
50HERTZ IN GERMANY
Strict regulations apply to electric and magnetic fields in Ger-
many, which are governed by the Federal Immission Control
Act. 50Hertz Transmission GmbH complies with these limits.
50Hertz Transmission GmbH takes the concerns of interested
parties seriously, carries out on-site measurements with them
and implements associated measures if necessary.
8.2.4. Noise
SDG3
Noise can be caused by transformers in high-voltage substa-
tions, high-voltage lines, pylons and other equipment. Under-
ground lines do not cause any noise.
Strict guidelines values apply in both control zones of the Elia
group (no noise pollution).
The main source of noise pollution across the grid is associated
with transformer operation. The purchase of transformers which
produce a low level of noise has been part of Elia’s environmen
-
tal policy for many years. If necessary, soundproofing measures,
such as soundproof walls, are provided for in the design phase of
the project so that our (new and existing) infrastructure meets
the noise standards outlined in environmental regulations.
ELIA IN BELGIUM
Elia Transmission Belgium SA/NV always carries out soundscape
studies prior to the realisation of its infrastructure projects to
ensure that noise levels are not exceeded. In addition, when a
new substation is built or the transforming capacity of an exist-
ing substation is increased, a noise study is carried out. Based
on noise measurements of existing transformers, a simulation is
carried out of the situation after the construction or upgrade of
a transformer in order to estimate its level of noise.
Elia Transmission Belgium SA/NV also conducts noise studies in
the event of complaints (see also Contact Centres).
unit 2019 2020 2021
Soundscape Nr. 47 48 64
50HERTZ IN GERMANY
Just as for electromagnetic fields, strict guideline values apply in
Germany for noise emissions, which are regulated in the Federal
Immission Control Act. 50Hertz Transmission GmbH complies
with these limits. Measurements are carried out in response to
information from interested parties and associated measures
are carried out where necessary.
lation work carried out in the technical areas of the company’s
headquarters and in the Teufelsbruch substation; temperature
adjustments to air conditioning units (switching from 21°C
degrees to 26°C) in the technical rooms at the Röhrsdorf admin-
istration site; and energy-related repairs at the administration
site.
8.2.3. Electric and magnetic fields
SDG 3, GRI 416-1

ELIA IN BELGIUM
Electrical transmission and distribution systems in Europe are
mainly operated with alternating voltage levels and a frequency
of 50 Hz. They therefore emit electric and magnetic fields (EMFs)
of extremely low frequency, as is also the case for all electric
devices, including domestic appliances.
Although no causal link can be established between negative
effects on human health and exposure to such fields (through
electricity transmission infrastructure), Elia Transmission Bel
-
gium SA/NV takes EMFs very seriously, considering each grid
project carefully and supporting scientific studies that improve
further understanding in this area.
Elia Transmission Belgium SA/NV continues to make annual
financial contributions (amounting to €370,000) to scientific
research on the subject. In this vein, it supports the Belgian Bio
-
ElectroMagnetics Group (BBEMG), whose scientific independ-
ence is enshrined in a cooperation agreement.
At an international level, Elia Transmission Belgium SA/NV
signed a research contract with the Electric Power Research
Institute (EPR), a non-profit organisation that conducts research
related to energy and the environment. This agreement grants
Elia Transmission Belgium SA/NV access to the results of inter
-
national research studies carried out in the area.
Elia Transmission Belgium SA/NV communicates transparently
on EMFs using a number of different channels: a dedicated web
-
site; information leaflets; a brochure; newsletters; information
sessions (with independent experts present where possible);
and, following requests from local residents, it carries out free
85
ELIA GROUP SUSTAINABILITY REPORT 2021
85
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
8.3. Biodiversity and landscape
ELIA IN BELGIUM
The total length of our infrastructure located in Natura 2000
areas (on land and sea) is 665 km.
MAP OF BIODIVERSITY ENHANCEMENTS AROUND ELIA’S POWER LINES BETWEEN 2012 AND 2020
SDG 14, GRI 304-1, GRI 304-2, GRI 304-3, G4-EUS-EN12
In the planning of projects, economic efficiency, the concerns
of local residents and technology are taken into account during
the approval procedures in addition to the protection of flora
and fauna. As part of the project approval process, environmen-
tal impact assessments (EIA) are carried early on out to minimise
nature conservation conflicts at an early stage. A corridor is then
identified for the exact route of the electrical line and defined in
a subsequent step. At the same time, protection and compensa-
tion measures which have a positive impact on ecosystems and
biodiversity are identified. All of these are carried out with exter-
nal environmental planners, routing experts and, if necessary,
other science and nature conservation experts. Requirements
related to nature conservation efforts are included in the con-
tractual requirements related to infrastructure projects.
About 6% of overhead line project costs (including mandatory
activities) are spent on ecological projects. From 2022 onwards,
the use of herbicides will be banned across our sites, leading to a
positive impact on biodiversity.
The use of wind at sea to generate electricity is enormously
important and indispensable for climate protection. At the same
time, the expansion of offshore wind energy and the submarine
cables needed to transport such electricity require the natural
environment to be disturbed. In addition to the 2019 Marine
Grid Declaration co-signed by Elia Transmission Belgium SA/NV
and 50Hertz Transmission GmbH (this declaration, signed by all
Renewables Grid Initiative (RGI) members, sets clear standards
regarding the early involvement of stakeholders and nature and
species protection in offshore grid expansion projects, beyond
legal requirements) – Elia Transmission Belgium SA/NV and
50Hertz Transmission GmbH are committed to growing respon
-
sibility in this sensitive environment as a co-signatories of the
Offshore Coalition declaration of intent.
Biodiversity enhancement
86
ELIA GROUP SUSTAINABILITY REPORT 2021
86
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
50HERTZ IN GERMANY
In the 50Hertz Transmission GmbH grid area, many different
protection zones are recorded in a cadastre; these are included
in the map below.
Neubrandenburg
Güstrow
Rostock
Schwerin
Potsdam
Halle
Leipzig
Dresden
Chemnitz
Zwickau
Jena
Gera
Erfurt
Eisenach
Cottbus
Frankfurt (Oder)
Magdeburg
Weimar
TenneT
Lower Saxony
Hamburg
Berlin
Brandenburg
Saxony
Thuringia
Schleswig-Holstein
Denmark
TenneT
TenneT
Energinet
PSE
Poland
Czech Republic
Bavaria
Hesse
Sweden
Saxony-Anhalt
TenneT
TenneT
ČEPS
PSE
220
110
110
150
150
220
220
220
150
220
Mecklenburg-
Vorpommern
Key
Switchgear (mostly at transition points
between the 50Hertz grid and distribution
system operators' grids)
380 kV
220 kV
Transformation 380/220 kV
Transformation 380/150 kV
Planned/under construction
Other companies
Operating voltage kV
Line 380 kV
Line planned/under construction 380 kV
Line 220 kV
HVDC/direct-current connection 400 kV
HVDC/direct-current connection
planned/under construction 300/320/525 kV
Other companies 380/220 kV
HDVC/back-to-back converter 380/150 kV
HVDC/converter 400 kV
HVDC/converter 300/320/525 kV
planned/under construction
Offshore grid connection 150/220 kV
Offshore grid connection 150/220 kV
planned/under construction
New construction, mainly along existing route
1
Grid users:
Our customers are regional distribution system
operators and power stations, pumped storage plants,
wind farms and large industrial facilities that are
connected to the transmission system.
Conventional power station
Pumped storage plant
Phase-shifting transformers
Onshore wind farm/Offshore wind farm
Onshore wind farm
planned/under construction
Offshore wind farm planned/under
construction
Situation at: December 2020 VC
110
Neubrandenburg
Güstrow
Rostock
Schwerin
Potsdam
Halle
Leipzig
Dresden
Chemnitz
Zwickau
Jena
Gera
Erfurt
Eisenach
Cottbus
Frankfurt (Oder)
Magdeburg
Weimar
TenneT
Lower Saxony
Hamburg
Berlin
Brandenburg
Saxony
Thuringia
Schleswig-Holstein
Denmark
TenneT
TenneT
Energinet
PSE
Poland
Czech Republic
Bavaria
Hesse
Sweden
Saxony-Anhalt
TenneT
TenneT
ČEPS
PSE
220
110
110
150
150
220
220
220
150
220
Mecklenburg-
Vorpommern
Key
Switchgear (mostly at transition points
between the 50Hertz grid and distribution
system operators' grids)
380 kV
220 kV
Transformation 380/220 kV
Transformation 380/150 kV
Planned/under construction
Other companies
Operating voltage kV
Line 380 kV
Line planned/under construction 380 kV
Line 220 kV
HVDC/direct-current connection 400 kV
HVDC/direct-current connection
planned/under construction 300/320/525 kV
Other companies 380/220 kV
HDVC/back-to-back converter 380/150 kV
HVDC/converter 400 kV
HVDC/converter 300/320/525 kV
planned/under construction
Offshore grid connection 150/220 kV
Offshore grid connection 150/220 kV
planned/under construction
New construction, mainly along existing route
1
Grid users:
Our customers are regional distribution system
operators and power stations, pumped storage plants,
wind farms and large industrial facilities that are
connected to the transmission system.
Conventional power station
Pumped storage plant
Phase-shifting transformers
Onshore wind farm/Offshore wind farm
Onshore wind farm
planned/under construction
Offshore wind farm planned/under
construction
Situation at: December 2020 VC
110
Neubrandenburg
Güstrow
Rostock
Schwerin
Potsdam
Halle
Leipzig
Dresden
Chemnitz
Zwickau
Jena
Gera
Erfurt
Eisenach
Cottbus
Frankfurt (Oder)
Magdeburg
Weimar
TenneT
Lower Saxony
Hamburg
Berlin
Brandenburg
Saxony
Thuringia
Schleswig-Holstein
Denmark
TenneT
TenneT
Energinet
PSE
Poland
Czech Republic
Bavaria
Hesse
Sweden
Saxony-Anhalt
TenneT
TenneT
ČEPS
PSE
220
110
110
150
150
220
220
220
150
220
Mecklenburg-
Vorpommern
Key
Switchgear (mostly at transition points
between the 50Hertz grid and distribution
system operators' grids)
380 kV
220 kV
Transformation 380/220 kV
Transformation 380/150 kV
Planned/under construction
Other companies
Operating voltage kV
Line 380 kV
Line planned/under construction 380 kV
Line 220 kV
HVDC/direct-current connection 400 kV
HVDC/direct-current connection
planned/under construction 300/320/525 kV
Other companies 380/220 kV
HDVC/back-to-back converter 380/150 kV
HVDC/converter 400 kV
HVDC/converter 300/320/525 kV
planned/under construction
Offshore grid connection 150/220 kV
Offshore grid connection 150/220 kV
planned/under construction
New construction, mainly along existing route
1
Grid users:
Our customers are regional distribution system
operators and power stations, pumped storage plants,
wind farms and large industrial facilities that are
connected to the transmission system.
Conventional power station
Pumped storage plant
Phase-shifting transformers
Onshore wind farm/Offshore wind farm
Onshore wind farm
planned/under construction
Offshore wind farm planned/under
construction
Situation at: December 2020 VC
110
pse
polen
Biosphere
reserve
FFH protecti-
on area
Neubrandenburg
Güstrow
Rostock
Schwerin
Potsdam
Halle
Leipzig
Dresden
Chemnitz
Zwickau
Jena
Gera
Erfurt
Eisenach
Cottbus
Frankfurt (Oder)
Magdeburg
Weimar
TenneT
Lower Saxony
Hamburg
Berlin
Brandenburg
Saxony
Thuringia
Schleswig-Holstein
Denmark
TenneT
TenneT
Energinet
PSE
Poland
Czech Republic
Bavaria
Hesse
Sweden
Saxony-Anhalt
TenneT
TenneT
ČEPS
PSE
220
110
110
150
150
220
220
220
150
220
Mecklenburg-
Vorpommern
Key
Switchgear (mostly at transition points
between the 50Hertz grid and distribution
system operators' grids)
380 kV
220 kV
Transformation 380/220 kV
Transformation 380/150 kV
Planned/under construction
Other companies
Operating voltage kV
Line 380 kV
Line planned/under construction 380 kV
Line 220 kV
HVDC/direct-current connection 400 kV
HVDC/direct-current connection
planned/under construction 300/320/525 kV
Other companies 380/220 kV
HDVC/back-to-back converter 380/150 kV
HVDC/converter 400 kV
HVDC/converter 300/320/525 kV
planned/under construction
Offshore grid connection 150/220 kV
Offshore grid connection 150/220 kV
planned/under construction
New construction, mainly along existing route
1
Grid users:
Our customers are regional distribution system
operators and power stations, pumped storage plants,
wind farms and large industrial facilities that are
connected to the transmission system.
Conventional power station
Pumped storage plant
Phase-shifting transformers
Onshore wind farm/Offshore wind farm
Onshore wind farm
planned/under construction
Offshore wind farm planned/under
construction
Situation at: December 2020 VC
110
87
ELIA GROUP SUSTAINABILITY REPORT 2021
87
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
8.3.1. Mitigation and compensation
measures
GRI 304-2, GRI 304-3
If preventive or corrective measures cannot prevent or correct
our environmental impacts, then mitigation and compensa-
tory measures are applied. These are either voluntary or legally
required (in order to obtain all the legal authorisations needed
prior to the execution of a project).
Depending on whether the objective is to mitigate or com
-
pensate for the impact of our projects, a wide range of existing
measures exists, including:
•
landscape integration:
planting of shrubs, hedges or trees
(green screens); the use of more compact types of pylons;
infrastructure grouping; architectural integration into the land-
scape;
•
species protection:
bird markers and nests;
•
forestry:
restoration and specific management measures.
Planting
Planting tree aisles
and rows, hedges,
orchards
Forestry
Forest restructuring,
first afforestation
Hydraulic engineering
Pond renaturation, restoring
straightened rivers to their original
condition, creating small bodies of
water, renaturation of flowing and
still bodies of water
Species protection
Building amphibian protection
facilities, nesting aids, bat habitats,
reptile habitats, species protection
towers
Demolition
Unsealing, demolition of buildings
in community outdoor areas
Others
Cabling medium
voltage lines
EXAMPLES OF COMPENSATION MEASURES
88
ELIA GROUP SUSTAINABILITY REPORT 2021
88
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
50HERTZ IN GERMANY
According to the Federal Nature Conservation Act (BNatSchG),
there is an obligation to refrain from causing avoidable distur-
bances to nature and landscapes, or to ensure such disturbances
are reduced to a minimum (in line with avoidance and minimi-
sation requirements). Wherever it makes sense, power lines are
combined and bundled with existing overhead lines and other
infrastructure such as railway lines and motorways. In order not
to unnecessarily disturb impair the landscape, lines are adapted
in line with landscape conditions. Where disturbances are una-
voidable, 50Hertz Transmission GmbH implements compensa-
tion measures (see image above). For this purpose, regional eco
poolings are being increasingly established. Eco poolings are
contributions we make to projects led by other organisations as
well as compensation payments, which enable more compre-
hensive measures to be taken (rather than just replacing plants,
for example) and are therefore more effective, efficient and
sustainable. When planning and implementing compensation
measures, 50Hertz Transmission GmbH involves the affected
communities, conservation agencies, interested citizens and
NGOs early in the process. 50Hertz Transmission GmbH works
with them as partners to develop suitable plans early on and
suggest these to the authorities as part of the approval plan-
ning process. Guidelines related to targeted compensation
management define the action areas which are necessary for
the successful approval and implementation of these measures.
An internal assessment commission meets every two months
to decide on the measures that will be adopted. The selected
measures are recorded in a cadastre.
Compensation measures
2019 2020 2021
In planning and realisation
170 268 153
In maintenance
218 249 371
Terminated
286 297 313
Total
674 814 837
ELIA IN BELGIUM
Before 2020, a set of compensation measures was developed
on an ad hoc basis for each project. From 2020 onwards, we
decided to establish clear and structured policies which are
available on our website (see Section 7.2 Stakeholders – Com-
munity Relations and public acceptance). We have developed a
framework regarding several types of compensation measures
which aim to minimise our impact on the environment near our
infrastructure projects: these include compensations for farmers
and landscape integration.
In 2021, Elia Transmission Belgium SA/NV continued the partner
-
ship it started in 2020 with the University of Liège, the ILVO
15
and
the Belgian professional association of farmers. This involved
working on a literature review which seeks to further under-
standing of the impact of high-voltage infrastructure on agri-
culture. The study was finalised and the protocol with land own-
ers reviewed regarding (amongst other factors) compensation,
rights of way, damage caused during the construction phase,
avoiding construction during farming work hours and soil dam-
age.
For our offshore projects, mitigation measures were principally
implemented during the construction phase; these aimed to
reduce the impacts of such projects on marine life (for example,
measures aimed at limiting the impact of any noise created and
acoustic deterrents to prevent marine life from coming close to
the work were employed during the laying of the foundation of
our Offshore Switchyard (OSY) platform.
15 Flanders Research Institute for Agriculture, Fisheries and Food
89
ELIA GROUP SUSTAINABILITY REPORT 2021
89
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
ELIA IN BELGIUM
Between 2012 and 2017, Elia Transmission Belgium SA/NV (which
used to be Elia System Operator SA/NV until the end of 2019)
was a front-runner in the implementation of the seven-year LIFE
project.
Our project partner for this was the ecological engineering con
-
sultancy Ecofirst.
The first “Elia LIFE” project, for which Elia System Operator SA/
NV joined forces with the French transmission system operator
RTE, was partly funded by the European Commission and the
Region of Wallonia. The project aimed to create green corridors
which would enhance biodiversity under overhead electrical
lines in forest areas. Elia System Operator SA/NV restored 427 ha
stable natural environments below its lines (through peat bogs,
bushes and grassland managed by grazing).
In 2018, Elia System Operator SA/NV decided to continue this
project for another five years without receiving any subsidies
under the name “Life2” by adding more green corridors around
its lines (amounting to a total of 154 ha at the end of the 2018-2021
period). The other objective of this project was to further monitor
changes to these areas and their maintenance in order to assess
their impact on biodiversity. The results are highly encouraging,
with 98% of evaluated sites showing conclusive outcomes.
Further information on these projects can be found on this web-
site: http://www.life-elia.eu/
As the project continues, the focus is on electrical lines located
in Natura 2000 zones.
Besides these “Elia Life” projects, another 151 ha of ecological
aisles were managed in a similar way around our lines in the
Flemish region in 2021.
Elia Transmission Belgium SA/NV is currently exploring how to
develop its internal geographical grid database to track all the
areas where these specific management measures have been
put in place.
50HERTZ IN GERMANY
For several years now, 50Hertz Transmission GmbH has been
focusing on ecological route management. During the regu-
lar maintenance of routes, ecological considerations such as
the removal of individual trees and the management of their
health are taken into account across more than two thirds of for-
est corridors located across the entire grid area. Pilot activities
started in recent years in ecological route management areas
along existing roads (such as the creation of forest edges or the
establishment of species-rich meadows and pastures) are now
part of an overall strategy to increase biodiversity. Currently, a
geodatabase is being created that outlines and organises all
activities along lines that contribute to increasing biodiversity;
this database will serve as a guide for deciding on further action.
Currently, almost 100 line sections have already been recorded in
this database. The geodatabase also outlines the spatial relation-
ship between forest corridors and protected areas in the 50Hertz
Transmission GmbH network area. Based on this, 50Hertz Trans-
mission GmbH is able to contribute to the EU Biodiversity Strat-
egy 2030. As part of ActNow, 50Hertz Transmission GmbH has
set itself the goal of introducing ecological route management
across 95% of suitable routes by 2030. In order to further develop
our approach to biodiversity and ecological management in the
future, we have started holding discussions about these specific
topics with external stakeholders, such as nature conservation
organisations and universities.
8.3.2. Ecological aisle
management
GRI 304-2, GRI 304-3
Until recently, the standard maintenance policy for overhead
lines involved ensuring that a corridor under our lines which
measured approximately 50 meters wide was kept clear of all
vegetation with a rotary slasher every eight years
16
.
To build an overhead line in forest areas, aisles are created. The
conductor cables need sufficient clearance on either side and
below them to make sure they are safe, which means trees have
to be removed along certain sections and at regular intervals
along these aisles. However, trees and shrubs provide habitats
for numerous animals and plants. Therefore, the goal is to mini
-
mise any negative impacts on these natural areas as far as possi-
ble in the long term whilst increasing biodiversity.
Both Elia Transmission Belgium SA/NV and 50Hertz Transmis
-
sion GmbH have been developing ecological aisle management
initiatives that are in line with the EU’s biodiversity strategy. The
strategy, which was officially adopted in May 2020, considers
ecological corridors to be part of a real trans-European nature
protection network and, thus, sees them as a key obligation to
improve biodiversity.
Within the ActNow programme, we have set a target related to
biodiversity, by 2030, 90% of the forest corridors where our lines
are located will be managed ecologically.
16 This obligation can be indirectly beneficial to specific ecosystems of great ecological value;
for example, the moors (in the High Fens nature reserve, in the eastern part of Belgium)
are better protected when corridors are established under overhead lines crossing them,
because the rest of the moors were planted with trees for wood production and by
draining these areas.
90
ELIA GROUP SUSTAINABILITY REPORT 2021
90
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
ELIA IN BELGIUM
With the help of Belgium’s leading environmental organisa-
tions, Elia Transmission Belgium SA/NV has identified the 130
sections of its network that pose the greatest hazard to birdlife.
Measuring 200 km in total, they are gradually being fitted with
anti-collision devices over a ten-year period (starting in 2016). If
an infrastructure maintenance project is due to take place along
these sections, the installation of bird markers is planned as part
of the project.
For sections without projects, we will capitalise on moments
when scheduled interventions are due to occur to fit markers
along conductors or earth connections.
In the reporting year, Elia Transmission Belgium SA/NV under
-
took several steps with the Belgian nature conservation organ-
isations Natuurpunt and Natagora. We joined forces to make
overhead lines more visible to birds in the Flemish Ghent Canal
Zone and by the Walloon Eau d’Heure lakes. We also took part
in monitoring sessions with Natuurpunt to compare the situa-
tion before and after the fitting of our overhead lines with bird
markers.
We also set up some nesting boxes along the bottom of or the
top of our pylons depending on the species we are aiming to
protect.
Bird markers
2019 2020 2021
Total lines equipped (km)
with bird markers
37.59 43.74 79.74
Along with various partners (transmission system operators
RTE in France and REN in Portugal and several nature and bird
protection organisations), Elia Transmission Belgium SA/NV has
applied to receive funding from the European LIFE programme
for their joint “Safelines4Birds” project, which targets specific
endangered bird species which are considered to be a “priority”.
50HERTZ IN GERMANY
Over the past few years, an extensive study has been carried out
with the Brandenburg State Environmental Agency. This was
evaluated with experts from the Renewables Grid Initiative (RGI)
and the German Nature and Biodiversity Conservation Union
(NABU). The aim of the study was to identify lines which posed
an increased risk to birds, in order to equip them with bird pro-
tection markers. The data from the study will be incorporated
into a Germany-wide map.
In 2020, a further 30 km of transmission lines in the area of
Havelländisches Luch (which is very rich in terms of bird diver
-
sity) were retrofitted with markers as part of a voluntary species
protection measure. Currently, bird protection markers have
been installed along around 368 km of overhead lines.
In preparation for further projects, 6 existing lines with 122 km
running through ornithologically sensitive areas were checked
for the technical feasibility of retrofitting bird protection markers
in the year under review.
Bird markers
2019 2020 2021
Total lines equipped (km)
with bird markers
300 368 368
8.3.3. Bird protection
G4 EUS EN12
High-voltage lines can harm bird life. The Elia group therefore
makes a huge effort to protect birds and minimise negative
impacts on them.
For this reason, the Elia group is installing bird markers (in order
to make the lines more visible to birds, meaning they will be able
to more easily avoid them) and nests along its pylons to reduce
these negative impacts and protect endangered species.
Within the ActNow programme we have set a target related to
bird protection, by 2030, 100% of our lines identified as critical for
birds will be equipped with bird markers.
91
ELIA GROUP SUSTAINABILITY REPORT 2021
91
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
8.4. Natural Resources
ELIA IN BELGIUM
Water management at the 600 or so high-voltage substations
operated by Elia Transmission Belgium SA/NV in Belgium pri-
marily relates to rainwater that ends up on our high-voltage
facilities (transformers), impermeable (roofs, asphalt roads) and
permeable surfaces (gravel roads) and a limited amount of water
used for sanitation. When building new substations and when
expanding or renovating existing substations, the necessary
investments are provided for in accordance with the principles
below:
• Ensuring that rainwater that ends up on the installations (trans
-
formers) is always drained without any (oil) contamination.
• Reducing the impermeable surface. This is done by construct
-
ing roadways with reinforced gravel pits and no longer with
asphalt on concrete. Drainage gutters are avoided for existing
paving and natural runoff and infiltration are provided next to
the road. Finally, the rainwater from the roofs is collected for
reuse (sanitation) and the overflow is infiltrated on site.
In the accidental event of hazardous substance leaks, Elia Trans
-
mission Belgium SA/NV has developed processes to immedi-
ately cope with the impacts of these on the environment and
employees are trained to detect early signs of these types of
events.
A significant part of the Belgian soils is historically polluted as a
direct result of nearby or in situ (prior use) industrial activities or
backfilling with polluted soil.
Elia Transmission Belgium SA/NV has mapped the soil condition
of its own land in order to plan out interventions. Several remedi
-
ation activities have been undertaken across on our sites.
50HERTZ IN GERMANY
50Hertz Transmission GmbH plans to collect and evaluate how
much water it uses for administrative and technical purposes
and, where necessary, to design measures to address issues. The
focus of this will be on water retention in the ground in line and
substation projects, as well as preventing the contamination of
water and soil through the use of hazardous substances. Thus,
oil-filled installations, such as transformers or generators, are
constantly monitored. These installations are regularly inspected
and, if necessary, renovated or renewed. The handling and stor-
age of substances which are hazardous for water is ensured
through regular inspections and staff training. Waste water may
only be discharged if an official permit has been obtained and
it has been regularly checked to ensure that it is free of pollut-
ants. When it comes to water protection, the Water Resources
Act (WHG) and the Plant Ordinance (AwSV) are important for
50Hertz Transmission GmbH. Water protection officers monitor,
advise and support the staff who are responsible for this. Our
employees are regularly informed about new security regula-
tions.
In the event that hazardous substances should leak, 50Hertz
Transmission GmbH implements numerous measures to miti
-
gate them. In addition to using the services of contracted service
providers, damage prevention material is made available at all
substations and administrative locations. In 2021, a standard set
of materials was installed across our sites; this consists of a box
and includes a natural binding agent, collection trays and var-
ious bits of collection and disposal equipment. Any deviations
from existing processes as well as contaminations are recorded
in an incident report by 50Hertz Transmission GmbH; following
this, causes are determined and evaluated, and improvement
measures are defined.
In 50Hertz Transmission GmbH’s activities at sea, the protection
of the Baltic Sea is ensured through a variety of measures. For
example, throughout the planning stage for offshore platforms,
care is taken to ensure that no hazardous substances are leaked
into the sea and that equipment with biodegradable hydraulic
oil is used wherever possible.
GRI 306-5, SDG14
8.4.1. Water and soil
GRI 303-1, GRI 303-2
The Elia group is committed to undertaking effective water and
soil conservation measures. Since the company’s business activi-
ties do not result in significant water consumption or the regular
release of process-linked effluents, our corporate responsibility
does not primarily relate to a reduction in water consumption;
instead, we must focus on water retention in the ground in grid
and substation projects and prevent water and soil pollution
through the use of or leaks of hazardous substances. The main
potential source of pollution for soil, ground and surface water is
the large volume of mineral oil in our transformers. The standard
solution to combat this consists of equipping our transformers
with a liquid-tight concrete tank, which, in the event of an oil
spill, can contain all leaks. To ensure that rainwater that falls on
the facilities can be drained without causing pollution, the tanks
are fitted with a hydrocarbon separator and an additional coa
-
lescence filter with an automatic shut-off valve. The Elia group
has developed an internal procedure to ensure fast and efficient
decontamination. In the event of a major incident, the Elia group
will contact the appropriate authorities.
92
ELIA GROUP SUSTAINABILITY REPORT 2021
92
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
ELIA IN BELGIUM
Elia Transmission Belgium SA/NV has established a waste man-
agement policy for collecting, sorting and handling its waste in
its local technical sites (service centres).
All types of waste generated during the maintenance of assets in
this geographical zone are stored in container parks which guar
-
antee optimal storage in dedicated locations. They are removed
periodically or upon request by authorised collectors special-
ised in the collection, transport and recycling of hazardous and
non-hazardous waste. On our construction sites, contractors
must comply with environmental legislation and organise the
sorting of the construction site waste they produce throughout
their contract.
Elia Transmission Belgium SA/NV has decided to standardise
the sorting rules and procedures it follows throughout Belgium
(regardless of the site and even if regulations might differ slightly
depending on the region where the site is located).
Waste is determined to be hazardous on the basis of its waste
code from the European List of Waste.
Waste disposal contractors provides Elia Transmission Belgium
SA/NV with information about different waste disposal methods
(and necessary certificates), as legally required in Belgium. In
some regions of Belgium, Elia is also required to report the yearly
quantities of specific waste types it produces to the authorities.
WASTE DISPOSAL 2020
Total weight (tonne)
Non-hazardous
waste
Hazardous waste
Recycled
2,434.13 23.02
Disposed of 0.00 15.46
Total
2,434.13 38.47
N.B. all the data related to the weight of waste produced on our construction sites
might not have been gathered as this waste falls under the responsibility of our external
contractors
50HERTZ IN GERMANY
When dealing with waste, avoidance is 50Hertz Transmission
GmbH’s top priority. However, the annual amount and composi-
tion of waste that is produced is highly dependent on conversion
and dismantling projects and compensation and replacement
measures. Since numerous grid expansion projects were under-
taken in 2021, construction projects and compensation projects
generated more waste overall than they did in the previous year.
WASTE DISPOSAL 2021
Waste total weight (tonne)
2019 2020 2021*
Hazardous waste
7,241 5,973 13,494
Non-hazardous waste 34,406 93,288 114,356
Waste total
41,647 99,261 127,850
recycling rate (in %) 86% 95% 90%
* preliminary values
50Hertz Transmission GmbH was able to implement the legally
stipulated recycling requirement (recycling before disposal) with
a recycling rate of around 90%.
8.4.2. Waste
GRI 306-1, GRI 306-2, GRI 306-3, GRI 306-4, GRI 306-5, G4-EUS-EN23
When dealing with waste that cannot be avoided, the motto is
reuse - recycle - recover - dispose. Maintenance work and infra-
structure projects are the activities that generate the most
waste. If facilities are newly built, converted or dismantled, spe-
cific elements (e.g. transformers that have a very long lifetime)
are stored in order to be reused either in refurbished stations or
in newly built ones. Those parts that are no longer needed are
disposed of in as sustainable a way as possible and specific ele-
ments are recycled (e.g. metals from the cables and oil).
This is addressed by Dimension 2 of our ActNow Programme
related to circular economy, We are laying the foundations for
integrating circularity and eco-design into the decision-making
processes for new pieces of infrastructure and we plan to further
increase our recycling rate when decommissioning assets.
93
ELIA GROUP SUSTAINABILITY REPORT 2021
93
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
In order to minimise the impact of our infrastructure on the
environment, we implement a wide range of mitigation and
compensation measures, including those which preserve biodiversity
on and around our high-voltage lines and substations.
BIRD MARKERS REDUCE BIRD CASUALTIES BY 75%
Last year, Elia made 36 km of its high voltage
lines visible to birds by installing bird mark-
ers along them in areas such as Mechelen,
Evergem, Kinrooi, Maaseik and the Eau d’Heure
lakes. We will continue installing more bird
markers along our lines throughout 2022, and
hope to have installed them along 200 km of
lines that pose an increased risk to birds by
2030. As demonstrated through a study under-
taken by Natuurpunt, such markers are effec-
tive: by comparing the number of bird colli-
sions which occurred along an overhead line in
Noordschote before and after their installation,
the number of bird casualties was noted as
having reduced by between 75% to 95%.
NESTING BOXES INSTALLED ON PYLONS
Where we can, we give birds a helping hand. In
Tienen, eight out of the ten the nesting boxes
which we previously installed along a number
of pylons were occupied again by Kestrels in
2021. Kestrels are particularly fond of such nest-
ing boxes because they are high up and located
around farmland. Farmers also benefit from
their presence: crop loss is reduced because
the birds of prey hunt mice and other small
rodents in the surrounding fields. Over the past
15 years, more than 300 chicks have hatched in
the nesting boxes on the line between Tienen
and Sint-Truiden.
Biodiversity
94
ELIA GROUP SUSTAINABILITY REPORT 2021
94
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
NATURE MANAGEMENT
Elia has to maintain safety corridors around its
high-voltage lines: tall trees can’t be permitted
to grow under our lines, since they could cause
disruptions, which would jeopardise security of
supply. This means corridors need to be created
around our pylons and lines. Elia stimulates
and restores biodiversity in affected areas by,
for example, planting peat shrubs and creating
ponds, so that natural habitats are preserved
for local flora and fauna.
To create these corridors, we avoid the use of
machines; instead, local animals graze the
land to keep vegetation levels low. Indeed, in
the Hoge Kempen National Park, a shepherd
watches over his sheep as they graze under our
lines, and in the Ardennes, a herd of cows takes
natural care of the grass and vegetation. More
-
over, in Langerbrugge near Ghent, two horses
recently been grazing the pastures next to our
high-voltage substation. The land is owned by
Elia, but is not being used for the time being. In
the meantime, therefore, the horses are keep
-
ing the vegetation levels low and safe, whilst
ensuring that biodiversity is restored naturally.
NATURE DEVELOPMENT
We are not afraid of rolling up our sleeves: in
2021, we planted bushes and herbs under 20
pylons in Bilzen. This has strengthened biodi-
versity in the municipality and will ensure that
farmland birds and other species are supported
to thrive in the region of Haspengouw, which
includes arable land and pastures.
BEE WEEK
During Bee Week, Elia placed the precious
little insects in the spotlight by putting our
bee hotel, which is occupied by solitary bees,
on display at our Monnoyer site. Solitary bees
pollinate plants and flowers, but do not live in
groups, or in large hives. BeeOdiversity is using
the hotel to study the impact of the environ-
ment on solitary bees.
Elia supports other types of bees too. For exam
-
ple, a colony of bees that nested in the cavity
wall of our high-voltage substation in Turnhout
was given a new home. The insects were get-
ting lost in our buildings, so we installed a bee-
hive XX. One of our members of staff - Theo - is
a beekeeper and he helped with the move.
95
ELIA GROUP SUSTAINABILITY REPORT 2021
95
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
ARCHAEOLOGICAL RESEARCH IN KRUIBEKES
Caring for the environment also means caring
for its history. Elia carried out an archaeological
study on the site of the high-voltage substation
in the municipality of Kruibeke. As part of this,
our staff found artefacts from the First World
War, the Iron Age, the Roman Empire and the
Middle Ages! The study preceded work which
had been planned for the high-voltage substa-
tion. (photographs of the archaeological study)
PERMEABLE ROAD IN DAMME
In Damme, we achieved a first in Flanders by
building the very first permeable road on top
of new electricity cables. As part of this, special
pavers allow rainwater to drain through to the
soil. This is good for the trees which run along-
side the road, cools the road down during the
summer and helps combat water scarcity!
Miscellaneous
96
ELIA GROUP SUSTAINABILITY REPORT 2021
96
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
9
Reporting
on EU Taxonomy
Regulation
96
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
97
ELIA GROUP SUSTAINABILITY REPORT 2021
97
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
The Disclosure Delegated Act specifies the content and pres-
entation of the information to be disclosed by Elia Group pursu-
ant to the Taxonomy Regulation, including the methodology to
be used in order to comply with it. Pursuant to this Regulation
Elia Group discloses hereunder the proportion of Taxonomy-eli-
gible and Taxonomy non-eligible economic activities in the total
turnover, capital expenditures (Capex) and operating expendi-
tures (Opex) of the Elia group as well as the qualitative informa-
tion relevant for this disclosure.
A taxonomy-eligible economic activity means an economic
activity that is described in the Climate Delegated Act irrespec
-
tive of whether that economic activity meets any or all of the
technical screening criteria laid down in that Deletaged Regu-
lation.
Further elaboration/clarifications on the sector and technical cri
-
teria supporting the sector in the future might change our cur-
rent conclusion. If this would be the case Elia Group will update
the results disclosed over 2021 accordingly.
This reporting 2021 should be considered as a transitionary year
preparing Elia Group for detailed taxonomy alignment reporting
over the year 2022.
We also refer to a white paper published in 2021 : see website :
https://www.eliagroup.eu/en/publications#
9.1 Context
This Chapter contains information on how and to what extent
the Elia Group’s activities are associated with economic activ-
ities that qualify as environmentally sustainable and has been
drafted in accordance with the Taxonomy Regulation of 18 June
2020
1
, the Climate Delegated Act of 4 June 2021
2
and the Disclo-
sure Delegated Act of 6 July 2021
3
.
The Taxonomy Regulation provides a definition of environmen
-
tally sustainable economic activities. To qualify as environmen-
tally sustainable, an economic activity:
(i) shall contribute substantially to one or more of the six environ
-
mental objectives set out in articles 9 to 15 of the Taxonomy
Regulation and in the delegated acts referred to in the afore-
mentioned articles, and
(ii) shall meet the specific technical screening criteria laid down
in the delegated acts.
The Climate Delegated Act specifies the technical screening cri
-
teria (TSC) for the environmental objectives ‘climate change mit-
igation’ and ‘climate change adaptation’ which determine the
conditions under which a specific economic activity qualifies
as contributing substantially to ‘climate change mitigation’ and
‘climate change adaptation’.
As the Delegated Act specifying the remaining four environ
-
mental objectives will only be applicable as from 1 January 2023,
Elia Group’s analysis is only based on the two environmental
objectives covered by the Climate Delegated Act.
1 Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the establishment of a framework to facilitate
sustainable investment, and amending Regulation (EU) 2019/2088 (EUR-Lex - 32020R0852 - EN - EUR-Lex (europa.eu)).
2 Commission Delegated Regulation (EU) C/2021/2800 final of 4 June 2021 supplementing Regulation (EU) 2020/852 of the European Parliament
and of the Council by establishing the technical screening criteria for determining the conditions under which an economic activity qualifies
as contributing substantially to climate change mitigation or climate change adaptation and for determining whether that economic activity
causes no significant harm to any of the other environmental objectives (EUR-Lex - C(2021)2800 - EN - EUR-Lex (europa.eu)).
3 Commission Delegated Regulation (EU) 2021/2178 of 6 July 2021 supplementing Regulation (EU) 2020/852 of the European Parliament and of
the Council by specifying the content and presentation of information to be disclosed by undertakings subject to Articles 19a or 29a of Directive
2013/34/EU concerning environmentally sustainable economic activities, and specifying the methodology to comply with that disclosure
obligation (EUR-Lex - 2021/2178 - EN - EUR-Lex (europa.eu)).
98
ELIA GROUP SUSTAINABILITY REPORT 2021
98
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
9.2 Taxonomy-eligible and taxonomy non-eligible economic activities
The eligibility assessment has been realised by verifying the eco-
nomic activities performed by each company of the Elia group
against the activities described in the Climate Delegated Act.
Referring to the consolidated financial statements under sec
-
tion §4 Segment Reporting and under chapter §7 Group struc-
ture this exercise was conducted on affiliates reported in the
differents segments. As general stated, the legal entities Nemo
Link, JAO, HGRT, Coreso, TSCNET and EEX are excluded from the
taxonomy-eligibility assessment (both nominator and denomi-
nator of KPIs), due to being qualified as Investments accounted
for using the equity-method – Joint Ventures – Associates in the
consolidated financial statements.
SEGMENT: ELIA TRANSMISSION BELGIUM
Entity
NACE code /
description
Activity description
Climate Delegated
Regulation
Decision
on eligibility
(yes/No)
Elia
Transmission
Belgium
SA/ NV
35120
Transmission of
electricity
Elia Transmission Belgium is the Belgian transmission sys-
tem operator for high-voltage electricity (30,000–400,000
volts). Its main activities include managing grid infrastruc-
ture and electrical system as well as facilitating the market
4.9 ‘Transmission
and distribution of
electricity’
Yes
Elia
Transmission
Belgium
SA/NV
42220
Construction of
electricity and
telecommunica-
tions network
Construction activities No perfect fit identi-
fied with the activi-
ties described in the
Climate Delegated
Regulation
No
Elia Asset
SA/NV
35120
Transmission of
electricity
Elia Asset is the company that owns all the installations
on the high-voltage grid and is responsible for the further
development and maintenance of this grid. Elia Asset and
Elia Transmission Belgium form a single economic entity
and operate under the name Elia
4.9 ‘Transmission
and distribution of
electricity’
Yes
Elia
Engineering
SA/ NV
71121
Engineering and
technical consul-
tancy activities,
except surveying
activities
Engineering and technical consultancy activities No perfect fit identi-
fied with the activi-
ties described in the
Climate Delegated
Regulation
No
Elia Re 65200
Reinsurance
Elia Re is an insurance captive No perfect fit identi-
fied with the activi-
ties described in the
Climate Delegated
Regulation
No
99
ELIA GROUP SUSTAINABILITY REPORT 2021
99
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
SEGMENT: 50HERTZ TRANSMISSION
Entity
NACE code /
description
Activity description
Climate Delegated
Regulation
Decision
on eligibility
(yes/No)
50Hertz
Transmission
GmbH
35120
Transmission of
electricity
50Hertz Transmission is TSO which operates the ex-
tra-high-voltage grid in northern and eastern.
Germany with a network grid length of around 10,325 km.
The company is also responsible for maintenance and
needs-based expansion as well as for maintaining the bal-
ance of generation and consumption within the balancing
zone’s whole electricity supply system.
4.9 ‘Transmission
and distribution of
electricity’
Yes
50Hertz
Offshore
GmbH
35120
Transmission of
electricity
The business activities of 50Hertz Offshore comprise the
planning, construction and maintenance of electricity lines
as well as the associated plants and facilities for connect-
ing offshore wind
turbines/farms primarily erected in the Baltic Sea to the
grid.
4.9 ‘Transmission
and distribution of
electricity’
Yes
Eurogrid
GmbH
64200
Holdings
80% owned by Elia Group and comprises the activities of
50Hertz, the German TSO. The remaining 20% being held
by the German state-owned Bank Kreditanstalt für Wieder-
aufbau («KfW»).
4.9 ‘Transmission
and distribution of
electricity’
No
SEGMENT: NONREGULATED ACTIVITIES
Entity
NACE code /
description
Activity description
Climate Delegated
Regulation
Decision
on eligibility
(yes/No)
re.alto Energy
BV/SRL
63110
Data processing,
hosting and
related activities
A start-up founded in August 2019 that is building a plat-
form enabling users to exchange energy data and services.
8.2 ‘Data-driven
solutions for GHG
emissions reductions
Yes
Elia Group
SA/NV
In the process of
amendment
Elia Group acts as a holding company owning (i) Elia Trans-
mission Belgium (Belgian TSO), (ii) Eurogrid International
(comprising the activities of 50Hertz, the German TSO), (iii)
Elia Grid International (the Group’s international consultan-
cy branch) and (iv) re.alto energy, an energy platform.
No fit identified with
the activities de-
scribed in the Climate
Delegated Regulation
No
Eurogrid
International
SA/NV
70220
Business and oth-
er management
consultancy
activities
Eurogrid International invests in electric utility-related
companies and provides support services to its customers,
including its own daughter companies.
No fit identified with
the activities de-
scribed in the Climate
Delegated Regulation
No
Elia Grid
International
SA/NV
70220
Business and oth-
er management
consultancy
activities
Power consultancy services. No fit identified with
the activities de-
scribed in the Climate
Delegated Regulation
No
100
ELIA GROUP SUSTAINABILITY REPORT 2021
100
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
9.3 KPIs: Turnover, Capex and Opex
The KPIs have been prepared based on the requirements out-
lined in the Disclosure Delegated Act.
The double counting in the allocation in the numerator of turn
-
over, Capex and Opex across economic activities is prevented as
each entity has only one economic activity. Consequently, turn-
over, Opex and Capex cover economic activities that are either
completely taxonomy-eligible or not at all. Except for Elia Trans-
mission Belgium which has two economic activities (one taxon-
omy-eligible, one not). The turnover of the non- taxonomy-eli-
gible activity is well delineated whereas Opex is immaterial and
Capex not existing for this activity.
9.3.1 Turnover
The turnover used in the KPI calculation is based on the
accounting policies, mentioned in section ‘Consolidated finan-
cial statements’ of Elia Group’s Financial Report under chapter
§3.4.1 ‘Income’ (IFRS 15 –Revenues) and the consolidated result
reported under chapter § 4.5 ‘Reconciliation of information on
reportable segments to IFRS amounts’ reporting the revenues
for the different segments (see above) in which the following
items are considered:
Nominator
(*)
Denominator
Revenues (including grid revenues,
last mile connection and other
revenue)
Yes Yes
Net income (expense) from settle-
ment mechanism
Yes Yes
(*) Nominator is adjusted for the legal entities / activities not qualifying as taxonomy-eligible.
Therefore, total considered revenue which is included in the
denominator of Turnover KPI is € 2,724 million for the Elia Group.
9.3.3 Opex (Operating
expenditures)
For determining the Opex, we applied the definition as
described in the Disclosure Delegated Act and the ESMA final
Report entitled ‘Advise on Article 8 of the Taxonomy Regulation’
dated 26 February 2021, according to which Opex covers direct
non-capitalised costs that relate to research and development,
building renovation measures, short-term lease, maintenance
and repair and any other direct expenditures relating to the day-
to-day servicing of items of property plant and equipment that
are necessary to ensure the continued and effective functioning
of such assets.
Total considered Opex which meets the above definition is
included in the denominator of Opex KPI and no adjustments
are made in the nominator as Opex identified is fully related to
eligible activities.
The Opex KPI represents an amount of €118,2 million.
9.3.2 Capex (Capital expenditures)
The Capex used in the KPI calculation is based on general
accounting policies, mentioned in section ‘Consolidated finan-
cial statements’ of Elia Group’s Financial Report under chapters
§3.3.1. ‘Property Plant and equipment’ (“PPE”) (IAS 16), § 3.3.2.
‘Intangible assets’ (IAS 38) and § 3.3.16 ‘Leases’ (IFRS 16).
The movements related to these assets are disclosed under
chapter § 4.5. ‘Reconciliation of information on reportable seg
-
ments to IFRS amounts’ under caption ‘capital expenditures’
and are included in the calculation as follows:
Nominator
(*)
Denominator
Additions for PPE ( including
leases)
Yes Yes
Additions for intangible assets
( including leases)
Yes Yes
(*) nominator is adjusted for the legal entities / activities not qualifying as eligible
The total considered Capex which is included in the denomina-
tor of Capex KPI is € 1,299.3 million
101
ELIA GROUP SUSTAINABILITY REPORT 2021
101
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
9.3.4 Overview KPI’s
Overall Elia Group’s turnover is 99.94% taxonomy-eligible, the
Capex and the Opex are both 100% taxonomy eligible.
Turnover Capex Opex
Code Amount
in million
Proportion
of the group, %
Amount
in million
Proportion
of the group, %
Amount
in million
Proportion
of the group, %
A. Taxonomy eligible activities 2,722.9 99.94% 1,298.33 99.92% 118.18 100%
Transmission of electricity in Belgium 35120 1,113.3 40.86% 417.23 32.11% 64.68 54.73
Transmission of electricity in Germany 35120 1,609.3 59.07% 880.44 67.67% 53.49 45.26
Energy platform 63110 0.3 0.01% 0.66 0.05% 0.01 0.01
B. Taxonomy non-eligible activities 1.7 0.06% 0.96 0.08% 0 0%
Power Consultancy in Belgium 70220 0.89 0.03% 0.85 0.07% 0 0
Engineering and technical consultancy
activities in Belgium
71121 0.17 0.01% 0 0 0 0
Construction works in Belgium 42220 0.68 0.02% 0 0 0 0
Holding activities (Elia Group) N/A 0 0 0.11 0.01% 0 0
TOTAL (A+B) 2,724.6 100% 1,299. 29 100% 118.18 100%
102
ELIA GROUP SUSTAINABILITY REPORT 2021
102
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
10. Reference Table
10.1 GRI Content Index
GRI
number
GRI
description
Chapter/
Section
Page
GRI 102: General disclosures
1. Organisational Profile
102-1 Name of the organisation 1.1. Elia group companies; 1.1.2. Business model; 1.1.3. Size of the group 9, 10, 12
102-2 Activities, brands, products, and services 1.1. Elia group companies; 1.1.2. Business model 9, 10
102-3 Location of headquarters 1.1. Elia group companies 11
102-4 Location of operations 1.1. Elia group companies 11
102-5 Ownership and legal form 1.1. Elia group companies 9
102-6 Markets served 3.4. Energy imports and exports 37
102-7 Scale of the organisation 1.1.2. Business model; 4.2. Headcount 10, 40
102-8 Information on employees and other workers 4.2. Headcount 40
102-9 Supply chain 1.1.2. Business model; 6.1 Management approach" 10, 59
102-10 Significant changes to the organisation and its supply chain no changes in the year reported
102-11 Precautionary Principle or approach 1.3.6. Risk management; 8.1. Management approach 21, 77
102-12 External initiatives 1.3.1. Memberships 14
102-13 Membership of associations 1.3.1. Memberships 14
2. Strategy
102-14 Statement from senior decision-maker Foreword 7
102-15 Key impacts, risks, and opportunities 2.1. Materiality and objectives 29
3. Ethics and integrity
102-16 Values, principles, standards, and norms of behaviour 1.3.2. Values, principles and standards 15
102-17 Mechanisms for advice and concerns about ethics 1.3.2. Values, principles and standards 15
103
ELIA GROUP SUSTAINABILITY REPORT 2021
103
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
GRI
number
GRI
description
Chapter/
Section
Page
4. Governance
102-18 Governance structure 1.3.3. Roles and responsibilities within the company 17
102-19 Delegating authority 1.3.3. Roles and responsibilities within the company 17
102-20 Executive-level responsability for economic, environmental, and social topics 1.3.3. Roles and responsibilities within the company 17
102-21 Consulting stakeholders on economic, environmental and social topics 7.2. Community relations and public acceptance;
7.3. Stakeholder dialogues
65, 68
102-22 Composition of the highest governance body and its committees Financial Report - Corporate Governance Report 3
102-23 Chair of the highest governance body Financial Report - Corporate Governance Report 3
102-26 Role of the highest governance body in setting purpose, values, and strategy 1.3.2. Values, principles and standards;
1.3.3. Roles and responsibilities within the company
15, 17
102-29 Identifying and managing economic, environmental and social impacts 2.1. Materiality and objectives; 2.2. ActNow;
7.2. Community relations and public acceptance
29, 31, 65
102-30 Effectiveness of risk management processess 1.3.6. Risk management 21
102-32 Highest governance body's role in sustainability reporting 1.3.3. Roles and responsibilities within the company 17
102-33 Communicating critical concerns 1.3.3. Roles and responsibilities within the company 17
102-38 Annual total compensation ratio 4.6. Remuneration policies and incentive systems 46
5. Stakeholder engagement
102-40 List of stakeholder groups 7.1. Management approach 63
102-41 Collective bargaining agreements 4.6. Remuneration policies and incentive systems 46
102-42 Identifying and selecting stakeholders 7.1. Management approach 63
102-43 Approach to stakeholder engagement 7.1. Management approach; 7.2. Community relations
and public acceptance
63, 65
102-44 Key topics and concerns raised 7.2. Community relations and public acceptance ;
7.3. Stakeholder dialogues
65, 68
6. Reporting principles
102-45 Entities included in the consolidated financial statements Company profile, 1.1. Elia group companies 5, 9
102-46 Defining report content and topic Boundaries 2.1. Materiality and objectives 29
102-47 List of material topics 2.1. Materiality and objectives 29
102-48 Restatements of information 2.1. Materiality and objectives 29
104
ELIA GROUP SUSTAINABILITY REPORT 2021
104
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
GRI
number
GRI
description
Chapter/
Section
Page
102-49 Changes in reporting -
102-50 Reporting period Foreword 6
102-51 Date of most recent report 1/04/2021
102-52 Reporting cycle 1
st
January 2021 to 31 December 2021
102-53 Contact point for questions regarding the Annual Report [email protected]
102-54 Claims of reporting in accordance with the GRI Standards Foreword
102-55 GRI content index 10.1. GRI Content Indext 102
GRI 103: Identified Material Aspects and Boundaries
103-1 Explanation of the material topic and its Boundary 2.1. Materiality and objectives 29
103-2 The management approach and its components 2.2. ActNow; 4.1. Management approach; 5.1. Management approach;
7.1. Management approach; 8.1. Management approach
31, 40, 53, 59, 63, 77
103-3 Evaluation of the management approach 1.3.3. Roles and responsibilities within the company; 2.2. ActNow 17, 31
GRI 201: Economic performance
201-1 Direct economic value generated and distributed 6.2. Suppliers and expenditure in the Eurozone 59
201-2 Financial implications and other risks and opportunities for the organisation's activi-
ties due to climate change
1.3.6. Risk management; 8.2. Emissions 21, 79
GRI 203: Indirect economic impacts
203-1 Development and impact of infrastructure investments and services supported 6.2. Suppliers and expenditure in the Eurozone 59
203-2 Significant indirect economic impacts, including the extent of impacts 6.2. Suppliers and expenditure in the Eurozone 59
GRI 204: Procurement practices
204-1 Proportion of spending on local suppliers 6.1 Management approach; 6.2. Suppliers and expenditure in the Eurozone 59
GRI 205: Anti-Corruption
205-1 Operations assessed for risks related to corruption 1.3.5. Anti-corruption 20
205-2 Communication and training on anticorruption policies and procedures 1.3.5. Anti-corruption 20
205-3 Confirmed incidents of corruption and actions taken No reported incident in 2021
105
ELIA GROUP SUSTAINABILITY REPORT 2021
105
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
GRI
number
GRI
description
Chapter/
Section
Page
GRI 206: Anti-competitive behaviour
206-1 Legal actions for anti-competitive behaviour, anti-trust, and monopoly practices - -
GRI 302: Energy
302-1 Energy consumption within the organisation 8.2.2. Energy consumption 83
302-2 Energy consumption outside of the organisation 3.1. Introduction; 3.4. Energy imports and exports 35, 37
302-3 Energy intensity 8.2.1. GHG Emissions 82
GRI 304: Biodiversity
304-1 Operational sites owned, leased, managed in, or adjacent to, protected areas and areas
of high biodiversity value outside protected areas
8.3. Biodiversity and landscape 85
304-2 Significant impacts of activities, products, and services on biodiversity 8.3. Biodiversity and landscape; 8.3.1. Mitigation and compensation
measures; 8.3.2. Ecological aisle management
85, 87, 89
304-3 Habitats protected or restored 8.3. Biodiversity and landscape; 8.3.1. Mitigation and compensation
measures; 8.3.2. Ecological aisle management
85, 87, 89
GRI 305: Emissions
305-1 Direct greenhouse gas (GHG) emissions (Scope 1) 8.2.1. GHG Emissions 82
305-2 Energy indirect greenhouse gas (GHG) emissions (Scope 2) 8.2.1. GHG Emissions 82
305-3 Other indirect greenhouse gas (GHG) emissions (Scope 3) 8.2.1. GHG Emissions 82
GRI 306: Effluents and waste
306-1 Waste generation and significant waste-related impacts 8.4.2. Waste 92
306-2 Management of significant waste-related impacts 8.4.2. Waste 92
306-3 Waste generated 8.4.2. Waste 92
306-4 Waste diverted from disposal 8.4.2. Waste 92
306-5 Waste directed to disposal 8.4. Natural resources 91
GRI 307: Environmental compliance
307-1 Non-compliance with environmental laws and regulations -
GRI 308: Supplier Environmental Assessment
308-1 New suppliers that were screened using environmental criteria 6.1 Management approach 59
308-2 Significant actual and potential negative environmental impacts in the supply chain
and actions taken
6.1 Management approach 59
106
ELIA GROUP SUSTAINABILITY REPORT 2021
106
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
GRI
number
GRI
description
Chapter/
Section
Page
GRI 401: Employment
401-1 Total number and rates of new employee hires and employee turnover 4.2. Headcount 40
401-2 Benefits provided to full-time employees that are not provided
to temporary or part-time employees
4.1. Management approach; 4.3. Work-life balance 40, 43
401-3 Parental leave Parental leave 43
GRI 402: Labour/Management Relations (MA)
402-1 Social Consultation and Dialogue - Co-Determination 4.7. Social dialogue and co-determination 47
GRI 403: Occupational Health and Safety
403-1 Occupational health and safety management system 5.1. Management approach 53
403-2 Hazard identification, risk assesment, and incident invesitigation 5.3. Inspections 56
403-3 Occupational health services 5.3. Inspections 56
403-5 Worker training on occupational health and safety 5.2. Health and safety training 55
403-6 Promotion of worker health 5.1. Management approach 53
403-7 Prevention and mitigation of occupational health and safety impacts
directly linked by business relationships
5.2. Health and safety training 55
403-8 Workers covered by an occupational health and safety management system 5.1. Management approach 53
403-9 Work-related injuries 5.4. Accidents 57
403-10 Work-related ill health 5.4. Accidents 57
GRI 404: Training and Education
404-1 Average hours of training per year per employee by gender, and by employee category 4.5. Training 45
GRI 405: Diversity and Equal Opportunity
405-1 Diversity of governance bodies and employees 4.2. Headcount; 4.8. Diversity, Equity, Inclusion 40, 48
405-2 Ratio of basic salary and remuneration of women to men No gender pay gap
GRI 406: Non-Discrimination
406-1 Total number of incidents of discrimination and corrective actions taken No reported case of discrimination in 2021
GRI 413: Local Communities
413-1 Operations with local community engagement, impact assessments, and develop-
ment programmes
7.1. Management approach; 7.5. Community engagement 63,
107
ELIA GROUP SUSTAINABILITY REPORT 2021
107
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
GRI
number
GRI
description
Chapter/
Section
Page
GRI 414: Supplier Social Assessment
414-1 New suppliers that were screened using social criteria 6.1 Management approach; 6.3. Human rights 59, 61
GRI 415: Political Influence
415-1 Political contributions No donations are made to politicians or political parties
GRI 416: Customer Health and Safety
416-1 Assessment of the health and safety impacts of product and service categories 8.2.3. Electric and magnetic fields 84
G4 - Electric Utilities Specific (EUS)
Lines & losses & quality of service
EU4 Length of above and underground transmission and distribution lines
by regulatory regime
1.2. Grid 13
EU12 Transmission and distribution losses as a percentage of total energy 3.2. Installed capacity; 3.5. Grid losses 35, 38
Demand management approach our control areas
DMA Management approach to ensure short and long-term electricity availability and
reliability
1.3.9. Grid reliability 26
DMA Demand-side management programmes including residential, commercial, institu-
tional and industrial programmes
DMA Disaster/ Emergency Planning and Response 1.3.8. Security and emergency management 25
Biodiversity
EN12 Description of significant impacts of activites, products, and services on biodiversity in
protected areas and areas of high biodiversity value outside protected ariea
8.3. Biodiversity and landscape; 8.3.3. Bird protection 85, 90
EN15 Direct Greenhouse gas (GHG) emissions (Scope 1) 8.2.1. GHG Emissions 82
EN16 Indirect Greenhouse gas (GHG) emissions (Scope 2) 8.2.1. GHG Emissions 82
Health and safety & Human resources
LA1 Total number and rates of new employee hires and employee turnover by age group,
gender and region
4.2. Headcount 40
LA6 Type of injury and rates of injury, occupational diseases, lost days and absenteeism,
and total number of work related fatalaties, by region and gender
5.4. Accidents 57
EU15 Percentage of employees eligible to retire in the next 5 and 10 years broken down by
job category and by region
Retirement 44
108
ELIA GROUP SUSTAINABILITY REPORT 2021
108
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
10.2 United Nations Global Compact Reference Table
Topic Principle Page
Human rights 01 Support and respect the protection of human rights 17, 32, 61
02 Exclusion of human rights violations 59, 61
Labour 03 Respect and recognition of freedom of association 40, 47
04 Elimination of all forms of forced labor 59, 61
05 Abolition of child labor 59, 62
06 Elimination of discrimination 15, 32, 40, 48-50
Environment 07 Precautionary environmental approach 32, 77, 85, 87, 89, 90
08 Demand environmental awareness 32, 71, 77
09 Development of environmentally friendly technologies 32, 71, 78
Anti-corruption 10 Measures against corruption 20, 32
109
ELIA GROUP SUSTAINABILITY REPORT 2021
Interview The Elia Group Strategy
Energy – Market and
integration of renewables
Human
resources Safety
Suppliers and
human rights
Stakeholder
engagement
Environmental
aspects
Reporting on the
EU Taxonomy Regulation
Reference
table
Reporting
parameters
109
ELIA GROUP SUSTAINABILITY REPORT 2021
Registered offices
The registered office of Elia Transmission Belgium and
Elia Asset is located at
Boulevard de l’Empereur 20
1000 Brussels, Belgium
The registered office of 50Hertz GmbH is established at
Heidestraße 2
D-10557 Berlin, Germany
The registered office of Eurogrid International is located at
Rue Joseph Stevens, 7
1000 Brussels, Belgium
The registered office of Elia Grid International is located at
Rue Joseph Stevens, 7
1000 Brussels, Belgium
Reporting period
This annual report covers the period from 1 January 2021 to
31 December 2021.
Contact
Group Communications and Reputation
Marleen Vanhecke
T + 32 486 49 01 09
Boulevard de l’Empereur 20
1000 Brussels
info@elia.be
Headquarters Elia Group
Boulevard de l’Empereur 20,
B-1000 Bruxelles
T +32 2 546 70 11
F +32 2 546 70 10
info@elia.be
Heidestraße 2
10557 Berlin
T +49 30 5150 0
F +49 30 5150 2199
in[email protected]
Concept and editorial staff
Communication & Reputation
Strategy
Sustainability
Investor relations
Finance
Graphic design
www.chriscom.be
Editor
Chris Peeters
Ce document est également disponible en français.
Dit document is ook beschikbaar in het Nederlands.
Reporting
parameters
We would like to thank everyone who contributed
to this annual report.
Powering
the decade
of electrification
Powering
the decade
of electrification
FINANCIAL
REPORT
2021
7 Corporate Governance Statement
1. Corporate
Governance
Statement
Elia Group Financial Report 2021 1
1. Corporate
Governance
Statement
CORPORATE GOVERNANCE
REPORT 2
REMUNERATION OF THE MEMBERS
OF THE BOARD OF DIRECTORS AND
OF THE EXECUTIVE BOARD 19
RISK MANAGEMENT AND
UNCERTAINTIES FACING THE COMPANY 30
2 Corporate Governance Statement
Corporate governance report
1 The (Belgian) 2020 Corporate Governance Code can be found on the website of the Corporate Governance Committee (www.corporategovernancecommittee.be).
2 The (Belgian) Code of Companies and Associations can be found on the website of the ministry of justice (http://www.ejustice.just.fgov.be/cgi_loi/wet.pl).
This Corporate Governance Statement contains the main aspects of Elia Group SA/NV’s corpo-
rate governance framework, including all relevant information on events affecting Elia Group
SA/NV’s governance during the financial year 2021.
In 2021 Elia Group SA/NV’s corporate governance was based on the following pillars:
• the (Belgian) 2020 Corporate Governance Code 
1
, which Elia Group SA/NV has adopted as its
benchmark code;
• the (Belgian) Code of Companies and Associations 
2
;
• Elia Group SA/NV’s Articles of Association.
Board of Directors
1
Bernard Gustin
2
Claude Grégoire
3
Geert Versnick
4
Michel Allé
5
Luc De Temmerman
6
Frank Donck
7
Cécile Flandre
8
Luc Hujoel
9
Roberte Kesteman
10
Jane Murphy
11
Dominique Offergeld
12
Pieter De Crem
13
Rudy Provoost
14
Saskia Van Uffelen
1
3
2
4
7
5
6
9
8
10
14
13
12
11
Elia Group Financial Report 2021 3
Composition of the management bodies as
at 31 December 2021
3 Pieter De Crem was co-opted as non-executive director by the Board of Directors of 9 February 2021, upon the proposal of Publi-T, to replace Kris Peeters, who tendered his voluntary
resignation as non-executive director of Elia Group SA/NV with effect from 1 January 2021. The Ordinary General Meeting held on 18 May 2021 confirmed the appointment of Pieter De
Crem as non-executive director.
4 Luc Hujoel tendered his voluntary resignation as non-executive director of Elia Group SA/NV with effect from 31 December 2021 (at midnight). To replace Luc Hujoel, the Board
of Directors, upon the proposal of Publi-T, co-opted Thibaud Wyngaard on 17 December 2021 as non-executive director with effect from 1 January 2022. The confirmation of the
appointment of Thibaud Wyngaard as non-executive director will be proposed to the Ordinary General Meeting to be held on 17 May 2022.
5 Luc Hujoel tendered his voluntary resignation as non-executive director of Elia Group SA/NV as of 31 December 2021 (at midnight). The Board of Directors of 17 December 2021 appointed
Geert Versnick to replace Luc Hujoel as Chairman of the Nomination Committee with effect from 1 January 2022.
6 Pieter De Crem was co-opted as non-executive director by the Board of Directors of 9 February 2021, upon the proposal of Publi-T, to replace Kris Peeters, who tendered his voluntary
resignation as non-executive director of Elia Group SA/NV with effect from 1 January 2021. The Ordinary General Meeting held on 18 May 2021 confirmed the appointment of Pieter De
Crem as non-executive director.
7 Pieter De Crem was co-opted by the Board of Directors of 9 February 2021, upon the proposal of Publi-T, to replace Kris Peeters, who tendered his voluntary resignation as non-executive
director of Elia Group SA/NV with effect from 1 January 2021. The Ordinary General Meeting held on 18 May 2021 confirmed the appointment of Pieter De Crem as non-executive director.
8 Further to the appointment of Geert Versnick as Chairman of the Nomination Committee with effect from 1 January 2022, the Board of Directors of 17 December 2021 appointed
Dominique Offergeld to replace Geert Versnick as Chairman of the Strategic Committee with effect from 1 January 2022. Geert Versnick is a standing invitee of the Strategic Committee
since 1 January 2022.
9 Since 9 February 2021.
10 Since 9 February 2021 and until 31 December 2021
11 Since 1 January 2022, Dominique Offergeld chairs the Strategic Committee.
Board of Directors
CHAIRPERSON
• Bernard Gustin, non-executive
independent director
VICECHAIRPERSONS
• Claude Grégoire, non-executive director
appointed upon proposal of Publi-T
• Geert Versnick, non-executive director
appointed upon proposal of Publi-T
DIRECTORS
• Michel Allé, non-executive independent
director
• Pieter De Crem, non-executive director
appointed upon proposal of Publi-T
3
• Luc De Temmerman, non-executive
independent director
• Frank Donck, non-executive independ
-
ent director
• Cécile Flandre, non-executive director
appointed upon proposal of Publi-T
• Luc Hujoel, non-executive director
appointed upon proposal of Publi-T
4
• Roberte Kesteman, non-executive
independent director
• Jane Murphy, non-executive
independent director
• Dominique Offergeld, non-executive
director appointed upon proposal of
Publi-T
• Rudy Provoost, non-executive director
appointed upon proposal of Publi-T
• Saskia Van Uffelen, non-executive
independent director
Advisory Committees to
the Board of Directors
NOMINATION COMMITTEE
• Luc Hujoel, Chairman
5
• Pieter De Crem
6
• Luc De Temmerman
• Frank Donck
• Jane Murphy
AUDIT COMMITTEE
• Michel Allé, Chairman
• Frank Donck
• Roberte Kesteman
• Dominique Offergeld
• Rudy Provoost
REMUNERATION COMMITTEE
• Luc De Temmerman, Chairman
• Pieter De Crem
7
• Roberte Kesteman
• Dominique Offergeld
• Saskia Van Uffelen
STRATEGIC COMMITTEE
• Geert Versnick, Chairman
8
• Michel Allé
• Claude Grégoire
9
• Bernard Gustin
• Rudy Provoost
• Luc Hujoel, standing invitee
10
• Dominique Offergeld, standing invitee
11
Joint auditors
• Ernst & Young Réviseurs d’Entreprises
SRL, represented by Paul Eelen
• BDO Réviseurs d’Entreprises SRL,
represented by Felix Fank
Executive Management
Board
• Chris Peeters (Chief Executive Officer
and TSO Head Elia)
• Catherine Vandenborre (Chief Financial
Officer)
• Stefan Kapferer (TSO Head 50 Hertz)
• Peter Michiels (Chief Human Resources,
Internal Communication Officer and
Chief Alignment Officer)
• Michael Freiherr Roeder von Diersburg
(Chief Digital Officer)
Secretary-General
• Siska Vanhoudenhoven
4 Corporate Governance Statement
Board of Directors
Appointment procedure and Term and
expiry of directorships
Elia Group SA/NV is managed by a Board of Directors that is com-
posed of at least ten (10) and maximum fourteen (14) members.
At least three members of the Board of Directors are independent
directors in the meaning of the applicable legal (article 7:87 of the
Code of Companies and Association and provision 3.5 of the 2020
Corporate Governance Code) and statutory provisions.
All members are appointed by the General Meeting of shareholders
and may be dismissed by it.
The independent directors are proposed for appointment by the
Board of Directors to the Ordinary General Meeting based on the
recommendation of the Nomination Committee. The non-inde-
pendent directors are appointed by the Ordinary General Meeting
upon proposal of Publi-T, in accordance with article 13.2 of the Arti-
cles of Association of Elia Group SA/NV.
For reasons of time management and practicality the Board of
Directors did not propose that the 2021 Ordinary General Meeting
voted separately on the proposed (re)appointment of each of the
four directors and thus decided to deviate from provision 5.7 of
the 2020 Corporate Governance Code. However, at the Ordinary
General Meeting of 2022, Elia Group SA/NV will submit the appoint-
ment or renewal of each director separately to the General Meeting
of shareholders in accordance with provision 5.7 of the 2020 Cor-
porate Governance Code.
The directors of Elia Group SA/NV are appointed or reappointed for
a maximum term of six years.
The maximum six-year term of the directorships diverges from the
maximum four-year term recommended by the 2020 Corporate
Governance Code. The maximum six-year term is justified in light
of the technical, financial and legal specificities and complexities
that apply within the group and that require a certain level of expe-
rience achieved through continuity in the composition of the Board
of Directors.
Specific requirements for members of
the Board of Directors
The Articles of Association stipulate that the Board of Directors is
composed exclusively of non-executive directors.
In addition, in accordance with the Articles of Association, the
members of the Board of Directors may not be members of the
supervisory board, the board of directors or bodies that legally
representing an undertaking that fulfils any of the following func-
tions: production or supply of electricity. Nor may the members
of the Board of Directors carry on any other function or activity,
whether remunerated or not, in favour of an undertaking falling
under the preceding sentence.
In addition to their independence (see above), the independent
directors are appointed partly for their knowledge of financial man-
agement and partly for their relevant technical knowledge of the
company’s activities.
In accordance with the Articles of Association and the Code of
Companies and Associations, at least one third (1/3) of the directors
must be of the opposite sex to the remaining two thirds.
In accordance with provision 5.5 of the 2020 Corporate Governance
Code, members of the Board of Directors may not accept more
than five directorships in listed companies.
In accordance with the Articles of Association, at least one director
must have the necessary accounting and auditing expertise.
In addition to the legal and statutory selection criteria, the Board
of Directors has approved on March 2, 2021, in application of provi
-
sion 5.1 of the 2020 Corporate Governance Code, additional criteria
applicable to all newly appointed directors. All these criteria can
be found in the Corporate Governance Charter published on the
website www.elia.be (under ‘Company, ‘Corporate Governance’,
‘Document library’).
The composition of the Board of Directors guarantees that deci
-
sions are taken in the
the interest of Elia Group SA/NV. This composition is based on a
gender mix and on diversity in general, as well as on the comple-
mentarity of skills, experience and knowledge. When renewing
the directorships of the members of the Board of Directors, care
is taken to ensure that a linguistic balance is achieved and main-
tained within the group of directors of Belgian nationality.
Elia Group Financial Report 2021 5
Current composition of the Board of
Directors
The Board of Directors is currently composed of fourteen (14) direc-
tors. Seven (7) directors are independent non-executive directors,
in the meaning of article 7:87 of the Code of Companies and Asso-
ciations and provision 3.5 of the 2020 Corporate Governance Code.
The seven (7) other non-executive directors are non-independent
directors appointed by the Ordinary General Meeting upon pro-
posal of Publi-T, as per the current shareholder structure and article
13.2 of the Articles of Association of Elia Group SA/NV (see also the
‘Shareholder structure’ section on pages 16 of this statement).
Diversity within the Board of Directors
Number of directors as at 31 December 2021 Unit 2021
Men
Aged 35 < 54 1
Aged ≥ 55 8
Women
Aged 35 < 54 2
Aged ≥ 55 3
Changes in the composition of the Board
of Directors in 2021
Kris Peeters tendered his voluntary resignation as non-executive
director of Elia Group SA/NV with effect from 1 January 2021. To
replace Kris Peeters, the Board of Directors, upon the proposal
of Publi-T, co-opted Pieter De Crem on 9 February 2021 as non-
executive director as from that date. The Ordinary General Meeting
held on 18 May 2021 confirmed his appointment as non-executive
director.
Luc Hujoel tendered his voluntary resignation as non-executive
director of Elia Group SA/NV with effect from 31 December 2021 (at
midnight). To replace Luc Hujoel, the Board of Directors, upon the
proposal of Publi-T, co-opted Thibaud Wyngaard on 17 December
2021 as non-executive director with effect from 1 January 2022. The
confirmation of the appointment of Thibaud Wyngaard as non-
executive director will be proposed to the Ordinary General Meet-
ing to be held on 17 May 2022.
Term and expiry of directorships
In line with the maximum six-year term of directorship, Luc De
Temmerman and Saskia Van Uffelen’s mandates were renewed at
the Ordinary General Meeting of 2021 for a one-year term, ending
immediately after the 2022 Ordinary General Meeting relating to
the financial year ending on 31 December 2021. Furthermore, Frank
Donck’s mandate was renewed at the Ordinary General Meeting
of 2021 for a six-year term, ending immediately after the 2027
Ordinary General Meeting relating to the financial year ending on
31 December 2026.
Geert Versnick and Pieter De Crem’s directorships will expire imme-
diately after the 2026 Ordinary General Meeting relating to the
financial year ending 31 December 2025.
12 As stated above, Thibaut Wyngaard was co-opted as non-executive director by the Board of Directors on 17 December 2021 to replace Luc Hujoel as director with effect from 1 January
2022. It shall be proposed to the Ordinary General Meeting to be held on 17 May 2022 to confirm his appointment, ending immediately after the 2026 Ordinary General Meeting (relating
to the financial year ending 31 December 2025).
13 However, Jane Murphy will be replaced by the Ordinary General Meeting of 17 May 2022 relating to the financial year 2021, as on 10 February 2022 Jane Murphy will have been a member
of the Board of Directors for 12 years.
14 See footnote hereabove.
The directorships of Bernard Gustin, Cécile Flandre, Claude
Grégoire, Dominique Offergeld, Roberte Kesteman and Rudy
Provoost will expire immediately after the 2023 Ordinary General
Meeting relating to the financial year ending 31 December 2022.
Michel Allé, Luc De Temmerman and Saskia Van Uffelen’s direc-
torships will expire immediately after the 2022 Ordinary General
Meeting relating to the financial year ending 31 December 2021.
For the sake of clarity, the end of term of each director referred to
above is also mentioned in the following chart:
End of term
immediately after
the Ordinary
General Meeting to
be held in
(relating to
financial year
ending)
Bernard Gustin, Chairman 2023 (2022)
Geert Versnick, Vice-Chairman 2026 (2025)
Claude Grégoire, Vice-Chairman 2023 (2022)
Michel Allé 2022 (2021)
Pieter De Crem 2026 (2025)
Luc De Temmerman 2022 (2021)
Frank Donck 2027 (2026)
Cécile Flandre 2023 (2022)
Luc Hujoel
12
2026 (2025)
Roberte Kesteman 2023 (2022)
Jane Murphy 2023
13
(2022)
14
Dominique Offergeld 2023 (2022)
Rudy Provoost 2023 (2022)
Saskia Van Uffelen 2022 (2021)
End of term
immediately after
the Ordinary
General Meeting to
be held in
Number of
directors
2022 3
2023 7
2026 3
2027 1
On 10 February 2010 Jane Murphy was appointed as non-execu-
tive independent director of Elia Group SA/NV for the first time.
Consequently, on 10 February 2022 Jane Murphy will have been
member of the Board of Directors for 12 years. Jane Murphy will
however, in deviation of provision 3.5 of the 2020 Code of Corporate
Governance, continue to seat in the Board of Directors until her
replacement by the Ordinary General Meeting of 17 May 2022. The
Board of Directors is of the opinion that pursuing her mandate over
a very short period of time will not endanger her independence.
It will also ensure continuity in the works of the Board of Directors
and the advisory committees up to the Ordinary General Meeting
of 17 May 2022.
6 Corporate Governance Statement
In accordance with the provisions of the Articles of Association, the
Board of Directors is supported by four advisory committees: the
Nomination Committee, the Audit Committee, the Remuneration
Committee and the Strategic Committee. The Board of Directors
ensures that these advisory committees operate in an efficient
manner.
Competences of the Board of Directors
Elia Group SA/NV has a one-tier (“système moniste/monistisch sys-
tem”) structure as governance model. The Board of Directors has, in
accordance with article 17.2 of the Articles of Association, the power
to perform all acts necessary or useful for achieving the statutory
purpose, with the exception of those acts reserved by law or by the
Articles of Association to the General Meeting. Thus, the Board of
Directors has inter alia the following powers:
1°
approval/amendment of the general strategy, financial and div-
idend policy of the company, including the strategic orienta-
tions or options for the company as well as the principles and
problems of a general nature, in particular with regard to risk
management and personnel management;
2°
approval, follow-up and amendment of the business plan and
budgets of the company;
3°
without prejudice to other specific powers of the Board of Direc-
tors, entering into any commitment where the amount exceeds
fifteen million euros (EUR 15,000,000), unless the amount as
well as its main characteristics are explicitly provided for in the
annual budget;
4°
decisions on the corporate structure of the company and of the
companies in which the company holds a participation, includ-
ing the issue of securities;
5°
decisions on the incorporation of companies and on the acqui-
sition or transfer of shares (regardless of the manner in which
these shares are acquired or transferred) in companies in which
the company directly or indirectly holds a participating interest,
insofar as the financial impact of this incorporation, acquisition
or transfer exceeds two million five hundred thousand euros
(EUR 2,500,000);
6°
decisions on strategic acquisitions or alliances, significant divest-
ments or transfers of core activities or assets of the company;
7°
significant changes to accounting or tax policies;
8°
significant changes in the activities;
9°
decisions concerning the launch of or acquisition of participa-
tions in activities outside the management of electricity net-
works;
10°
strategic decisions to manage and/or acquire new electricity
networks outside Belgium;
11°
in relation to (i) Elia Transmission Belgium SA/NV and Elia Asset
SA/NV: monitoring their general policy as well as the decisions
and matters referred to in 4°, 5°, 6°, 8°, 9° and 10° above; (ii) the
key subsidiaries designated by the Board of Directors (other
than Elia Transmission Belgium SA/NV and Elia Asset SA/NV):
the approval and monitoring of their general policy as well as
the decisions and matters referred to in 1° to 10° above; (iii) the
subsidiaries other than the key subsidiaries: the approval and
monitoring of their general policy as well as the decisions and
matters referred to in the 4°, 5°, 6°, 8°, 9° and 10° above;
12°
exercising general supervision on the Executive Management
Board; in that context, the Board of Directors shall also super-
vise the way in which the business activity is conducted and
developed in order inter alia to assess whether the company’s
business is being conducted in a due and proper way;
13°
the powers granted to the Board of Directors by or by virtue of
the Belgian Code of Companies and Associations or the Articles
of Association.
In the framework of the risk management competence of the
Board of Directors, the Board of Directors approved a reference
framework for internal control and risk management, established
by the Executive Management Board, that is based on the COSO
II framework. The Board of Directors has also appointed a Com-
pliance Officer who is responsible for monitoring the company’s
compliance with laws and regulations and for applying the relevant
internal guidelines. The Compliance Officer reports at least once
a year to the Board of Directors on the execution of his mission.
With respect to the exercise of its supervision oversight responsi
-
bilities (see item 12° hereabove), the Board of Directors is at least
responsible for the following:
• exercising general supervision on the Executive Management
Board; in that context, the Board of Directors shall also supervise
the way in which the business activity is conducted and devel-
oped in order to, inter alia, assess whether the company’s business
is being conducted in a due and proper way;
• monitoring and reviewing the effectiveness of the advisory com
-
mittees of the Board of Directors;
• taking all necessary measures to ensure the integrity and timely
publication of the financial statements and other significant
financial and non-financial information communicated to share-
holders and potential shareholders;
• approving an internal control and risk management framework,
set up by the Executive Management Board and evaluating the
implementation of this framework. The Board of Directors also
describes in the annual report the main features of the internal
control and risk management systems of the Elia Group SA/NV;
• supervising the performance of the statutory auditors and the
internal audit function, taking into account the review carried out
by the Audit Committee.
The Special General Meeting of Shareholders of 18 May 2021 con
-
ferred the power to the Board of Directors to acquire the company’s
own shares, without the total number of own shares held by the
Elia Group SA/NV pursuant to this power exceeding 10% of the total
number of shares, for a compensation that cannot be lower than
10% below the lowest closing price in the thirty days preceding the
transaction and not higher than 10% above the highest closing
price in the thirty days preceding the transaction.
This power is conferred for a period of five years as from 4 June 2021.
It applies to the Board of Directors and, to the extent necessary, to
any third party acting on behalf of the company.
Elia Group Financial Report 2021 7
Meetings and decision-making
The Board of Directors meets whenever required in the interests of
the company and at least once (1) per quarter. It must be convened
whenever the company’s interests so require and whenever at least
two (2) directors so request. It deliberates validly in accordance with
the rules that it lays down.
The meetings of the Board of Directors can be held via video con
-
ference, conference call or using other means of remote commu-
nication, provided all the members agree and the organisational
principles of the Board are adhered to. The decisions of the Board
of Directors can be taken in accordance with article 7:95, second
paragraph of the Code of Companies and Associations by unani-
mous written agreement of the directors.
The Board of Directors constitutes a collegiate body in which the
members strive for consensus in their deliberations.
The deliberations of the Board of Directors are set down in minutes.
These minutes are filed in a special register.
Activity report
In 2021, the Board of Directors of Elia Group SA/NV met nine (9)
times.
The Board of Directors primarily focused on strategic issues, the
financial and regulatory situation of the company and its subsidi-
aries, the business continuity of the activities in view of the COVID-
19 pandemic, the progress on major investment projects, various
governance matters and the follow-up of the risks.
Members who were unable to attend usually granted a proxy to
another member. In accordance with article 19.4 of the Articles of
Association of the company, members who are absent or unable to
attend may grant a written proxy to another member of the Board
of Directors to represent them at a given meeting of the Board of
Directors and vote on their behalf at that meeting. However, no
director can hold more than two proxies.
Attendance rate
Bernard Gustin, Chairman 9/9
Geert Versnick, Vice-chairman 7/9
Claude Grégoire, Vice-chairman 9/9
Michel Allé 8/9
Pieter De Crem
15
8/8
Luc De Temmerman 9/9
Frank Donck 9/9
Cécile Flandre 8/9
Luc Hujoel 9/9
Roberte Kesteman 9/9
Jane Murphy 9/9
Dominique Offergeld 8/9
Rudy Provoost 9/9
Saskia Van Uffelen 9/9
15 Pieter De Crem was co-opted as non-executive director by the Board of Directors of 9 February 2021, upon the proposal of Publi-T, to replace Kris Peeters, who tendered his voluntary
resignation as non-executive director of Elia Group SA/NV with effect from 1 January 2021. The Ordinary General Meeting held on 18 May 2021 confirmed the appointment of Pieter De
Crem as non-executive director.
Conflict of interest
The directors of Elia Group SA/NV must strictly observe the provi-
sions of article 7:96 of the Code of Companies and Associations. The
procedure of article 7:96 of the Code of Companies and Associa-
tions was not applied in 2021, as there were no conflicts of interest.
In accordance with the Corporate Governance Charter, outside the
scope of the legal conflict of interest regime, the directors must dis-
close to the Board of Directors any information in their possession
that may be relevant to the Board of Directors’ decision-making. In
the case of sensitive or confidential information, directors consult
with the Chairman of the Board of Directors.
Advisory committees
As set out above, in order to carry out its tasks and responsibilities
effectively, the Board of Directors is supported by four (4) advisory
committees: the Remuneration Committee, the Audit Commit-
tee, the Nomination Committee and the Strategic Committee (see
below).
In principle, an advisory committee makes recommendations to
the Board of Directors in certain specific matters for which it has
the necessary expertise. The power of decision itself rests exclu-
sively with the Board of Directors. The role of an advisory commit-
tee is therefore limited to providing advice to the Board of Directors.
The Board of Directors monitors the effectiveness of the advisory
committees.
Members of the executive and senior management may be invited
to attend advisory committee meetings to provide relevant infor-
mation and insights into their areas of responsibility.
Each advisory committee reports to the Board of Directors after
each meeting.
Secretary to the Board of Directors
The Board of Directors appointed a Secretary General who advises
the Board of Directors on all matters of governance. The Secretary
General performs all administrative duties of the Board of Directors
(agenda, minutes, filing, etc.) and ensures the preparation of doc-
uments necessary to carry out the tasks of the Board of Directors.
The role of the Secretary General includes:
•
supporting the Board of Directors and its committees on all gov-
ernance matters;
•
preparing the Corporate Governance Charter and the Corporate
Governance Statement;
• ensuring a good information flow within the Board of Directors
and its committees and between the Executive Management
Board and the Board of Directors;
•
ensuring that the essence of the discussions and decisions at
board meetings are accurately captured in the minutes; and
•
facilitating induction and assisting with professional develop-
ment as required.
Directors have individual access to the Secretary General.
8 Corporate Governance Statement
Interactions with the executive
management board
The Chairman establishes a close relationship with the Chief Exe-
cutive Officer and provides him with support and advice, while
respecting the executive responsibility of the Chief Executive
Officer.
The Chairman ensures effective interaction between the Board of
Directors and the Executive Management Board.
There is a periodic, institutionalised interaction between the Board
of Directors and the Executive Management Board in the form of
a statutory reporting obligation on the part of the Executive Man-
agement Board to the Board of Directors.
The Chairman and Vice-Chairman of the Executive Management
Board may, together or individually, participate in the meetings of
the Board of Directors in an advisory capacity.
In addition, the directors remain available to give advice, also out
-
side of board meetings.
Interactions with the shareholders
The Chairman of the Board of Directors ensures effective commu-
nication with shareholders and ensures that directors develop and
maintain an understanding of the views of the shareholders and
other significant stakeholders.
The Elia website also contains a calendar of periodic information
and General Meetings (www.elia.be, under ‘investors’, ‘upcoming
events’).
Shareholders and interested parties can always address their ques-
tions directly to the Investor Relations department (see for contact
details: www.elia.be, under ‘investors’).
Evaluation
The Board of Directors’ evaluation procedure is conducted in
accordance with principle 9 of the 2020 Corporate Governance
Code. The evaluation of the directors is conducted by means of a
transparent and regular procedure that sees directors complete
an evaluation questionnaire, then possibly undergo an individual
interview with the Chairman of the Board of Directors and the
Chairman of the Nomination Committee. The results are discussed
by the Board of Directors and, as the case may be, appropriate
actions are taken in the areas which can be improved.
Auditors
The Ordinary General Meeting of Elia Group SA/NV held on 19 May
2020 reappointed Ernst & Young Réviseurs d’Entreprises SRL and
appointed BDO Réviseurs d’Entreprises SRL as auditors of the
company for a period of three years. Their term of office will end
immediately after the 2023 Ordinary General Meeting, relating to
the financial year ending 31 December 2022. Ernst & Young Révi-
seurs d’Entreprises SRL is represented for the exercise of this office
by Paul Eelen. BDO Réviseurs d’Entreprises SRL is represented for
the exercise of this office by Felix Fank.
Significant events in 2021
Elia Group SANV rejoined the BEL20
index
In March 2021, Elia Group SA/NV rejoined the BEL 20 index, the
benchmark index of Euronext Brussels. Elia Group SA/NV has been
listed on Euronext Brussels since 2005 and was previously included
in the BEL 20 between March 2012 and March 2017. Its return to
the index demonstrated the market’s confidence in its growth
and strategy. At the end of January, Elia Group SA/NV received the
BelMid Company of the Year 2020 award, in recognition of the fact
that it had achieved the greatest relative growth in terms of market
capitalisation in 2020 on Euronext Brussels.
EU Taxonomy case study published
As a driver of the energy transition, Elia Group SA/NV is committed
to ensuring that its activities are strongly aligned with the EU Tax-
onomy, a classification system for sustainable economic activities.
Elia Group SA/NV therefore published a white paper which outlines
the company’s eligibility and alignment with the EU Taxonomy. The
paper includes the methodology used for the assessment, high-
lights the group’s implementation of sustainable tools and prac-
tices, and reinforces its commitment to operating its businesses
in a sustainable way.
Amendments to the articles of
association following implementation
of the capital increase reserved for staff
members
The Extraordinary General Meeting of Elia Group SA/NV of 19 May
2020 approved the proposed capital increase reserved for mem-
bers of staff of the company and its Belgian subsidiaries. This
capital increase has been planned to take place in two stages,
in December 2020 and March 2021, for a maximum amount of
€6 million (maximum of €5,000,000 in 2020 and maximum of
€1,000,000 in 2021) subject to the issuing of new Class B shares,
with cancellation of the preferential subscription right of existing
shareholders in favour of staff members of the company and its
Belgian subsidiaries.
The issue price of the capital increase of 22 December 2020 was set
at €73.74 per share, i.e. at a price equal to the average of the closing
prices of the last thirty calendar days preceding 29 October 2020,
reduced by 16.66%. The total value of the December 2020 capital
increase (including share premium) was €4,996,401.18 and 67,757
Class B shares in Elia Group SA/NV were issued.
The issue price of the capital increase of 18 March 2021 was set at
€83,14 per share, i.e. at a price equal to the average of the clos-
ing prices of the last thirty calendar days preceding 28 January
2021, reduced by 16.66%. The total value of the March 2021 capital
increase (including share premium) was € 611,910.40 and 7,360
Class B shares in Elia Group SA/NV were issued.
Accordingly, articles 4.1 and 4.2 of the Articles of Association of Elia
Group SA/NV relating to the share capital and the number of shares
were amended on 18 March 2021. The latest version of Elia Group
Elia Group Financial Report 2021 9
SA/NV’s Articles of Association is available in full on the company’s
website (www.eliagroup.eu, under ‘About Elia Group’, ‘Corporate
Bodies’).
Other significant events
For the other significant events in 2021, see the pages 18-19-20 of
the Elia Group SA/NV Integrated Report.
Remuneration Committee
Composition
The Remuneration Committee is composed of at least three (3) and
maximum five (5) directors, of whom the majority are independent
and at least one third non-independent.
The Remuneration Committee is currently composed of five (5)
non-executive directors, of whom three (3) are independent.
Competences
In addition to its usual support role to the Board of Directors, the
Remuneration Committee is responsible, pursuant to article 7:100
of the Code of Companies and Associations and to article 16.1 of
the Articles of Association, for making recommendations to the
Board of Directors regarding remuneration policy and the indi-
vidual remuneration of members of the Executive Management
Board and of the Board of Directors.
In particular, the Remuneration Committee exercises the following
powers:
•
it formulates proposals to the Board of Directors on the remuner-
ation policy of the directors, the other executives referred to in
article 3:6, § 3, last paragraph of the Code of Companies and Asso-
ciations, and the members of the Executive Management Board
and, if applicable, on the resulting proposals to be submitted
by the Board of Directors to the shareholders’ general meeting;
•
it makes proposals to the Board of Directors on the individual
remuneration of the directors, the other executives referred to
in article 3:6, § 3, last paragraph of the Code of Companies and
Associations, and the members of the Executive Management
Board, including the variable remuneration (including, for the
other executives referred to in article 3:6, § 3, last paragraph of
the Code of Companies and Associations and the members of
the Executive Management Board, exceptional remuneration
in the form of bonuses) and long-term performance bonuses,
whether or not linked to shares, in the form of stock options
or other financial instruments, and severance payments, and, if
applicable, on the proposals arising therefrom which the Board
of Directors must submit to the shareholders’ general meeting;
•
it prepares the remuneration report which the Board of Directors
attaches to the Corporate Governance Statement (that is sub-
mitted for consultative vote to the Ordinary General Meeting);
•
it comments on the remuneration report at the Ordinary General
Meeting.
16 Pieter De Crem was co-opted as non-executive director by the Board of Directors of 9 February 2021, upon the proposal of Publi-T, to replace Kris Peeters, who tendered his voluntary
resignation as non-executive director of Elia Group SA/NV with effect from 1 January 2021. The Ordinary General Meeting held on 18 May 2021 confirmed the appointment of Pieter De
Crem as non-executive director.
Activity Report
The Remuneration Committee met six (6) times in 2021.
Attendance rate
Luc De Temmerman, Chairman 6/6
Pieter De Crem
16
5/5
Roberte Kesteman 6/6
Dominique Offergeld 6/6
Saskia Van Uffelen 6/6
Elia Group SA/NV evaluates its management staff on a yearly basis
in accordance with its performance management policy. This pol-
icy also applies to members of the Executive Management Board.
The Remuneration Committee approved the proposed collective
and individual targets for the Executive Management Board for
2021. Accordingly, the Remuneration Committee evaluates the
members of the Executive Management Board on the basis of a
series of collective and individual targets, of both a quantitative
and qualitative nature, also taking into account the feedback from
internal and external stakeholders. It should be noted that the cur-
rent remuneration policy concerning the variable portion of the
Executive Management Board’s remuneration takes into account
the implementation of multi-year tariffs. Consequently, the sal-
ary scheme for members of the Executive Management Board
includes, among other things, an annual variable remuneration
and long term incentive (LTI) spread out over the multi-year regula-
tion period. The annual variable remuneration, which is connected
with Elia Group SA/NV’s strategy, has two components: the attain-
ment of collective quantitative targets and the individual perfor-
mances, including progress on net profit, infrastructure projects,
safety and culture, security of (electricity) supply and sustainability
or efficiency.
In addition, the remuneration policy foresees in the allocation of
exceptional cash bonuses for specific projects in specific, non-re
-
curring cases.
During the financial year 2021, the Remuneration Committee pre
-
pared the remuneration report for consultative vote of the Ordinary
General Meeting of 2021 and reviewed Elia Group SA/NV’s remuner-
ation policy which was approved by the Ordinary General Meeting
of 2021. In addition, the Remuneration Committee reviewed the
compensation model of the Executive Management Board of Elia
Group SA/NV in view of ya new remuneration policy for the Exec-
utive Management Board that will be presented to the Ordinary
General Meeting for approval on 17 May 2022.
In view of provision 7.6 of the 2020 Corporate Governance Code,
the Remuneration Committee examined in 2020 whether a share-
based compensation should be granted to the members of the
Board of Directors as from 2021. The Board of Directors has followed
the recommendation of the Remuneration Committee and has
decided that a share based remuneration is not suitable within Elia
Group SA/NV as (i) Elia’s activities are by nature organised in such
a way as to present a low risk profile and are focused on the long
term and (ii) the shareholding structure is based on a reference
10 Corporate Governance Statement
shareholding that naturally pursues fixed long-term objectives and
sustainability goals. In addition (and in deviation from provision 7.9
of the 2020 Corporate Governance Code), the Board of Directors
decided not to impose a minimum threshold of shares to be held
by the members of the Executive Management Board. The Board of
Directors is indeed of the opinion that the way in which the remu-
neration of the members of the Executive Management Board is
structured, sufficiently contributes to the long-term interests and
the sustainability of the company. Moreover, the fixed remunera-
tion guarantees commitment in more difficult times whereas the
variable remuneration and the LTI guarantee ambition in achieving
the performance criteria that translate the company’s strategy (see
also the remuneration report for explanations as to provisions 7.6
and 7.9 of the 2020 Corporate Governance Code.)
Audit Committee
Composition
The Audit Committee is composed of at least three (3) and max-
imum five (5) directors, of whom two (2) shall be independent
directors.
The Audit Committee is currently composed of five non-executive
directors, three (3) of whom are independent.
The members of the Audit Committee have a collective expertise
in the field of the company’s activities.
Pursuant to article 3:6, §1, 9° of the Code of Companies and Associ
-
ations, this report must contain justification of the independence
and accounting and auditing competence of at least one member
of the Audit Committee. The internal rules of procedure of the Audit
Committee require, in this respect, that all members of the Audit
Committee have the sufficient experience and expertise required
to exercise the role of the Audit Committee, particularly in terms of
accounting, auditing and finance. The internal rules of procedure
of the Audit Committee provide that the professional experience
of at least two members of the Audit Committee must be detailed
in this report. The experience of Michel Allé, Chairman of the Audit
Committee, and of Dominique Offergeld, member of the Audit
Committee, are described in detail below.
Michel Allé (non-executive independent director of Elia Group SA/
NV, Elia Transmission Belgium SA/NV and Elia Asset SA/NV since
17 May 2016 and Chairman of the Audit Committee) has degrees
in physics civil engineering and economics (both from the Uni-
versité Libre de Bruxelles (ULB)). Alongside his academic career
as a professor of economics and finance (Solvay Brussels School,
ULB’s Ecole Polytechnique), he worked for many years as a Chief
Financial Officer. In 1979, he began his career in the service of the
Prime Minister, as an advisor in the Science Policy Department. He
was appointed director of the National Energy R&D Programme
in 1982 and then director in charge of Innovative Companies. In
1987 he joined the Cobepa group where he held many positions,
including Vice President of Mosane from 1992 to 1995. From 1995
to 2000 he was a member of the Cobepa group’s Executive Com-
mittee. He then served as Chief Financial Officer of BIAC between
2001 and 2005 and as Chief Financial Officer of SNCB (Belgian Rail-
ways) between 2005 and 2015. He also has extensive experience as a
director, including past and present roles at Telenet, Zetes, Eurvest
(Nicols), D’Ieteren, Epic Therapeutics SA, Neuvasq Biotechnologies
SA and Dreamjet Participations SA. He has chaired the Zetes Audit
Committee.
Dominique Offergeld (non-executive director of Elia Group SA/NV,
Elia Transmission Belgium SA/NV and Elia Asset SA/NV, appointed
upon the proposal of Publi-T) has a degree in economics and social
science (specialisation: public economics) from Université Notre
Dame de la Paix in Namur. She has taken various extra-academic
programmes, including the General Management Program at
Cedep (INSEAD) in Fontainebleau (France). She started her career
at Générale de Banque (now BNP Paribas Fortis) in the corporate
finance department in 1988, and was subsequently appointed as
specialist advisor to the vice-president and minister for economic
affairs of the Walloon Region in 1999. In 2001 she became advi-
sor to the Deputy Prime Minister and Minister for Foreign Affairs.
Between 2004 and 2005, she was deputy director of the office of
the minister for energy, subsequently becoming general advisor to
the SNCB holding company in 2005. She was previously director of
(among others) Publigas and government commissioner at Fluxys.
She was also Chairwoman of the Board of Directors and the Audit
Committee of SNCB. Between 2014 and 2016, she was director of
the Minister for Mobility’s Strategy Unit, with responsibility for Bel-
gocontrol and the SNCB. She has been CFO of ORES since August
2016, a position she also held between 2008 and 2014.
Competences
In addition to its usual support role to the Board of Directors, the
Audit Committee is, pursuant to article 7:99 of the Code of Compa-
nies and Associations and article 15.1 of the Articles of Association,
in particular responsible for:
•
examining the accounts and exercising control over the budget;
• monitoring the financial reporting process;
• monitoring the effectiveness of the company’s internal control
and risk management systems;
• monitoring the internal audit and its effectiveness;
•
monitoring the statutory audit of the annual accounts, including
follow-up on questions raised and recommendations made by
the statutory auditors and, as the case may be, by the auditor
responsible for monitoring the consolidated accounts;
•
reviewing and monitoring the independence of the statutory
auditors and, as the case may be, of the auditor responsible for
monitoring the consolidated accounts, in particular regarding
the provision of additional services to the company;
•
formulating a proposal to the Board of Directors for the (re)
appointment of the statutory auditors, as well as making recom-
mendations to the Board of Directors regarding the conditions
of their appointment;
•
as the case may be, investigating the issues giving rise to the
resignation of the statutory auditors, and making recommenda-
tions regarding all appropriate actions in this respect;
• monitoring the nature and extent of the non-audit services pro
-
vided by the statutory auditors;
• reviewing the effectiveness of the external audit process.
Elia Group Financial Report 2021 11
The Audit Committee makes recommendations on the selection,
(re)appointment and resignation of the Head of Internal Audit.
At the beginning of each year, the Audit Committee asks the
head of Internal Audit for his or her «Annual Work Plan». The Audit
Committee ensures that an appropriate balance is struck between
financial and operational audit work. This «Annual Work Plan» is
communicated by the Head of Internal Audit to the Executive Man-
agement Board at the same time.
The Audit Committee evaluates at least once (1) a year the effec
-
tiveness of the internal control and risk management systems with
the Head of Internal Audit, the external auditors and any experts
whose intervention the Committee considers necessary.
The purpose of this assessment is to ensure that the main risks
(including risks related to fraud and compliance with applica-
ble laws and regulations) are properly identified, managed and
reported.
The Audit Committee reviews the comments on internal control
and risk management included in the Corporate Governance State-
ment of the company’s annual report.
In addition, the Audit Committee reviews the specific arrange-
ments in place for the company’s employees to raise concerns, in
confidence, about possible irregularities in financial reporting or
other matters.
As from 2022, the Audit Committee will also contribute to the
preparation of Elia Group SA/NV’s sustainability report and will
monitor the implementation of the group’s sustainability policy.
The Audit Committee may investigate any matter that falls within
its remit. For this purpose, it is given the resources it needs to per
-
form this task, has access to all information, with the exception of
confidential commercial data concerning grid users, and can call
on internal and external experts for advice.
Activity Report
The Audit Committee met five (5) times in 2021.
Attendance rate
Michel Allé, Chairman 5/5
Frank Donck 5/5
Roberte Kesteman 5/5
Dominique Offergeld 5/5
Rudy Provoost 4/5
In 2021, the Audit Committee examined the 2020 annual accounts,
under both Belgian GAAP and IFRS as well as the half-yearly results
as at 30 June 2021 and the 2021 quarterly results, in accordance with
Belgian GAAP and IFRS rules. The Audit Committee also reviewed
the yearly budget process and the group Business Plan for 2022-
2026.
In addition, the Audit Committee followed up the risk manage-
ment activity and took note of the Internal Audits carried out and
the recommendations made. The Audit Committee follows an
action plan for each Internal Audit carried out, in order to improve
the efficiency, traceability and awareness of the areas audited and
thereby reduce the associated risks and provide assurance that
the control environment and risk management are appropriate.
The Audit Committee followed the various action plans from a
number of perspectives (timetable, results, priorities) on the basis,
among other things, of an activity report from the Internal Audit
department. The Audit Committee noted the strategic risks and
the ad-hoc risk analyses based on the environment in which the
group operates. The Audit Committee in 2021 also reviewed the Bel-
gian GAAP valuation rules of the company, examined the proposal
to enter into a liquidity agreement and followed the evolution of
the legislation relating to sustainability.
Furthermore, the Audit Committee regularly examined the com
-
pliance of the non-audit services provided by the auditors with
legal requirements.
12 Corporate Governance Statement
Nomination Committee
Composition
The composition of the Nomination Committee respects provision
4.19 of the 2020 Corporate Governance Code but deviates from the
Articles of Association of the company. Accordingly, the Nomina-
tion Committee is currently composed of five (5) directors, of whom
a majority are independent.
Competences
In addition to its usual support role to the Board of Directors, the
Nomination Committee is responsible for providing advice and
support to the Board of Directors regarding the appointment of
the directors, the Chief Executive Officer and the members of the
Executive Management Board.
The Nomination Committee plans the orderly renewal of the direc-
tors. The Nomination Committee leads the process for the reap-
pointment of retiring directors.
The Nomination Committee ensures that sufficient and regular
attention is paid to the renewal of executive managers. The Nomi-
nation Committee also ensures that adequate talent development
programs and diversity programs are in place.
Activity Report
The Nomination Committee met nine (9) times in 2021.
Attendance rate
Luc Hujoel, Chairman 9/9
Luc De Temmerman 9/9
Pieter De Crem
17
7/7
Frank Donck 9/9
Jane Murphy 9/9
In line with its competences under the Articles of Association, the
Nomination Committee dealt in 2021 in particular with the follow-
ing matters: compliance with the requirements in the area of full
ownership unbundling concerning the non-executive directors
(article 13.1 of the Articles of Association of Elia Group SA/NV), pro-
posal for the (reappointment of non-executive directors, follow up
of future Board mandates to be renewed in 2022, review of the
Corporate Governance Charter, report of the Compliance Officer
and preparation of the 2021 Corporate Governance Statement.
17 Pieter De Crem was co-opted as non-executive director by the Board of Directors of 9 February 2021, upon the proposal of Publi-T, to replace Kris Peeters, who tendered his voluntary
resignation as non-executive director of Elia Group SA/NV with effect from 1 January 2021. The Ordinary General Meeting held on 18 May 2021 confirmed the appointment of Pieter De
Crem as non-executive director.
Strategic Committee
Composition
The Strategic Committee is composed of not more than five (5)
directors, two (2) of whom are independent.
The Strategic Committee is currently composed of five (5) directors,
two (2) of whom are independent.
Two (2) directors are invited on a permanent basis to the meetings
of the Strategic Committee.
Up to 9 February 2021, the Strategic Committee was composed of
Geert Versnick (Chairman), Michel Allé, Bernard Gustin, Luc Hujoel
and Rudy Provoost. In addition, Claude Grégoire and Dominique
Offergeld were invited to attend all meetings of the Strategic Com-
mittee as “standing invitees”.
The Board of Directors of 9 February 2021 decided to appoint
Claude Grégoire as member of the Strategic Committee, while
Luc Hujoel became a standing invitee of the Strategic Committee.
Therefore, since 9 February 2021 (and up to 31 December 2021), the
Strategic Committee was composed of Geert Versnick (Chairman),
Michel Allé, Claude Grégoire, Bernard Gustin and Rudy Provoost.
In addition, Dominique Offergeld and Luc Hujoel were invited
to attend all meetings of the Strategic Committee as “standing
invitees”.
Since 1 January 2022, further to the voluntary resignation of Luc
Hujoel and the appointment of Geert Versnick as Chairman of the
Nomination Committee, Dominique Offergeld chairs the Strategic
Committee, while Geert Versnick is a standing invitee.
Competences
The Strategic Committee has an advisory role and is responsible for
providing advice and recommendations to the Board of Directors
on the matters entrusted to it. The Strategic Committee has no
decision-making powers and has therefore no authority to decide
on the strategy of the Elia Group SA/NV.
The Strategic Committee is responsible for providing advice and
recommendations to the Board of Directors concerning the com
-
pany’s business development activities and international invest-
ment policy in the broadest sense of the term, including the
method of financing.
As from 2022, the Strategic Committee will also advice the Board
on the sustainability policy of Elia Group SA/NV as well as on the
reporting in view of the new European taxonomy legislation.
The Strategic Committee examines the issues without prejudice to
the role of the other advisory committees set up within the Board
of Directors.
Elia Group Financial Report 2021 13
Activity Report
The Strategic Committee met nine (9) times in 2021.
Attendance rate
Geert Versnick, Chairman 9/9
Michel Allé 8/9
Claude Grégoire 8/9
Bernard Gustin 9/9
Rudy Provoost 8/9
Luc Hujoel 9/9
Dominique Offergeld 9/9
14 Corporate Governance Statement
Executive Management Board
Current composition of the Executive Management Board
2
3
1
4
5
1
Chris Peeters
Chief Executive Officer and
TSO Head Elia
2
Catherine Vandenborre
Chief Financial Officer
3
Stefan Kapferer
TSO Head 50 Hertz
4
Peter Michiels
Chief Human Resources,
Internal Communication
Officer,
Chief Alignment Officer
5
Michael Freiherr Roeder
von Diersburg
Chief Digital Officer
As mentioned above, Elia Group SA/NV has a one-tier structure
tier (“système moniste/monistich system”) as governance model.
In accordance with the possibility provided for by article 7:121 of the
Code of Companies and Associations, and pursuant to its Articles of
Association, the Board of Directors delegated the day-to-day man-
agement to an Executive Management Board (Collège de gestion
journalière/College van dagelijks bestuur).
Elia Group Financial Report 2021 15
Competences of the Executive
Management Board
In accordance with Article 17.3 of the Articles of Association, the
Executive Management Board is responsible for, within the lim-
its of the rules and principles of general policy and the decisions
adopted by the Board of Directors of the company, all acts and
decisions that do not exceed the needs of the daily management
of the company, as well as those acts and decisions that do not jus-
tify the intervention of the Board of Directors for reasons of minor
importance or urgency, including:
1°
the day-to-day management of the company, including all com-
mercial, technical, financial, regulatory and personnel matters
related to this day-to-day management of the company, includ-
ing, inter alia, all commitments (i) when the amount is less than
or equal to 15 million euros (EUR 15,000,000) or (ii) when the
amount as well as its main characteristics are explicitly provided
for in the annual budget;
2°
the regular reporting to the Board of Directors on its operational
activities in the company in execution of the powers granted in
accordance with article 17.3 of the Articles of Association, with
due observance of the legal restrictions regarding access to
commercial and other confidential data relating to net users
and the processing thereof and the preparation of the decisions
of the Board of Directors, including in particular: (a) timely and
accurate preparation of the annual accounts and other financial
information of the company in accordance with the applicable
accounting standards and company policy, and the appropriate
communication thereof; (b) preparation of the adequate pub-
lication of key non-financial information about the company;
(c) preparation of the financial information in the half-yearly
statements that will be submitted to the Audit Committee for
advice to the Board of Directors as part of its general task of
monitoring the financial reporting process; (d) implementation
of internal controls and risk management based on the frame-
work approved by the Board of Directors, without prejudice to
the follow-up of the implementation within this framework by
the Board of Directors and the investigation conducted by the
Audit Committee for this purpose; (e) submitting to the Board
of Directors the financial situation of the company; (f) making
available the information necessary for the Board of Directors to
carry out its duties, in particular by preparing proposals on the
policy issues set out in article 17.2 of the Articles of Association
(see the powers of the Board of Directors above);
3°
the regular reporting to the Board of Directors on its policy in
the key subsidiaries designated by the Board of Directors and
the annual reporting to the Board of Directors on its policy in the
other subsidiaries and on the policy in the companies in which
the company directly or indirectly holds a participating interest;
4°
all decisions relating to proceedings (both before the Supreme
Administrative Court and other administrative courts, as well
as before the ordinary courts of law and arbitration tribunals)
and in particular for taking decisions in the name and for the
account of the company to file, amend or withdraw an appeal
and to engage one or more lawyers to represent the company;
5°
all other powers delegated by the Board of Directors.
The Executive Management Board has all powers necessary,
including the power of representation, and sufficient margin for
manoeuvre to exercise the powers that have been delegated to
it and to propose and implement a corporate strategy, without
prejudice to the powers of the Board of Directors.
Meetings and decision-making
The Executive Management Board generally meets at least twice (2)
a month. Executive Management Board Members who are unable
to attend usually grant a proxy to another Executive Management
Board Member. A written proxy, conveyed by any means (of which
the authenticity of its source can be reasonably determined), can
be given to another member of the Executive Management Board,
in accordance with the internal rules of procedure of the Executive
Management Board. However, no member may hold more than
two proxies. In 2021, the Executive Board met on 21 occasions.
Each quarter, the Executive Management Board reports to the
Board of Directors on the company’s financial situation (in particu-
lar on the balance between the budget and the results stated) and
reports at each meeting of the Board of Directors on all day-to-day
management responsibilities, in particular the management by
the group of the transmission system activities in the main Belgian
and German affiliates of the group (Elia Transmission Belgium SA/
NV / Elia Asset SA/NV and 50 Hertz Transmission GmbH). As part
of its reporting in 2021, the Executive Management Board kept the
Board of Directors informed of the company’s/the group’s financial
situation, the follow-up of its investment programme (including
the monitoring and development of major investment projects),
the follow-up on the group’s infrastructure (including as to main-
tenance and operations), the evolutions in the energy policy field
(including the main decisions taken by regulators and administra-
tions), human resources matters, safety and security issues, M&A/
business development matters and the evolution of the share price.
The Executive Management Board also follows-up most important
group risks and their mitigation measures as well as the recom-
mendations of the Internal Audit.
Changes in the composition of the
Executive Management Board
There was no change in the composition of the Executive Manage-
ment Board in 2021.
The composition of the Executive Management Board is based on
gender diversity and diversity in general, as well as on the comple
-
mentarity of skills, experience and knowledge. When searching
for and appointing new members of the Executive Management
Board, special attention is paid to diversity parameters in terms of
age, gender and complementarity.
Diversity within the Executive Management Board
Number of Executive Board Members
as at 31 December 2020
Men
Aged 35 < 54 1
Aged ≥ 55 3
Women
Aged 35 < 54 1
Aged ≥ 55 0
16 Corporate Governance Statement
Code of Conduct, Code of Ethics and
Corporate Governance Charter
CODE OF CONDUCT
Following the entry into force of European Regulation No. 596/2014
on market abuse (‘Market Abuse Regulation’), Elia Group SA/NV
amended its Code of Conduct that aims to prevent members of
key personnel and persons discharging managerial responsibilities
in the group from potentially breaking any laws on the use of
privileged information and market manipulation. The Code of
Conduct lays down a series of regulations and communication
obligations for transactions by those individuals in relation to their
Elia Group SA/NV securities, in accordance with the provisions of
the Market Abuse Regulation and the Act of 2 August 2002 on
monitoring of the financial sector and other financial services. This
Code of Conduct is available on the website www.elia.be (under
‘Company, ‘Corporate Governance’, ‘Document library’).
CODE OF ETHICS
Elia Group SA/NV’s Code of Ethics defines what Elia Group SA/NV
regards as correct ethical conduct and sets out the policy and a
number of principles on the avoidance of conflicts of interests. Act-
ing honestly and independently with respect to all stakeholders is
a key guiding principle for all of our employees.
The Board of Directors and the Executive Management Board reg-
ularly communicate about these principles in order to clarify the
mutual rights and obligations of the company and its employees.
CORPORATE GOVERNANCE CHARTER AND INTERNAL
RULES OF PROCEDURE OF THE BOARD OF DIRECTORS,
THE BOARD’S ADVISORY COMMITTEES AND THE
EXECUTIVE MANAGEMENT BOARD
The Corporate Governance Charter and the internal rules
of procedure of the Board of Directors, the Board’s advisory
committees and the Executive Management Board can be
found on the website www.elia.be (under ‘Company’, ‘Corporate
Governance’, ‘Document library’). The responsibilities of the Board
of Directors and of the Executive Management Board are described
in detail
in the Articles of Association of the company and are therefore not
reiterated in the internal rules of the Board of Directors and of the
Executive Management Board. In March 2021 Elia Group SA/NV has
finalised a new version of its Corporate Governance Charter in order
to comply with the group’s new structure and governance, the
changes introduced by the Code of Companies and Associations
and the new 2020 Corporate Governance Code.
Disclosure obligations
TRANSPARENCY RULES  NOTIFICATIONS
Disclosure based on the act on major shareholdings of
2 may 2007
Elia Group SA/NV received no notifications in 2021 within the mean-
ing of the Act of 2 May 2007 on disclosure of major shareholdings
in issuers whose shares are admitted to trading on a regulated
market and laying down miscellaneous provisions, and within the
meaning of the Royal Decree of 14 February 2008 on disclosure of
major shareholdings.
In accordance with article 15 of the Act of 2 May 2007, Elia Group
SA/NV published on 18 March 2021, as a result of Elia Group SA/
NV’s capital increase reserved for its staff and for the staff of its
Belgian subsidiaries and the issuance of 7,360 new shares, that
it has issued a total of 68,728,055 shares. See the press release
published on www.eliagroup.eu (under ‘News’, ‘Press releases’,
‘Regulated information’).
Disclosure based on the act on takeover bids of 1 april
2007
On 23 November 2007 Publi-T communicated to the company that
it held on 1 September 2007 more than 30% of the securities with
voting rights in the company. No update of this notification was
notified as of 1 September 2021.
The shareholder structure as at 31 December 2021, based on the
transparency notifications received by Elia Group SA/NV up to that
date, is the following:
Shareholder
Number of shares
(= Denominator)
Type of shares*** % of shares % of voting rights
Publi-T
30,806,445* Class B & C*
44.82%
44.82%
Publipart
2,280,231 Class A & B **
3.32%
3.32%
Belfius Insurance
714,357 Class B
1.04%
1.04%
Katoen Natie Group 4,228,344
Class B
6.15%
6.15%
Interfin 2,598,143
Class B
3.78%
3.78%
Other free float 28,100,535
Class B
40.89%
40.89%
TOTAL 68,728,055 100% 100%
*Publi-T holds a total of 30,806,445 shares, of which 30,722,070 are class C shares (and 84,375 are class B shares)
**Publipart holds a total of 2,280,231 shares, of which 1,717,600 are class A shares (and 562,631 are class B shares)
***The Company’s share capital amounts to € 1,714,205,819.64, represented by 68,728,055 ordinary shares. The shares are divided into three classes: 1,717,600 class A shares; 36,288,385
class B shares; and 30,722,070 class C shares. All shares have identical voting, dividend and liquidation rights, but class A and class C shares carry certain special rights regarding the
nomination of candidates for appointment to the Board of Directors and voting on shareholders’ resolutions.
According to the transparency notification of 30 October 2014, Publi-T and FPIM (Belfius Insurance) are acting in concert within the meaning of article 3 §1, 13° b) of the Belgian law of May 2,
2007.
Elia Group Financial Report 2021 17
ITEMS TO BE DISCLOSED PURSUANT TO ARTICLE 34 OF
THE ROYAL DECREE OF 14 NOVEMBER 2007
In accordance with article 3:6, §2, 7° of the Code of Companies
and Associations, Elia Group SA/NV discloses hereafter the items
referred to under article 34 of the Royal Decree of 14 November
2007 on the obligations of issuers of financial instruments admit-
ted to trading on a regulated market.
Capital structure
As at 31 December 2021, the capital of the company amounted to €
1,714,205,819.64, represented by a total of 68,728,055 shares, among
which 1,717,600 Class A Shares (2,50% of the total share capital and
voting rights), 36,288,385 Class B Shares (52,80% of the total share
capital and voting rights) and 30,722,070 Class C Shares (44,70%
of the total share capital and voting rights). All shares have no par
value and are fully paid-up.
Total capital
€ 1,714,205,819.64
Total number of securities conferring voting rights (by class) % of the total share capital
class A 1,7 17,600 2,50%
class B 36,288,385 52,80%
class C 30,722,070 44,70%
TOTAL 68,728,055
Total number of voting rights (by class) % of the total voting rights
class A 1,7 17,600 2,50%
class B 36,288,385 52,80%
class C 30,722,070 44,70%
TOTAL 68,728,055
Class A and Class C shares are respectively held by Publipart SA/NV
and Publi-T SC/CV. Pursuant to article 4.3 of the Articles of Asso-
ciation, all shares have the same rights irrespective of the class to
which they belong, unless otherwise provided in the Articles of
Association. In this context, the Articles of Association provide that
certain specific rights are attached to Class A and Class C shares
with respect to (i) the appointment of members of the Board of
Directors (article 13.2) and (ii) the approval of decisions of the Gen-
eral Meeting (articles 28.2 and 33.1).
Restriction on the transfer of shares
Articles 4.3 and 4.4 of the Articles of Association provide restric-
tions as to shareholding by electricity and/or natural gas companies
within the meaning of the Belgian Act of 29 April 1999 on the organ-
isation of the electricity market and the Belgian Act of 12 April 1965
on the transport of gaseous and other products through conduits
or if otherwise performing any of the functions of production or
supply of electricity and/or natural gas.
Besides, Class A and C shares are subject to a preemptive right to
the benefit, respectively of Class C and A shareholders, in accord
-
ance with article 9 of the company’s Articles of Association.
Holders of securities with special control rights
See above for Class A and C shareholders rights.
Control mechanism of any employee share scheme
where the control rights are not exercised directly by
the employees
There is no employee share scheme with such a mechanism.
Restrictions on the exercise of voting rights
Article 4.3 of the Articles of Association provides that voting rights
attached to shares held directly or indirectly by electricity and/or
natural gas companies within the meaning of the Belgian Act of
29 April 1999 on the organisation of the electricity market and the
Belgian Act of 12 April 1965 on the transport of gaseous and other
products through conduits, respectively, are suspended. In addi-
tion, article 11.2 of the Articles of Association stipulates that the
company may suspend exercise of the rights attaching to securities
that are subject to joint ownership, usufruct or pledge until such
time as one person has been designated as the holder of these
rights vis-a-vis the company.
Shareholders’ agreement
The company is not aware of provisions of a shareholders’ agree-
ment that would restrict the transfer of shares or the exercise of
voting rights otherwise than as stipulated in the Articles of Asso-
ciation.
Appointment and replacement of directors
The appointment and replacement of directors are governed by
articles 12 and 13 of the Articles of Association. Their main provisions
are described above.
Amendment to the articles of association
The rules governing the amendment to the company’s Articles of
Association are provided by the Code of Companies and Associa-
tions as well as by article 29 of the Articles of Association. The Arti-
cles of Association may be amended by an Extraordinary General
Meeting convened for that purpose. The object of the proposed
amendments must be stated on the agenda. The Extraordinary
General Meeting shall only validly adopt such resolution if at least
18 Corporate Governance Statement
50% of the share capital is present or represented and with a major-
ity of 75% of the votes cast, whereby abstentions are not taken
into account either in the numerator or in the denominator. If the
attendance quorum is not met at a first General Meeting, a sec-
ond General Meeting may be convened and will decide without
any attendance quorum requirement. If the amendments to the
Articles of Association relate to the rights attached to a or several
class(es) of shares, the quorum and majority requirements above-
mentioned apply within each category of shares. For certain spe-
cific matters (e.g. amendment of the purpose of the company),
higher voting majorities may apply. Pursuant to article 28.2 of the
Articles of Association, as long as the Class A and/or Class C shares
represent more than twenty-five per cent (25%) of the total num-
ber of shares, no decision can be adopted by the General Meeting,
without prejudice to the majority provided for in the Articles of
Association and the Code of Companies and Associations, unless
such decision is approved by a majority of the Class A and/or Class C
shares that are present or represented. If, in the case of an increase
in the capital of the company, the Class A and/or Class C shares are
diluted and no longer represent more than twenty-five per cent
(25%) of the total number of shares, the Class A and/or the Class
C shares will retain the aforementioned right as long as the Class
C shares represent more than fifteen per cent (15%) of the total
number of shares.
Powers of the board of directors, in particular to issue
and buy back shares
With regards to the powers of the Board of Directors in general,
reference is made to the section ‘Competences of the Board of
Directors’ (see above).
The Special General Meeting of Shareholders of 18 May 2021 con
-
ferred the power to the Board of Directors to acquire the compa-
ny’s own shares, without the total number of own shares held by
the company pursuant to this power exceeding 10% of the total
number of shares, for a compensation that cannot be lower than
10% below the lowest closing price in the thirty days preceding the
transaction and not higher than 10% above the highest closing
price in the thirty days preceding the transaction.
This power is conferred for a period of five years as from 4 June
2021. It applies to the Board of Directors of the company and, to
the extent necessary, to any third party acting on behalf of the
company. It also applies to the direct and, to the extent necessary,
indirect subsidiaries of the company.
This power does not affect the possibilities of the Board of Directors,
in accordance with the applicable legal provisions, to acquire own
shares if no power by virtue of the Articles of Association or power
by the General Meeting is required for this purpose.
Within the above framework, Elia Group SA/NV has entered into a
liquidity agreement with Exane BNP Paribas providing the latter
with the mandate to purchase and sale Elia Group SA/NV shares
on the regulated market of Euronext Brussels. Exane BNP Paribas
is acting on behalf and for the account of Elia Group SA/NV and
within the framework of a discretionary mandate as authorized by
the Extraordinary General Meeting of 18 May 2021. The purpose of
the liquidity contract is to support the liquidity of the Elia Group
SA/NV shares listed on Euronext Brussels.
Significant agreements that may be impacted by a
change of control of the company
There are no such agreements.
Agreements between Elia group sa/nv and its direc-
tors or employees providing for compensation if the
directors resign or are made redundant without valid
reason or if the employment of the employees ceases
because of a takeover bid
No specific dismissal arrangements have been agreed outside the
legal framework.
Elia Group Financial Report 2021 19
Remuneration of the members of
the Board of Directors and of the
Executive Management Board
Introduction
This remuneration report relates to the remuneration of the mem
-
bers of the Board of Directors and of the Executive Management
Board of Elia Group SA/NV during the financial year 2021. This
remuneration report is based on the remuneration policy applica-
ble in the company since 2021.
This remuneration policy was drafted and approved by the Board
of Directors of 25 March 2021 based on a reasoned advice of the
Remuneration Committee of Elia Group SA/NV on 24 March 2021,
in order to submit it for approval to the Ordinary General Meeting of
18 May 2021. The Ordinary General Meeting of 18 May 2021 approved
the remuneration policy.
The remuneration policy can be consulted using the following
hyperlink:
https://www.elia.be/en/investor-relations/shareholders-meet-
ings-overview/2021-may-shareholder-meeting-details
This remuneration policy applies within Elia Group SA/NV as from
1
st
January 2021.
A new remuneration policy will be submitted to the Ordinary Gen
-
eral Meeting of Elia Group SA/NV of 17 May 2022, in accordance with
Article 7:89/1 of the Belgian Code of Companies and Associations.
Subject to approval by the said General Meeting, it will be applica-
ble as from 1
st
January 2022.
1. Total remuneration of the members of the Board of Directors and of the Executive
Management Board
1.1. TOTAL REMUNERATION OF THE MEMBERS OF THE
BOARD OF DIRECTORS
The Board of Directors of Elia Group SA/NV is composed of 14 non
executive board members. The present report gives an overview
of their remuneration for all their mandates within the Elia group.
Until 18 May 2021, all members of the Board of Directors of Elia
Group SA/NV were also member of the Board of Directors of Elia
Transmission Belgium SA/NV and Elia Asset SA/NV. However,
independent director Frank Donck voluntarily resigned from the
Boards of Directors of Elia Transmission Belgium SA/NV and Elia
Asset SA/NV as of 18 May 2021, so that he is now a member of the
Elia Group SA/NV Board of Directors only.
1.1.1. Fixed remuneration
The remuneration of the directors consists of a base salary of
€12,500 for Elia Group SA/NV, €6,250 for Elia Transmission Belgium
SA/NV and €6,250 for Elia Asset SA/NV and an attendance fee per
meeting of the Board of Directors of €750 for Elia Group SA/NV,
€375 for Elia Transmission Belgium SA/NV and €375 for Elia Asset
SA/NV, starting with the first Board meeting attended by the direc-
tor. The base salary and the attendance fee are increased by 100%
for the Chairman of the Board of Directors of both Elia Group SA/
NV and Elia Transmission Belgium SA/NV and Elia Asset SA/NV.
The base salary for each member of the Audit Committee, the
Remuneration Committee, the Nomination Committee (Elia Group
SA/NV) respectively the Corporate Governance Committee (Elia
Transmission Belgium SA/NV / Elia Asset SA/NV) and the Strategic
Committee (which only exists in Elia Group SA/NV) is set at €3,000
per annum per committee of Elia Group SA/NV and at €1,500 per
annum per committee of Elia Transmission Belgium SA/NV and of
Elia Asset SA/NV. The attendance fee, starting with the first meet-
ing attended by the member, for each member of a committee is
set at €750 per committee meeting of Elia Group SA/NV and at
€375 per committee meeting of Elia Transmission Belgium SA/NV
and of Elia Asset SA/NV. The base salary and the attendance fee are
increased by 30% for each committee Chairman.
The base salaries and attendance fees are indexed each year in
January according to the consumer price index for the month of
January 2016.
The base salaries and attendance fees cover all expenses, with the
exception of (a) expenses incurred by directors domiciled outside
Belgium during the exercise of their mandate (such as transport
and subsistence expenses), insofar these directors are domiciled
outside Belgium at the time of their appointment or, if the direc
-
tors in question change their domicile after their appointment,
after approval of the Remuneration Committee, (b) of all expenses
incurred by directors in the event a meeting of the Board of Direc-
tors is organized outside Belgium (e.g. in Germany) and (c) of all
expenses incurred by directors during their travels abroad in the
framework of their mandate, at the request of the Chairman or the
Vice-Chairmen of the Board of Directors.
All costs and fees are charged to the company’s operating expenses.
In 2021, one meeting of the Board of Directors has been organized
outside Belgium, in particular in Germany, for which the Company
has paid the expenses.
All remunerations were granted in proportion to the duration of
the directorship.
At the end of each first, second and third quarter an advance on
the annual fees is paid to the directors. A final settlement is made
in December of the current year.
The table below reflects the total fixed remuneration (including
indexation) paid out to each director for all mandates within the
Elia group during the financial year 2021 in execution of the rules
set out above.
20 Corporate Governance Statement
Directors
Fixed remuneration
Total fixed remuneration
Base salary Attendance fees
Michel ALLÉ € 38,753.50 € 31,668.00 € 70,421.50
Pieter DE CREM
18
€ 40,053.00 € 32,480.00 € 72,533.00
Luc DE TEMMERMAN
19
€ 42,001.50 € 42,711.20 € 84,712.70
Frank DONCK
20
€ 27,635.64 € 27,608.00 € 55,243.64
Cécile FLANDRE
21
€ 27,063.00 € 12,992.00 € 40,055.00
Claude GRÉGOIRE € 30,310.00 € 21,112.00 € 51,422.00
Bernard GUSTIN
22
€ 57,373.00 € 36,540.00 € 93,913.00
Luc HUJOEL
23
€ 35,506.50 € 34,672.40 € 70,178.90
Roberte KESTEMAN
24
€ 42,066.76 € 36,540.00 € 78,606.76
Jane MURPHY € 33,558.00 € 30,044.00 € 63,602.00
Dominique OFFERGELD € 40,053.00 € 30,856.00 € 70,909.00
Rudy PROVOOST € 36,805.00 € 27,608.00 € 64,413.00
Saskia VAN UFFELEN
25
€ 33,558.00 € 24,360.00 € 57,918.00
Geert VERSNICK
26
€ 31,284.10 € 18,676.00 € 49,960.10
Total € 516,021.00 € 407,867.60 € 923,888.60
18 Director as from 9 February 2021. Peter De Crem’s fees are paid to the company Ed Merc BV.
19 Luc De Temmerman’s fees are paid to the company InDeBom Strategies Comm.V.
20 Frank Donck’s fees are paid to the company Ibervest NV.
21 Cécile Flandre’s fees are paid to the company Publi-T SC
22 Bernard Gustin’s fees are paid to the company Bernard Gustin SRL.
23 Director until 31 December 2021 at midnight. Luc Hujoel’s fees are paid to the company Interfin SCRL.
24 Roberte Kesteman’s fees are paid to the company Symvouli BV.
25 Saskia Van Uffelen’s fees are paid to the company Quadrature Cabinet Conseil SRL.
26 Geert Versnick’s fees are paid to the company Fleming Corporation BV.
Elia Group Financial Report 2021 21
The tables below give a detailed overview of the fixed remuneration (including indexation) paid out to each director for the mandates
within Elia Group SA/NV, Elia Transmission Belgium SA/NV and Elia Asset SA/NV respectively.
Elia Group
SA/NV
Directors
FIXED REMUNERATION OF THE DIRECTORS IN ELIA GROUP SANV
Board of Directors Audit Committee
Nomination
Committee
Remuneration
Committee
Strategic Committee
Base
salary
Attend-
ance fees
Base
salary
Attend-
ance fees
Base
salary
Attend-
ance fees
Base
salary
Attend-
ance fees
Base
salary
Attend-
ance fees
Michel ALLÉ
Chairman of the
Audit Committee
€ 13,531.00 € 7,308.00 € 4,221.10 € 5,278.00 - - - - € 3,247.00 € 6,496.00
Pieter
DE CREM
27
€ 13,531.00 € 6,496.00 - - € 3,247.00 € 5,684.00 € 3,247.00 € 4,060.00 - -
Luc
DE TEMMERMAN
Chairman of the
Remuneration
Committee
€ 13,531.00 € 7,308.00 - - € 3,247.00 € 7,308.00 € 4,221.10 € 6,333.60 - -
Frank
DONCK
€ 13,531.00 € 7,308.00 € 3,247.00 € 4,060.00 € 3,247.00 € 7,308.00 - - - -
Cécile
FLANDRE
€ 13,531.00 € 6,496.00 - - - - - - - -
Claude
GRÉGOIRE
Vice-Chairman
of the Board of
Directors
€ 13,531.00 € 7,308.00 - - - - - - € 3,247.00 € 6,496.00
Bernard GUSTIN
Chairman of
the Board of
Directors
€ 27,062.00 € 14,616.00 - - - - - - € 3,247.00 € 7,308.00
Luc HUJOEL
28
Chairman of
the Nomination
Committee
€ 13,531.00 € 7,308.00 - - € 4,221.10 € 9,500.40 - - - -
Roberte
KESTEMAN
€ 13,531.00 € 7,308.00 € 3,247.00 € 4,060.00 - - € 3,247.00 € 4,872.00 - -
Jane
MURPHY
€ 13,531.00 € 7,308.00 - - € 3,247.00 € 7,308.00 - - - -
Dominique
OFFERGELD
€ 13,531.00 € 6,496.00 € 3,247.00 € 4,060.00 - - € 3,247.00 € 4,872.00 - -
Rudy
PROVOOST
€ 13,531.00 € 7,308.00 € 3,247.00 € 3,248.00 - - - - € 3,247.00 € 6,496.00
Saskia
VAN UFFELEN
€ 13,531.00 € 7,308.00 - - - - € 3,247.00 € 4,872.00 - -
Geert VERSNICK
Vice-Chairman
of the Board of
Directors and
Chairman of
the Strategic
Committee
€ 13,531.00 € 5,684.00 - - - - - - € 4,221.10 € 7,308.00
27 Director as from 9 February 2021
28 Director until 31 December 2021 at midnight. Luc Hujoel’s fees are paid to the company Interfin SCRL.
22 Corporate Governance Statement
Elia Transmission
Belgium SA/NV
Directors
FIXED REMUNERATION OF THE DIRECTORS OF ELIA TRANSMISSION BELGIUM SANV
WHO ARE ALSO DIRECTORS OF ELIA GROUP SANV
29
Board of Directors Audit Committee
Corporate Governance
Committee
Remuneration
Committee
Base
salary
Attendance
fees
Base
salary
Attendance
fees
Base
salary
Attendance
fees
Base
salary
Attendance
fees
Michel ALLÉ
Chairman of the
Audit Committee
€ 6,766.00 € 3,654.00 € 2,111.20 € 2,639.00 - - - -
Pieter
DE CREM
30
€ 6,766.00 € 3,248.00 - - € 1,624.00 € 2,842.00 € 1,624.00 € 2,030.00
Luc
DE TEMMERMAN
Chairman of the
Remuneration
Committee
€ 6,766.00 € 3,654.00 - - € 1,624.00 € 4,060.00 € 2,111.20 € 3,166.80
Frank
DONCK
31
€ 2,571.08 € 1,218.00 € 617.12 € 1,218.00 € 617.12 € 2,030.00 - -
Cécile
FLANDRE
€ 6,766.00 € 3,248.00 - - - - - -
Claude GRÉGOIRE
Vice-Chairman of the
Board of Directors
€ 6,766.00 € 3,654.00 - - - - - -
Bernard GUSTIN
Chairman of the
Board of Directors
€ 13,532.00 € 7,308.00 - - - - - -
Luc HUJOEL
32
Chairman of
the Corporate
Governance
Committee
€ 6,766.00 € 3,654.00 - - € 2,111.20 € 5,278.00 - -
Roberte
KESTEMAN
€ 6,766.00 € 3,654.00 € 1,624.00 € 2,030.00 € 1,006.88 € 2,030.00 € 1,624.00 € 2,436.00
Jane
MURPHY
€ 6,766.00 € 3,654.00 - - € 1,624.00 € 4,060.00 - -
Dominique
OFFERGELD
€ 6,766.00 € 3,248.00 € 1,624.00 € 2,030.00 - - € 1,624.00 € 2,436.00
Rudy
PROVOOST
€ 6,766.00 € 3,654.00 € 1,624.00 € 1,624.00 - - - -
Saskia
VAN UFFELEN
€ 6,766.00 € 3,654.00 - - - - € 1,624.00 € 2,436.00
Geert VERSNICK
Vice-Chairman of the
Board of Directors
€ 6,766.00 € 2,842.00 - - - - - -
29 Lieve Creten is a director of Elia Transmission Belgium SA/NV, but is not a director of Elia Group SA/NV. Her remuneration is therefore not disclosed in the present remuneration report,
in accordance with applicable legislation. Please note however that her remuneration is in line with the remuneration policy and therefore in line with the remuneration of the other
directors of Elia Transmission Belgium SA/NV.
30 Director as from 9 February 2021
31 Director until 18 May 2021.
32 Director until 31 December 2021 at midnight. Luc Hujoel’s fees are paid to the company Interfin SCRL.
Elia Group Financial Report 2021 23
Elia Asset
SA/NV
Directors
FIXED REMUNERATION OF THE DIRECTORS OF ELIA ASSET SANV
WHO ARE ALSO DIRECTORS OF ELIA GROUP SANV
33
Board of Directors Audit Committee
Corporate Governance
Committee
Remuneration
Committee
Base
salary
Attendance
fees
Base
salary
Attendance
fees
Base
salary
Attendance
fees
Base
salary
Attendance
fees
Michel ALLÉ
Chairman of the
Audit Committee
€ 6,766.00 € 3,654.00 € 2,111.20 € 2,639.00 - - - -
Pieter
DE CREM
34
€ 6,766.00 € 3,248.00 - - € 1,624.00 € 2,842.00 € 1,624.00 € 2,030.00
Luc
DE TEMMERMAN
Chairman of the
Remuneration
Committee
€ 6,766.00 € 3,654.00 - - € 1,624.00 € 4,060.00 € 2,111.20 € 3,166.80
Frank
DONCK
35
€ 2,571.08 € 1,218.00 € 617.12 € 1,218.00 € 617.12 € 2,030.00 - -
Cécile
FLANDRE
€ 6,766.00 € 3,248.00 - - - - - -
Claude GRÉGOIRE
Vice-Chairman of the
Board of Directors
€ 6,766.00 € 3,654.00 - - - - - -
Bernard GUSTIN
Chairman of the
Board of Directors
€ 13,532.00 € 7,308.00 - - - - - -
Luc HUJOEL
36
Chairman of
the Corporate
Governance
Committee
€ 6,766.00 € 3,654.00 - - € 2,111.20 € 5,278.00 - -
Roberte
KESTEMAN
€ 6,766.00 € 3,654.00 € 1,624.00 € 2,030.00 € 1,006.88 € 2,030.00 € 1,624.00 € 2,436.00
Jane
MURPHY
€ 6,766.00 € 3,654.00 - - € 1,624.00 € 4,060.00 - -
Dominique
OFFERGELD
€ 6,766.00 € 3,248.00 € 1,624.00 € 2,030.00 - - € 1,624.00 € 2,436.00
Rudy
PROVOOST
€ 6,766.00 € 3,654.00 € 1,624.00 € 1,624.00 - - - -
Saskia
VAN UFFELEN
€ 6,766.00 € 3,654.00 - - - - € 1,624.00 € 2,436.00
Geert VERSNICK
Vice-Chairman of the
Board of Directors
€ 6,766.00 € 2,842.00 - - - - - -
33 Lieve Creten is a director of Elia Asset SA/NV, but is not a director of Elia Group SA/NV. Her remuneration is therefore not disclosed in the present remuneration report, in accordance with
applicable legislation. Please note however that her remuneration is in line with the remuneration policy and therefore in line with the remuneration of the other directors of Elia Asset
SA/NV.
34 Director as from 9 February 2021.
35 Director until 18 May 2021.
36 Director until 31 December 2021 at midnight. Luc Hujoel’s fees are paid to the company Interfin SCRL.
24 Corporate Governance Statement
1.1.2. Variable remuneration
The members of the Board of Directors do not receive any variable
remuneration.
1.1.3. Pension
The members of the Board of Directors do not receive any addi-
tional remuneration or contribution to finance any pension costs.
1.1.4. Other components of the remuneration
The members of the Board of Directors do not receive any remu-
neration other than the fixed remuneration.
1.1.5. Extraordinary items
The members of the Board of Directors have not received any
non-recurring remuneration in the financial year 2021.
1.1.6. Total remuneration of the members of the Board
of Directors in 2020 and in 2021
The total remuneration of the members of the Board of Directors
in 2021 amounted to EUR 923,888.60 and is reflected in the table
under heading 1.1.1., as no other remuneration than fixed remu-
neration has been paid to the members of the Board of Directors
during the financial year 2021.
The total remuneration of the members of the Board of Directors
in 2020 amounted to EUR 844,529.77. No other remuneration than
fixed remuneration has been paid to the members of the Board of
Directors during the financial year 2020.
1.2. TOTAL REMUNERATION OF THE MEMBERS OF THE
EXECUTIVE MANAGEMENT BOARD
The Executive Management Board of Elia Group SA/NV is com-
posed of 5 members.
Three of them (being Chris Peeters – the Chief Executive Officer,
Catherine Vandenborre – Chief Financial Officer and Peter Michiels
– Chief Human Resources & Internal Communications Officer, Chief
Alignment Officer) also serve as member of the Executive Manage-
ment Board of Elia Transmission Belgium SA/NV and of Elia Asset
SA/NV, one member (being Stefan Kapferer) also serve as CEO of
50Hertz Transmission GmbH and one member (being Michael Frei-
herr von Roeder von Diersburg) exclusively acts as member of the
Executive Management Board of Elia Group SA/NV.
All the members of the Executive Management Board of Elia Group
SA/NV have employee status
37
.
37 Mr Chris Peeters, Mrs Catherine Vandenborre and Mr Peter Michiels’ employment contracts are subject to Belgian law and Mr Stefan Kapferer and Mr Michael Freiherr von Roeder von
Diersburg’s employment contracts are subject to German law.
38 The amount of the variable short-term remuneration for the members of the Executive Management Board that also serve as members of the Executive Management Board of Elia
Transmission Belgium SA/NV and Elia Asset SA/NV, includes (i) a Bonus Pension Plan and (ii) an amount in cash in execution of the Collective Labour Agreement 90.
1.2.1. Fixed remuneration
The table below gives an overview of the total fixed remuneration,
which only consists of a base salary paid in cash, in 2021 of the
members of the Executive Management Board of Elia Group SA/
NV for the services rendered by them to any company of the Elia
group during the financial year 2021.
Member of the Executive
Management Board
Total fixed
remuneration paid
by the Elia group
Chris PEETERS
Chief Executive Officer - Chairman
€ 474,122.06
Catherine VANDENBORRE
Chief Financial Officer
€ 354,912.92
Stefan KAPFERER
Chief Executive Officer 50Hertz
€ 402,000.00
Michael FREIHERR VON ROEDER
VON DIERSBURG
Chief Digital Officer
€ 275,000.00
Peter MICHIELS
Chief Human Resources & Internal
Communications Officer
Chief Alignment Officer
€ 242,520.66
Total € 1,748,555.64
1.2.2. Variable remuneration
The table below gives an overview of the total variable remunera-
tion in 2021 of the members of the Executive Management Board
of Elia Group SA/NV for the services rendered by them to any com-
pany of the Elia group during the financial year 2021.
Member of the Executive
Management Board
Total variable remuneration
paid by the Elia group
One-year
variable
38
Multi-year
variable
Chris PEETERS
Chief Executive Officer – Chairman
€ 300,948.05 € 121,601.70
Catherine VANDENBORRE
Chief Financial Officer
€ 134,388.11 € 90,527.23
Stefan KAPFERER
Chief Executive Officer 50Hertz
€ 175,172.30 €120,600.00
Michael FREIHERR VON ROEDER
VON DIERSBURG
Chief Digital Officer
€ 103,245.12 € 68,750.00
Peter MICHIELS
Chief Human Resources & Internal
Communications Officer
Chief Alignment Officer
€ 91,834.53 € 62,174.40
Total € 805,588.11 € 463,653.33
The amount of the variable remuneration reported is paid in cash
or as part of an option plan.
The remuneration policy deals with the determination of an appro-
priate balance between fixed and variable remuneration, and
between cash and deferred remuneration. In view of recommen-
dation 7.10 of the Corporate Governance Code 2020, the variable
remuneration in the short term has been capped at 75% for the
Elia Group Financial Report 2021 25
Chief Executive Officer and between 45% and 60% for the other
members of the Executive Management Board of the total annual
remuneration as defined by article 3:6, §3, third Alinea, 1°, a) of the
Belgian Code of Companies and Associations.
In accordance with article 17.9 of the articles of association the
Board of Directors has deviated from the requirements of section
7:91, second paragraph of the Belgian Code of Companies and
Associations.
1.2.3. Pension
The table below gives an overview of the total pension contribu-
tions paid for the members of the Executive Management Board
of Elia Group SA/NV for the services rendered by them to any com-
pany of the Elia group during the financial year 2021.
All pension plans for members of the Executive Management
Board of Elia Group SA/NV for their services within the Elia group
during the financial year 2021 were of the defined contribution
type, with the amount paid before tax being calculated on the basis
of the annual remuneration.
All pension contributions are fixed.
Member of the Executive
Management Board
Total pension
contributions paid
by the Elia group
Chris PEETERS
Chief Executive Officer - Chairman
€ 123,602.19
Catherine VANDENBORRE
Chief Financial Officer
€ 82,519.91
Stefan KAPFERER
Chief Executive Officer 50Hertz
€ 100,250.00
Michael FREIHERR VON ROEDER
VON DIERSBURG
Chief Digital Officer
NA
39
Peter MICHIELS
Chief Human Resources & Internal
Communications Officer Chief Alignment
Officer
€ 52,351.87
Total € 358,723.97
39 Mr Michael Freiherr von Roeder von Diersburg did not receive pension contributions for the year 2021.
1.2.4. Other components of the remuneration
The other benefits granted to the members of the Executive Man-
agement Board of Elia Group SA/NV for their services within the
Elia group during the financial year 2021 including guaranteed
income in the event of longterm illness or an accident, healthcare
and hospitalisation insurance, invalidity insurance, life insurance,
reduced energy prices, other allowances, assistance with public
transport costs, provision of a company car, employer-borne costs
and other minor benefits, are in line with the regulations applying
to all company executives and local market standard.
1.2.5. Extraordinary items
No non-recurring remuneration (e.g. a specific bonus in view of a
certain project) been awarded in 2021.
1.2.6. The relative share of fixed and variable
remuneration
The table below gives an overview of the relative share of fixed and
variable remuneration in 2021 of the members of the Executive
Management Board of Elia Group SA/NV for their services within
the Elia group in the financial year 2021.
To determine the relative share of fixed and variable remunera-
tion, the relative share of the fixed remuneration was obtained by
dividing the sum of the fixed components (in particular: the fixed
remuneration (including the other benefits) and the pension con-
tributions) by the amount of the total remuneration, multiplied by
100. The relative share of the variable remuneration was calculated
by dividing the sum of the variable components (i.e. the variable
remuneration and the extraordinary items of the remuneration) by
the amount of the total remuneration, multiplied by 100.
Member Executive Management Board
Relative share of
fixed and variable
remuneration paid by
the Elia group
Chris PEETERS
Chief Executive Officer - Chairman
60.27% - 39.73%
Catherine VANDENBORRE
Chief Financial Officer
67.69% - 32.31%
Stefan KAPFERER
Chief Executive Officer 50Hertz
64.33% - 35.67%
Michael FREIHERR VON ROEDER
VON DIERSBURG
Chief Digital Officer
62.80% - 37.20%
Peter MICHIELS
Chief Human Resources & Internal
Communications Officer
Chief Alignment Officer
68.08% - 31.92%
Average 64.08% - 35.92%
26 Corporate Governance Statement
1.2.7. Total remuneration of the members of the Executive Management Board in 2021
Member of the Elia
Group Executive
Board
Fixed Remuneration Variable Remuneration
Extra-
ordinary
items
Pension
contri-
butions
Total remune-
ration
Relative
share of fixed
and variable
remuneration
Base
salary
Other
benefits
One-year
variable
Multi-year
variable
Chris PEETERS
Chief Executive
Officer – Chairman
€ 474,122.06 € 43,324.01 € 300,948.05 € 121,601.70 0 € 123,602.19 € 1,063,598.01 60.27% - 39.73%
Catherine
VANDENBORRE
Chief Financial Officer
€ 354,912.92 € 33,672.04 € 134,388.11 € 90,527.23 0 € 82,519.91 € 696,020.21 67.69% - 32.31%
Stefan KAPFERER
Chief Executive
Officer 50Hertz
€ 402,000.00 € 31,209.00 € 175,172.30 € 120,600.00 0 € 100,250.00 € 829,231.30 64.33% - 35.67%
Michael FREIHERR
VON ROEDER
VON DIERSBURG
Chief Digital Officer
€ 275,000.00 € 15,353.00 € 103,245.12 € 68,750.00 0 NA € 462,348.12 62.80% - 37.20%
Peter MICHIELS
Chief Human
Resources & Internal
Communications
Officer Chief
Alignment Officer
€ 242,520.66 € 33,636.49 € 91,834.53 € 62,174.40 0 € 52.351,87 € 482,517.95 68.08% - 31.92%
Total € 1,748,555.64 € 157,194.54 € 805,588.11 € 463,653.33 0 € 358.723,97 € 3,533,715.59 64.08% - 35.92%
2. Share-based remuneration
BOARD OF DIRECTORS
The members of the Board of Directors do not receive any share-
based remuneration.
In view of recommendation 7.6 of the Corporate Governance
Code 2020, the Remuneration Committee has examined in 2020
whether a share-based compensation should be granted to the
members of the Board of Directors as from 2021.
The Board of Directors of November 2020 has followed the recom
-
mendation of the Remuneration Committee and has decided that
today such share-based remuneration is not suitable within Elia
Group SA/NV as (i) Elia’s activities are by nature organized in such
a way as to present a low risk profile and are focused on the long
term and (ii) the shareholding structure is based on a reference
shareholding that naturally pursues fixed long-term objectives and
sustainability goals.
EXECUTIVE MANAGEMENT BOARD
The members of the Executive Management Board did not receive
any share-based remuneration.
The members of the Executive Management Board, however, have
the possibility to acquire shares either via the capital increases
reserved for the staff of Elia Group SA/NV and its Belgian subsidi-
aries or via an offer to acquire shares for the staff of 50Hertz Trans-
mission GmbH.
In addition, the members of the Executive Management Board are
free to buy Elia Group SA/NV shares on the market.
In deviation of recommendation 7.9 of the Corporate Governance
Code 2020, the Board of Directors has decided that there is no
minimum number of shares to be held by the members of the
Executive Management Board.
As at 31 December 2021, the members of the Executive Manage
-
ment Board held the following number of shares of Elia Group
SA/NV:
Elia Group SA/NV
Member of the Executive
Management Board
On
Number
of shares
Chris PEETERS
Chief Executive Officer - Chairman
31.12.2021 4,649
Catherine VANDENBORRE
Chief Financial Officer
31.12.2021 1,421
Stefan KAPFERER
Chief Executive Officer 50Hertz
31.12.2021 290
Michael FREIHERR VON ROEDER
VON DIERSBURG
Chief Digital Officer
31.12.2021 174
Peter MICHIELS
Chief Human Resources & Internal
Communications Officer
Chief Alignment Officer
31.12.2021 1,315
Total 31.12.2021 7,849
3. Severance pay
No severance payments were made in 2021.
4. Any use of the right to reclaim
Premiums paid for the previous period may be recovered in cases of
proven fraud or financial statements containing significant errors.
During the financial year 2021 there was no reason to exercise this
right to reclaim.
Elia Group Financial Report 2021 27
5. Information on how the remuneration
complies with the remuneration policy
and how performance criteria were
applied
5.1. INFORMATION ON HOW THE REMUNERATION
COMPLIES WITH THE REMUNERATION POLICY
The objective of Elia Group SA/NV’s remuneration policy is to
attract, retain and reward the best talent so that Elia Group SA/
NV can achieve its short- and long-term goals within a coherent
framework. The Elia Group SA/NV Strategic Ambitions aim to (i)
design, deliver and operate the future transmission grid infrastruc-
ture supporting renewable energy sources (RES) integration , (ii)
further shape the (European) markets and ensure high security of
supply, (iii) ensure sustainability of its activities, (iv) strengthen the
position of the group through inorganic growth and expand into
new business areas, (v) be a leader in health and safety and evolve
its culture and talents, (vi) finance the future, (vii) realise its digital
transformation, and (viii) increase efficiency, realize synergies and
optimize resource allocation.
The total amount of remuneration paid out to the members of
the Executive Management Board in the financial year 2021 has
contributed to the long-term objectives and the sustainability of
Elia Group SA/NV as the structure of the Executive Management
Board’s remuneration is designed to promote sustainable value
creation by the company. The level of the fixed remuneration
ensured, on the one hand, that the Elia group could rely on a pro-
fessional and experienced management, even in more difficult
times, such as the Covid-19 crisis. The payment of the short-term
bonus, on the other hand, ensured the realization of the perfor-
mance criteria that translate the Elia group’s strategy. The long-
term success of the company was further stimulated by the long-
term incentive plan, through which the members of the Executive
Management Board were also rewarded in case of a.o. the realiza-
tion of the energy transition.
5.2. Information on how
performance criteria
were applied
5.2.1. Short-term variable remuneration
The first pillar of variable remuneration is based on the achieve-
ment of a number of targets set by the Remuneration Commit-
tee at the beginning of 2021, with a maximum of 45% of variable
remuneration relating to individual targets and a minimum of
70% to the achievement of Elia Group SA/NV ‘s collective targets
(‘short-term incentive plan’).
With regard to individual short-term targets, the table below gives
an overview of the individual targets and their relative weight.
Member Executive
Management Board Individual targets
Relative weighting of the
performance criteria
Chris PEETERS
Chief Executive
Officer - Chairman
Group Building 30%
Elia Group Management Board building 20%
Strategy Development 30%
Develop partnership strategy 20%
Catherine
VANDENBORRE
Chief Financial
Officer
Invest in new sources of growth 30%
Putting sustainability at the heart of the finance function 30%
Financing the new business model (digital transformation, inorganic) 30%
Implement a transformation office 10%
Stefan KAPFERER
Chief Executive
Officer 50Hertz
Offshore growth 25%
Digital & customer centricity 25%
Enhanced capex delivery 25%
Increase the relevance of the group 25%
Michael FREIHERR
VON ROEDER
VON DIERSBURG
Chief Digital Officer
Drive the digital transformation 30%
Lay the foundation for a modular business architecture and data centric business 30%
Manage legacy cost base down 20%
Start moving from Project to Product 20%
Peter MICHIELS
Chief Human
Resources & Internal
Communications
Officer
Chief Alignment
Officer
Create a high performance organisation Build Offshore talent pipeline 40%
Build a dynamic business and leadership culture Sustainability 40%
Accelerate digital transformation 20%
28 Corporate Governance Statement
In view of the fact that nearly all individual short-term targets were
achieved or exceeded, the individual short-term remuneration
awarded during the financial year 2021 amounts to € 96,420.27
for Mr Chris Peeters, to € 41,831.21 for Mrs Catherine Vandenborre,
to € 55,476.00 for Mr Stefan Kapferer, to € 29,551.50 for Mr Michael
Freiherr von Roeder von Diersburg and to € 29,256.70 for Mr Peter
Michiels.
40 For Mr Stefan Kapferer and Mr Michael Freiherr von Roeder von Diersburg, these amounts will be paid in 2024, on condition that the member concerned is still acting as member of the
Executive Management Board on 31 December 2023.
With regard to the
collective short-term targets
, the table below
gives an overview of the overall collective short-term targets of the
Executive Management Board members and their relative weight,
as defined for the financial year 2021.
Belgium
Relative
weighting of the
performance criteria Germany
Relative
weighting of the
performance criteria
Financial
Net Profit (after tax)
& Efficiency
20% Net Profit (after tax) 20%
Quality Safety & Culture 20% Value Based Culture 20%
Capex delivery
Capex Projects (quantitative
and qualitative goals)
25%
Demand driven grid
development
20%
Security of supply Security of Supply 20% Security of Supply 20%
Sustainability/
Efficiency
Sustainability 15% Efficiency 20%
In view of the fact that nearly all collective short-term targets were
achieved or exceeded, the collective short-term remuneration
awarded during the financial year 2021 amounts to € 204,527.78
for Mr Chris Peeters, to € 92,556.90 for Mrs Catherine Vandenborre,
to € 62,577.83 for Mr Peter Michiels, to € 119,696.30 for Mr Stefan
Kapferer and to € 73,693.62 for Mr Michael Freiherr von Roeder
von Diersburg.
5.2.2. Long-term variable remuneration
The second pillar of the variable remuneration is based on mul-
ti-year criteria set for four years (‘long-term incentive plan’). These
amounts are reviewed at the end of each year depending on the
realization of the long-term criteria and according to the criteria
“on time, on budget and on quality”.
The table below gives an overview of the overall collective long-
term targets of the Executive Management Board members for
the financial year 2021 and of their relative weight.
Collective targets
Relative weighting of the
performance criteria
Elia Group realization of critical
investment portfolio
50%
Elia Group efficiency savings 50%
In view of the fact that all long-term targets were exceeded, the
collective long-term remuneration awarded during the financial
year 2021 amounts to € 121,601.70 for Mr Chris Peeters, to € 90,527.23
for Mrs Catherine Vandenborre, to € 62,174.40 for Mr Peter Michiels,
to € 120,600.00 for Mr Stefan Kapferer, and to € 68,750.00 for Mr
Michael Freiherr von Roeder von Diersburg. These amounts will be
paid in 2022, on condition that the member concerned is still act-
ing as member of the Executive Management Board on 31 March
2022
40
6. Derogations and deviations from
the remuneration policy and from the
procedure for its implementation
There have been no derogations nor deviations from the remuner-
ation policy as this policy was approved in 2021.
Elia Group Financial Report 2021 29
7. Comparative information on the change of remuneration and the Elia group
performance
The tale below first gives an overview of the evolution in time
over the last five years of respectively the total remuneration of
the members of the Board of Directors of Elia Group SA/NV for all
mandates within the Elia group and of the total renumeration of
the members of the Executive Management Board of Elia Group
SA/NV for all mandates within the Elia group. In this regard, one
should bear in mind that, following the founding of Elia Transmis-
sion Belgium SA/NV and the conversion of Elia System Operator
SA/NV into Elia Group SA/NV in 2019, the composition of the Exec-
utive Management Board has changed in 2020.
The table below further gives an overview of the evolution of the
performance of the Elia group.
The average remuneration (on a full-time equivalent basis) of the
employees of the Elia group in 2021 amounts to 99,196.10 EUR. The
average remuneration of all employees is calculated as the total
(IFRS-based) labor costs (exclusive social security contributions of
the employer) divided by the number of employees on an FTE basis.
Total remuneration of the members of the Board of Directors of Elia Group SA/NV
Annual Change 2017
2018 vs.
2017
2018
2019 vs.
2018
2019
2020 vs.
2019
2020
2021 vs.
2020
2021
Board of
directors
€ 872,583.54 1% € 885,128.26 -3% € 861,045.20 -2% € 844,529.77 9% € 923,888.60
Total remuneration of the members of the Executive Board
Annual Change 2017
2018 vs.
2017
2018
2019 vs.
2018
2019
2020 vs.
2019
2020
2021 vs.
2020
2021
Total € 3,715,740.35 11% € 4,115,752.83 12% € 4,623,753.44 -31% € 3,199,058.00 10 % € 3,533,715.59
CEO € 873,254.95 15% € 1,007,986.54 17% € 1,181,809.42 -20% € 949,206.00 12% € 1,063,598.01
Other members € 2,632,766.45 18% € 3,107,766.29 11% € 3,441,944.02 -35% € 2,249,852.00 10% € 2,470,117.58
Performance of the Elia group
Annual Change
(in millions)
2017
2018 vs.
2017
2018
2019 vs.
2018
2019
2020 vs.
2019
2020
2021 vs.
2020
2021
Turnover € 867.10 123% € 1,931.80 20% € 2,319.00 7% € 2,473.60 16% € 2,859.7
EBIT € 324.60 55% € 502.60 13% € 569.70 2% € 578.50 -7% € 540.1
Normalized net
income
€ 203.40 38% € 280.80 9% € 306.80 0% € 308.10 7% € 328,3
The ratio between the highest remuneration of a member of the
Executive Management Board and the lowest remuneration of an
employee of the Elia group, expressed on a full-time equivalent
basis, in 2021 was 27.46.
8. Information on shareholder vote
The general meeting of shareholders of Elia Group SA/NV of 18 May
2021 approved the 2020 remuneration report of Elia Group SA/NV
with a majority of 89%.
30 Corporate Governance Statement
Risk management and
uncertainties facing the company
GRI 102-15, GRI 102-30
What for?
The Elia group’s ambition to deliver the infrastructure of the
future and enable a successful energy transition to the benefit
of the consumer is formulated in a highly challenging context.
The changing European energy market, large-scale deployment
of renewable-based generation technologies with intermittent
and harder to predict production patterns, increases in commod-
ity prices and rises in energy bills, steadily increasing energy con-
sumption, ageing infrastructure, resource bottlenecks, to name
but a few, increase the complexity of the group’s activities and,
in particular the mission of transmission system operators of Elia
Transmission Belgium SA/NV and of 50Hertz Transmission GmbH.
There is a need to anticipate (unwanted) events and understand
their causes, consequences and likelihood. All this with the aim of
making informed decisions. That is exactly what risk management
is about: it allows us to manage the effect of uncertainties on the
achievement of objectives . As put in a mildly provocative way by
risk management expert James Lam : “The only alternative to risk
management is crisis management and crisis management is
much more expensive, time consuming and embarrassing. “
How does it work?
Uncertainties may generate desirable events - the opportunities
- and unwanted events - the risks. Both are in the scope of risk man-
agement. Different types of objective aspects might be impacted
by risks, like health and safety, continuity of supply or profitability.
These are called the risk dimensions.
The Risk Management framework of Elia group is strongly linked
to COSO’s framework , which gathers best practices for assessing
business risks. In line with these guidelines, risk management takes
place at different levels in the organisation (strategic, business/
operational, project…) and relies on Elia group’s strategy and risk
appetite, the level of risk our organisation is prepared to accept in
pursuit of its objectives. This risk appetite is a guidance based on 5
matrices which capture financial, reputational, health and safety
and operational/societal risks and impacts. Once a risk is identified
as substantive based on the corporate risk appetite, a dialogue
takes place to make sure relevant contextual factors are adequately
taken into account in the assessment. The most substantive risks
are integrated into the risk reporting and the evaluation of the ade-
quacy between risks and responses is then challenged up to the
level of the Executive Management Board and the Board of Direc-
tors. If the (aggregated) risk is below the critical level defined by
the risk appetite, the risk is assessed as medium and a cost-benefit
analysis determines the use of control measures to reduce risks. For
a few cases where it facilitates decision-making, the risk appetite
has been translated into more operational criteria, which are used
by the operational entities.
There are processes in place which aim at identifying key risks,
assessing them, defining appropriate responses, communicating
them to the Board of Directors and monitoring the effectiveness
of mitigation actions. All the information collected by these pro-
cesses is recorded in risk registers. Regular exchanges between
risk managers and risk owners allow these registers to be kept
up-to-date. The most important elements are summarised in risk
reports, which in 2021 were presented three times to the Board of
Directors and Audit Committee.
Control/
monitoring
Risk
identification
Figure 1 Illustration of the steps
of the Risk management
process
1 ISO 31000
2 James Lam, Enterprise Risk Management, Wiley Finance
3 COSO: Committee of Sponsoring Organisations
Risk
assessment
Risk
response
Information
& communication
Elia Group Financial Report 2021 31
Contextual factors
MACROECONOMIC CONTEXT
2021 was characterised by an uncertain macroeconomic climate.
The covid-19 context has highlighted vulnerabilities in global supply
chains, notably for semiconductor manufacturing and advanced
packaging or critical minerals and materials. The global economy
recovery is hampered by the emergence of virus variants as well
as higher commodity prices and shipping prices (container freight
rates). These in turn lead to increases in company’s production
costs, followed by increases in final prices of goods and services,
with ultimately an adverse impact on the inflation issue described
hereunder. As well as this, interest rates remained very low in 2021,
following the European Central Bank’s monetary policy, but this
situation may change in the future. Evolutions in long-term inter-
est rates may affect the expected return for transmission system
operators.
INFLATION
The lockdown episodes of last winter have been followed by a
strong demand recovery. This has triggered raw material, energy
and staffing scarcity. The consequence of this is a significant
increase in commodity and shipping prices in 2021, which in turn
adversely impacted the inflation rate in general. In the short term
rising inflation and interest rates have no major impact on Elia
group’s regulated activities as they are mainly covered by the
regulatory framework. The increase in raw material prices leads
to higher capex cost, which are fully incorporated in the regula-
tory asset base and as such remunerated. Also depending on the
type of opex costs (controllable / non-controllable), the regulatory
framework covers the impact of inflation. Should interest rates
increase, the financial charges approved by the regulator are
passed through to consumers tariffs (embedded debt principle)
for Elia Transmission Belgium SA/NV and partly passed through for
50Hertz Transmission GmbH (fully for offshore & for onshore new
CAPEX). The impact on long terms provisions (employee benefits/
dismantling) is primarily accounted through OCI (other compre-
hensive income) under IFRS. Capitalised borrowing costs are also
higher, but depreciated over time for Elia Transmission Belgium
SA/NV.
This being said, inflation may have an adverse impact on the activ
-
ities of other stakeholders such as balancing responsible parties,
customers, suppliers (see supplier’s risk), etc, and affect end con-
sumers. An impact on credit risk cannot be ruled out.
Increases in electricity and gas prices may also fuel discussions
around the affordability of the energy transition and bring chal-
lenge on the transmission infrastructure development plans. This
context may also place a greater pressure on the transmission
system operators of the group to deliver new infrastructure and
maintain the existing infrastructure efficiently.
COVID 19
2021 was characterised by the development of vaccination. How-
ever, access to healthcare and vaccination remains very unequal
between low income and high-income countries. The existence of
pockets where the immunity against the virus is far lower facilitates
the emergence of virus variants and disrupts the global economy
recovery.
The way in which this contextual factor influences our business is
outlined in the following sections on risks and responses. Efforts
are deployed towards a minimization of possible impacts on our
people and operations, notably on security of supply, health and
safety and projects.
PREPARING THE ENERGY TRANSITION
As outlined in the risk description, preparing the energy transition
in the context of nuclear phase-out requires additional generation
units being available for ensuring both the network balancing and
adequacy. This in turns requires a framework in which investors
will feel confident enough to invest in those generation units. The
implementation of those generation units, and in particular the
permitting process, is sometimes an issue. Additionally, preparing
for the energy transition has a cost. Finding ways to finance them
in a manner that is responsible for the future generations and in
a context of inflation, with rising energy prices, potential higher
interest rate and higher indebtedness is a challenge in itself.
ENERGY DEMAND & ENERGY EFFICIENCY
While global energy demand had steadily increased over the past
decades, with some contraction episodes related to pandemic
lockdown, energy efficiency is also one of the key measures out-
lined by the EU in respect of Union-wide CO footprint reduction.
Significant energy efficiency measures in Belgium and Germany
can potentially affect power consumption and thus reduce the vol-
umes of electricity transmitted via the group’s networks. The same
applies for a slowing down of the economic activities of industrial
clients and a reduction of their consumption. These effects may
be counterbalanced by an intensification of the use of electrical
vehicles and electrification of industrial processes.
Link between opportunities, main risks,
materiality topics & strategic priorities
Elia Group SA/NV closely monitors its main risks and opportunities
to support informed decision-making and efficiently control their
impact on our performance. The tables hereunder provide a brief
explanation of the main opportunities and risks, their impact on
value chain activities and their link with the 3 pillars of growth as
well as the trend evolution compared to 2020. An opportunity is a
positive uncertainty, likely to generate an increase in the value of
the respective capital(s). Risks are negative uncertainties. Detailed
information on these risks can be found hereafter.
32 Corporate Governance Statement
Link with our pillars of growth
Risk Description
Risk
category Management of risk
Evolution
of
estimated
probability
and
impact
compared
with
FY2020
Delivering
the infra
-
structure of
the future &
developing
and operat
-
ing a sustain-
able power
system
Develop-
ing new
services that
create value
for cus
-
tomers in
the energy
system
Growing
beyond
our current
perimeter to
deliver soci
-
etal value
Changing HR
needs
The group's culture & skills must be
aligned with our strategy. We are
acting in an environment which has
increased in complexity; this requires
a more agile, digital and innovative
mindset.
Specific technical skills (in offshore,
digitalisation, intellectual property…)
are needed to support the
achievement of our strategy - and
these skills need to be acquired
despite the current 'talent war'."
Strategic
- Culture change & leadership programs
- Launch of a Digital Transformation
Office
- Talent management framework
- Training
- New Way of Working policies
- Diversity & inclusion initiatives
- Well-being initiatives
=
x x x
Changing/
new regulatory
conditions
Unplanned and/or inconvenient
changes to or misinterpretations of
regulatory or policy mechanisms in
Belgium or Germany could clash with
the group’s existing and envisioned
strategy, causing severe financial and
organisational impacts.
Regulatory
- Regular contact with European &
national authorities
- Proactive anticipation of new
directives & regulations
- Membership of ENTSO-E, which can
provide advocacy for changes which
are aligned with our strategy
=
x x
The COVID-19
pandemic
The pandemic could impact system
operations (and, therefore, continuity
of supply) if minimum staff numbers
in critical departments cannot be
guaranteed as a result of COVID
infections or quarantine measures
(this includes the impact of COVID-19
on the mental well-being of our
employees and on our
revenues).
Regulatory/
strategic
- Regular surveys which check the
mental well-being of our staff
- Reinforced safety and access
measures in control centres
- Antigen tests made available on site
- Vaccinations provided at our offices in
Germany
- Dedicated COVID-19 taskforce in
Belgium
=
x
Early termination
of Transmission
System Operator
licences
An early revocation of the transmission
system operator licenses belonging to
Elia Transmission Belgium SA/NV
and/or 50Hertz Transmission GmbH
would have an adverse material
impact on these entities and therefore
on Elia Group SA/NV.
Regulatory
- Safeguarding security of supply and
enhanced and accelerated CAPEX
delivery are our top priorities
- Strong governance processes in place
with a focus on compliance
=
x
Sustainability of
income
Changes to the regulatory parameters
could impact the profitability of the
group.
Regulatory
- Ensuring that our strategy is aligned
with the interests of society
- Maintaining and growing our asset
base
- Increasing efficiency in our investment
and asset maintenance policies
- Regular and open dialogue with our
regulators
x x x
Balancing
The growth in the number of
renewable energy units connected
to distribution systems across Europe
and the number of connections
to large offshore wind farms creates
new challenges for operational grid
management, particularly in terms of
the increased volatility of energy flows
across our network.
Operational
- Grid expansion and a higher use of
the grid
- National and international cooperation
for grid control
- Reforms to market design to unlock
more flexibility (such as our proposed
consumer-centric market design)
- Unlocking the potential held in flexible
load management
- Digital and customer centricity
initiatives
- Enabling new market players/
technologies
- Preparing an integrated balancing
market at EU level
=
x x
Adequacy
The electrification of other sectors
across society will lead to a growing
electricity demand; the growth in
renewable energy sources may be too
slow to cover this increased demand.
Operational
- Adequacy and flexibility studies
- Providing useful information to the
authorities
- Capacity remuneration mechanism
in Belgium to guarantee the country's
security of supply in the longer term
- Dimension 1 of our ActNow
programme: accelerating the
decarbonisation of the power sector
=
x x
Elia Group Financial Report 2021 33
Link with our pillars of growth
Risk Description
Risk
category Management of risk
Evolution
of
estimated
probability
and
impact
compared
with
FY2020
Delivering
the infra
-
structure of
the future &
developing
and operat
-
ing a sustain-
able power
system
Develop-
ing new
services that
create value
for cus
-
tomers in
the energy
system
Growing
beyond
our current
perimeter to
deliver soci
-
etal value
Contingency
events &
business
continuity
disruption
Unforeseen events that alter the
smooth operation of one or more
infrastructure components are a
risk; examples of such events include
unfavourable weather conditions,
human errors, malicious attacks,
terrorism and equipment failure.
Operational
- Implementation of IT security
measures
- Security screening of critical functions
- Limiting access to control rooms and
data rooms
- Redundancy of infrastructure
- Redundancy of critical tools
- Additional security layer for critical
infrastructure
- Risk preparedness plan for electricity
sector
- Business continuity and restoration
plans
- Asset condition monitoring
=
x x x
Climate change
and the energy
transition
Changes to the climate and the
energy transition cause uncertainties
and challenges in terms of the
markets, system and infrastructure.
Operational
- ActNow programme
- Infrastructure design / stringent
climate-related design conditions
- Climate vulnerability assessments
- Climate adaptation plan for our
existing infrastructure
x x
Failure of
information &
communication
technology (ICT),
data security
& protection
measures
A failure of our ICT systems and
processes or a breach of their security
measures could result in losses for
customers
and reduced revenues for the group
and its affiliates.
Operational
- Implementation of IT security
measures (e.g.: IT segmentation,
backups, failover mechanisms)
- Compliance with relevant regulation
(GDPR/network codes/NIS directive/
ISO27000)
- Employee awareness raising and
training
x x
Permitting
The need to obtain infrastructure
approvals and permits within certain
time frames represents an important
challenge. These approvals and
permits can be challenged (in court),
further delaying projects.
Operational
- Transparent communication and
dialogue with local communities
- Concrete and open stakeholder
management
- Working closely with local authorities
towards common goals
=
x x
Suppliers
Given the complexity of infrastructure
works, the increasing demands on
the market, and the fact that factories
have increasing numbers of orders to
fulfil, the group may find it
challenging to find enough suppliers
for its projects, may end up paying
more for services or may have to deal
with issues surrounding the quality of
products/services they purchase.
Operational
- Earlier placing of orders
- Improved capacity forecasts
- Widening the range of possible
suppliers
- Improved support for new suppliers
- Encouraging increased transparency
across the supply chain
- Internal expertise related to critical
technologies and tools
- Regular price revisions
x x
Health and safety
accidents
Accidents, asset failure or external
attacks may cause harm to people
which may lead to liabilities.
Operational
- Promotion of a strong safety culture
(safety culture ladder)
- Active implementation of Health and
Safety policies
=
x x
Negative
changes in
financial markets
The ability of the organisation to
access global sources of financing
to cover its financing needs or
repayment of its debt could be
impacted by the deterioration of
financial markets.
Financial
- Strong treasury risk monitoring
- Diversified financing sources in debt
instruments and good balancing
of maturities of its funding- Green
financing
- Ring-fenced group structure with
seperate S&P credit rating for ETB, Elia
Group and Eurogrid GmbH
x x
Cashflow
Deviations between actual and
budgeted volumes of electricity
transmitted and between effectively
incurred and budgeted costs/revenues
(incl. interest expenses) may have
a negative short-term effect on the
financial position of the group.
Financial
- Daily short-term liquidity
management
- Availability of credit lines and
commercial paper programs
- Improvements in forecasting (energy
volumes)
- Involvement in the design of
regulatory mechanims and tariffs
=
x x
New business
developments
Any negative results from new
business developments are entirely
borne by the group; they represent
an additional financial risk and could
impact its reputation.
Financial
- Ring-fenced group structure
- Capped liabilities in contracts
- Strong governance and risk
management process for decision-
making regarding new business
developments
=
x x
Legal disputes,
liabilities
The outcome of legal disputes and
lawsuits may negatively affect
business operations and/or the
organisation's financial results.
Financial
Risk management process aimed at
avoiding legal disputes as far as possible
- Capped liabilities in contracts
- Identification of appropriate legal
provisions
=
x x x
34 Corporate Governance Statement
Link with our pillars of growth
Opportunity Brief description of the opportunity Response to opportunity
Importance
of
opportunity
compared
with FY2020
Delivering
the infra
-
structure of
the future &
developing
and operat
-
ing a sustain-
able power
system
Develop-
ing new
services that
create value
for cus
-
tomers in
the energy
system
Growing
beyond
our current
perimeter to
deliver soci
-
etal value
Offshore
evolution 
As Elia Group, we have to support the
harnessing of offshore capacity by coming
up with smart solutions for planning and
operations, as well as the timely delivery of
onshore and offshore infrastructure.
- Definition of the group's offshore strategy,
so the organisation can play an active role
in offshore development and help Europe
to reach its targets in this area.
=
x x
Digital
transformation
The group must embed digitalisation
across all of its activities in order to drive its
transformation; better understand how the
world will evolve; and develop its activities to
operate efficiently in the interest of society."
- Digitalisation is an integral part of the
group's strategy
- The organisation of the group has been
adapted to enable more digitalisation
- Launch of a digital transformation
programme and a digital transformation
office
=
x x
Relevance role
played in the
energy transition
leading to a
sustainable
future
The energy transition lies at the heart of Elia
Group’s vision and Elia Transmission Belgium
and 50Hertz Transmission aim to play an
exemplary role by integrating sustainability
into their activities and be a trusted advisor
for the authorities.
- The interests of society drive every decision
taken
- Ambitious sustainability targets included in
the ActNow programme
- Studies carried out to anticipate impacts
(e.g. Roadmap to net zero / Vision 2050,
e-mobility study)
- Climate change vulnerability assessments
x x x
CAPEX
realisation
The execution of its project portfolio in a
timely and effective manner forms a key part
of Elia Group's strategy.
The group is aware that this opportunity is
closely linked to its ability to manage a much
larger portfolio than it ever has before in a
context of operational constraints (see risk
section).
- Strong culture of high performance and
delivery
- Implementation of federal development
plans
- Risk management in infrastructure projects
- Enhanced CAPEX delivery
- Efficiency and simplification through use of
Group behavioural standards
x x
Opportunities & responses provided
OFFSHORE EVOLUTION
The EU estimates that in the future roughly 18% or up to 450 GW
of the total required generation capacity could be provided by off-
shore wind (see e.g. https://windeurope.org/about-wind/reports/
our-energy-our-future/). To supply Europe’s load centers with off-
shore wind from the North and Baltic Seas, the transmission infra-
structure will have to undergo an immense expansion, for which
a future-proof system planning will be critical. Over the last years,
the Elia group has taken a leading role in offshore grid develop-
ments and positioned itself as a frontrunner in delivering efficient
and future-proof solutions with project such as MOG, NemoLink
or Kriegers Flak Combined Grid Solution. The group will continue
to develop smart solutions for the uptake and integration of off-
shore wind energy into the grid, as well as ensure timely delivery
of onshore and offshore infrastructure. Failure to do so may delay
EU and Member State decarbonisation targets, as well as deprive
industrial and household consumers from using green energy.
Response
Against the background of the group’s strong track-record in pro-
ject delivery and its leading position in shaping innovative solutions
for offshore grid concepts, the group will expand its activities in
the offshore industry. It is the group’s target to design and deliver
offshore grid projects by providing optimised solutions depending
on the customers’ needs and priorities. The group wants to further
create value for (European) society in the context of the Green Deal
and also expands its overall relevance in the industry.
DIGITAL TRANSFORMATION
Several trends are changing fundamentally the landscape in which
the group operates. The world of tomorrow will be dominated by
variable renewable production:
• The place of large international power flows between countries
and large centers of renewable energy sources production
• As well as the place of decentralised and numerous energy
exchanges among consumers and energy actors.
In order to manage increasing complexity in a decentral and
renewables-based energy system, to meet the changing needs
and expectations of consumers, the realization of the digital trans-
formation it is key for success. In front of this massive transforma-
tion of how energy is produced, exchanged and consumed, the
group must use digitalisation in all its activities in order to drive
its transformation, better understand how the world will evolve
and develop our activities to operate at the interest of society in
tomorrow’s energy landscape.
Response
The Elia group has recognised the importance of digitalisation and
how it will transform the power system in the future. Therefore
digitalisation is integral part of the strategy. The group’s organi-
sation has been adapted to enable more digitalization. Technical
initiatives like “Internet of Energy” as well as cultural and HR-related
ones enable the group also to better understand and match the
needs of the consumers of tomorrow. A digital transformation pro-
gram and a digital transformation office have also been launched.
RELEVANCE FOR THE ENERGY TRANSITION LEADING
TO A SUSTAINABLE FUTURE
With the Green Deal, the European Union has set the objective
to be carbon neutral by 2050. The transmission system opera-
tors have a major role to play in this transition, both to help the
integration of renewable energy sources into the system and to
provide the means to the consumers to decarbonised and take
Elia Group Financial Report 2021 35
advantage of the energy transition (correct market rules, access
to price signals…). The energy transition lies at the heart of Elia
group’s vision and the transmission system operators of the group
aim at playing an exemplary role to integrate sustainability in their
activities as well as to be a trusted advisor for the authorities both
at national (Belgium and Germany) and EU level. In that respect,
the transmission system operators of the group provide support in
files linked to the future of the energy system (like nuclear phase-
out or development of hydrogen) in a comprehensive, well thought
out and impartial manner.
Response
All the teams of the group are dedicated to deliver the best of
themselves. The interest of society drives every decision made.
Arguments brought to a debate are always built from internal or
external studies and critically analyzed. As trusted advisors, the
transmission system operators of the group strive to provide the
best possible recommendations on the future energy system and
for the decarbonisation of the society to authorities, resulting from
careful and well though analyses using the best expertise, data and
information available. The Elia group has set ambitious internal sus-
tainability targets through its “Act Now” program. The Elia group
is committed to become a role model and to influence positively
the outside world through actively shaping the energy transition
for a sustainable world (in line with our purpose).
Sustainability will become a stronger compass to guide business
plan decisions (and consequently resource allocations, prioritiza
-
tion) in order to reach the proper ambition level of projects and
activities.
In November 2021, the “Roadmap to net zero” study, containing
the group’s vision on building a climate-neutral European energy
system by 2050, was published and well received by the various
stakeholders. It is available at this address: https://www.elia.be/
en/news/press-releases/2021/11/20211119_elia-group-publishes-
roadmap-to-net-zero.
CAPITAL EXPENDITURE CAPEX REALISATION
The execution of its project portfolio in a timely and effective man-
ner is key to the Elia group strategy. Not only is it a prerequisite to
the integration of further renewable energy sources and a safe-
guard of a reliable power system, but also an important element of
the remuneration of the group, as well as an opportunity to further
reinforce its reputation of high professionalism in the delivery of
infrastructure. This would in turn facilitate further growth potential
(e.g.: offshore). The group is aware though that this opportunity is
closely linked to its ability to manage a larger portfolio than ever,
under other operational constraints described in the permitting
and suppliers’ risks.
Responses
In a response to the above, the Elia group has launched a project
with initiatives along several dimensions:
• Strong project performance and delivery culture
• Implementation of federal development plans
• Roles and responsibilities
• Methods and tools
• Risk management in infrastructure projects
• Enhanced Capex Delivery
• Efficiency & simplification through use of Group standards
For each of these dimensions, we look for measures to reach the
next level maturity. The Innovation section provides further insights
on Opportunities.
Strategic/regulatory risks and responses
provided
CHANGING HR NEEDS
The energy transition drives us to a consumer centric model on
which our strategy and ambition is based. To enable this consumer-
centric model, the group culture and planned changes must be
fully aligned with the group strategy. Additionally, specific technical
expertise (offshore, digitalisation, IP...) is now required to support
the achievement of the group strategy while it may be challenging
to find these profiles on the hiring market. Also, the pandemic has
highlighted the need to take extra care of our employee’s well-be-
ing and pay more attention to their personal needs.
Responses
Training – Training of our staff on various fields such as technical,
economical and soft skills, IT or languages skills are delivered via
the Elia Academy. The Elia Group Digital Academy completes the
training catalogue with a set of videos, podcasts and e-books rel-
evant for our business and available online.
Work policies - Within the Elia group, HR initiatives, policies and
processes are designed to support the implementation of our strat-
egy and objectives. The New Way of Working policy is a good exam-
ple. When supported by an adequate set of tools and technologies
many employees can efficiently fulfill their role at distance. This
policy provides a flexible framework, which enables homeworking
to represent about half of the working time and work at premises
the other half. This ensures a healthy balance between virtual and
physical interactions, between work life and private life while also
supporting our sustainability ambitions by limiting transport-re-
lated CO emissions.
Covid - Specific task forces continuously monitor the measures
taken by the public authorities in Germany and Belgium in the
covid-19 context and coordinate their implementation, so that our
group complies with the requirements in force at any time.
The well-being of our employees is essential for our group. It is the
scope of our Care 4 Energy program. Our employees may bene
-
fit from different resources, ranging from publications providing
advice on how to work in an ergonomic way at home to tailored
support via a well-being officer, a dedicated platform named
BloomUp (Elia Transmission Belgium SA/NV) or a dedicated app
(50Hertz Transmission GmbH). The group also supports the partic-
ipation of its employees in sports activities and organises regular
surveys to monitor the well-being situation amongst its employees.
Culture and talent management - A reinforced focus on talent
and culture led to several anticipating actions. The Talent@Elia
Group initiative is one of them. It focuses on developing a leader-
ship model and a talent management framework. This enables
36 Investor Relations
the group to keep a close eye on both critical competences and
critical functions. The Make a Difference program is another ini-
tiative which aims to reinforce desirable behaviors shown by our
employees.
Diversity and inclusion is a priority for our Group. Our hiring pro
-
cesses are designed to support inclusive recruitment. Also, culture
or our organization aims to foster inclusive leadership and an open
and ethical company culture.
Social dialogue – The Group puts into practice social dialogue.
The development of needs to adapt with the (new) realities of our
employees may then be identified and considered in the evolution
of our work policies.
CHANGINGNEW REGULATORY CONDITIONS
Given the specificities of its activities, the group is subject to exten-
sive European, federal and regional legislation and regulation.
Unplanned and/or inconvenient changes or misinterpretations in
regulatory or policy mechanisms in Belgium or Germany could
conflict with the group’s existing and envisioned strategy causing
severe financial and organisational impacts.
Responses
In order to minimise uncertainties, the two transmission system
operators of the group strive to proactively anticipate European
legislation, new directives and regulations being prepared at EU
level or awaiting transposition into Belgian and German law. For
the year 2021 this concerned mainly the so-called “Fit-for-55 Pack-
age”, striving to reach the European goals of 55% CO reduction by
2030. Furthermore the Hydrogen and Decarbonised gas package
deserves a particular attention, as well as the overall ambition to
speed-up the role out of renewable generation and related grid
infrastructure. Apart from developing own position papers, Elia
Transmission Belgium SA/NV and 50Hertz Transmission GmbH are
also members of the European Network of Transmission System
Operators for Electricity (ENTSO-E). Through participating in this
network, the transmission system operators provide advocacy for
evolutions in line with their strategy.
Further information
In Belgium, the regulatory and legal framework entails risks with
regard to the division of powers between federal and regional enti-
ties (for instance, contradictions between the various regulations,
including the grid codes, could hinder the ability to perform the
group’s activities). Political sensitivities are also emerging on the
impact of public policies on households and company energy bills,
which could materialise in the form of legislation affecting the ade-
quate coverage of these costs. The further development of and
changes to these regulations may also impact the group’s liability
in the event of a power outage on the grid or – in the context of a
reform of the State – the division of powers between federal and
regional authorities, potentially including the power to approve
transmission tariffs. In order to minimise those risks, the group
also strives to anticipate proactively evolution brought to national
or local legislations.
PANDEMIC RISK COVID TYPE
The group is affected by the COVID pandemic. This has a potential
impact both on its ability to carry out its activities (mainly in case
the minimum occupancy in critical functions would be endan-
gered because of contaminations and quarantine measures) and
on its revenues. However, the group so far managed to minimise
the impact of this crisis. Next to those direct effects, the group is
aware that the covid context and the reduction in social contacts
may play an adverse role on the well-being of our collaborators and
increase psycho-social risks.
Responses
Business continuity plans are up to date. These include a resilience
planning for critical functions. The group provided vaccination in
Germany and self-tests in both countries. As explained in the HR
risk description, the group has taken extra care of the well-being of
his employees and developed HR policies which allow an effective
homeworking for the administrative functions. The group has also
integrated health-related actions for its personnel and contractors
working on the field, to ensure the maintenance and the develop-
ment of its infrastructure progressed as planned. The group can
indeed confirm that the impact of the pandemic on the execution
of the infrastructure plans has been minimal in 2021, which is also
thanks to an excellent cooperation with its contractors.
Stringent measures have been maintained in control centers
throughout the year.
The impact of a potential drop of energy consumption by the con
-
sumers would be limited because most of the group’s tariffs are
not based on the volume of energy but on the peak of power taken
from the network, which remains steady.
The group has also undertaken a careful monitoring to ensure that
its customer’s invoices are paid on time.
EARLY TERMINATION OF TRANSMISSION SYSTEM
OPERATOR LICENCE
To execute their activities of transmission system operators, Elia
Transmission Belgium SA/NV and 50Hertz Transmission GmbH
have a licence, which can be revoked earlier if they do not have,
inter alia, the human, technical and/ or financial resources to guar-
antee the continuous and reliable operation of the grid in accord-
ance with the applicable legislation, as well as the unbundling
obligations as described in Article 9 of the EU Electricity Directive.
Such a revocation would have an adverse material impact on Elia
Transmission Belgium SA/NV and/or 50Hertz Transmission GmbH
and therefore on Elia Group SA/NV.
Responses
The Elia group has performed a reorganisation by the end of 2019,
which enabled the ring-fencing of the Belgian regulated activities
of the group from its other activities (German regulated activities
or non-regulated activities). This in turn limits the risk of cross-sub-
sidy between regulated activities or with non-regulated activities.
It thereby provides the group with a suitable framework for the
further development of all activities.
Elia Group Financial Report 2021 37
Further information
Elia Transmission Belgium SA/NV was confirmed as the Belgian
transmission system operator with effect from December 31, 2019
by different public entities (the Federal Government for a period
of 20 years, the Brussel’s Government for a period of 20 years, and
the Flemish regulator for a period of 4 years). The risk of early ter-
mination of its transmission system operator licences is therefore
limited in the short term.
SUSTAINABILITY OF INCOMES
The remuneration of the group is almost entirely driven by the
regulatory framework applicable to Elia Transmission Belgium SA/
NV, 50Hertz Transmission GmbH and NemoLink. Changes to the
regulatory parameters could affect the profitability of the group. A
sufficient regulatory allowed remuneration allows the transmission
system operators of our group to act in favor of society through
maintaining a reliable transmission service to the community and
enabling the development of the energy transition infrastructure.
The realisation of certain parameters defined in the tariff meth-
odologies are subject to specific uncertainties that could affect
the group’s financial position. In particular, the remuneration of
the group depends in part on its ability to realise the needed pro-
jects and maintain the realised assets, as the current remuneration
in both Belgium and Germany is subject to the Regulatory Asset
Base. This depends on its ability to obtain the necessary permits
and to manage potential environmental and public health risks
and accommodate city planning constraints without incurring
significant costs. If the group would not be able to realise or not
timely/ economically realise its investment programme, this could
have a negative impact on the group’s future profits.
Responses
In the context of the energy transition, the development needs of
transmission infrastructure in Belgium and Germany require the
implementation of ambitious investment programs, which indi-
rectly contributes to increasing their Regulatory Asset Base. The
group also strives to develop tariff methodologies that take into
account the changes brought about by the energy transition and
the decentralization of energy generation. Lastly, the group seeks
to act as efficiently as possible in its investment and asset main-
tenance policies. This allows consumers to benefit from the scale
effect of centralised grid management.
Further information
End 2019, the Belgian regulator (CREG) approved Elia Transmis-
sion Belgium SA/NV’s Tariff proposal for the 2020- 2023 regulatory
period. CREG and Elia Transmission Belgium SA/NV have signed an
agreement on 22 December 2021 on procedures for the adoption
of the tariff methodology and for approval of tariff proposals and
tariff changes for the 2024-2027 regulatory period.
In 2021, the German regulator (BundesNetzAgentur or BNetzA) has
confirmed a decrease in the regulatory allowed return of equity for
the period 2024-2028. This decline is driven by the lower interest
rates on the market. It is possible that other changes in the regula-
tory regime may contribute to partially compensate this decrease.
However, these changes and the definition of other components of
the future regulatory regime still need to be clarified in the coming
months.
The credit insulation of Elia Transmission Belgium SA/NV limits
the risks that a change in the credit metrics of Eurogrid GmbH
adversely affects Elia Transmission Belgium SA/NV’s rating or vice
versa.
Operational risks & responses provided
BALANCING
The production of electrical energy should be equal to the demand
at any time. The two transmission system operators of the group
(Elia Transmission Belgium SA/NV and 50Hertz Transmission
GmbH) use balancing energy to balance unplanned fluctuations
in the production of electricity or the energy load. The growth in
the number of renewable energy units connected to distribution
systems across Europe and, the connection of large offshore wind
farms, also creates new challenges for operational grid manage-
ment, particularly through increased volatility of energy flows on
our network.
Responses
Maintaining security of the grid with respect to balancing at rea-
sonable costs for the society relies on a mix of measures. These
involve improving the cooperation for grid control at both national
and international levels, enhancing the quality of forecasts (con-
sumption, offshore, etc.), as well as ensuring a market design that
incentivises the Balancing Responsible Parties to manage their
portfolio balance, whilst at the same time offering them the market
arrangements which allow them to trade their imbalances as close
as possible to real-time (e.g. intraday markets). In addition, market
reforms have to be implemented that unlock as much flexibility as
possible and that can be called upon in real-time to keep the grid
balanced at the least cost. The latter market reforms are aiming
to open the balancing markets to all technologies and all players,
irrespective of the voltage level they are connected to.
As an illustration of the aforementioned measure, in the course
of 2021, Elia group launched its Consumer Centric Market Design
(CCMD) proposal, as part of a wider Consumer Centric system
vision. CCMD aims at implementing market design changes ena-
bling to move from “competition for the meter” to “competition
behind the meter”, thereby unlocking new/additional service pro-
visions to end consumers and enabling them more easier valorise
and market their flexibility. Subject to timely regulatory approval,
Elia group’s ambition is to have the CCMD vision rolled out by 2024-
2025.
In addition, in the course of 2021, both Elia Transmission Belgium
SA/NV and 50Hertz Transmission GmbH continued to work on the
implementation of the European platforms for the activation of
balancing energy and to the preparation of the connection of the
Belgian market and German market to these platforms in 2022.
Integrating balancing markets enables, subject to available cross
border capacity, to mutualise balancing energy available to each
transmission system operator to balance its control block.
38 Investor Relations
ADEQUACY
The federal governments in place have a key role to play in ensuring
that enough capacity is available in their countries to avoid the risk
of an electricity shortage and problems of supply. The transmission
system operators of the group (Elia Transmission Belgium SA/NV
and 50Hertz Transmission GmbH), for their part, provide them with
useful information.
Further information
As foreseen by law, Elia Transmission Belgium SA/NV looks bi-annu-
ally at Belgium’s adequacy situation in the longer term. These stud-
ies assess the adequacy between load projections and anticipated
available capacity (incl. DSR, load shifting, batteries…) in Belgium
and the surrounding countries. The anticipated available capacity
includes politically set objectives in terms of renewable genera-
tion as well as an economic viability gap to assess if sufficiently
robust signals are available to trigger investments in the market
to close any potential adequacy gap as defined by the legal secu-
rity of supply criteria. Elia Transmission Belgium SA/NV published
such a study in June 2019 (“Adequacy & Flexibility Study 2020-2030”
- hereafter the “2019 AF Study”) and in June 2021 (“Adequacy &
Flexibility Study 2022-2032” - hereafter the “2021 AF Study”). Both
studies are available on Elia Transmission Belgium SA/NV’s website,
see e.g.:
https://www.elia.be/fr/marche-de-electricite-et-reseau/
adequation/etudes-adequation
Both studies concluded that as a result of the planned nuclear
phase-out, Belgium would face an adequacy gap by 2025 and that
there are insufficient robust investment signals to expect this gap
to be filled up by the market without additional intervention. Fol-
lowing the 2019 AF study, in order to guarantee Belgium’s security
of supply in the longer term, the Belgian Parliament adopted in 2019
a modification of the Electricity Law in order to introduce a capacity
remuneration mechanism (CRM). Elia Transmission Belgium SA/
NV assisted the government in designing and implementing this
CRM mechanism and has been appointed by the latter to operate it.
In August 2021, the European Commission approved the Belgian
CRM (its compliance with State Aid Legislation) and in October
2021 Elia Transmission Belgium SA/NV ran a first CRM auction to
contract capacities for delivery year 2025-2026. The Belgium CRM
scheme/design foresees that for each delivery year a capacity vol-
ume to secure the by law set security of supply standards has to be
procured through two distinctive auctions, one run in four years
before delivery and one run one year before delivery. The aim of
this split procurement is, amongst other things, to allow all kind of
technologies to participate to the CRM.
The auction modalities/rules, as well as the computation of the
amount of capacity to be procured, are determined by a set of legal
and/or regulatory documents or decisions.
The results of the first CRM auction (Y-4 for delivery year 2025-2026)
have been validated by the CREG and published on Elia Transmis-
sion Belgium SA/NV’s website, conform the legally applicable pre-
scriptions.
Due to uncertainty on the timely obtaining of environmental per
-
mit of the projects in the CRM mechanism, the government has
adopted in December 2021 a draft law proposal describing alterna-
tive arrangements aiming at ensuring security of supply for delivery
year 2025-2026 in case the projects concerned would not be able to
secure their environmental permit by a set deadline. The govern-
ment has concretised these arrangements in March 2022.
CONTINGENCY EVENTS & BUSINESS CONTINUITY
DISRUPTION
The transmission systems operated by the group are very reliable.
Nonetheless, unforeseen events, such as unfavourable weather
conditions, may occur and alter the smooth operation of one or
more infrastructure components. In most cases, these will lead to
a so-called single contingency event, and have no impact on the
end customers’ power supply because of the meshed structure
of the grids operated by the group. Indeed, electricity can often
reach end customers via a number of different connections in the
system. However, in other cases, an incident in the electricity sys-
tem may lead to a multiple contingencies event that could result
in a local or widespread electricity outage provoking liability claims
and litigation, which could negatively impact the financial position
of the group.
There are causes other than unfavourable weather conditions for
contingency events and business continuity disruption. Examples
include human errors, malicious attacks, terrorism, equipment fail-
ures, etc. Offshore equipment particularly has our full attention, in a
context where there is less of a track record with these technologies
and a higher complexity for curative actions.
The probability of the occurrence of one or more of the above-men-
tioned events may increase if the competent authorities do not
approve the necessary operational procedures, investments or full
time equivalent (FTE) resources proposed by Elia Transmission Bel-
gium SA/NV, Elia Asset SA/NV and 50Hertz Transmission GmbH.
Responses
There are several procedures in place to manage these risks, going
from crisis management plans to operational procedures such
as defence plans and restoration plans. All of them are regularly
trained for and tested with large-scale exercises and simulator
trainings so that our staff and transmission system operators,
as the case may be, are ready to deal with the most unexpected
and extreme situations. Also, in line with the European Directive
2019/941, a risk preparedness plan is now prepared at both national
and international levels, in collaboration with Austria, Belgium,
Switzerland, Germany, France, Luxembourg and the Netherlands.
In the event of an error attributable to Elia Transmission Belgium
SA/NV, Elia Asset SA/NV or 50Hertz Transmission GmbH, the
respective general terms and conditions of its contracts provide for
appropriate liability caps for the group and the relevant affiliate, as
the case may be, to a reasonable level. Each relevant insurance pol-
icy is designed to limit some of the financial repercussions if these
risks were to occur. Should unfavourable circumstances occur, the
transmission system operator may take any emergency measures
it deems appropriate, such as disconnecting some or all electricity
exports, requesting electricity-generating companies to increase
or decrease their electricity production or requesting a reduction
in the electricity consumption from the competent Minister in the
relevant area to reduce the impact of the event. Additionally, the
design and operation of offshore as well as onshore technologies
takes constraints related to repair time, monitoring opportunities
and grid resilience into accouuirement of a (group) crisis manage-
Elia Group Financial Report 2021 39
ment plan applies to critical infrastructure operators at European
level (Article 24 of the Commission Regulation (EU) 2017/1485 calls
for the implementation of Business Continuity Plans). It is the
ambition of Elia group to be compliant with this regulation as the
management of its Critical Infrastructures is one of its priorities.
A framework for crisis management on local/group level for man
-
aging all corporate crisis situations such as community relations
issues is under development and will enter into force in 2022.
Further information
As a regulated entity, Elia Transmission Belgium SA/NV acts in
accordance with the “network codes” applicable at European,
federal and regional level, while network access contracts are
approved by the regulator. Elia Transmission Belgium SA/NV’s
exposure under the regulatory framework and these contracts is
limited to an acceptable amount. These risks are generally covered
by a “liability” insurance contract for the appropriate amounts. In
Belgium, due to resource bottlenecks, asset replacements and
capital expenditures are generally subject to arbitration, which
contributes to the ageing of some asset fleets, complicates the
asset management and may eventually affect the availability of
some network components and the performance of protection
devices. In terms of security, the screening of relevant profiles is
applied and projects to improve the security of critical infrastruc-
ture are ongoing.
CLIMATE RISKS
The risks associated with climate change are especially important
for the group given our ambition to deliver the infrastructure of
the energy transition, which helps achieve climate targets at the
same time. Climate change and energy transition bring uncertain-
ties and challenges to transmission system operators of the group
missions related to markets, system and infrastructure.
Climate risks are often classified as physical climate risks and tran
-
sitional risks
41
.
Physical climate risks fall into two categories: chronic and acute
ones. Based on the best climate scenario information available
today, a vulnerability assessment of the group’s activities took place,
in line with the technical screening criteria of the EU Taxonomy
Delegated act. This assessment highlighted the possible harmful
effect of heatwave, cold wave/winter incident, storm, drought and
wildfire. All these phenomena belong to acute physical risks and
lead to less favorable operating conditions for the group’s assets or
even damage them. Such circumstances may trigger risk factors
for contingency events and business continuity disruption.
Transitional risks are related to the transition to a lower carbon
economy, which implies extensive policy, legal, technology and
market changes.
Responses
The assessment of climate risks is integrated into a multi-discipli-
nary group-wide risk management process, where risks are iden-
tified, assessed and high priority risks closely followed-up.
41 See e.g. the recommendations of the Taskforce on Climate Related Financial Disclosures https://assets.bbhub.io/company/sites/60/2021/10/FINAL-2017-TCFD-Report.pdf
42 An example of recent climate scenario publication is Intergovernmental Panel on Climate Change’s 6th assessment report, published in August 2021 available at the following address:
www.ipcc.ch/assessment-report/ar6/.
43 https://www.elia.be/en/news/press-releases/2021/11/20211119_elia-group-publishes-roadmap-to-net-zero
The design of our infrastructure already considers stringent climate
conditions. However, further enhancements may still be required
in the future. Indeed, events with unprecedented incidence and
intensity have already occurred and the increasing maturity of
climate scenarios
42
will continue to provide insights on less well-
known extreme phenomena. This greater awareness is likely to
trigger revisions of the standards specifying how structural design
should be conducted in Europe, of urban planning requirements,
and will lead to the introduction of new European directives, etc.
Next to these regulatory changes, the Elia group has integrated
the management of physical climate risks in its company-wide risk
management process and in its Act Now sustainability program.
Our experts identify these risks, assess them, as well as the appro-
priateness of our response. This may lead, amongst other things, to
a revision of our specifications or the launch of dedicated projects
aiming to increase the resilience of the infrastructure. Following
the flooding events of July 2021, a risk analysis is ongoing. Its deliv-
erables include an updated list of substations with flooding risks,
a list of pragmatic measures aiming at increasing the resilience
of both existing and future infrastructure, as well as the CAPEX
impact of their implementation. This flooding risk analysis is a con-
crete example of how climate vulnerability assessments, may high-
light needs for the infrastructure network, in order to achieve its
adaptation. Other risk exercises will follow so that all acute physical
risks are covered and regularly reviewed.
The ageing of infrastructure, already mentioned in the previous
section, is also a key parameter to consider in the evaluation of the
infrastructure resilience to climate risks. As a matter of fact, mate-
rials and structures will inevitably be affected by the effect of time,
the environment, repeated mechanical and electrical loading, etc.
Also, some old overhead line supports were designed according to
less stringent standards with regards to climate risks. The timely
replacement of this infrastructure, combined with an efficient cir-
cularity approach will help tackle climate adaptation issues all by
keeping climate change risks under control.
In November 2021, the “Roadmap to Net Zero” study, containing
the group’s vision on building a climate-neutral energy system by
2050, was published
43
. This document aims to support the energy
transition through providing energy system insights and defining
focus points for efficient decision making. The results are relevant
for Europe as a whole, the entire energy sector and policy makers.
FAILURE OF INFORMATION AND COMMUNICATION
TECHNOLOGY ICT, DATA SECURITY & PROTECTION.
A failure of the ICT systems and processes used by the group or a
breach of the security measures may result in losses for customers
and reduced revenues for the group and its affiliates. The group
and its relevant affiliates also collect and store sensitive data, their
own business data and that of their suppliers and business part
-
ners. The group and its relevant affiliates are also subject to several
privacy and data protection rules and regulations, including, as of
25 May 2018, the General Data Protection Regulation (EU Regula-
tion 2016/679 of 27 April 2016) regarding personal data as well as the
NIS directive (EU Directive 2016/118 of 6 July 2016 concerning meas-
ures for a high common level of security and network and infor-
40 Investor Relations
mation systems across the Union). Despite all of the precautions
taken, important system hardware and software failures, failure of
compliance processes, computer viruses, malware, cyber-attacks,
accidents or security breaches could still occur. Any such events
could impair the ability of the group and/or the ability of any of the
group’s relevant affiliates to provide all or part of their services and
generally may result in a breach of their legal and/or contractual
obligations. This could, in turn, result in legal claims or proceedings,
contractual liability, liability under any other data protection laws,
criminal, civil and/or administrative sanctions, a disruption of the
operations of the group or the operations of the relevant affiliates
of the group, or damage the reputation of the group or its relevant
affiliates, and in general could adversely affect the business of the
group and its relevant affiliates.
Responses
The group and each of its relevant affiliates take appropriate meas-
ures to revise, update and back up its ICT processes and hardware
software and network protection (for example, failover mecha-
nisms) on an ongoing basis to the maximum extent permitted by
technical and financial considerations. Furthermore, data govern-
ance and classification, as well as data protection and information
security (ISO 27001) are applied and monitoring has started. The
two transmission system operators of the group also continuously
adapt their processes to further ensure compliance and strengthen
their resilience.
PERMITTING RISK
The changing European energy market and largescale deployment
of renewable-based generation technologies also requires the fur-
ther development of the infrastructure of Elia Asset SA/NV (and Elia
Transmission Belgium SA/NV) and 50Hertz Transmission GmbH.
Electricity grids are recognised as enabling the energy transition.
The development of such infrastructure and interconnectors with
other neighbouring countries are dependent on securing per-
mits and approvals from local, regional, national and international
authorities. The need to obtain such approvals and permits within
certain timeframes represents an important challenge to timely
implementation. Moreover, these approvals and permits can be
contested in the relevant courts.
Responses
In order to manage uncertainties related to permitting, concrete
and upfront stakeholder management takes place, as well as
transparent communication to the community. Working hands in
hands with authorities on a common goal (i.e. the integration of
renewables while ensuring the security of supply with affordable
energy prices) helps to build sustainable relations and achieve grid
projects within the timeframe of climate ambitions. For instance,
in spite of COVID circumstances, the group worked together with
governments and local municipalities to develop and be able to go
further with digital participation strategies. By having this proac-
tive and agile approach, the group did not suffer from significant
delays to progress and obtain the decisions we were waiting for
in 2020 and 2021.
Further information
In Belgium, some projects are particularly important to facilitate
the energy transition: the interconnection projects, the reinforce-
ment of the backbone (HTLS projects), the construction of new
projects to reinforce the backbone, such as Ventilus and Boucle
du Hainaut and finally the development of the second wave of
offshore windfarms. Despite the common interest for the society,
they also require a great deal of effort to gain community accept-
ance due to local impact. Further information on these projects
is available in our Federal Development Plan 2020-2030: https://
www.elia.be/fr/infrastructure-et-projets/plans-investissements/
plan-de-developpement-federal-2020-2030.
In Germany, the speed of the permitting process is a general risk
across all large infrastructure projects. The new German govern
-
ment states in its coalition agreement 2021 a clear ambition to
speed up the process for approvals and permits. Further informa-
tion on how this could be realised are not yet known.
SUPPLIER’S RISK
The two transmission system operators of the group (Elia Trans-
mission Belgium SA/NV and 50Hertz Transmission GmbH) rely on
a limited number of key suppliers to provide them with material
and realise their investment projects. Given the complexity of the
infrastructure works, the increasing demand in the market, and
the factories’ full order books, the group may not be able to find
sufficient suppliers or supply capacity for their projects. In addition,
the lockdowns have been followed by a strong demand recovery,
generating supply chain bottlenecks as well as raw material, energy
and staffing scarcity. These elements induced a significant increase
in commodity and transportation prices, which in turn adversely
impacted the supply chain of our suppliers and the inflation rate
in general, as explained in a following part of the document (see
contextual factors). This makes the challenge yet greater for our
suppliers to deliver the required number of goods or services in a
timely manner and with the adequate level of quality. Any cancel-
lation of or delay in the completion of its infrastructure works could
have an adverse effect on the business and reputation of the group
and its affiliates. Last, the availability of skilled HR profiles are also
important to mitigate these risks and allow contractors to demon-
strate a deeply embedded safety culture. Should they fail to have
enough skilled profiles, this might adversely impact the group’s
business, including the safety of our works. In addition, the group
and the relevant affiliates of the group are also exposed to the risk
of public procurement claims and their respective suppliers, when
facing financial difficulties, may not be able to comply with their
contractual obligations.
Responses
The two transmission system operators of the group (Elia Transmis-
sion Belgium SA/NV and 50Hertz Transmission GmbH) maintain
ongoing dialogue with their suppliers to enhance transparency in
the supply chain and regularly perform predictive capacity analysis
at market level Targeted measures are taken to mitigate specific
risks. Examples include earlier order placement for some catego-
ries, the development of more resilient purchasing strategies and
diversification of their supplier portfolio. The HR initiatives aim-
ing to increase the internal technology knowhow and skillset with
respect to critical technologies and tools also contribute to limit
the risk of dependencies with respect to EU and non-EU suppliers.
Price revision formulas are more often used to minimise the most
recent development of the supplier’s risks.
Elia Group Financial Report 2021 41
HEALTH & SAFETY ACCIDENTS
Elia Transmission Belgium SA/NV and 50Hertz Transmission GmbH
operate facilities where accidents and asset failures may cause
harm to people. As a result, the group and its relevant affiliates
may be exposed to adverse impact on their capitals, mainly human,
asset and financial. Potential liabilities may have a negative impact
on their financial position, require significant financial and mana-
gerial resources, or possibly damage their respective reputations.
Responses
The safety and well-being of individuals (both the group’s staff,
the staff of the relevant affiliates and third parties) is a key priority
and a daily concern for the group and the relevant affiliates. The
group and its relevant affiliates have put a Health and Safety policy
in place and system-based management tools, such as process
and procedure management and unwanted event follow-up appli-
cations, proactive site visits and a supported prevention attitude.
Action is taken towards a Just Culture, which aims at creating a
constructive environment to deal with safety topics in an atmos-
phere of trust and the encouragement of responsible behavior.
Such a culture implies having safety systems designed to support
and provide an appropriate response to safety risks.
A strong safety culture does not guarantee to eliminate all safety
risks but it will provide an adequate environment to keep improv
-
ing in this topic and will support the cultural growth.
Financial risks & responses provided
NEGATIVE CHANGES IN FINANCIAL MARKETS
The ability of the group to access global sources of financing to
cover its financing needs or repayment of its debt could be affected
by the deterioration of financial markets.
Fluctuations of interest rates may negatively influence the financial
situation of the group. The allowed return on equity defined in the
regulatory schemes can be adversely affected by the decrease of
interest rates. Changes in interest rates could affect the cost of debt
the group will have to incur.
In order to finance its investments and to achieve its short and
long-term strategic goals, the group and its affiliates need to
access debt and capital markets
To finance its investments CAPEX, the group is dependent on its
ability to access the debt and capital markets in order to raise the
necessary funds to repay its existing indebtedness and meet its
financial needs for its future investments. Geopolitical issues and
the evolution of the pandemic Covid-19 could further impact the
financial markets, resulting in potential volatility, which could have
a negative impact on the growth of the group and on the pursuit
of its objectives.
Elia Group SA/NV, Elia Transmission Belgium SA/NV and Eurogrid
GmbH are rated by S&P. There is no assurance that the rating will
remain stable for any given period or that the rating will not be
lowered by the rating agency if, in its judgment, circumstances in
the future so warrant. A decision by a rating agency to downgrade
or withdraw the company’s credit rating could reduce the group’s
funding options and increase its cost of borrowing.
Responses
The financial risks (liquidity, funding, market risks etc.) faced by
the group are described and controlled. To this end, the group has
defined responsibilities and procedures specifically for the finan-
cial instruments to be used and the operating limits for managing
them. These procedures and related systems are revised on a regu-
lar basis to reflect any changes in market conditions and the activ-
ities of the group. The financial impact of these risks is limited, as
Elia Transmission Belgium SA/NV and 50Hertz Transmission GmbH
operate under the Belgian or German regulatory framework. As
part of the group’s efforts to mitigate the funding risk (including
refinancing risk), the group aims to diversify its financing sources in
debt instruments (standard or green bond), balances the maturity
of its funding to the long term lifetime of its assets and assures
developing strong relationships with a group of financial institu-
tions. Additionally, as a listed company, Elia Group SA/NV also has
access to the equity market.
Management of the liquidity risk ensures adequate coverage of
financial needs through contracting suitable credit lines and the
management of the commercial paper programme and an active
management of any surplus liquidity.
CASHFLOW
The fluctuation in interest rates of the group’s debt mentioned in
the previous section can also have an impact on the actual finan-
cial charges by causing a time differential (positive or negative)
between the financial costs effectively incurred by the group and
the forecast financial costs. This could cause transitory effects on
the cash position of the group.
Deviations between actual and budgeted volumes of electricity
transmitted and between effectively incurred and budgeted costs/
revenues may have a short-term effect on the cash position of the
group.
Existing legal rules foresee that costs linked to the public service
obligations of transmission system operators are covered by tariffs
(and tariff evolutions) which are approved by the regulators on a
regular basis. In the framework of their respective competences,
national and regional governments have taken measures to sup
-
port the further development of renewable energy by introducing
different support mechanisms. The two transmission system oper-
ators of the group (Elia Transmission Belgium SA/NV and 50Hertz
Transmission GmbH) are entitled to several of these public service
obligations mechanisms. This may have an indirect impact on the
group’s cashflow: deviations from the expected market price (Ger-
many) or number of sales of green certificates at a guaranteed min-
imum price (Belgium) or deviations from the expected volumes of
infeed of renewable energy and lower end user consumption could
generate short-term and mid-term significant cash expenses.
Responses
The short-term liquidity risk is managed on a daily basis with the
funding needs being fully covered through the availability of credit
lines and a commercial paper program. Other risk mitigation meas-
ures include being involved in the design of public service obliga-
tion mechanisms aiming to support the development of renewable
energy. Once these mechanisms are in place, performing good
forecasts on end-user consumption, renewable energy sourc-
42 Investor Relations
es-infeed, market prices, the expected number of sales of green
certificates at a guaranteed minimum price, as well as reporting
and communicating issues to governments and regulators can
contribute to keeping a good balance.
Further information
With the advent of Belgian laws and regulations governing decen-
tralised or renewable energy generation, notably via photovoltaic
solar panels and wind turbines, the federal and regional govern-
ments organised the issuance of so-called ‘green certificates’ (GC),
which are used as a financial support mechanism for renewable
energy. The offshore green certificate public service obligation
generates an increasingly large cash outflow, and will as from 2022
be compensated by state funds based on taxes put at disposal to
Elia Transmission Belgium SA/NV on monthly base. This mecha-
nism will replace the costs covering by the tariff. In order to ensure
the financial position of Elia Transmission Belgium SA/NV, an effec-
tive and timely payment of those state funds has been organised
by a dedicated protocol with the parties involved, to limit the risk of
pre-financing of these costs by Elia Transmission Belgium SA/NV.
The EEG mechanism is prescribed by German law (AusglMechV)
and is linked to the support of the production of the renewable
energy sources (RES). The transmission system operators pay the
RES producers the difference between market price and the price
prescribed by law for their generated energy and recharges the
difference to the end user applying a surcharge amount per kWh.
If the RES infeed is higher than expected, or market prices are lower
than estimated or end user consumption is lower than expected,
the liquidity of 50Hertz Transmission GmbH can be heavily affected.
Due to strongly increased market prices and pay out of the Ger-
man federal subsidy grant to the transmission system operator
the pressure on 50Hertz Transmission GmbH cashflow has relaxed
compared to 2020. However, volatility in market prices and end user
consumption could still impact the liquidity significantly. Especially
as we are still confronted with the pandemic situation
NEW BUSINESS DEVELOPMENTS
Any negative results from new business developments are entirely
born by Elia Group NV/SA and represent an additional financial risk.
Responses
The reorganization of the group in 2019 explained in the “Risk of
early termination of transmission system operator licence” section
is one of the responses provided. Concerning the group affiliate Elia
Grid International SA/NV, its main revenue stream in 2021 is related
to turnkey projects for the Elia group, characterised by lower risks
of claims and liabilities.
LEGAL DISPUTES & LIABILITIES
The outcome of legal disputes and lawsuits may negatively affect
the business operations and/or the financial results.
Responses
The group and its relevant affiliates carry out their activities in such
a way as to reduce (as much as possible) the risk of legal disputes
and, if necessary, the appropriate provisions are identified and
implemented on a quarterly basis.
R&D (Innovation)
In line with its strategic priorities, innovation within the Elia group
is tackling the challenges of increasingly complex operation of the
network, higher integration of renewables and efficient infrastruc-
ture management. The selection of projects focuses on “real first”
initiatives, like long distance drone flights or the use of robots in
converter stations. This is fully in accordance with our willingness
to continually challenge the existing. The group is even heading
towards further disruptive initiatives. These are called moonshots.
The group is also working to build a large ecosystem, that is seen as
an enabler for early identification of opportunities and accelerated
progress. As an example, the group organises the open innovation
challenge. In 2021, its focus was on Offshore Grid Integration.
The link with other risks described earlier is quite direct. Innovation
works as a vehicle for cultural change. All projects are carried out in
collaboration with the business, they benefit from agile methods
and their outcomes serves as a revelation to new technologies. The
business may also submit innovation proposals to The Nest, a ded-
icated risk-free working environment that allows fast prototyping
of promising projects.
Elia Group Financial Report 2021 43
Features of the internal control and
risk management systems
GRI 102-17, GRI 102-30
The reference framework for internal control and risk manage-
ment, established by the Executive Management Board and
approved by Elia Group SA/NV Board of Directors, is based on the
COSO II framework. The framework has five closely linked basic
components, providing an integrated procedure for internal con-
trol and risk management systems: control environment, risk man-
agement, control activities, information and communication, and
monitoring. The use and inclusion of these concepts in Elia Group
SA/NV’s various procedures and activities enables the company
to control its activities, improve the effectiveness of its operations,
optimally deploy its resources, and ultimately achieve its objectives.
The implementation of COSO II at Elia Group SA/NV is described
below.
Control environment
ORGANISATION OF INTERNAL CONTROL
Pursuant to the Elia Group SA/NV Articles of Association, the Board
of Directors has established an Executive Management Board as
well as various committees to help it fulfil its duties: the Audit Com-
mittee, the Strategic Committee, the Remuneration Committee
and the Nomination Committee. The Audit Committee is, pursuant
to Article 7:99 of the Code of Companies and Associations and the
Articles of Association, responsible in particular for (ii); (iii); (iv); (v).
The Board of Directors has charged the Audit Committee with the
main following tasks: (i) examining the accounts and exercising
control over the budget; (ii) monitoring the financial reporting pro-
cess; (iii) monitoring the effectiveness of the company’s internal
control and risk management systems; (iv) monitoring the inter-
nal audit and its effectiveness; (v) monitoring the statutory audit
of annual and consolidated accounts, including the follow-up of
any issues raised or recommendations made by external audi-
tors; (vi) reviewing and monitoring the independence of external
auditors, (vii) formulating a proposal to the Board of Directors for
the (re)-appointment of the statutory auditors, as well as making
recommendations to the Board of Directors regarding the condi-
tions of their appointment; (viii) monitoring the nature and extent
of the non-audit services provided by the statutory auditors; (ix)
reviewing the effectiveness of the external audit process. The Audit
Committee generally meets quarterly. The Finance Department
helps the Executive Management Board by providing, in a timely
manner, correct and reliable financial information to aid not only
decision-making with a view to monitoring the profitability of activ-
ities, but also effective management of corporate financial services.
External financial reporting – one of Elia Group SA/NV’ s duties –
includes (i) statutory financial and tax reporting; (ii) consolidated
financial reporting; (iii) specific reporting obligations applicable
to listed companies. The structured approach developed by Elia
Group SA/NV helps to ensure that financial data is both exhaustive
and precise, taking into account the deadlines for activity reviews
and the actions of key players so as to ensure adequate control
and accounting.
INTEGRITY AND ETHICS
Elia Group SA/NV’s integrity and ethics are a crucial aspect of
its internal control environment. The Board of Directors and the
Executive Management Board regularly communicate about these
principles in order to clarify the mutual rights and obligations of the
company and its employees. These rules are communicated to all
new employees, and compliance with them is formally included in
employment contracts. Elia Group SA/NV’s Code of Conduct (the
“Code of Conduct”) also helps to prevent employees from breach-
ing any Belgian legislation on the use of privileged information
or market manipulation. Management consistently ensures that
employees comply with internal values and procedures and –
where applicable – take any actions deemed necessary, as laid
down in the company regulations and employment contracts. Elia
Group SA/NV’s Code of Ethics (the “Code of Ethics”) defines what
Elia Group SA/NV regards as correct ethical conduct and sets out
the policy and a number of principles on the avoidance of conflicts
of interests. Acting honestly and independently with respect to all
stakeholders is a key guiding principle for all of our employees. Elia
Group SA/NV’s Code of Ethics expressly states that bribery in any
form, misuse of privileged information and market manipulation
is prohibited. This is confirmed by the Code of Conduct. Elia Group
SA/NV and its employees do not use gifts or entertainment to gain
competitive advantage. Facilitation payments are not permitted by
Elia Group SA/NV. Disguising gifts or entertainment as charitable
donations is also a violation of the Code of Ethics. Moreover, the
Code of Ethics prohibits all forms of racism and discrimination,
promotes equal opportunities for all employees, and ensures the
protection and confidential use of IT systems.
All parties involved in procurement must abide by Elia Group SA/
NV’s Purchasing Code of Ethics and all associated regulations. Elia
Group SA/NV’s Purchasing Code of Ethics is published internally
and externally and is based on four pillars: confidentiality, non-dis
-
criminatory treatment of suppliers, transparency, and avoidance of
conflicts of interest. The management of the employees involved
in the procurement and payment processes regularly provides
opportunities for training and awareness- raising on these topics.
Elia Group SA/NV offers its employees the opportunity to express
their concern about an (alleged) breach of the Code of Ethics
without fear of sanctions and/or unfair treatment. In addition to
the existing reporting channels, an external system EthicsAlert for
reporting integrity breaches has been implemented that is com-
pliant with the EU Whistleblowing Directive. Internal employees
as well as external stakeholders can report via this platform their
suspicions about possible breaches of the Code of Ethics which
may harm Elia Group SA/NV’s reputation and/or interests in a pro-
tected manner.
Violations of these codes can be reported to the local management
or HR, directly to the Compliance Officer or by using the external
system after which they will be handled objectively and confiden-
tially in line with the whistleblowing procedure.
Internal Audit’s annual programme includes a number of actions
and verification audits designed to act as specific safeguards
44 Corporate Governance Statement
against fraud. Any findings are systematically reported to the Audit
Committee. In 2021, no relevant findings relating to financial fraud
were reported in the audits making up the annual audit plan of
2021.
ROLES AND RESPONSIBILITIES
Elia Group SA/NV’s internal control system relies on clearly defined
roles and responsibilities at all levels of the organisation. The roles
and responsibilities of the various committees established within
Elia Group SA/NV are primarily identified in the legal framework
applicable to Elia Group SA/NV, the Articles of Association and the
Corporate Governance Charter. Under the supervision of the Chief
Financial Officer, the Accounting Department is responsible for
statutory financial and tax reporting and the consolidation of the
Elia Group SA/NV’s various subsidiaries. The Controlling Depart-
ment monitors analytical accounting and reporting and assumes
responsibility for all financial reporting in a regulatory context. The
Investor Relations Department is responsible for specific reporting
applicable to listed companies.
As regards the financial reporting process, the tasks and respon
-
sibilities of all employees in the Accounting Department have
been clearly defined with a view to producing financial results
that accurately and honestly reflect Elia Group SA/NV’s financial
transactions. A detailed framework of tasks and responsibilities
has been drawn up to identify the main control duties and the
frequency with which tasks and control duties are performed. An
IFRS Accounting Manual is used by all entities within the scope
of consolidation as a reference for accounting principles and pro-
cedures, thus ensuring consistency, comparability and accurate
accounting and reporting within the group. The Finance Depart-
ment has the appropriate means (including IT tools) to perform its
tasks; all entities within the scope of consolidation use the same
ERP software, which has a range of integrated controls and sup-
ports task separation as appropriate. The roles and responsibilities
of all employees are clarified by providing a description of each job
in line with the Business Process Excellence methodology.
COMPETENCIES
With a view to ensuring its various activities are performed reliably
and effectively, Elia Group SA/NV clearly spells out the vital impor-
tance of its employees’ competencies and expertise in its recruit-
ment, training and retention procedures. The Human Resources
Department has drawn up the appropriate policies and defined
all jobs in order to identify the relevant roles and responsibilities as
well as the qualifications needed to fulfil them. Elia Group SA/NV
has drawn up a policy for the management of generic and specific
competencies in line with the company’s values, and promotes
training so as to enable all its employees to effectively perform the
tasks allocated to them. Requirements with regard to competency
levels are continually analysed by means of formal and informal
self-assessments at various stages of an employee’s career. Training
programmes on financial reporting are offered to all employees
involved directly or indirectly with that task. The training empha-
sises the existing regulatory framework, accounting obligations
and actual activities, with a high level of understanding enabling
participants to address the appropriate issues.
Risk management
Risk management is another internal control system that is cru-
cial in helping Elia Group SA/NV to achieve its strategic objec-
tives as defined in its mission. The Board of Directors, the Audit
Committee and the Risk Manager jointly and regularly identify,
analyse and assess key risks encountered by the company. The
risks are identified and assessed qualitatively and/or quantitatively
depending on their nature and potential effect. The Risk Manager
then makes recommendations on how best to manage each risk
considering the close interaction of Elia Group SA/NV’s entire risk
universe. Based on this assessment, preventive, remedial and/or
corrective actions are implemented, including the strengthening
of existing internal control activities where applicable. As part of its
responsibilities, the Executive Management Board establishes an
effective internal control system to ensure, among other objectives,
accurate financial reporting. It emphasises the importance of risk
management in financial reporting by taking into account, with
the Audit Committee, a whole range of associated activities and
risks. It ensures that risks are truly reflected in financial results and
reports. In addition, Risk Management goes beyond those risks
known to Elia Group SA/NV and tries to anticipate the nature and
characteristics of emerging risks, which may impact Elia Group’
SA/NV s objectives. Financial risk assessments primarily involve the
identification of:
1.
significant financial reporting data and its purpose;
2.
major risks involved in the attainment of objectives;
3.
risk control mechanisms, where possible.
Financial reporting objectives include (i) ensuring financial state
-
ments comply with widely accepted accounting principles; (ii)
ensuring that the information presented in financial results is both
transparent and accurate; (iii) using accounting principles appro-
priate to the sector and the company’s transactions; (iv) ensuring
the accuracy and reliability of financial results. The activities under-
taken by Elia Transmission Belgium SA/NV and 50 Hertz Transmis-
sion GmbH, as electricity transmission system operators in relation
to their physical installations, contribute significantly to the group’s
financial results. Therefore, appropriate procedures and control sys-
tems have been established to ensure an exhaustive and realistic
inventory of physical installations. Risk management is a compa-
ny-wide activity, actively supported by the delegation of relevant
responsibilities to all employees as part of their specific activities,
as defined in the risk appetite and risk management process.
CONTINUOUS ASSESSMENT
Employing a simultaneously top-down and bottom-up approach
enables Elia Group SA/NV to identify and, where possible, antic-
ipate forthcoming events and react to any incidents occurring
inside or outside the organisation which might affect the attain-
ment of objectives.
TOPDOWN APPROACH BASED ON STRATEGIC RISKS
Elia Group SA/NV’s strategic risk assessments were reviewed in 2021
three times a year in the Audit Committee. Action plans or specific,
theme-based risk assessments are carried out whenever there is a
perception of potential threats or opportunities.
Elia Group Financial Report 2021 45
BOTTOMUP APPROACH WITH REGARD TO BUSINESS
With a view to identifying new risks or evaluating changes in
existing risks, the Risk Manager and the Executive Management
Board remain in contact and look out for any changes that may
call for the relevant risk assessment and associated action plans
to be amended. Various criteria are used to determine the need
to re-evaluate financial reporting procedures and associated risks.
Operational management assesses the relevant risks and puts
forward action plans. The Board of Directors, upon the advice of
the Audit Committee, must approve any significant changes to
assessment rules. Risk Management is instrumental for Elia Group
SA/NV to maintain its value for stakeholders and the community,
works with all departments with a view to optimising Elia Group
SA/NV’s ability to achieve its strategic objectives, and advises the
company regarding the nature and potential effects of future risks.
Control activities
MAIN CONTROL ACTIVITIES
Elia Group SA/NV has established internal control mechanisms at
its various structural levels so as to ensure compliance with stand-
ards and internal procedures geared to the proper management
of identified risks. These include:
(i)
clear task separation as part of procedures, preventing the same
person from initiating, authorising and recording a transaction
– policies have been drawn up regarding access to information
systems and the delegation of powers;
(ii)
integrated audit approach as part of internal procedures so
as to link end results with the transactions supporting them;
(iii)
data security and integrity through the appropriate allocation
of rights;
(iv)
appropriate documentation of procedures through the use
of the Business Process Excellence Intranet, which centralises
policies and procedures. Departmental managers are respon-
sible for establishing activities to control the risks inherent to
their department.
FINANCIAL REPORTING PROCEDURE
For all significant financial reporting risks, Elia Group SA/NV sets
out appropriate control mechanisms to minimise the probability
of error. Roles and responsibilities have been defined in connec-
tion with the closing procedure for financial results. Measures have
been established for the continuous follow-up of each stage, with a
detailed agenda of all activities undertaken by group subsidiaries;
control activities are performed to ensure quality and compliance
with internal and external requirements and recommendations.
During the financial closing period, a specific test is performed to
ensure control over significantly unusual transactions, accounting
checks and adjustments at the end of the relevant financial period,
company transactions and critical estimates. The combination of
all these controls ensures the reliability of financial results. Regular
internal and external audits also contribute to financial reporting
quality. In identifying those risks that may affect the achievement
of financial reporting objectives, the Executive Management Board
takes into account the possibility of misreporting associated with
fraud and takes appropriate action where internal control needs
to be strengthened. Internal Audit performs specific audits based
on the risk assessment for potential fraud, with a view to avoiding
and preventing any instances of fraud.
Information and communication
Elia Group SA/NV communicates relevant information to its
employees to enable them to fulfil their responsibilities and achieve
their objectives. Financial information is needed for budgeting,
forecasts and ensuring compliance with the regulatory framework.
Operational information is also vital for the production of various
reports, essential for the well-functioning of the company. As such,
Elia Group SA/NV records recent and historical data needed for
corporate risk assessments. Multiple communication channels are
used: manuals, memos, emails, bulletin boards and intranet appli-
cations. Financial results are reported internally and validated at dif-
ferent levels. The management responsible for financial reporting
regularly meets other internal departments (operational and con-
trol departments) to identify financial reporting data. It validates
and documents the critical assumptions underpinning booked
reserves and the company’s accounts. At group level, consolidated
results are broken down into segments and validated by means of
a comparison with historical figures and a comparative analysis
between forecasts and actual data. This financial information is
reported monthly to the Executive Management Board and is dis-
cussed quarterly with the Audit Committee. The Chairman of the
Audit Committee then reports to the Board of Directors.
Monitoring
Elia Group SA/NV continually re-evaluates the adequacy of its risk
management approach. Monitoring procedures include a com-
bination of monitoring activities carried out as part of normal
business operations, in addition to specific ad hoc assessments
on selected topics. Monitoring activities include (i) monthly report-
ing of strategic indicators to the Executive Management Board
and the management; (ii) follow-up on key operational indicators
at departmental level; (iii) a monthly financial report including an
assessment of variations as compared with the budget, compar-
isons with preceding periods and events liable to affect cost con-
trolling. Consideration is also given to third-party feedback from
a range of sources, such as (i) stock market indices and reports by
ratings agencies; (ii) share value; (iii) reports by federal and regional
regulators on compliance with the legal and regulatory frame-
work; (iv) reports by security and insurance companies. Comparing
information from external sources with internally generated data
and ensuing analyses allows Elia Group SA/NV to keep on making
improvements. Internal Audit also plays a key role in monitoring
activities by conducting independent reviews of key financial and
operational procedures in view of the various regulations applica-
ble to Elia Group SA/NV. The findings of those reviews are reported
to the Audit Committee to help it monitor internal control and risk
management systems and corporate financial reporting proce-
dures. The group’s legal entities are also subject to external audits,
which generally entail an evaluation of internal control and remarks
on (annual and quarterly) statutory and consolidated financial
results. External auditors make recommendations for improving
internal control systems. In entities that have an Audit Committee,
the recommendations, action plans and their implementation are
reported annually to that Committee, which in turn reports to the
Board of Directors on the independence of the auditor or statutory
audit firm and drafts a motion for a resolution on the appointment
of external auditors.
46 Investor Relations
2. Investor
relations
Elia Group Financial Report 2021 47
ELIA GROUP ON THE STOCK EXCHANGE 48
MANAGEMENT REPORT AND
ANALYSIS OF THE 2021 RESULTS 51
48 Investor Relations
Elia Group’s share pricein2021
Elia group SA/NV on the stock exchange
Record high for the Elia Group share in 2021 despite
volatile markets
EVOLUTION IN PRICE AND TRADED VOLUMES
500,000
400,000
300,000
200,000
100,000
0
Elia Group (Eli) Volume
125.0
115.0
105.0
95.0
85.0
75.0
65.0
55.0
Jan
/21
Feb
/21
Mar
/21
Apr
/21
May
/21
Jun
/21
Jul
/21
Aug
/21
Sep
/21
Oct
/21
Nov
/21
Dec
/21
EVOLUTION OF THE ELIA GROUP SHARE
AGAINSTTHEBEL20INDEX
Elia Group (Eli) Bel 20
140.0
120.0
100.0
80.0
60.0
Jan
/21
Feb
/21
Mar
/21
Apr
/21
May
/21
Jun
/21
Jul
/21
Aug
/21
Sep
/21
Oct
/21
Nov
/21
Dec
/21
EVOLUTION OF THE ELIA GROUP SHARE AGAINST ITS EUROPEAN
COUNTERPARTS
Jan
/21
Feb
/21
Mar
/21
Apr
/21
May
/21
Jun
/21
Jul
/21
Aug
/21
Sep
/21
Oct
/21
Nov
/21
Dec
/21
Elia Group (ELI) National Grid Terna Red Electrica
130,00
120,00
110,00
100,00
90,00
80,00
70,00
Almost two years on from the beginning of the COVID-19 pandemic
and financial markets have remained volitale and dominated by
COVID-19 related news flows. Despite the continuation of this
unprecedented public health crisis, most of Elia Group SA/NV’s
operational activities continued supported by their socio-economic
importance and the group’s vigorous efforts to ensure business
continuity.
Driven by the highly regulated nature of our activities, Elia Group
SA/NV delivered solid financial results driven by the realisation of
investments in Belgium and Germany and strong a strong perfor
-
mance of Nemo Link.
The Elia Group share price, closed the year at a price of €115.70, up
18.67% from €97.50 at the end of 2020. On the 3 March 2021 the
share price hit a low of €84.60 and recorded a high of €117.10 on
29 December 2021. The approved dividend of €1.71 for 2020 was
paid, leading to a total yearly return of 15.55% inline with peers and
the BEL 20 Index.
Liquidity of the Elia Group share increased to 57,532 in shares traded
per day in 2021. This increase in liquidity was also supported by the
re-entrance of Elia Group SA/NV in the BEL20 index
With 68,728,055 shares outstanding, the company’s market cap
-
italisation stood at €7,951,835,964 at the end of December 2021.
Information on treasury
shares – liquidity agreement
The Special General Meeting of Shareholders of 18 May 2021 con-
ferred the power to the Board of Directors to acquire the company’s
own shares, without the total number of own shares held by Elia
Group SA/NV pursuant to this power exceeding 10% of the total
number of shares, for a compensation that cannot be lower than
10% below the lowest closing price in the thirty days preceding the
transaction and not higher than 10% above the highest closing
price in the thirty days preceding the transaction.
This power is conferred for a period of five years as from 4 June
2021. It applies to the Board of Directors of Elia Group SA/NV and,
to the extent necessary, to any third party acting on behalf of Elia
Group SA/NV.
In view of the above, Elia Group SA/NV has entered into a liquidity
agreement with Exane BNP Paribas providing the latter with the
mandate to purchase and sale Elia Group shares on the regulated
market of Euronext Brussels. Exane BNP Paribas is acting on behalf
and for the account of Elia Group SA/NV and within the framework
of a discretionary mandate as authorized by the Extraordinary Gen-
eral Meeting of 18 May 2021. The purpose of the liquidity contract
is to support the liquidity of the Elia Group SA/NV shares listed on
Euronext Brussels.
Table I below provides an overview of the treasury shares acquired
or disposed of in 2021 within the framework of the liquidity agree
-
ment. Table II below provides a more specific overview of the dis-
posals of treasury shares in 2021.
Elia Group Financial Report 2021 49
TABLE I: EVOLUTION OF TREASURY SHARES
Number
of shares
Accounting
par value
Percentage
of capital
Consideration
for the acquired
or transferred
shares (€)
Treasury shares
acquired
in 2021
270,331 24.94 0.39% 28,354,836
Treasury shares
disposed
of in 2021
44
-263,083 24.94 -0.38% -27,628,488
Situation per
31/12/2021
7,248 24.94 0.01% 726,347
TABLE II: OVERVIEW OF THE DISPOSALS OF TREASURY SHARES
Date
Num-
ber of
shares
Accoun-
ting par
value
Percen-
tage of
capital
Average
price (€)
Lowest
price (€)
Highest
price (€)
2021 263,083 24.94 0.38% 97.85 106.20 117.60
The voting rights of all treasury shares are suspended by law. As
per 31 December 2021, Elia Group SA/NV had 7,248 treasury shares
that are not entitled to dividend rights.
Dividend
On 22 February 2022, Elia Group SA/NV Board of Directors decided
to propose a nominal dividend of €120.3 million, or €1.75 per share
(gross) to the general meeting of shareholders of 17 May 2022, in
accordance with the dividend policy and subject to approval of the
profit appropriation by the annual general meeting of sharehold-
ers. This represents an increase in dividend for the sixth consecutive
year and an increase of 2.34% compared to 2020.This gives a net
dividend of €1.225 per share.
The following paying agents will pay out dividends to shareholders:
BNP Paribas Fortis, ING Belgium, KBC and Belfius. Dividend pay-
outs for shares held in a stock account will be settled automatically
by the bank or stockbroker. Elia Group SA/NV will pay out dividends
on registered shares directly to shareholders.
Dividend policy
On 21 March 2019, the Board of Directors formally approved the
policy it intends to apply when proposing dividends to the general
meeting of shareholders. Under this policy, the full-year dividend
growth is intended not to be lower than the increase of the Con-
sumer Price Index (“inflation”) in Belgium. The policy supports the
group’s long-term ambition to offer a secure dividend in real terms
to the shareholders while at the same time enabling the group to
sustain a strong balance sheet that is needed to fund the group’s
investment program.
Nevertheless, future dividends will remain dependent upon the
results of the group (which are affected by a number of factors,
outside the company’s control) as well as the company’s financial
situation, financing needs (in particular, capital expenditures and
investment plan) and business perspectives. The proposed divi-
dend represents a pay-out ratio of 43.6% of the IFRS reported profit
attributable to owners of ordinary shares.
44 As the shares were disposed of on Euronext Brussels, Elia Group SA/NV has no information on the identity of the acquirers.
44.8%
CONTRIBUTION OF GERMANY
TOTHE NET PROFIT
ATTRIBUTABLE TO THE ELIA GROUP
1.75€
GROSS DIVIDEND
PER SHARE
FINANCIAL CALENDAR
15 April 2022 Publication Annual Report 2021
17 May 2022 General meeting of shareholders
18 May 2021 Quarterly statement for Q1 2022
01 June 2022 Payment of 2021 dividend
27 July 2022 Publication of 2022 half-year results
25 November 2022 Quarterly statement for Q3 2022
SHAREHOLDER STRUCTURE
Based on transparency declarations received by the company (in
accordance with the Act of 2 May 2007 and the Royal Decree of
14February 2008.
Other free float
40.88%
Interfin
3.78%
Publi-T
44.82%
Katoen Natie Group
6.15%
Belfius Insurance
1.04%
Publipart
3.32%
INVESTORS
For any questions regarding Elia and its shares, please contact:
Elia
Investor Relations, Boulevard de l’Empereur 20
1000 Brussels, Belgium
Tel.: +32 2 546 74 29
Fax: +32 2 546 71 80
E-mail: inv[email protected]
Information about the Group (press releases, annual reports,
share prices, disclosures, etc.) can be found on the Elia Group
website www.eliagroup.eu.
50 Investor Relations
Key figures
45 The Group applies IFRS 15 under the full retrospective method under which comparative figures for financial year 2017 have been restated
46 The adjusted net result has been introduced in 2019 as an Alternative Performance Measure. This represents the Normalised net result in prior years
47 The Regulatory Asset Base includes 60% of the RAB of 50Hertz until 2017 and 80% of the RAB as from 2018. In 2019, the composition of the RAB is no longer including EEG and similar
surcharges due to change in regulation
(in € million) 2021 2020 2019 2018 2017 
45
2016
Consolidated results
Total revenue and other income 2,859.7 2,473.6 2,319.0 1,931.8 867.1 868.1
EBITDA
(*)
1,006.9 1,005.6 930.2 750.5 455.4 425.0
Results from operating activities (EBIT)
(*)
540.1 578.5 569.7 502.6 324.6 295.0
Net finance costs (106.6) (141.5) (139.6) (93.2) (76.5) (82.9)
Income tax (105.2) (129.1) (121.0) (102.2) (39.6) (32.0)
Adjusted net result
(*)
46
328.3 308.1 306.2 280.8 203.4 168.0
Reported net result 328.3 307.9 309.1 307.1 208.5 179.9
Non-controlling interest 33.1 38.5 35.5 25.7 0.0 0.0
Hybrid securities 19.2 19.3 19.3 6.2 0.0 0.0
Profit attributable to owners of ordinary shares 276.0 250.1 254.3 275.2 208.5 179.9
(in € million) 31.12.2021 31.12.2020 31.12.2019 31.12.2018 31.12.2017 31.12.2016
Consolidated balance
Total assets 18,144.3 15,165.6 13,893.4 13,754.3 6,582.3 6,241.5
Equity attributable to owners of the company 4,552.0 4,173.2 4,022.3 3,447.5 2,563.3 2,511.4
Equity attributable to owners of the parent –
ordinary shareholders
3,850.6 3,471.8 3,320.9 2,741.3 2,563.3 2,511.4
Equity attributable to owners of the parent
-Hybrid securities holders
701.4 701.4 701.4 706.2 0.0 0.0
Net financial debt 4,886.3 7,465.0 5,523.1 4,605.6 2,689.1 2,557.3
31.12.2021 31.12.2020 31.12.2019 31.12.2018 31.12.2017 31.12.2016
Other key figures
Regulatory Asset Base (RAB) (bn EUR)
47
10.3 9.7 9.1 9.2 7.4 7.1
Dividend per share (EUR) 1.75 1.71 1.69 1.66 1.62 1.58
Return on Equity (%) 6.49% 6.46% 6.80% 8.16% 8.14% 7.16%
Return on Equity (adj.)
(*)
7.56% 7.20% 7.66% 10.04% 8.14% 7.16%
Earnings per share (adj.) (EUR)
(*)
4.02 3.64 3.91 4.52 3.42 2.95
Equity per share (EUR) 56.0 50.5 48.4 44.9 42.1 41.2
Number of shares (period-end) 68,728,055 68,720,695 68,652,938 61,015,058 60,901,019 60,753,714
(*) Detailed glossary of definitions is included in Appendix.
Elia Group Financial Report 2021 51
Management discussion
Management report and analysis of the 2021 results
2021 Highlights
•
Grid investments totalling €376.7 million in Belgium and €850.9
million in Germany made to ensure a reliable, sustainable and
affordable energy system
• Good progress on major infrastructure works with new cooper
-
ation agreements signed with other transmission system oper-
ators
• Belgium’s first CRM auction organised
• Partnerships shaping the future energy market to facilitate the
transition to a sustainable energy system
•
Adjusted net profit up by 6.6% reaching €328.3 million, following
Nemo Link’s very strong performance and solid operations in
Belgium which offset the reduced result in Germany, driven by
increased operational expenses
•
A dividend of €1.75 per share will be proposed at the General
Meeting of 17 May 2022
As a system operator, we are in a privileged position: we are deliv
-
ering the appropriate grid infrastructure, running a reliable power
system and developing new market products to integrate more
and more renewables into the system, whilst also enabling others
to see what is coming. In this phase of transition, our advisory role
is very important. We have access to information which allows us
to provide many players with interesting insights. It is our societal
responsibility to share the results of our studies and our vision with
our stakeholders, engage in dialogue with them and help them
understand the context of the energy transition.
Elia Group
Key figures (in € million) 2021 2020 Difference (%)
Revenue, other income and net income (expense) from settlement mechanism 2,859.7 2,473.6 15.6%
Equity accounted investees 49.4 9.2 437.0%
EBITDA 1,006.9 1,005.6 0.1%
EBIT 540.1 578.5 (6.6%)
Adjusted items 0.0 (0.3) n.r.
Adjusted EBIT 540.1 578.8 (6.7%)
Net finance costs (106.6) (141.5) (24.7%)
Adjusted net profit 328.3 308.1 6.6%
Net profit 328.3 307.9 6.6%
Non-controlling interests 33.1 38.5 n.r.
Net profit attributable to the Group 295.2 269.4 9.6%
Hybrid securities 19.2 19.3 n.r.
Net profit attributable to owners of ordinary shares 276.0 250.1 10.4%
Key figures of the financial position (in € million)
2021 2020 Difference (%)
Total assets 18,144.3 15,165.6 19.6%
Equity attributable to owners of the company 4,552.0 4,173.2 9.1%
Net financial debt 4,886.3 7,465.0 (34.5%)
Key figures per share
2021 2020 Difference (%)
Reported earnings per share (EUR) (Elia share) 4.02 3.64 10.4%
Return on Equity (adj.) (%) (Elia share) 7.56 7.20 4.9%
Equity attributable to owners of the company per share (EUR) 56.0 50.5 10.9%
52 Investor Relations
Results
Elia Group’s adjusted net profit increased by 6.6%, reaching €328.3
million, driven by the realisation of investments in Belgium and
Germany and a strong performance from Nemo Link and was
partially offset by the lower result of 50Hertz Transmission due to
higher operational costs.
• Looking at the various segments, Elia Transmission (Belgium)
realised solid results with an adjusted net profit of €131.0 million
(+€6.2 million). The higher result was mainly due to a higher fair
remuneration and a higher performance on incentives and was
offset by lower capitalised borrowings and a lower contribution
from employee benefits.
• In Germany, 50Hertz Transmission (on a 100% basis) recorded a
lower adjusted net profit of €165.4 million (-€27.2 million), which
was driven by pressure on operational cost due to peaks in main-
tenance, higher IT costs following our effort to transform into
a digital TSO, and higher personnel costs while we increased
our talent pool; this was partially offset by one-off regulatory
settlements linked to changes in regulation, higher investment
remuneration following the asset growth, and higher financial
result due to lower interest costs.
•
The non-regulated segment and Nemo Link posted strong
results with an adjusted net profit of €31.9 million (+€41.2 mil-
lion), which were driven by the very strong performance of Nemo
Link and lower regulatory settlements; these were partially offset
by higher holding and business development costs. The contri-
bution from Elia Grid International and re.alto remained limited
and flat year-over-year.
No adjusting items were recorded over 2021.
The net profit of Elia Group attributable to the owners of ordinary
shares (after deducting the €33.1 million in non-controlling interest
and €19.2 million attributable to hybrid securities holders) was up
by 10.4%, reaching €276.0 million.
Non-regulated
& Nemo Link
50Hertz Trans.
0.0% 10.0% 20.0% 30.0% 40.0% 60.0% 60.0%
Elia Trans.
9.7%
50.4%
39.9%
COMPONENTS OF ELIA GROUP’S ADJUSTED NET PROFIT
Capital expenditures
Our large-scale (onshore and offshore) infrastructure projects in
both Belgium and Germany are underway, enabling the establish-
ment of an integrated European energy system that includes large
amounts of distributed renewable production and cross-border
electricity flows. The COVID-19 measures did not impede progress
on these projects. During the summer months, the flooding in Bel-
gium caused the need for unforeseen repair work on some of our
high-voltage substations. Thanks to the huge amounts of com-
mitment demonstrated by our employees, this work was finalised
in record time.
In 2021, Elia Group invested €1,227.6 million in the creation and
delivery of its onshore and offshore electricity transmission infra-
structure, sustainable enhancement of its operational practices,
upgrading of the market design and facilitation of the digitalisation
of the power sector leading to a growth of the Regulatory Asset
Base (RAB) of 6.19%.
ELIA GROUP INVESTMENTS IN 2021 TOTALS €1,227.6 M
Elia Transmission
Belgium
50Hertz
2020 20202021 2021
900
800
700
600
500
400
300
200
100
0
337.4
715.9
376.7
850.9
Good progress on major
infrastructureworks
Strengthening the Belgianbackbone
To strengthen Belgium’s electricity backbone, several major infra-
structure works were undertaken along both its north-south
and east-west axes. Since the works were carried out on existing
high-voltage lines, this required appropriate planning to avoid
compromising the country’s security of supply.
Of particular importance were the works carried out on the
high-voltages lines of Zandhoven-Kinrooi and Avelgem-Avelin.
These are being equipped with a new type of conductor (HTLS
technology) that can transport more power without generating
higher impact on the landscape. These projects will allow Elia to
better distribute and transmit increased electricity flows through-
out the country and to its neighbouring countries. The works are
being undertaken in phases across several years, with the con-
struction site shifting along the routes as each phase of work is
completed. The works on the Avelgem-Avelin line will be finalised
by the end of 2022.
In order to optimise Elia’s grid to the east of the Province of Liège
and enhance the integration of renewable energy in the area, Elia
is reinforcing the Boucle de l’Est (70 kV to 110 kV) overhead line;
as part of this, in 2021, it began dismantling the Ans-Bressoux (70
kV) line, paying particular attention to the protection of biodiversity
as it did so.
Finally, Elia started expanding the Mercator high-voltage substation
in Kruibeke, which plays a crucial role as part of the north-south
axis of Belgium’s 380 kV backbone, and is related to the upcoming
reinforcements which are due to be undertaken between Liefken-
shoek-Kruibeke (Brabo III) and Kruibeke-Dilbeek.
At the Monceau-sur-Sambre high-voltage substation, a
phase-shifting transformer (PST) was successfully commissioned.
This forms an important part of Belgium’s connection to France.
The project has involved the upgrading of five substations and
the laying of 60 km of cable, improving the supply of electricity
throughout the region.
Elia Group Financial Report 2021 53
Further expansion of the German grid
Important steps were taken throughout 2021 as part of the realisa-
tion of the Ostwind 2 project, which involves the German electricity
grid being connected to two new offshore wind farms in the Baltic
Sea: Arcadis Ost 1 and Baltic Eagle. The wind farms are set to be
commissioned in 2023 and 2024 and will provide a total generation
capacity of around 725 MW.
The first two of three 220 kV cable sections have been installed
along the seabed. Work is now underway to complete the third sec-
tion of the submarine cable. Land cables have also been success-
fully laid between the landing point (where the submarine cable
meets the mainland) and the onshore Lubmin substation. To limit
the environmental impact of the works, underground protective
pipes were installed using horizontal drilling. Work on the Arcadis
Ost 1 offshore transformation platform is also on schedule: it was
transported from Gdansk (Poland) to a shipyard in Aalborg (Den-
mark), where assembly of the electrical equipment has started. The
offshore installation phase will start in 2022.
50Hertz has started work on its Kabeldiagonale Berlin project,
which involves laying cables along a tunnel that is around seven
kilometres long and runs between two transformer stations some
20 to 30 metres underground. The 380 kV cables, which will replace
an old cable system, wil transmit more electricity to the central
districts of Berlin.
The works on upgrading the eastern section of the 380 kV Nordring
Berlin line (which is 75 kilometres long) can now continue after a
complaint against the project was dismissed by the courts. This
project will replace a 220 kV connection dating back to the 1950s
with a new 380 kV line, which has a much higher capacity.
Foundation work has begun along the southern section of the Uck
-
ermark line. This new 115 km line 380 kV line will connect the Ber-
tikow substation (near Prenzlau) to Neuenhagen in northern Berlin
and will transport wind power from the north-east of Germany to
the Berlin area. The Bundesnetzagentur, the German regulator, has
given the go-ahead for the construction of the 380kV power line
between the Bertikow substation and the Pasewalk substation (in
Mecklenburg-Western Pomerania). The 30 km high-voltage line
will replace an existing 220 kV line and will increase the transmis-
sion capacity in the region by a factor of four.
Construction work aimed at replacing pylons and conductors has
also begun on the 380 kV overhead line (150 km-long) between
Pulgar (Saxony) and Vieselbach (Thuringia). In 2021, the eastern
section (27 km) was built and commissioned through the use of
simplified permit procedures, in accordance with the law. The rein-
forcement of the Pulgar-Vieselbach project should be finished by
2025. The reinforcement works will increase the current transmis-
sion capacity by about 40%.
50Hertz has opened a new substation near Altdöbern. A great deal
of renewable energy is integrated into the extra-high-voltage elec-
tricity grid here. Over the next five years, 50Hertz will upgrade 19 of
its substations and build three new ones.
(in € million) 2021 2020
Net debt 4,886.3 7,465.1
Leverage (D/E) (incl. NCI & hybrid) 1.6x 1.8x
Net debt / EBITDA 4.9 7.4
EBITDA / Gross interest 9.1 6.8
Average cost of debt 1.67% 1.89%
% fixed of gross debt 100.0% 100%
Net debt and credit metrics
Elia Group carried a total net financial debt of €4,886.3 million
(-€2,578.7 million) at the end of 2021.
The decrease was entirely attributable to Germany (-€2,741.7 mil
-
lion), as 50Hertz benefitted from three federal compensation pay-
ments (€2,160.0 million) to pay back the revolving credit facilities
(€700 million) that were temporarily contracted to finance the EEG
deficit at the end of 2020. Additionally, it benefitted from a very
high EEG cash in (+€758.9 million) which resulted from the very
high energy market prices, while the investment programme was
mainly financed from operating cash flow.
In Belgium, Elia’s net debt rose slightly (+€135.4 million) with
organic growth financed by cash flow from operating activities
and the drawing of commercial paper (€60 million).
Elia Group had access to diversified sources of finance and tapped
into the debt capital market to strengthen and secure its liquid-
ity position for the further expansion of its grid. In April, Eurogrid
GmbH took advantage of favourable market conditions to issue
a €500 million senior bond and a coupon of 0.741%, thus secur-
ing part of the liquidity for its upcoming investment programme.
Following this transaction, Elia Group’s average costs of debt
decreased to 1.67% (down 22 bps), mainly to the benefit of society.
Standard & Poor’s credit rating of Elia Group remained BBB+ with
a stable outlook. The Group further progressed on its sustainable
finance journey: after the green bond debut of Eurogrid GmbH
and the sustainability-linked RCF of Elia Transmission Belgium in
2020, the latter published its Green Finance Framework at the end
of 2021, paving the way for future green financing in Belgium.
2021 NET DEBT EVOLUTION
7,465
(2,919)
(1,243) (1,217)
208
142
(63)
80
4,886
FY2020 FY2021EEG
Grants
& Cash
Flow
Operating
CF
Net
CAPEX
Net int.
paid &
income
tax
Dividend
paid
Proceeds
from
associates
Other
-34.5%
3,757
3,306
3,441
1,015
430
403
54 Investor Relations
Elia Transmission in Belgium
Elia Transmission Belgium key figures (in € million) 2021 2020 Difference (%)
Revenue, other income and net income (expense) from
settlement mechanism
1,199.5 1,004.7 19.4%
Revenues 1,009.8 858.1 17.7%
Other income 68.3 57.5 18.8%
Net income (expense) from settlement mechanism 121.4 89.1 36.3%
Equity accounted investees 2.3 1.9 21.1%
EBITDA 432.2 425.8 1.5%
EBIT 227.1 237.5 (4.4%)
Adjusted items 0.0 0.0 n.r.
Adjusted EBIT 227.1 237.5 (4.4%)
Net finance costs (63.1) (66.4) (5.0%)
Income tax expenses (32.9) (46.3) (28.9%)
Net profit 131.0 124.8 5.0%
Adjusted items 0.0 0.0 n.r.
Adjusted net profit 131.0 124.8 5.0%
Key figures of the financial position (in € million) 2021 2020 Difference (%)
Total assets 7,153.5 7,008.4 2.1%
Total equity 2,445.5 2,265.2 8.0%
Net financial debt 3,441.0 3,305.6 4.1%
Free cash flow (117.6) (260.8) (54.9%)
Elia Transmission’s revenue was up 19.4% compared with 2020,
increasing from €1,004.7 million to €1,199.5 million. This revenue
was impacted by a higher regulated net profit, higher deprecia-
tions linked to the growing asset base and higher costs for ancillary
services, driven by the high gas prices and an energy mix charac-
terised by a high nuclear base load and more onshore wind and
solar generation. This was partially offset by lower financial costs
which were driven in 2020 by the refinancing of a shareholder loan,
costs for unwinding the interest rate swap and lower taxes due
to higher Innovation Income Deduction, which were all passed
through into revenue.
EBITDA rose slightly to €432.2 million (+1.5%) due to a higher reg
-
ulated net profit and higher depreciations linked to the growing
asset base and was offset by lower financial costs and income tax
that are all passed through into revenue. The decrease in EBIT
(-4.4%) was driven by depreciations of assets not covered by tariffs
being the intangible assets expensed during the previous regula-
tory period and activated under IFRS (€7.4 million), leasing con-
tracts (€7.9 million) and capitalised borrowing costs (€2.4 million).
The contribution of equity-accounted investments rose slightly to
€2.3 million due to a higher contribution from HGRT.
Net finance cost decreased by €3.3 million (-5.0%) compared to
the previous year, mainly driven by the one-off unwinding of an
interest rate swap linked to the repayment of the shareholder loan
(€5.2 million) in 2020 and costs for setting up a sustainability-linked
RCF (€1.5 million) in 2020. This was partially offset by higher interest
costs following last year’s Eurobond issue (€800 million) in April
and a lower activation of borrowing costs (€3.4 million) since some
major commissioning in 2020. Elia Transmission Belgium has a
well-balanced debt maturity profile with no upcoming near-term
maturities. The average cost of debt was 1.91% at the end of 2021
compared to 1.93% at the end of 2020, benefitting consumers.
Elia Transmission achieved solid results, with an adjusted net
profit that increased by 5.0% to €131.0 million, mainly driven by:
• A higher fair remuneration (+€6.2 million) due to asset growth
and higher equity.
•
An increase in incentives (+€5.1 million), reflecting a strong
operational performance and efficiency primarily with respect
to incentives linked to interconnection capacity, the availability
of the grid, the timely commissioning of projects, innovation and
controllable costs. This was partly offset by lower performance on
data quality incentive and balancing. Additionally, the average
tax rate decreased due to a higher innovation income deduction,
leading to a higher net contribution from incentives.
• Lower capitalised borrowing costs due to a lower level of assets
under construction and lower average cost of debt (-€3.8 mil
-
lion).
• Less major damage to electrical installations compared to the
previous year (+€3.7 million).
•
Employee and tax provisions (-€8.8 million), which were mainly
driven by a lower contribution from employee benefits to plan
assets. Additionally, last year’s provision benefited from a one-off
change in plan assets of a defined benefit plan (€3.9 million) and
the reversal of a tax provision (€1.6 million).
•
A lower depreciation of software acquired prior to 2020 (+1.6
million), as some of the assets acquired during the previous reg-
ulatory period and covered by its regulatory methodology were
written off.
Elia Group Financial Report 2021 55
Other (+€2.3 million): this was primarily due to the depreciation of
issuance costs linked to the previous year’s Eurobond issue while
fully covered by tariffs (-€2.3 million) and offset by lower share-
based payment expenses for a capital increase in favour of the
members of the personnel (+€1.4 million) and deferred tax effects
(+€3.1 million).
Total assets rose by €145.1 million to €7,153.5 million, mainly due to
execution of the investment programme. The net financial debt
increased to €3,441.0 million (+4.1%), as Elia’s CAPEX programme
was mainly financed by cash flows from operating activities and
the drawing of commercial paper (€60 million). The sustainabil-
ity-linked RCF (€650 million) is fully undrawn while a significant
portion of the commercial paper programme (€240 million)
remains unused. Elia Transmission Belgium is rated BBB+ with a
stable outlook by Standard & Poor’s.
Equity increased to €2,445.5 million (+€180.3 million), mainly due
to the reservation of the 2021 profit (+€131.0 million), the revaluation
of post-employment benefit obligations linked to an increase of
the discount rate (+€18.1 million) and a lower allocation of equity
towards Nemo Link (+€30.4 million).
50Hertz Transmission in Germany
50Hertz Transmission key figures (in € million) 2021 2020 Difference (%)
Revenue, other income and net income (expense) from
settlement mechanism
1,716.9 1,454.9 18.0%
Revenue 1,569.9 1,353.6 16.0%
Other income 95.1 90.1 5.5%
Net income (expense) from settlement mechanism 51.9 11.2 n.r.
Equity accounted investees 0.0 0.0
EBITDA 534.0 578.6 (7.7%)
EBIT 272.9 340.1 (19.8%)
Adjusted items 0.0 0.0 n.r.
Adjusted EBIT 272.9 340.1 (19.8%)
Net finance costs (34.7) (62.5) (44.5%)
Income tax expenses (72.8) (84.9) (14.3%)
Net profit 165.4 192.6 (14.1%)
Of which attributable to Elia Group 132.3 154.1 (14.1%)
Adjusted items 0.0 0.0 n.r.
Adjusted net profit 165.4 192.6 (14.1%)
Key figures of the financial position (in € million) 2021 2020 Difference (%)
Total assets 9,941.3 7,028.4 41.4%
Total equity 1,928.7 1,631.4 18.2%
Net financial debt 1,014.9 3,756.6 (73.0%)
Free cash flow 2,889.4 (1,526.4) (289.3%)
50Hertz Transmission’s total revenues and other income was up
compared to the previous year (+18.0%) growing from €1,454.9 mil-
lion to €1,716.9 million. The two main drivers of this increase are the
revenue from incentive regulation (+€109.5 million) and the energy
revenues (+€108.1 million), due to the soaring energy prices in the
second half of 2021.
EBITDA decreased to €534.0 million (-7.7%). The growing asset base
benefitted the investment remuneration (+€13.6 million), but the
business expansion led to pressure on the operating expenses.
Onshore maintenance costs increased (-€12.3 million), driven by
a peak in the maintenance cycle. As the grid was expanded and
reinforced, old onshore assets were taken out of operation and
decommissioned, leading to higher losses from sale and disposal
(-€7.7 million). Furthermore, personnel costs rose, as we kept
expanding our talent pool to deliver on the energy transition and
manage the increasing complexity of system operations (-€19.9
million). In order to efficiently manage this growing complexity,
the digitalisation of the business is progressing, as reflected by
higher IT expenses (-€4.2 million). After the COVID-19 measures in
2020, the company returned to full speed in 2021. Consequently,
operational expenses for areas such as consulting, external ser-
vices and travelling increased (-€13.9 million). Furthermore, 2020
included revenues from a penalty payment (-€6.8 million). Finally,
EBITDA benefitted from one-off revenues from the regulatory set-
tlement and related provisions amounting to €42.4 million (+€5.1
million); €10.5 million of this originated from the settlement for the
year 2018 and €31.7 million originated from the refund of clawback
amounts (“Abzugsbeträge”). The clawback payments are part of
the regulatory “Investment Measures” mechanism, which will be
phased out as of 2024 and replaced by the Capital Cost Adjustment
model. As part of the transition, the ordinance includes a partial
refund of historical clawback amounts, which was accrued in 2021.
There was a more pronounced decrease in EBIT (-€67.2 million)
due to increasing depreciations (-€15.1 million) following the com-
56 Investor Relations
missioning of projects, such as the Kriegers Flak Combined Grid
Solution. Furthermore, the change in operating provisions was
lower than for the previous year (-€7.5 million). No adjusted items
occurred in 2021.
The adjusted net profit declined to €165.4 million (-14.1%) as a result
of:
• Higher onshore OPEX and other costs (-€35.3 million), driven by
the expansion and digitalisation of the business, a peak in the
maintenance cycle and losses from asset disposal.
•
Higher personnel costs (-€14.0 million), mainly from increases
in staff numbers.
• Increased depreciations (-€10.6 million), driven by the commis
-
sioning of projects.
• These effects were partially compensated by:
•
Higher regulatory settlements and related provisions (+€3.6mil-
lion).
•
Higher investment remuneration (+€9.6 million) following the
growth of the asset base.
•
Higher financial results (+€19.5 million), as a high interest
rate bond was refinanced with more favourable conditions
(+€6.0million). Additionally, forward interest rates increased,
leading to lower interest costs on provisions (+€13.5 million).
Total assets rose by €2,912.9 million compared to 2020 mainly due
to a favorable development of the EEG business and further pro
-
gress on the investment programme. The free cash flow totalled
€2,889.4 million and was heavily affected by the high cash inflow
for the EEG account (+€2,918.9 million). In 2021, 50Hertz received
three federal payments (€2,160.0 million) to cover the cash defi-
cit build up in 2020 and pay back the revolving credit facilities
(€700million) contracted at the end of last year to cover this
EEG deficit. The EEG cash flow was further uplifted by the strong
increase in energy prices during the second half of 2021, leading to
higher cash-in than expected.
The total equity increased by €297.3 to €1,928.7 million. Due to a
change in accounting policy, hedge accounting is applied, as of
2021, to future contracts entered into by 50Hertz for the purpose
of reducing the risk of fluctuations in the expected amount of grid
losses. This change, taking place in a context of strong energy
prices, resulted in the recognition of the fair value of these con-
tracts for a gross amount of €355.6 million at the end of 2021. Con-
sidering a deferred tax effect, a hedge reserve amounting to €249.9
million was recorded in other comprehensive income. However,
as the costs for grid losses are almost fully passed through to the
tariffs, the fair value of the future contracts has no relevance for the
current or future profitability of the company.
Non-regulated activities & Nemo Link
Non-regulated activities and Nemo Link Key figures (in € million) 2021 2020 Difference (%)
Total revenues and other income 36.8 34.7 6.1%
Equity accounted investees 47.1 7.4 536.5%
EBITDA 40.8 1.1 3609.1%
EBIT 40.3 0.9 4377.8%
Adjusted items 0.0 (0.3) (100.0%)
Adjusted EBIT 40.3 1.2 3294.4%
Net finance costs (8.9) (12.6) (29.4%)
Income tax expenses 0.5 2.2 n.r.
Net profit 31.9 (9.5) (435.8%)
Of which attributable to the Elia Group 31.9 (9.5) (435.8%)
Adjusted items on net profit 0.0 (0.2) (100.0%)
Adjusted net profit 31.9 (9.3) (443.6%)
Key figures of the financial position (in € million) 2021 2020 Difference (%)
Total assets 1,654.0 1,766.7 (6.4%)
Total equity 1,142.9 1,187.7 (3.8%)
Net financial debt 430.4 402.9 6.8%
Non-regulated revenue increased by 6.1% to €36.8 million com-
pared to 2020. This is the result of lower revenues generated by Elia
Grid International (‘EGI’) (-€7.3 million), as the international consult-
ing business was negatively impacted by the COVID-19 restrictions,
leading to a delay in projects and offset by higher intersegment
transactions mainly between Elia Group SA, Elia Transmission Bel-
gium and 50Hertz.
Equity-accounted investments contributed €47.1 million to the
Group’s result, which is almost entirely attributable to Nemo Link.
With an availability rate of 99.1%, Nemo Link continues to be one
of the highest performing assets of its kind. Strong nuclear availa
-
bility in continental Europe, increased gas and carbon prices and
general scarcity in the UK positively affected market price-spread,
at the benefit of the congestion market, main revenue stream of
the asset. Nemo Link performed strongly, leading to a total net
profit of €94.0 million and a contribution of €47.0 million to Elia
Group’s net profit.
Elia Group Financial Report 2021 57
Adjusted EBIT rose to €40.3 million (+€39.1 million). This increase
was entirely due to the higher contribution from Nemo Link (+€39.7
million), a lower operating loss for re.alto due to lower development
costs and the generation of initial fee income (+€0.5 million); it was
partially offset by higher operating costs at the holding linked to
the pursuit of inorganic growth ambitions (-€0.9 million). Despite
the drop in revenues, EGI’s EBIT remained flat, reflecting the cost
control measures in COVID times.
Net finance cost fell to €8.9 million, primarily comprising the inter-
est cost linked to the senior bond (€4.7 million), the cost linked to
the Nemo Link private placement (€2.9 million) and other financial
costs linked to Elia Group SA. The previous year’s financial costs
were mainly impacted by regulatory settlements which amounted
to €3.4 million.
Adjusted net profit increased strongly by €41.2 million to €31.9mil-
lion, mainly as a result of:
• Higher contribution from Nemo Link (+€39.7 million).
• Lower regulatory settlements for 2020 (+€2.2 million).
• Lower loss of re.alto (+€0.4 million), due to lower costs and initial
fee income.
• Higher holding costs driven by business development activities
(-€1.0 million).
• Other items (-€0.1million) driven by lower other non-regulated
costs while EGI remained flat year-over-year.
Total assets dropped slightly to €1,654.0 million (-6.4%) and the
net financial debt increased to €430.4 million (+6.8%), driven by
the use of liquidity by Elia Group SA to pay for last year’s dividend;
it was partially offset by the yearly reimbursement of the Nemo
Link amortising loan.
Adjusting items - reconciliation table
(in € million) −
Period ended 31 December 2021 Elia Transmission
50Hertz
Transmission
Non-regulated
activities and
Nemo Link
Consolidation
entries Elia Group
Adjusted items
Corporate reorganisation 0.0 0.0 0.0 0.0 0.0
Adjusted EBIT 0.0 0.0 0.0 0.0 0.0
Tax impact 0.0 0.0 0.0 0.0 0.0
Net profit – adjusted items 0.0 0.0 0.0 0.0 0.0
(in € million) −
Period ended 31 December 2020 Elia Transmission
50Hertz
Transmission
Non-regulated
activities and
Nemo Link
Consolidation
entries Elia Group
Adjusted items
Corporate reorganisation 0.0 0.0 (0.3) 0.0 (0.3)
Adjusted EBIT 0.0 0.0 (0.3) 0.0 (0.3)
Tax impact 0.0 0.0 0.1 0.0 0.1
Net profit – adjusted items 0.0 0.0 (0.2) 0.0 (0.2)
58
3. Consolidated
financial
statements
Elia Group Financial Report 2021 59
3. Consolidated
financial
statements
DECLARATION BY RESPONSIBLE PERSONS
The undersigned declare that to the best of their knowledge:
• the financial statements, which have been prepared in accordance with applicable accounting policies for financial statements, give
a true and fair view of the assets, the financial position and results of Elia and of its subsidiaries included in the consolidation;
• the annual report gives a true and fair view of the evolution and the results of the Company and of the situation of Elia and of its sub
-
sidiaries included in the consolidation, as well as a description of the most significant risks and uncertainties they are facing.
Brussels, 31 March 2021
Catherine Vandenborre Chris Peeters
Chief Financial Officer Chairman of the Management Committee
Chief Executive Officer
(in € million) − Year ended 31 December
Notes
2021
2020
Revenue
(5.1)
2,551.3
2,209.6
Raw materials, consumables and goods for resale
(5.2)
(83.1)
(86.2)
Other income
(5.1)
135.1
163.6
Net income (expense) from settlement mechanism
(5.1)
173.3
100.3
Services and other goods
(5.2)
(1,443.6)
(1,051.7)
Personnel expenses
(5.2)
(334.1)
(307.2)
Depreciation, amortisation and impairment
(5.2)
(467.5)
(432.5)
Changes in provisions
(5.2)
0.7
5.5
Other expenses
(5.2)
(41.4)
(32.1)
Results from operating activities
490.7
569.3
Share of profit of equity accounted investees (net of tax)
(6.4)
49.4
9.2
Earnings before interest and tax (EBIT)
540.1
578.5
Net finance costs
(5.3)
(106.6)
(141.5)
Finance income
3.9
6.6
Finance costs
(110.5)
(148.1)
Profit before income tax
433.5
437.0
Income tax expense
(5.4)
(105.2)
(129.1)
Profit for the period
328.3
307.9
Profit attributable to:
Equity holders of the parent - equity holders of ordinary shares
276.0
250.1
Equity holders of the parent - hybrid securities
19.3
19.3
Non-controlling interest
33.1
38.5
Profit for the period
328.3
307.9
Earnings per share (in €)
(5.5)
Basic earnings per share
4.02
3.64
Diluted earnings per share
4.02
3.64
(in € million) ― Year ended 31 December
Notes
2021
2020
Profit for the period
328.3
307.9
Other comprehensive income (OCI)
Items that may be reclassified subsequently to profit or loss:
Net changes in fair value of cash flow hedges
(5.6)
356.2
5.0
Related tax
(105.8)
(1.3)
Items that will not be reclassified to profit or loss:
Remeasurements of post-employment benefit obligations
(6.13)
27.4
(8.1)
Net changes in fair value of investments
(5.6)
0.0
15.0
Related tax
(7.0)
2.2
Other comprehensive income for the period, net of tax
270.8
12.8
Total comprehensive income for the period
599.1
320.7
Total comprehensive income attributable to:
Equity holders of the parent - ordinary shareholders
496.3
260.4
Equity holders of the parent - hybrid securities holders
19.3
19.3
Non-controlling interest
83.5
41.0
Total comprehensive income for the period
599.1
320.7
(in € million) − Year ended 31 December
Notes
2021
2020
ASSETS
NON-CURRENT ASSETS
13,867.5
13,044.0
Property, plant and equipment
(6.1)
10,859.5
10,094.4
Goodwill
(6.3)
2,411.1
2,411.1
Intangible assets
(6.2)
148.6
105.4
Equity-accounted investees
(6.4)
309.6
323.1
Other financial assets
(6.5)
136.3
104.5
Trade and other receivables non-current
0.5
0.5
Deferred tax assets
(6.6)
1.9
5.0
CURRENT ASSETS
4,276.8
2,121.6
Inventories
(6.7)
21.6
39.0
Trade and other receivables
(6.8)
861.3
1,475.4
Current tax assets
(6.9)
10.1
3.4
Other financial assets
(6.5)
316.2
0.0
Cash and cash equivalents
(6.10)
3,049.5
590.1
Deferred charges and accrued revenues
(6.8)
18.1
13.7
Total assets
18,144.3
15,165.6
EQUITY AND LIABILITIES
EQUITY
4,938.4
4,500.0
Equity attributable to owners of the Company
(6.11)
4,552.0
4,173.1
Equity attributable to ordinary shares:
3,850.6
3,471.7
Share capital
1,709.2
1,709.1
Share premium
262.9
262.4
Reserves
173.0
173.0
Hedging reserve
197.1
(3.3)
Treasury shares
(0.8)
0.0
Retained earnings
1,509.2
1,330.5
Equity attributable to hybrid securities holders
(6.11)
701.4
701.4
Non-controlling interest
386.4
326.9
NON-CURRENT LIABILITIES
8,471.3
7,823.6
Loans and borrowings
(6.12)
7,741.7
7,249.6
Employee benefits
(6.13)
104.9
130.1
Provisions
(6.14)
125.6
133.3
Deferred tax liabilities
(6.6)
209.7
89.5
Other liabilities
(6.15)
289.5
221.1
CURRENT LIABILITIES
4,734.6
2,842.0
Loans and borrowings
(6.12)
194.0
805.5
Provisions
(6.14)
7.7
7.4
Trade and other payables
(6.16)
3,696.4
1,009.1
Current tax liabilities
(6.9)
26.8
13.6
Accruals and deferred income
(6.19)
809.8
1,006.4
Total equity and liabilities
18,144.3
15,165.6
(in € million)
Share capital
Share premium
Hedging reserve
Reserves
Treasury shares
Retained earnings
Equity attributable to
ordinary shares
Equity attribu
table to hybrid
securities
Equity attributable to the
owners of the company
Non-controlling interests
Total equity
Balance at 1 January 2020
1,705.8
259.2
(7.0)
173.0
1,189.8
3,320.8
701.4
4,022.2
309.9
4,332.1
Profit for the period
269.4
269.4
269.4
38.5
307.9
Other comprehensive income
3.8
6.6
10.3
10.3
2.5
12.8
Total comprehensive income for the period
3.8
276.0
279.7
279.7
41.0
320.7
Transactions with owners, recorded directly in equity
Contributions by and distributions to Owners
Shares issued
1.8
3.2
5.0
5.0
5.0
Share-based payment expenses
1.4
1.4
1.4
1.4
Hybrid: coupon paid
(19.3)
(19.3)
(19.3)
(19.3)
Dividends to non-controlling interests
(24.0)
(24.0)
Dividends
(116.0)
(116.0)
(116.0)
(116.0)
Total contributions and distributions
3.2
3.2
(135.3)
(128.8)
(128.8)
(24.0)
(152.8)
Total transactions with owners
3.2
3.2
(135.3)
(128.8)
(128.8)
(24.0)
(152.8)
Balance at 31 December 2020
1,709.1
262.4
(3.3)
173.0
1,330.5
3,471.7
701.4
4,173.1
326.9
4,500.0
Balance at 1 January 2021
1,709.1
262.4
(3.3)
173.0
1,330.5
3,471.7
701.4
4,173.1
326.9
4,500.0
Profit for the period
295.2
295.2
295.2
33.1
328.3
Other comprehensive income
200.4
20.0
220.3
220.3
50.4
270.8
Total comprehensive income for the period
200.4
315.2
515.6
515.6
83.5
599.1
Transactions with owners, recorded directly in equity
Contributions by and distributions to Owners
Shares issued
0.2
0.4
0.6
0.6
0.6
Hybrid: coupon paid
(19.3)
(19.3)
(19.3)
(19.3)
Acquisition of treasury shares
(0.8)
(0.8)
(0.8)
(0.8)
Dividends to non-controlling interests
(24.0)
(24.0)
Dividends
(117.5)
(117.5)
(117.5)
(117.5)
Other
0.3
0.3
0.3
0.3
Total contributions and distributions
0.2
0.4
(0.8)
(136.5)
(136.7)
0.0
(136.7)
(24.0)
(160.7)
Total transactions with owners
0.2
0.4
(0.8)
(136.5)
(136.7)
0.0
(136.7)
(24.0)
(160.7)
Balance at 31 December 2021
1,709.3
262.8
197.1
173.0
(0.8)
1,509.2
3,850.6
701.4
4,552.0
386.4
4,938.4
(in € million) − Year ended 31 December
Notes
2021
2020
Cash flows from operating activities
Profit for the period
328.3
307.9
Adjustments for:
Net finance costs
(5.3)
106.6
141.6
Other non-cash items
2.1
2.0
Current income tax expense
(5.4)
94.7
127.3
Profit or loss of equity accounted investees, net of tax
(49.4)
(9.2)
Depreciation of property, plant and equipment and amortisation of intangible assets
(5.2)
467.5
432.4
Loss on sale of property, plant and equipment and intangible assets
17.5
8.6
Impairment losses of current assets
0.8
1.4
Change in provisions
1.5
(4.8)
Change in deferred taxes
(6.6)
10.5
0.8
Changes in fair value of financial assets through profit or loss
0.0
0.0
Cash flow from operating activities
980.1
1,008.0
Change in inventories
17.0
(14.9)
Change in trade and other receivables
639.9
(1,060.8)
Change in other current assets
(0.7)
(0.5)
Change in trade and other payables
2,645.0
(258.6)
Change in other current liabilities
(119.8)
(106.3)
Changes in working capital
3,181.4
(1,441.3)
Interest paid
(6.12)
(124.9)
(143.2)
Interest received
3.7
4.5
Income tax paid
(87.0)
(164.4)
Net cash from operating activities
3,953.3
(736.4)
Cash flows from investing activities
Acquisition of intangible assets
(59.8)
(32.4)
Acquisition of property, plant and equipment
(1,160.5)
(1,049.9)
Acquisition of equity-accounted investees
(6.4)
0.0
(0.4)
Proceeds from sale of property, plant and equipment
3.5
2.8
Proceeds from sales of investments
1.6
1.6
Proceeds from capital decrease from equity accounted investees
30.5
15.3
Dividend received
31.8
13.8
Loans and long term receivables
(0.5)
0.0
Net cash used in investing activities
(1,153.4)
(1,049.2)
Cash flow from financing activities
Proceeds from the issue of share capital
(6.11)
0.6
5.0
Purchase of own shares
(6.11)
(0.7)
0.0
Dividend paid
(6.11)
(117.5)
(116.0)
Hybrid coupon paid
(6.11)
(19.3)
(19.3)
Dividends to non-controlling parties
(24.0)
(24.0)
Repayment of borrowings
(6.12)
(737.7)
(1,319.5)
Proceeds from withdrawal of borrowings
(6.12)
558.0
2,874.5
Net cash flow from (used in) financing activities
(340.6)
1,400.7
Net increase (decrease) in cash and cash equivalents
2,459.3
(384.9)
Cash & Cash equivalents at 1 January
590.1
975.0
Cash & Cash equivalents at 31 December
3,049.5
590.1
Net variations in cash & cash equivalents
2,459.3
(384.9)
Elia Group Financial Report 2021 67
Consolidated statement of cash flows
(in € million) − Year ended 31 December
Notes
2021
2020
Cash flows from operating activities
Profit for the period
328.3
307.9
Adjustments for:
Net finance costs
(5.3)
106.6
141.6
Other non-cash items
2.1
2.0
Current income tax expense
(5.4)
94.7
127.3
Profit or loss of equity accounted investees, net of tax
(49.4)
(9.2)
Depreciation of property, plant and equipment and amortisation of intangible assets
(5.2)
467.5
432.4
Loss on sale of property, plant and equipment and intangible assets
17.5
8.6
Impairment losses of current assets
0.8
1.4
Change in provisions
1.5
(4.8)
Change in deferred taxes
(6.6)
10.5
0.8
Changes in fair value of financial assets through profit or loss
0.0
0.0
Cash flow from operating activities
980.1
1,008.0
Change in inventories
17.0
(14.9)
Change in trade and other receivables
639.9
(1,060.8)
Change in other current assets
(0.7)
(0.5)
Change in trade and other payables
2,645.0
(258.6)
Change in other current liabilities
(119.8)
(106.3)
Changes in working capital
3,181.4
(1,441.3)
Interest paid
(6.12)
(124.9)
(143.2)
Interest received
3.7
4.5
Income tax paid
(87.0)
(164.4)
Net cash from operating activities
3,953.3
(736.4)
Cash flows from investing activities
Acquisition of intangible assets
(59.8)
(32.4)
Acquisition of property, plant and equipment
(1,160.5)
(1,049.9)
Acquisition of equity-accounted investees
(6.4)
0.0
(0.4)
Proceeds from sale of property, plant and equipment
3.5
2.8
Proceeds from sales of investments
1.6
1.6
Proceeds from capital decrease from equity accounted investees
30.5
15.3
Dividend received
31.8
13.8
Loans and long term receivables
(0.5)
0.0
Net cash used in investing activities
(1,153.4)
(1,049.2)
Cash flow from financing activities
Proceeds from the issue of share capital
(6.11)
0.6
5.0
Purchase of own shares
(6.11)
(0.7)
0.0
Dividend paid
(6.11)
(117.5)
(116.0)
Hybrid coupon paid
(6.11)
(19.3)
(19.3)
Dividends to non-controlling parties
(24.0)
(24.0)
Repayment of borrowings
(6.12)
(737.7)
(1,319.5)
Proceeds from withdrawal of borrowings
(6.12)
558.0
2,874.5
Net cash flow from (used in) financing activities
(340.6)
1,400.7
Net increase (decrease) in cash and cash equivalents
2,459.3
(384.9)
Cash & Cash equivalents at 1 January
590.1
975.0
Cash & Cash equivalents at 31 December
3,049.4
590.1
Net variations in cash & cash equivalents
2,459.3
(384.9)
The accompanying notes (1-9) form an integral part of these consolidated financial statements.
Rounding – In general, all figures are rounded. Variances are calculated from the source data before rounding, implying that some
variances may not add up.
NOTES ACCOMPANYING THE CONSOLIDATED
FINANCIAL STATEMENTS
1. Reporting entity
The registered office of Elia Group SA/NV (hereafter referred to as the ‘Company’), which was established in Belgium, is located at 20
Boulevard de l’Empereur, 1000 Brussels. The consolidated financial statements for the financial year 2021 include those of Elia Group
SA/NV and its subsidiaries (collectively referred to as ‘the group' or 'Elia group') and the group's interest in joint ventures and
associates.
Elia Group SA/NV is a limited liability company, with its shares listed on Euronext Brussels, under the symbol ELI.
The Elia group comprises two electricity transmission system operators (TSOs): Elia Transmission Belgium SA/NV in Belgium and
50Hertz Transmission GmbH, in which the Elia group holds an 80% stake. 50Hertz Transmission GmbH is one of Germany’s four
transmission system operators; it operates in the north and east of the country.
The group also has a 50% stake in Nemo Link Ltd, which constructed an electrical interconnector between the UK and Belgium: the
Nemo Link interconnector. Nemo Link Ltd is a joint venture between Elia Transmission Belgium SA/NV and National Grid Ventures
(from the UK). It began its commercial operations on 30 January 2019, with a transfer capacity of 1000 MW.
With around 2,750 employees and a transmission system that comprises some 18,990 km of high-voltage connections and serves
30 million end consumers, the Elia group is one of Europe’s top five TSOs. It efficiently, reliably and securely transports electricity from
generators to distribution system operators and major industrial consumers, while also importing and exporting electricity from and to
neighbouring countries. The group is a driving force behind the development of the European electricity market and the integration of
energy generated from renewable sources. In addition to its transmission activities in Belgium and Germany, the Elia group offers
businesses a range of consultancy and engineering services. The group operates under the legal entity Elia Group SA/NV, which is a
listed company whose reference shareholder is municipal holding company Publi-T SC.
2. Basis of preparation
2.1. Statement of compliance
These consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards
(IFRS), which have been adopted by the European Union. The group has applied all new and revised standards and interpretations
published by International Accounting Standards Board (IASB), including those which came into effect for the financial year starting on
1 January 2021, which are applicable to the group’s activities.
New and amended standards and interpretations
The standards, amendments and interpretations listed below came into effect in 2021, with little or limited impact on the group:
• Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 – Interest Rate Benchmark Reform phase 2;
• Amendment to IFRS 16 Leases: COVID-19-Related Rent Concessions beyond 30 June 2021 (applicable for annual periods
beginning on or after 1 April 2021 but not yet endorsed in the EU).
The following standards, amendments and interpretations had not yet taken effect in by 2021. The changes to the standards,
amendments and interpretations listed below are not expected to have a material impact on the annual accounts and are therefore not
outlined in any great detail:
• Amendments to IAS 16 Property, Plant and Equipment - Prohibiting a company from deducting from the cost of property, plant
and equipment amounts received from selling items produced while the company is preparing the asset for its intended use
(applicable for annual periods beginning on or after 1 January 2022, but not yet endorsed in the EU).
• Amendments to IAS 37 Provisions, Contingent Liabilities and Contingent Assets; Onerous Contracts – Cost of Fulfilling a
Contract (applicable for annual periods beginning on or after 1 January 2022, but not yet endorsed in the EU);
• Amendments to IFRS 3 Business Combinations - updating a reference to the Conceptual Framework (applicable for annual
periods beginning on or after 1 January 2022, but not yet endorsed in the EU)
• Annual Improvements to IFRS Standards 2018–2020 (applicable for annual periods beginning on or after 1 January 2022, but
not yet endorsed in the EU)
• IFRS 17: Insurance Contracts (applicable for annual periods beginning on or after 1 January 2023, but not yet endorsed in the
EU);
• Amendments to IFRS 4 Insurance contracts – Expiry date of the deferral approach (applicable for annual periods beginning on
or after 1 January 2023, but not yet endorsed in the EU)
• Amendments to IAS 1 Presentation of Financial Statements: Classification of liabilities as Current or Non-current (applicable for
annual periods beginning on or after 1 January 2023, but not yet endorsed in the EU);
68
• Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of Accounting Policies
(applicable for annual periods beginning on or after 1 January 2023, but not yet endorsed in the EU)
• Amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors (applicable for annual periods
beginning on or after 1 January 2023, but not yet endorsed in the EU);
• Amendments to IAS 12 Income Taxes: implementation of a comprehensive balance sheet method of accounting for income
taxes(applicable for annual periods beginning on or after 1 January 2023, but not yet endorsed in the EU).
2.2 Functional and presentation currency
These consolidated financial statements are presented in millions of euro, rounded to the nearest hundred thousand, unless stated
otherwise.
2.3 Basis of measurement
In general, these consolidated financial statements were prepared on a historical cost basis. However, reporting related to the following
categories deviate from this general rule:
• Equity accounted investees: the equity method was applied to determine the value of a shareholding over which the group
has a significant influence;
• Other shareholdings: entities in which the group has a shareholding but over which it does not have a significant influence
were valued at fair value through other comprehensive income (OCI);
• Current and non-current receivables were valued at the lowest of the carrying amount and the recoverable amount;
• Employee benefits were valued at the present value of the defined benefit obligations, minus the fair value of the plan assets
(see also Note 6.13);
• Derivative financial instruments were measured at fair value through OCI or profit and loss (P&L), depending on whether the
derivative can be designated as a hedging instrument (see also Note 8.1);
• Decommissioning provisions were valued at present value.
2.4 Going concern
The directors re-assessed the going concern assumption of the Company and, at the time of approving the financial statements, held a
reasonable expectation that the group had adequate resources to continue in operational existence for the foreseeable future. The
directors will therefore continue to adopt the going concern basis of accounting in the preparation of the financial statements.
In the context of the COVID-19 crisis, the group paid particular attention to adequately reflect the current and expected impact of the
situation on the financial position, performance and cash flows of the company, applying the IFRS accounting principles in a consistent
manner. In general, since Elia is acting in accordance with the regulatory framework in Belgium and Germany, the profitability and the
financial position of the group have not been affected.
2.5 Use of estimates and judgements
The preparation of these consolidated financial statements in accordance with IFRS requires management to make judgements,
estimates and assumptions that could affect the reported amounts of assets and liabilities and revenue and expenses. The estimates
and underlying assumptions are based on historical experience and various other factors that are believed to be reasonable under the
circumstances: the results of these estimates and assumptions form the basis for making judgements regarding the carrying amounts of
assets and liabilities. Actual results could therefore differ from these estimates. The estimates and underlying assumptions are reviewed
on an ongoing basis. Revisions to accounting estimates are recognised either: in the period during which the estimate is revised if the
revision only affects this period; or in the period during which the estimate is revised and throughout future periods if the revision affects
both current and future periods.
The following points include information about significant areas of estimation uncertainty and critical judgements in applying accounting
policies that have the most significant effect on the amounts recognised in the consolidated financial statements:
• The total allowed remuneration for the group’s role as TSO in the Belgian and German segments is mainly determined by
calculation methods set by the Belgian federal regulator (the Commission for Electricity and Gas Regulation or CREG) and the
German federal regulator (the Federal Network Agency or BNetzA) respectively. The recognition of deferral regulatory
accounts is also based on the different regulatory schemes. For certain calculations, a level of professional judgement needs
to be applied. More disclosures are provided in Notes 6.19, 9.1.4 and 9.2.3.
• Entities in which the group holds less than 20% of the voting rights but has significant influence are accounted for under the
equity method. Following the guidance in IAS 28, the group assesses whether it has significant influence over its associates
and therefore needs to account for them under the equity method (rather than applying IFRS 9) and reassesses this in each
reporting period (see also Note 6.4).
• Deferred tax assets are recognised for the carry-forward of unused tax losses and unused tax credits in so far as it is probable
that future taxable profit will be available against which the unused tax losses and unused tax credits can be utilised. In making
a judgement on this, management takes into account elements such as long-term business strategy and tax planning
opportunities (see Note 6.6).
• Credit risk related to customers: management closely reviews the outstanding trade receivables, including by considering
ageing, payment history and credit risk coverage (see Note 8.1).
• Employee benefits including reimbursement rights – see Note 6.13:
o The group has defined benefit plans and defined contribution plans which are disclosed in Note 6.13. The calculation of the
Elia Group Financial Report 2021 69
• Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of Accounting Policies
(applicable for annual periods beginning on or after 1 January 2023, but not yet endorsed in the EU)
• Amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors (applicable for annual periods
beginning on or after 1 January 2023, but not yet endorsed in the EU);
• Amendments to IAS 12 Income Taxes: implementation of a comprehensive balance sheet method of accounting for income
taxes(applicable for annual periods beginning on or after 1 January 2023, but not yet endorsed in the EU).
2.2 Functional and presentation currency
These consolidated financial statements are presented in millions of euro, rounded to the nearest hundred thousand, unless stated
otherwise.
2.3 Basis of measurement
In general, these consolidated financial statements were prepared on a historical cost basis. However, reporting related to the following
categories deviate from this general rule:
• Equity accounted investees: the equity method was applied to determine the value of a shareholding over which the group
has a significant influence;
• Other shareholdings: entities in which the group has a shareholding but over which it does not have a significant influence
were valued at fair value through other comprehensive income (OCI);
• Current and non-current receivables were valued at the lowest of the carrying amount and the recoverable amount;
• Employee benefits were valued at the present value of the defined benefit obligations, minus the fair value of the plan assets
(see also Note 6.13);
• Derivative financial instruments were measured at fair value through OCI or profit and loss (P&L), depending on whether the
derivative can be designated as a hedging instrument (see also Note 8.1);
• Decommissioning provisions were valued at present value.
2.4 Going concern
The directors re-assessed the going concern assumption of the Company and, at the time of approving the financial statements, held a
reasonable expectation that the group had adequate resources to continue in operational existence for the foreseeable future. The
directors will therefore continue to adopt the going concern basis of accounting in the preparation of the financial statements.
In the context of the COVID-19 crisis, the group paid particular attention to adequately reflect the current and expected impact of the
situation on the financial position, performance and cash flows of the company, applying the IFRS accounting principles in a consistent
manner. In general, since Elia is acting in accordance with the regulatory framework in Belgium and Germany, the profitability and the
financial position of the group have not been affected.
2.5 Use of estimates and judgements
The preparation of these consolidated financial statements in accordance with IFRS requires management to make judgements,
estimates and assumptions that could affect the reported amounts of assets and liabilities and revenue and expenses. The estimates
and underlying assumptions are based on historical experience and various other factors that are believed to be reasonable under the
circumstances: the results of these estimates and assumptions form the basis for making judgements regarding the carrying amounts of
assets and liabilities. Actual results could therefore differ from these estimates. The estimates and underlying assumptions are reviewed
on an ongoing basis. Revisions to accounting estimates are recognised either: in the period during which the estimate is revised if the
revision only affects this period; or in the period during which the estimate is revised and throughout future periods if the revision affects
both current and future periods.
The following points include information about significant areas of estimation uncertainty and critical judgements in applying accounting
policies that have the most significant effect on the amounts recognised in the consolidated financial statements:
• The total allowed remuneration for the group’s role as TSO in the Belgian and German segments is mainly determined by
calculation methods set by the Belgian federal regulator (the Commission for Electricity and Gas Regulation or CREG) and the
German federal regulator (the Federal Network Agency or BNetzA) respectively. The recognition of deferral regulatory
accounts is also based on the different regulatory schemes. For certain calculations, a level of professional judgement needs
to be applied. More disclosures are provided in Notes 6.19, 9.1.4 and 9.2.3.
• Entities in which the group holds less than 20% of the voting rights but has significant influence are accounted for under the
equity method. Following the guidance in IAS 28, the group assesses whether it has significant influence over its associates
and therefore needs to account for them under the equity method (rather than applying IFRS 9) and reassesses this in each
reporting period (see also Note 6.4).
• Deferred tax assets are recognised for the carry-forward of unused tax losses and unused tax credits in so far as it is probable
that future taxable profit will be available against which the unused tax losses and unused tax credits can be utilised. In making
a judgement on this, management takes into account elements such as long-term business strategy and tax planning
opportunities (see Note 6.6).
• Credit risk related to customers: management closely reviews the outstanding trade receivables, including by considering
ageing, payment history and credit risk coverage (see Note 8.1).
• Employee benefits including reimbursement rights – see Note 6.13:
o The group has defined benefit plans and defined contribution plans which are disclosed in Note 6.13. The calculation of the
liabilities or assets related to these plans is based on actuarial and statistical assumptions. For example, this is the case for
the present value of future pension liabilities. The present value is, among other factors, impacted by changes in discount
rates, and financial assumptions such as future increases in salary. In addition, demographic assumptions, such as average
assumed retirement age, also affect the present value of future pension liabilities.
o In determining the appropriate discount rate, management considers the interest rates of corporate bonds in currencies
consistent with currencies of the post-employment benefit obligation, i.e. euro, with at least an AA rating or above, as set by
at least one leading rating agency and extrapolated along the yield curve to correspond with the expected term of the
defined benefit obligation. Higher and lower yielding bonds are excluded in developing the appropriate yield curve.
o Each plan's projected cash flow is matched to the spot rates of the yield curve to calculate an associated present value.
A single equivalent discount rate is then determined that produces that same present value. The resulting discount rate
therefore reflects both the current interest rate environment and the plan's distinct liability characteristics.
• Provisions for environmental remediation costs: at each year-end, an estimate is made regarding future expenses with respect
to soil remediation, based on the expert advice. The extent of remediation costs is dependent on a limited number of
uncertainties, including newly identified cases of soil contamination (see Note 6.14).
• Other provisions are based on the value of the claims filed or on the estimated amount of the risk exposure. The expected
timing of the related cash outflow depends on the progress and duration of the associated process/procedures (see Note 6.14).
• In determining the appropriate discount rate to discount the future dismantling obligation, management considers the interest
rates of corporate bonds in euro with at least an AA rating or above as set by at least one leading rating agency and
extrapolated along the yield curve to correspond with the expected term of the dismantling obligation. A sensitivity analysis is
performed to measure the impact of a differing discount rate.
• Goodwill impairment testing: the group performs impairment tests on goodwill and on cash-generating units (CGUs) at the
reporting date, and whenever there are indications that the carrying amount might be higher than the recoverable amount. This
analysis is based on assumptions such as estimated investment plans, remuneration defined in the regulatory frameworks,
market evolution, market share, margin evolution and discount rates (see Note 6.3).
• Fair value measurement of financial instruments: when the fair values of financial assets and financial liabilities recorded in the
statement of financial position cannot be measured based on quoted prices in active markets, their fair value is measured
using valuation techniques. The inputs for these valuation techniques are taken from observable markets where possible.
Where this is not feasible, a certain level of professional judgement is required in establishing fair values. Changes in the fair
value of the derivative hedging instrument designated as a cash flow hedge are recognised directly in OCI to the extent that
the hedge is effective. If the hedge is ineffective, changes in fair value are recognised in profit or loss (see Note 6.17).
• The useful life of the fixed assets is defined to reflect the real depreciation of each asset. The depreciation of property, plant
and equipment is mainly calculated based on the useful lives determined by the regulatory frameworks in Belgium and
Germany, which are considered to be the best possible approximation of actual events in terms of economic utilisation. (see
Note 3.3.1 and 6.1)
• The group makes use of practical expedients when applying IFRS 16 (Leasing):
o The group applies a single discount rate per type of contracts, summarised per their duration. Those leases are assumed to
have similar characteristics. The discount rate used is the group's best estimate of the weighted average incremental
borrowing rate. Each lease contract is classified in a duration bucket (<5 years, between 5 and 10 years, etc.) for which an
interest rate is derived equal to the interest rate of a traded bond with the same rating as Elia Group SA/NV in the same
sector with a similar duration. The interest rate is fixed over the lifetime of the lease contract.
o The group assesses the non-cancellable period of each of the contracts falling within the scope of IFRS 16. This includes
the period covered by an option to extend the lease, if the lessee is reasonably certain that they will exercise that option.
Certainly, where it relates to office rent contracts, the group makes its best estimate of the non-cancellable period based on
all information at its disposal (see Note 6.18).
• The impacts of the COVID-19 crisis and macroeconomic developments were taken into account by the group to assess
potential effects on Elia’s financial performance. In general, as Elia is acting in accordance with regulatory frameworks in
Belgium and Germany, its profitability was not significantly affected in 2020 or 2021. In 2021, the COVID-19 pandemic did not
impede progress made on onshore and offshore infrastructure projects in either Belgium or Germany. The COVID-19 crisis did
have an impact on the 2020 load (particularly during the period running from March to August). The gradual release of the
COVID-19 lockdown measures generated a recovery of the load in 2021; this meant that the group was able to progressively
return to full speed in 2021; the only exception to this was Elia Grid International’s activities, since the international consulting
business was negatively impacted by the COVID-19 restrictions, leading to a drop in its revenues. This situation was
nevertheless offset by cost control measures in COVID times. Effects on macro-economic metrics, such as the interest rate,
discount rate, etc. - were taken into account.
In light of the COVID-19 pandemic, the group assessed whether its non-financial assets might be impaired: it carried out an
analysis of potential impairment indicators, in accordance with the provisions of IAS 36 – Impairment of Assets. The
impairment test was carried out based on the last business plan; this identified no impairment risks as per 31 December 2021.
The COVID-19 crisis and, in 2021, the strong increase of electricity prices could result in a potentially increased credit risk and
may therefore affect the amount of impairment losses to be recognised with respect to expected credit losses. The group has
since monitored payment receipts and counterparty risk more closely, noting no significant deterioration.
We refer to the following notes for more information: 6.3, 6.8, 6.18 and 8.1.
2.6 Approval by the Board of Directors
These consolidated financial statements were authorised for publication by the Board of Directors on 24 March 2022.
70
3. Significant accounting policies
3.1 Basis of consolidation
SUBSIDIARIES
A subsidiary is an entity that is controlled by the Company. The group controls an entity when it is exposed, or has rights, to variable
returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial
statements of subsidiaries are included in the consolidated financial statements from the date this control commences until the date that
it ceases. The accounting policies of subsidiaries are changed when necessary, in order to align them with the policies adopted by the
group. Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests even if this results
in a deficit balance of the non-controlling interests. Changes to the group's interest in a non-wholly-owned subsidiary that do not result in
a loss of control are accounted for as equity transactions.
ASSOCIATES
Associates are those companies over which the Company exerts significant influence, but not control, in terms of their financial and
operating policies. Investments in associates are accounted for in the consolidated financial statements in accordance with the equity
method. They are initially recognised in the consolidated statement of financial position at cost, with all transaction costs incurred with
the acquisition included, and are adjusted thereafter to reflect the group’s share of the profit or loss and other comprehensive income of
the associate. This accounting under the equity method is done from the date that significant influence commences until the date that it
ceases. When the group's share of the losses exceeds its interest in an associate, its carrying amount is reduced to nil and further
losses are not recognised except to the extent that the group has incurred legal or constructive obligations or has made payments on
behalf of an associate.
INTERESTS IN JOINT VENTURES
A joint venture is an arrangement under which the group has joint control and has rights to the net assets of the arrangement, as
opposed to joint operations, under which the group has rights to its assets and obligations for its liabilities. Interests in joint ventures are
accounted for using the equity method. They are initially recognised at cost price, with all transaction costs incurred with the acquisition
included. Subsequent to initial recognition, the consolidated financial statements include the group's share of the total recognised profits
and losses of joint ventures on the basis of the equity method, from the date that joint control commences until the date that it ceases.
When the group's share of the losses exceeds its interest in joint ventures, its carrying amount is reduced to nil and further losses are
not recognised except to the extent that the group has incurred legal or constructive obligations or has made payments on behalf of a
joint venture.
NON-CONTROLING INTERESTS
Non-controlling interests are measured in line with their proportional share of the acquiree's identifiable net assets at the acquisition
date.
LOSS OF CONTROL
Upon the loss of control, the group derecognises the assets and liabilities of the subsidiary, any non-controlling interests and the other
components of other comprehensive income related to the subsidiary. Any surplus or deficit arising on the loss of control is recognised
in profit or loss. If the group retains any interest in the former subsidiary, then such interest is measured at fair value at the date that
control is lost. Subsequently, it is accounted for as an equity-accounted investee or as a fair value financial asset depending on the level
of influence retained.
ELIMINATION OF INTRA-GROUP TRANSACTIONS
Intra-group balances and any unrealised gains or losses or income and expenses arising from intra-group transactions are eliminated
when preparing the consolidated financial statements.
Unrealised gains from transactions with associates are eliminated to the extent of the group's interest in the entity. Unrealised losses are
eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.
BUSINESS COMBINATION AND GOODWILL
Goodwill arises on the acquisition of subsidiaries and represents the excess of the consideration transferred over the group's interest in
the net fair value of the net identifiable assets, liabilities and contingent liabilities of the acquiree.
The group measures goodwill at the acquisition date as:
• the fair value of the consideration transferred; plus
• the recognised amount of any non-controlling interest in the acquiree; plus
• if the business combination is completed in stages, the fair value of the pre-existing equity interest in the acquiree; less
• the fair value of the identifiable assets acquired and liabilities at acquisition date.
When the excess is negative, a gain on a bargain purchase is recognised immediately in profit or loss.
The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are
generally recognised in profit or loss.
Transaction costs incurred by the group in connection with a business combination, other than those associated with the issue of debt or
equity securities, are expensed as incurred.
Any contingent consideration payable is measured at fair value at the acquisition date. If the contingent consideration is classified as
equity, then it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes in the fair value of the
contingent consideration are recognised in profit or loss.
Elia Group Financial Report 2021 71
3. Significant accounting policies
3.1 Basis of consolidation
SUBSIDIARIES
A subsidiary is an entity that is controlled by the Company. The group controls an entity when it is exposed, or has rights, to variable
returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial
statements of subsidiaries are included in the consolidated financial statements from the date this control commences until the date that
it ceases. The accounting policies of subsidiaries are changed when necessary, in order to align them with the policies adopted by the
group. Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests even if this results
in a deficit balance of the non-controlling interests. Changes to the group's interest in a non-wholly-owned subsidiary that do not result in
a loss of control are accounted for as equity transactions.
ASSOCIATES
Associates are those companies over which the Company exerts significant influence, but not control, in terms of their financial and
operating policies. Investments in associates are accounted for in the consolidated financial statements in accordance with the equity
method. They are initially recognised in the consolidated statement of financial position at cost, with all transaction costs incurred with
the acquisition included, and are adjusted thereafter to reflect the group’s share of the profit or loss and other comprehensive income of
the associate. This accounting under the equity method is done from the date that significant influence commences until the date that it
ceases. When the group's share of the losses exceeds its interest in an associate, its carrying amount is reduced to nil and further
losses are not recognised except to the extent that the group has incurred legal or constructive obligations or has made payments on
behalf of an associate.
INTERESTS IN JOINT VENTURES
A joint venture is an arrangement under which the group has joint control and has rights to the net assets of the arrangement, as
opposed to joint operations, under which the group has rights to its assets and obligations for its liabilities. Interests in joint ventures are
accounted for using the equity method. They are initially recognised at cost price, with all transaction costs incurred with the acquisition
included. Subsequent to initial recognition, the consolidated financial statements include the group's share of the total recognised profits
and losses of joint ventures on the basis of the equity method, from the date that joint control commences until the date that it ceases.
When the group's share of the losses exceeds its interest in joint ventures, its carrying amount is reduced to nil and further losses are
not recognised except to the extent that the group has incurred legal or constructive obligations or has made payments on behalf of a
joint venture.
NON-CONTROLING INTERESTS
Non-controlling interests are measured in line with their proportional share of the acquiree's identifiable net assets at the acquisition
date.
LOSS OF CONTROL
Upon the loss of control, the group derecognises the assets and liabilities of the subsidiary, any non-controlling interests and the other
components of other comprehensive income related to the subsidiary. Any surplus or deficit arising on the loss of control is recognised
in profit or loss. If the group retains any interest in the former subsidiary, then such interest is measured at fair value at the date that
control is lost. Subsequently, it is accounted for as an equity-accounted investee or as a fair value financial asset depending on the level
of influence retained.
ELIMINATION OF INTRA-GROUP TRANSACTIONS
Intra-group balances and any unrealised gains or losses or income and expenses arising from intra-group transactions are eliminated
when preparing the consolidated financial statements.
Unrealised gains from transactions with associates are eliminated to the extent of the group's interest in the entity. Unrealised losses are
eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.
BUSINESS COMBINATION AND GOODWILL
Goodwill arises on the acquisition of subsidiaries and represents the excess of the consideration transferred over the group's interest in
the net fair value of the net identifiable assets, liabilities and contingent liabilities of the acquiree.
The group measures goodwill at the acquisition date as:
• the fair value of the consideration transferred; plus
• the recognised amount of any non-controlling interest in the acquiree; plus
• if the business combination is completed in stages, the fair value of the pre-existing equity interest in the acquiree; less
• the fair value of the identifiable assets acquired and liabilities at acquisition date.
When the excess is negative, a gain on a bargain purchase is recognised immediately in profit or loss.
The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are
generally recognised in profit or loss.
Transaction costs incurred by the group in connection with a business combination, other than those associated with the issue of debt or
equity securities, are expensed as incurred.
Any contingent consideration payable is measured at fair value at the acquisition date. If the contingent consideration is classified as
equity, then it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes in the fair value of the
contingent consideration are recognised in profit or loss.
3.2 Foreign currency translation
FOREIGN CURRENCY TRANSACTIONS AND BALANCES
Transactions in foreign currencies are converted into the functional currency of the Company at the foreign exchange rate on the date of
the transaction. Monetary assets and liabilities denominated in foreign currencies on the reporting date are converted at the foreign
exchange rate on that date. Foreign exchange differences arising on conversion are recognised in profit or loss.
Non-monetary assets and liabilities denominated in foreign currencies that are valued in terms of historical cost are converted at the
exchange rate on the date of the transaction.
FOREIGN OPERATIONS
A foreign operation is an entity that is a subsidiary, an associate, an interest in a joint venture or a branch of the reporting entity whose
activities are based or conducted in a country or currency other than those of the reporting entity.
The financial statements of all group entities that have a functional currency which differ from the group's presentation currency are
translated into the presentation currency as follows:
• Assets and liabilities are translated at the exchange rate at the reporting date;
• Income and expenses are translated at the average exchange rate of the year.
Exchange differences arising from the translation of the net investment in foreign subsidiaries, interests in joint ventures and associates
at closing exchange rates are included in shareholder's equity under OCI. Upon the (partial) disposal of foreign subsidiaries, joint
ventures and associates, (partial) cumulative translation adjustments are recognised in the profit or loss as part of the gain or loss on
the sale.
3.3. Statement of financial position
3.3.1. Property, plant and equipment
Owned assets
Items of property, plant and equipment are stated at historical cost (including the directly allocated costs such as finance costs), less
accumulated depreciation and impairment losses (see Section 3.3.7. 'Impairment of non-financial assets'). The cost of self-produced
assets comprises the cost of materials, direct labour and, where relevant, the initial estimate of the costs of dismantling and removing
the assets and restoring the site on which the assets were located. If parts of an item of property, plant and equipment have different
useful lives, they are accounted for as separate items of property, plant and equipment.
Borrowing costs that are directly attributable to the construction of the qualifying asset are capitalized as part of the cost of that asset.
Subsequent costs
The Group recognises in the carrying amount of an item of property, plant and equipment the subsequent costs of replacing part of such
an item when that cost is incurred, but only when it is probable that the future economic benefits embodied in the item will flow to the
Group and the cost of the item can be measured reliably. All other costs, such as repair and maintenance costs, are recognised in profit
or loss as and when they are incurred.
Depreciation
Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful life of each component of an item of
property, plant and equipment. Land is not depreciated. The applied depreciation percentages can be found in the bullet points below.
Depreciation methods, remaining useful lives and residual values of property, plant and equipment are reassessed annually and are
prospectively adjusted as the occasion arises.
• Administrative buildings 1.67 – 2.00%
• Industrial buildings 2.00 – 4.00%
• Overhead lines 2.00 – 4.00%
• Underground cables 2.00 – 5.00%
• Substations (facilities and machines) 2.50 – 6.67%
• Remote control 3.00 – 12.50%
• Dispatching 4.00 – 10.00%
• Other PPE (fitting out rented buildings) contractual period
• Vehicles 6.67 – 20.00%
• Tools and office furniture 6.67 – 20.00%
• Hardware 25.00 – 33.00%
• Right of use assets contractual period
Decommissioning an asset
In accordance with IAS 16, when the entity has a present, legal or constructive obligation to dismantle the item or restore the site, the
initial cost of the item of property, plant and equipment includes an initial estimate of the costs of dismantling and removing the item and
restoring the site on which it is located. A corresponding provision for this obligation is recorded for the amount of the asset component
(the dismantling asset) and depreciated over the asset's entire useful life (see also 3.3.13 Provisions).
72
Derecognition
An asset is no longer recognised when it is subject to disposal or when no future economic benefits are expected from its use or
disposal. Gains or losses arising from the derecognition of the asset (determined as the difference between the net disposal proceeds
and the carrying amount of the asset) are included in profit or loss, under other income or other expenses, during the year in which the
asset was derecognised.
3.3.2. Intangible assets
Computer software
Software licences acquired by the group are stated at cost, less accumulated amortisation (see below) and impairment losses (see
Section 3.3.7. 'Impairment').
Expenditure on research activities undertaken with the purpose of developing software within the group is recognised in profit or loss as
expenditure as incurred. Expenditure on the development phase of software developed within the group is capitalised if:
• the costs of development can be measured reliably;
• the software is technically and commercially feasible and future economic benefits are probable;
• the group plans – and has sufficient resources – to complete development;
• the group plans to use the software.
The capitalised expenditure includes the cost of material, direct labour costs and overhead costs that are directly attributable to
preparing the software for its use. Other costs are recognised in profit or loss as incurred.
Licences, patents and similar rights
Expenditure on acquired licences, patents, trademarks and similar rights are capitalised and amortised on a straight-line basis over the
contractual period, if any, or the estimated useful life.
Subsequent expenditure
Subsequent expenditure on capitalised intangible assets is capitalised only when it increases the future economic benefits embodied in
the specific asset to which it relates. All other expenditure is recognised in profit or loss as expenditure as incurred.
Amortisation
Amortisation is recognised in profit or loss on a straight-line basis over the estimated useful life of intangible assets, unless the useful
life is indefinite. Goodwill and intangible assets with indefinite useful lives are tested systematically for impairment on each end of the
reporting period. Software is amortised from the date it becomes available for use. The estimated useful lives are as follows:
• Licences 20.00%
• Concessions contractual period
• Computer software 20.00 – 25.00%
Depreciation methods, remaining useful lives and residual values of intangible assets are reassessed annually and are prospectively
adjusted as the occasion arises.
Derecognition
An intangible asset is derecognised upon disposal (i.e., at the date the recipient obtains control) or when no future economic benefits
are expected from its use or disposal. Any gain or loss arising upon derecognition of the asset (calculated as the difference between the
net disposal proceeds and the carrying amount of the asset) is included in the statement of profit or loss.
3.3.3 Goodwill
Goodwill is stated at cost, less accumulated impairment losses. Goodwill is allocated to cash-generating units and is not amortised but
is tested annually for impairment (see Section 3.3.7 'Impairment of non-financial assets'). In the case of associates, the carrying amount
of goodwill is included in the carrying amount of the investment in the associates.
3.3.4 Trade and other receivables
Contract assets
Revenue arising from third party services (see Note 3.4.1) and associated costs are recognised over time as we have the right to
consideration for work performed but not billed. Progress is determined based on the costs incurred.
The contract assets primarily relate to the group’s rights to consideration for work completed but not billed at the reporting date on
project work. The contract assets are transferred to receivables when the rights become unconditional. This usually occurs when the
group issues an invoice to the customer. Contract assets are included in trade and other receivables.
Levies
In its role as a TSO, Elia Transmission Belgium SA/NV and 50Hertz Transmission GmbH are subject to various public service
obligations imposed by the Government and/or by regulation mechanisms. These identify public service obligations in various fields
(such as promoting the use of renewable energy, social support, fees for the use of the public domain, offshore liability) for fulfilment by
TSOs. The costs incurred by TSOs in respect of these obligations are fully covered by the tariff ‘levies’ approved by the regulator. The
amounts outstanding (deficit) are reported as a trade and other receivable.
In this process, as the TSO’s are agents, the Group opted for a net presentation both at profit or loss and at balance sheet level. These
transactions are fully “passed through”.
See also Note 9.1.4.
Elia Group Financial Report 2021 73
Derecognition
An asset is no longer recognised when it is subject to disposal or when no future economic benefits are expected from its use or
disposal. Gains or losses arising from the derecognition of the asset (determined as the difference between the net disposal proceeds
and the carrying amount of the asset) are included in profit or loss, under other income or other expenses, during the year in which the
asset was derecognised.
3.3.2. Intangible assets
Computer software
Software licences acquired by the group are stated at cost, less accumulated amortisation (see below) and impairment losses (see
Section 3.3.7. 'Impairment').
Expenditure on research activities undertaken with the purpose of developing software within the group is recognised in profit or loss as
expenditure as incurred. Expenditure on the development phase of software developed within the group is capitalised if:
• the costs of development can be measured reliably;
• the software is technically and commercially feasible and future economic benefits are probable;
• the group plans – and has sufficient resources – to complete development;
• the group plans to use the software.
The capitalised expenditure includes the cost of material, direct labour costs and overhead costs that are directly attributable to
preparing the software for its use. Other costs are recognised in profit or loss as incurred.
Licences, patents and similar rights
Expenditure on acquired licences, patents, trademarks and similar rights are capitalised and amortised on a straight-line basis over the
contractual period, if any, or the estimated useful life.
Subsequent expenditure
Subsequent expenditure on capitalised intangible assets is capitalised only when it increases the future economic benefits embodied in
the specific asset to which it relates. All other expenditure is recognised in profit or loss as expenditure as incurred.
Amortisation
Amortisation is recognised in profit or loss on a straight-line basis over the estimated useful life of intangible assets, unless the useful
life is indefinite. Goodwill and intangible assets with indefinite useful lives are tested systematically for impairment on each end of the
reporting period. Software is amortised from the date it becomes available for use. The estimated useful lives are as follows:
• Licences 20.00%
• Concessions contractual period
• Computer software 20.00 – 25.00%
Depreciation methods, remaining useful lives and residual values of intangible assets are reassessed annually and are prospectively
adjusted as the occasion arises.
Derecognition
An intangible asset is derecognised upon disposal (i.e., at the date the recipient obtains control) or when no future economic benefits
are expected from its use or disposal. Any gain or loss arising upon derecognition of the asset (calculated as the difference between the
net disposal proceeds and the carrying amount of the asset) is included in the statement of profit or loss.
3.3.3 Goodwill
Goodwill is stated at cost, less accumulated impairment losses. Goodwill is allocated to cash-generating units and is not amortised but
is tested annually for impairment (see Section 3.3.7 'Impairment of non-financial assets'). In the case of associates, the carrying amount
of goodwill is included in the carrying amount of the investment in the associates.
3.3.4 Trade and other receivables
Contract assets
Revenue arising from third party services (see Note 3.4.1) and associated costs are recognised over time as we have the right to
consideration for work performed but not billed. Progress is determined based on the costs incurred.
The contract assets primarily relate to the group’s rights to consideration for work completed but not billed at the reporting date on
project work. The contract assets are transferred to receivables when the rights become unconditional. This usually occurs when the
group issues an invoice to the customer. Contract assets are included in trade and other receivables.
Levies
In its role as a TSO, Elia Transmission Belgium SA/NV and 50Hertz Transmission GmbH are subject to various public service
obligations imposed by the Government and/or by regulation mechanisms. These identify public service obligations in various fields
(such as promoting the use of renewable energy, social support, fees for the use of the public domain, offshore liability) for fulfilment by
TSOs. The costs incurred by TSOs in respect of these obligations are fully covered by the tariff ‘levies’ approved by the regulator. The
amounts outstanding (deficit) are reported as a trade and other receivable.
In this process, as the TSO’s are agents, the Group opted for a net presentation both at profit or loss and at balance sheet level. These
transactions are fully “passed through”.
See also Note 9.1.4.
Trade and other receivables
Trade receivables and other receivables are measured at amortised cost minus the appropriate allowance for amounts regarded as
unrecoverable.
Impairment
For trade receivables and contract assets, the group applies a simplified approach when calculating the Expected Credit Losses (ECLs).
The group therefore does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each
reporting date. The group has established a provision matrix that is based on its historical credit loss experience as its best proxy for
future credit losses to be incurred.
See Note 8.1. ‘Credit risk’, for a detailed description of the model.
3.3.5 Inventories
Inventories (spare parts) are stated at the lower of cost and net realisable value. Net realisable value is the estimated selling price minus
the estimated costs of completion and selling expenses. The cost of inventories is based on the weighted-average-cost-price method.
The cost includes the expenditure incurred in acquiring the inventories and the direct costs of bringing them to their location and making
them operational.
Write-downs of inventories to net realisable value are recognised in the period in which the write-offs occurred.
3.3.6 Cash and cash equivalents
Cash and cash equivalents comprise cash balances, bank balances, commercial paper and deposits that can be withdrawn on demand.
Overdrafts that are repayable on demand form an integral part of the group's cash management and are included as a component of
cash and cash equivalents for the purpose of the statement of cash flows.
3.3.7 Impairment of non-financial assets
The carrying amount of the group's assets, excluding inventories and deferred taxes, is reviewed at the end of the reporting period for
each asset to determine whether there is any indication of impairment. If any such indication exists, the recoverable amount of the asset
is estimated.
The recoverable amount of goodwill and intangible assets with an indefinite useful life and intangible assets that are not yet available for
use is estimated at the end of each reporting period.
An impairment loss is recognised whenever the carrying amount of such an asset or its cash-generating unit exceeds its recoverable
amount. Impairment losses are recognised in profit or loss. Recognised impairment losses relating to cash-generating units are
allocated first to reduce the carrying amount of any goodwill allocated to cash-generating units and then to reduce the carrying amount
of the other assets in the units on a pro-rata basis.
After recognition of impairment losses, the depreciation costs for the asset will be prospectively adjusted.
Calculation of the recoverable amount
The recoverable amount of intangible assets and property, plant and equipment is determined as the higher of their fair value less costs
of disposal and their value in use. In assessing value in use, the expected future cash flows are discounted to their present value using
a pre-tax discount rate that reflects both the current market assessment of the time value of money and the risks specific to the asset.
The group's assets do not generate cash flows that are independent from other assets. The recoverable amount is therefore determined
for the cash-generating unit (i.e. the entire high-voltage grid) to which the asset belongs. This is also the level at which the group
administers its goodwill and gathers the economic benefits of acquired goodwill.
Reversals of impairment
An impairment loss with respect to goodwill is not reversed. Impairment loss on other assets is reversed if there have been changes in
the estimates used to determine the recoverable amount.
An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have
been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
74
3.3.8 Financial assets
Initial recognition and measurement
The classification of financial assets at initial recognition depends on their contractual cash flow characteristics and the group’s business
model for managing them. The group initially measures a financial asset at its fair value plus transaction costs.
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in three categories:
• Financial assets at amortised cost (debt instruments)
• Financial assets measured at fair value through OCI (equity instruments)
• Financial assets measured at fair value through profit and loss
Financial assets at amortised cost
Financial assets at amortised cost are managed with a view to holding them to maturity and collecting contractual cash flows. The
financial assets give rise to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Financial assets at amortised cost are subsequently measured using the Effective Interest Rate (EIR) method and are subject to
impairment. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired.
The group’s financial assets at amortised cost include loans to third parties.
Financial assets measured at fair value through OCI (equity instruments FVOCI)
Upon initial recognition, the group irrevocably classifies its equity investments as equity instruments measured at fair value through OCI
when the group does not have significant influence and the assets are not held for trading. This classification is determined on an
instrument-by-instrument basis.
Gains and losses on these financial assets are never recycled to profit or loss. Dividends are recognised as other income in the
statement of profit or loss when the right of payment has been established, except when the group benefits from such proceeds as a
recovery of part of the cost of the financial asset, in which case any such gains are recorded in OCI. Equity instruments measured at fair
value through OCI are not subject to impairment assessment.
The group has elected to irrevocably classify non-listed equity investments over which the group does not have significant influence in
this category.
Financial assets measured at fair value through profit and loss (FVTPL)
All financial assets not classified as measured at amortised cost or FVOCI as described above are measured at FVTPL
Impairment of financial assets
The group recognises an allowance for expected credit losses (ECLs) for its debt instruments. See Note 8.1 ‘Credit risk’, for a detailed
description of the approach.
3.3.9 Derivative financial instruments and hedge accounting
Derivative financial instruments
The group sometimes uses derivative financial instruments to hedge its exposure to foreign exchange, interest rate and commodity
prices risks arising from operating, financing and investment activities. In accordance with its treasury policy, the group neither holds nor
issues derivative financial instruments for trading purposes. However, derivatives that do not qualify for hedge accounting are accounted
for as instruments held for trading purposes.
Derivative financial instruments are initially recognised at fair value. Any gain or loss resulting from changes in the fair value is
immediately booked in the statement of profit or loss. Where derivative financial instruments qualify for hedge accounting, the reflection
of any resulting gain or loss depends on the nature of the item being hedged.
The fair value of interest rate swaps is the estimated amount that the group would receive or pay to terminate the swap at the end of the
reporting period, taking into account the current interest rates and the current creditworthiness of the swap counterparties and the
group. The fair value of forward exchange contracts is their quoted market price at the end of the reporting period, i.e. the present value
of the quoted forward price.
Derivatives used as hedging instruments
Cash flow hedges
Changes in the fair value of the derivative hedging instrument designated as a cash-flow hedge are recognised directly in OCI to the
extent that the hedge is effective. If the hedge is ineffective, changes in fair value are recognised in profit or loss.
The group uses forward currency contracts as hedges of its exposure to foreign currency risk in forecast transactions and firm
commitments, as well as forward commodity contracts for its exposure to volatility in the commodity prices. The group designates only
the spot element of forward contracts as a hedged risk. The forward element is considered the cost of hedging and is recognised in OCI
and accumulated in a separate component of the statement of financial position under hedging reserves.
If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold, terminated or exercised, hedge
accounting is prospectively discontinued. The cumulative gain or loss previously recognised in OCI remains there until the forecast
transaction occurs. When the hedged item is a non-financial asset, the amount recognised in OCI is transferred, where justified, to the
Elia Group Financial Report 2021 75
3.3.8 Financial assets
Initial recognition and measurement
The classification of financial assets at initial recognition depends on their contractual cash flow characteristics and the group’s business
model for managing them. The group initially measures a financial asset at its fair value plus transaction costs.
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in three categories:
• Financial assets at amortised cost (debt instruments)
• Financial assets measured at fair value through OCI (equity instruments)
• Financial assets measured at fair value through profit and loss
Financial assets at amortised cost
Financial assets at amortised cost are managed with a view to holding them to maturity and collecting contractual cash flows. The
financial assets give rise to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Financial assets at amortised cost are subsequently measured using the Effective Interest Rate (EIR) method and are subject to
impairment. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired.
The group’s financial assets at amortised cost include loans to third parties.
Financial assets measured at fair value through OCI (equity instruments FVOCI)
Upon initial recognition, the group irrevocably classifies its equity investments as equity instruments measured at fair value through OCI
when the group does not have significant influence and the assets are not held for trading. This classification is determined on an
instrument-by-instrument basis.
Gains and losses on these financial assets are never recycled to profit or loss. Dividends are recognised as other income in the
statement of profit or loss when the right of payment has been established, except when the group benefits from such proceeds as a
recovery of part of the cost of the financial asset, in which case any such gains are recorded in OCI. Equity instruments measured at fair
value through OCI are not subject to impairment assessment.
The group has elected to irrevocably classify non-listed equity investments over which the group does not have significant influence in
this category.
Financial assets measured at fair value through profit and loss (FVTPL)
All financial assets not classified as measured at amortised cost or FVOCI as described above are measured at FVTPL
Impairment of financial assets
The group recognises an allowance for expected credit losses (ECLs) for its debt instruments. See Note 8.1 ‘Credit risk’, for a detailed
description of the approach.
3.3.9 Derivative financial instruments and hedge accounting
Derivative financial instruments
The group sometimes uses derivative financial instruments to hedge its exposure to foreign exchange, interest rate and commodity
prices risks arising from operating, financing and investment activities. In accordance with its treasury policy, the group neither holds nor
issues derivative financial instruments for trading purposes. However, derivatives that do not qualify for hedge accounting are accounted
for as instruments held for trading purposes.
Derivative financial instruments are initially recognised at fair value. Any gain or loss resulting from changes in the fair value is
immediately booked in the statement of profit or loss. Where derivative financial instruments qualify for hedge accounting, the reflection
of any resulting gain or loss depends on the nature of the item being hedged.
The fair value of interest rate swaps is the estimated amount that the group would receive or pay to terminate the swap at the end of the
reporting period, taking into account the current interest rates and the current creditworthiness of the swap counterparties and the
group. The fair value of forward exchange contracts is their quoted market price at the end of the reporting period, i.e. the present value
of the quoted forward price.
Derivatives used as hedging instruments
Cash flow hedges
Changes in the fair value of the derivative hedging instrument designated as a cash-flow hedge are recognised directly in OCI to the
extent that the hedge is effective. If the hedge is ineffective, changes in fair value are recognised in profit or loss.
The group uses forward currency contracts as hedges of its exposure to foreign currency risk in forecast transactions and firm
commitments, as well as forward commodity contracts for its exposure to volatility in the commodity prices. The group designates only
the spot element of forward contracts as a hedged risk. The forward element is considered the cost of hedging and is recognised in OCI
and accumulated in a separate component of the statement of financial position under hedging reserves.
If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold, terminated or exercised, hedge
accounting is prospectively discontinued. The cumulative gain or loss previously recognised in OCI remains there until the forecast
transaction occurs. When the hedged item is a non-financial asset, the amount recognised in OCI is transferred, where justified, to the
carrying amount of the asset. In other cases, the amount recognised in OCI is transferred to profit or loss in the same period that the
hedged item affects profit or loss.
When a derivative or hedge relationship is terminated, cumulative gains or losses still remain in OCI, provided that the hedged
transaction is still expected to occur. If the hedged transaction is no longer expected to take place, the cumulative unrealised gain or
loss is removed from OCI and is immediately recognised in profit or loss.
The group recognises derivatives to hedge the price for the future procurement of the physical requirement for grid losses that is
expected in subsequent periods and is covered in each case by short-term procurement transactions on the spot market. These
derivatives are measured at fair value in OCI with no effect on profit or loss as part of cash flow hedge accounting; they serve as price
hedging of the physical demand for electrical energy to cover grid losses (underlying transaction). Due to the availability and liquidity of
futures trading, the hedging period for intended price hedging covers a period of up to two years from the balance sheet date. In this
context, the group pursues a conservative hedging strategy oriented towards the regulatory framework and the ability to roll over the
electricity procurement costs incurred, which enables timely and predictable price hedging.
The critical term match method measures effectiveness. If the valuation-relevant parameters of the hedged item and hedging instrument
match, it is assumed that an effective hedging relationship exists and that changes in value from both items offset each other. The group
strives for full price hedging of the expected volume of grid loss energy (hedge ratio 1:1).
Hedging of monetary assets and liabilities
Hedge accounting is not applied to derivative instruments that economically hedge monetary assets and liabilities denominated in
foreign currencies. Changes in the fair value of such derivatives are recognised in profit or loss as foreign currency gains and losses.
3.3.10 Equity
Share capital – transaction costs
Transaction costs related to the issuing of capital are deducted from the capital received.
Share capital – share-based payment expenses
Share-based payment expenses are added to the capital received.
Dividends
Dividends are recognised as a liability in the period in which they are declared (see note 6.11.1).
Hybrid securities
Hybrid securities are deeply subordinated securities. With the exception of ordinary shares, hybrid securities rank as the most junior
instruments in the capital structure of the group in an insolvency hierarchy. Hybrid securities are perpetual instruments and do not
default on non-payment of coupons (unless such payment was mandatory following a resolution or payment of a dividend to ordinary
shareholders).
The holders of hybrid securities have limited influence on the outcome of a bankruptcy proceeding or restructuring outside bankruptcy.
Consequently, the holders cannot oblige the group to pay distributions or redeem the securities in part or in full. Payment of distributions
on and redemption of the securities is at our sole discretion. In light of their characteristics, hybrid securities are classified as an equity
instrument under IFRS. The associated issue costs are recognised directly in retained earnings.
Treasury shares
When shares recognised as equity are repurchased, the amount of the consideration paid, which includes directly attributable costs, is
recognised as a change in equity. Repurchased shares are classified as treasury shares and are deducted from equity. The amount of
treasury shares held is disclosed in the treasury share reserve. When treasury shares are subsequently sold or reissued, the amount
received is recognised as an increase in equity and the resulting surplus or deficit on the transaction is presented within retained earnings.
No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of treasury shares.
Share-based payments
The cost of share-based payment transactions is reflected in the income statement. The stock options are valued at grant date, based
on the share price at grant date, business evolution, exercise price and interest rates. Stock option plan cost is taken into result on a
straight-line basis from the grant date until the end of the vesting period.
3.3.11 Financial liabilities
Financial liabilities consist of interest-bearing loans and borrowings in the group. They are initially recognised at fair value, less related
transaction costs. Subsequent to initial recognition, interest-bearing loans and borrowings are stated at amortised cost price with any
difference between amount at initial recognition and redemption value being recognised in profit or loss over the period of the loans on
an effective interest basis.
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing
financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are
substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a
new liability. The difference in the respective carrying amounts is recognised in the statement of profit or loss.
Financial assets and financial liabilities are offset and the net amount is reported in the consolidated statement of financial position if
there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise
the assets and settle the liabilities simultaneously.
76
3.3.12. Employee benefits
Defined-contribution plans
In Belgium, contribution based promises, called defined-contribution pension plans under Belgian pension legislation, are classified as
defined-benefit plans for accounting purposes due to the legal minimum return to be guaranteed by the employer.
Before 1 January 2016, the legal minimum return was 3.75% on employee contributions, 3.25% on employer contributions and 0% for
inactive plan participants.
From 1 January 2016 onwards, the legal minimum return is a variable rate between 1.75% and 3.75%. The interest rate is automatically
adapted on 1 January each year based on the average return OLO 10 years over 24 months, with 1.75% as a minimum. As of 1
January 2016, the legal minimum return is 1.75% on employee and employer contributions and 0% for inactive plan participants.
As the plans are funded via a pension fund, the vertical approach is applied, meaning that 1.75% is applied on all the reserves (even
before 2016).
The employer needs to finance the deficits related to the “Law on Supplementary Pensions (LSP) guarantee at any time for the
employee contract and at the moment the vested reserves are transferred in case of departure, retirement or liquidation of the pension
for the employer contract.
For each plan, the fair value of assets equals the sum of the accrued individual reserves (if any) and the value of the collective fund(s) (if
any).
The Defined-Benefit Obligation (DBO) was determined following the Projected Unit Credit (PUC) method. The plan formula (backloaded
or not) determines whether the premiums are projected.
In Germany, the defined-contribution plan comprises a fixed pension to be paid to an employee upon retirement, which is usually based
on one or more factors such as the employee’s age, years of service and salary.
In both countries, the calculation is performed by an accredited actuary.
Defined-benefit plans
For defined-benefit plans, which exist in both Belgium and Germany, the pension expenses for each plan are assessed separately on
an annual basis by accredited actuaries using the PUC method. The estimated future benefit that employees have earned in return for
their service in the current and previous periods is discounted to determine its present value, and the fair value of any plan assets is
deducted. The discount rate is the interest rate, at the end of the reporting period, on high quality bonds that have maturity dates
approximately equivalent to the terms of the group's obligations and that are denominated in the currency in which the benefits are
expected to be paid.
When the benefits of a plan are improved, the portion of the increased benefit relating to past service by employees is recognised as an
expense in profit or loss at the earlier of the following dates:
• when the plan amendment or curtailment occurs; or
• when the entity recognises related restructuring costs under IAS 37 or termination benefits.
Where the calculation results in a benefit to the group, the recognised asset is limited to the present value of any future refunds from the
plan or reductions in future contributions to the plan.
Remeasurements – comprising actuarial gains and losses, the effect of the asset ceiling (excluding amounts included in net interest on
the net defined-benefit liability) and the return on plan assets (excluding amounts included in net interest on the net defined-benefit
liability) – are recognised immediately in the statement of financial position with a corresponding debit or credit to retained earnings
through OCI in the period in which they occur. Remeasurements are not reclassified to profit or loss in subsequent periods.
Reimbursement rights (Belgium)
Reimbursement rights are recognised as a separate asset when, and only when, it is virtually certain that another party will reimburse
some or all of the expenditure required to settle the corresponding benefit obligation. Reimbursement rights are presented as non-
current assets under other financial assets and are measured at fair value. These rights are handled the same way as the
corresponding defined-benefit obligation. When the changes in the period result from changes in financial assumptions or from
experience adjustments or changes in demographic assumptions, then the asset is adjusted through OCI. The components of the
defined-benefit cost are recognised net of amounts relating to changes in the carrying amount of the rights to reimbursement.
Other long-term employee benefits
The group's net obligation regarding long-term service benefits other than pension plans is assessed on an annual basis by accredited
actuaries. The net obligation is calculated using the PUC method and is the amount of future benefit that employees have earned in
return for their service in the current and previous periods. The obligation is discounted to its present value, and the fair value of any
related assets is deducted. The discount rate is the yield, at the end of the reporting period, on high quality bonds that have maturity
dates approximately equivalent to the terms of the group's obligations and that are denominated in the currency in which the benefits
are expected to be paid.
Short-term employee benefits
Short-term employee benefits are measured on an undiscounted basis and are expensed as the related service is provided. A liability is
recognised for the amount expected to be paid out under a short-term cash bonus or profit-sharing plans if the group has a legal or
constructive obligation to pay this amount as a result of the employee’s past service and the obligation can be reliably estimated.
Elia Group Financial Report 2021 77
3.3.12. Employee benefits
Defined-contribution plans
In Belgium, contribution based promises, called defined-contribution pension plans under Belgian pension legislation, are classified as
defined-benefit plans for accounting purposes due to the legal minimum return to be guaranteed by the employer.
Before 1 January 2016, the legal minimum return was 3.75% on employee contributions, 3.25% on employer contributions and 0% for
inactive plan participants.
From 1 January 2016 onwards, the legal minimum return is a variable rate between 1.75% and 3.75%. The interest rate is automatically
adapted on 1 January each year based on the average return OLO 10 years over 24 months, with 1.75% as a minimum. As of 1
January 2016, the legal minimum return is 1.75% on employee and employer contributions and 0% for inactive plan participants.
As the plans are funded via a pension fund, the vertical approach is applied, meaning that 1.75% is applied on all the reserves (even
before 2016).
The employer needs to finance the deficits related to the “Law on Supplementary Pensions (LSP) guarantee at any time for the
employee contract and at the moment the vested reserves are transferred in case of departure, retirement or liquidation of the pension
for the employer contract.
For each plan, the fair value of assets equals the sum of the accrued individual reserves (if any) and the value of the collective fund(s) (if
any).
The Defined-Benefit Obligation (DBO) was determined following the Projected Unit Credit (PUC) method. The plan formula (backloaded
or not) determines whether the premiums are projected.
In Germany, the defined-contribution plan comprises a fixed pension to be paid to an employee upon retirement, which is usually based
on one or more factors such as the employee’s age, years of service and salary.
In both countries, the calculation is performed by an accredited actuary.
Defined-benefit plans
For defined-benefit plans, which exist in both Belgium and Germany, the pension expenses for each plan are assessed separately on
an annual basis by accredited actuaries using the PUC method. The estimated future benefit that employees have earned in return for
their service in the current and previous periods is discounted to determine its present value, and the fair value of any plan assets is
deducted. The discount rate is the interest rate, at the end of the reporting period, on high quality bonds that have maturity dates
approximately equivalent to the terms of the group's obligations and that are denominated in the currency in which the benefits are
expected to be paid.
When the benefits of a plan are improved, the portion of the increased benefit relating to past service by employees is recognised as an
expense in profit or loss at the earlier of the following dates:
• when the plan amendment or curtailment occurs; or
• when the entity recognises related restructuring costs under IAS 37 or termination benefits.
Where the calculation results in a benefit to the group, the recognised asset is limited to the present value of any future refunds from the
plan or reductions in future contributions to the plan.
Remeasurements – comprising actuarial gains and losses, the effect of the asset ceiling (excluding amounts included in net interest on
the net defined-benefit liability) and the return on plan assets (excluding amounts included in net interest on the net defined-benefit
liability) – are recognised immediately in the statement of financial position with a corresponding debit or credit to retained earnings
through OCI in the period in which they occur. Remeasurements are not reclassified to profit or loss in subsequent periods.
Reimbursement rights (Belgium)
Reimbursement rights are recognised as a separate asset when, and only when, it is virtually certain that another party will reimburse
some or all of the expenditure required to settle the corresponding benefit obligation. Reimbursement rights are presented as non-
current assets under other financial assets and are measured at fair value. These rights are handled the same way as the
corresponding defined-benefit obligation. When the changes in the period result from changes in financial assumptions or from
experience adjustments or changes in demographic assumptions, then the asset is adjusted through OCI. The components of the
defined-benefit cost are recognised net of amounts relating to changes in the carrying amount of the rights to reimbursement.
Other long-term employee benefits
The group's net obligation regarding long-term service benefits other than pension plans is assessed on an annual basis by accredited
actuaries. The net obligation is calculated using the PUC method and is the amount of future benefit that employees have earned in
return for their service in the current and previous periods. The obligation is discounted to its present value, and the fair value of any
related assets is deducted. The discount rate is the yield, at the end of the reporting period, on high quality bonds that have maturity
dates approximately equivalent to the terms of the group's obligations and that are denominated in the currency in which the benefits
are expected to be paid.
Short-term employee benefits
Short-term employee benefits are measured on an undiscounted basis and are expensed as the related service is provided. A liability is
recognised for the amount expected to be paid out under a short-term cash bonus or profit-sharing plans if the group has a legal or
constructive obligation to pay this amount as a result of the employee’s past service and the obligation can be reliably estimated.
3.3.13 Provisions
A provision is recognised in the balance sheet when the group has a current legal or constructive obligation as a result of a past event
and it is likely that an outflow of economic benefits – of which a reliable estimate can be made – will be required to settle the obligation.
If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects the current
market assessment of the time value of money and, where appropriate, of the risks specific to the liability.
The group’s main long-term provisions are provisions for dismantling obligations. The present value of the obligation at the time of
commissioning represents the initial amount of the provision for dismantling with, as the counterpart, an asset for the same amount,
which is included in the carrying amount of the related property, plant and equipment and is depreciated over the asset's entire useful
life.
Factors having a significant influence on the amount of provisions include:
• cost estimates
• the timing of expenditure ; and
• the discount rate applied to cash flows.
These factors are based on information and estimates deemed by the group to be the most appropriate as of today.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate,
the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a
finance cost.
3.3.14 Trade and other payables
Trade and other payables are stated at amortised cost.
Levies
In its role as a TSO, Elia Transmission Belgium SA/NV and 50Hertz Transmission GmbH are subject to various public service
obligations imposed by the Government and/or by regulation mechanisms. These identify public service obligations in various fields
(such as promoting the use of renewable energy, social support, fees for the use of the public domain, offshore liability) for fulfilment by
TSOs. The costs incurred by TSOs in accordance with these obligations are fully covered by the tariff ‘levies’ approved by the regulator.
The amounts outstanding (surplus) are reported as a trade and other payable.
In this process, as the TSO’s are agents, the group opted for a net presentation both at profit or loss and at balance sheet level. These
transactions are fully “passed through”.
See also Note 9.1.14.
3.3.15 Other non-current liabilities
Government grants
Government grants are recognised when it is reasonably certain that the group will receive such grants and that all underlying
conditions will be met. Grants related to an asset are presented under other liabilities and will be recognised in the statement of profit or
loss on a systematic basis over the expected useful life of the asset in question. Grants related to expense items are recognised in the
statement of profit or loss in the same period as the expenses for which the grant was received. Government grants are presented as
other operating income in the statement of profit or loss.
Contract liabilities – last mile connection
The consideration of the last mile connection is paid upfront, whilst the revenues are recognised over the life time of the underlying
asset. The amounts to be released in future are reflected in this section. See also Note 3.4.1.
3.3.16 Leases
Upon the inception of a contract, the group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the
contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether
a contract conveys the right to control the use of an identified asset, the group uses the definition of a lease included in IFRS 16.
The group as a lessee
The group recognises a right-of-use asset and a lease liability at the lease commencement date. Assets and liabilities arising from a
lease are initially measured on a present value basis and discounted using the group's best estimate for the weighted average
incremental borrowing rate, in case the rate implicit in the lease cannot be readily determined. The group applies a single discount rate
per group of similar contracts, summarised per their duration.
Lease payments included in the measurement of the lease liability comprise fixed payments, including in-substance fixed payments.
Variable lease payments are expensed as incurred. As practical expedient, no distinction is made between lease and non-lease
components. Components that do not transfer any goods or services (initial direct costs, prepayments) are excluded from the lease
price.
Right of use assets are subsequently reduced by accumulated depreciation, impairment losses and any adjustments resulting from the
remeasurement of the lease liability. These assets are depreciated using the straight-line method from the commencement date to the
end of the lease term, unless the lease transfers ownership of the underlying asset to the group by the end of the lease term or the cost
of the right-of-use asset reflects the fact that the group will exercise a purchase option. In that case the right-of-use asset will be
depreciated over the useful life of the underlying asset, which is determined on the same basis as that of property and equipment.
78
The lease liability is subsequently increased by the interest cost on the lease liability and reduced by lease payments made. It is
remeasured when there is a change in future lease payments arising from a change in an index or rate, a change in the estimate of the
amount expected to be payable under a residual value guarantee, or a change in the reassessment of whether a purchase or extension
option is reasonably certain to be exercised or a termination option not to be exercised.
The group presents right-of-use assets within ‘property, plant and equipment’ and lease liabilities within ‘loans and borrowings’ (current
and non-current) in the statement of financial position.
The group has elected not to recognise right-of-use assets and lease liabilities for leases of low-value assets and short-term leases,
including IT equipment. The group recognises the lease payments associated with these leases as an expense on a straight-line basis
over the lease term.
The group as a lessor
Leases that substantially transfer all the risks and rewards incidental to ownership of an underlying asset are recognised as finance
leases.
All other leases that do not transfer all such risks and rewards are recognised as operating leases. As a lessor, the group has only
operating lease contracts. The lease payments received are recognised as other income on a straight-line basis over the lease term.
3.3.17 Regulatory deferral accounts
The group operates in a regulated environment in which tariffs are meant to realise total revenue/income consisting of:
• a reasonable return on invested capital;
• all reasonable costs which are incurred by the group.
Since the tariffs are based on estimates, there is always a difference between the tariffs that are actually charged and the tariffs that
should have been charged (tariff setting agreed with regulator) to cover all reasonable costs of the system operator including a
reasonable profit margin for the shareholders.
If the applied tariffs result in a surplus or a deficit at the end of the year, this means that the tariffs charged to end consumers should
have been lower or higher respectively (and vice versa). This surplus or deficit is therefore reported in the regulatory deferral account.
The release of the regulatory deferral account will impact future tariffs: incurred regulatory liabilities will decrease future tariffs, incurred
regulatory assets will increase future tariffs.
In the absence of an IFRS standard which specifically applyies to the treatment of these regulatory deferral accounts, Elia management
referred to the requirements of IFRS 14 and the Conceptual Framework for Financial Reporting alongside the latest evolutions of the
IASB project on Rate-regulated Activities to develop the following accounting policy:
• a liability is recognised in the statement of financial position and presented as part of “accruals and deferred income” with
respect to the Elia group’s obligation to deduct an amount from the tariffs to be charged to customers in future periods
because the total allowed compensation for goods or services already supplied is lower than the amount already charged to
customers, or excess revenues has been generated due to higher volumes than initially estimated (regulatory liability);
• an asset is recognised in the statement of financial position with respect to the Elia group’s right to add an amount to the
tariffs to be charged to customers in future periods because the total allowed compensation for the goods or services
already supplied exceeds the amount already charged to customers or shortage in revenues has occurred due to lower
volumes than initially estimated (regulatory asset); and
• the net movement in the regulatory deferral accounts for the period is presented separately in the statement of profit or loss
within the line item “net regulatory income (expense)”.
The amount in the regulatory deferral accounts is reported on an annual basis and assessed by the regulator.
The sum of revenue from contracts with customers (as defined in IFRS 15), other income and the net income (expense) from settlement
mechanism is also presented as a subtotal headed “Revenue, other income and net income (expense) from settlement mechanism”, as
in substance it represents the revenue that is economically earned during the period taking into account the regulated environment in
which the Elia group operates. The effect of discounting is reflected in the financial result. See Note 9.
Elia Group Financial Report 2021 79
The lease liability is subsequently increased by the interest cost on the lease liability and reduced by lease payments made. It is
remeasured when there is a change in future lease payments arising from a change in an index or rate, a change in the estimate of the
amount expected to be payable under a residual value guarantee, or a change in the reassessment of whether a purchase or extension
option is reasonably certain to be exercised or a termination option not to be exercised.
The group presents right-of-use assets within ‘property, plant and equipment’ and lease liabilities within ‘loans and borrowings’ (current
and non-current) in the statement of financial position.
The group has elected not to recognise right-of-use assets and lease liabilities for leases of low-value assets and short-term leases,
including IT equipment. The group recognises the lease payments associated with these leases as an expense on a straight-line basis
over the lease term.
The group as a lessor
Leases that substantially transfer all the risks and rewards incidental to ownership of an underlying asset are recognised as finance
leases.
All other leases that do not transfer all such risks and rewards are recognised as operating leases. As a lessor, the group has only
operating lease contracts. The lease payments received are recognised as other income on a straight-line basis over the lease term.
3.3.17 Regulatory deferral accounts
The group operates in a regulated environment in which tariffs are meant to realise total revenue/income consisting of:
• a reasonable return on invested capital;
• all reasonable costs which are incurred by the group.
Since the tariffs are based on estimates, there is always a difference between the tariffs that are actually charged and the tariffs that
should have been charged (tariff setting agreed with regulator) to cover all reasonable costs of the system operator including a
reasonable profit margin for the shareholders.
If the applied tariffs result in a surplus or a deficit at the end of the year, this means that the tariffs charged to end consumers should
have been lower or higher respectively (and vice versa). This surplus or deficit is therefore reported in the regulatory deferral account.
The release of the regulatory deferral account will impact future tariffs: incurred regulatory liabilities will decrease future tariffs, incurred
regulatory assets will increase future tariffs.
In the absence of an IFRS standard which specifically applyies to the treatment of these regulatory deferral accounts, Elia management
referred to the requirements of IFRS 14 and the Conceptual Framework for Financial Reporting alongside the latest evolutions of the
IASB project on Rate-regulated Activities to develop the following accounting policy:
• a liability is recognised in the statement of financial position and presented as part of “accruals and deferred income” with
respect to the Elia group’s obligation to deduct an amount from the tariffs to be charged to customers in future periods
because the total allowed compensation for goods or services already supplied is lower than the amount already charged to
customers, or excess revenues has been generated due to higher volumes than initially estimated (regulatory liability);
• an asset is recognised in the statement of financial position with respect to the Elia group’s right to add an amount to the
tariffs to be charged to customers in future periods because the total allowed compensation for the goods or services
already supplied exceeds the amount already charged to customers or shortage in revenues has occurred due to lower
volumes than initially estimated (regulatory asset); and
• the net movement in the regulatory deferral accounts for the period is presented separately in the statement of profit or loss
within the line item “net regulatory income (expense)”.
The amount in the regulatory deferral accounts is reported on an annual basis and assessed by the regulator.
The sum of revenue from contracts with customers (as defined in IFRS 15), other income and the net income (expense) from settlement
mechanism is also presented as a subtotal headed “Revenue, other income and net income (expense) from settlement mechanism”, as
in substance it represents the revenue that is economically earned during the period taking into account the regulated environment in
which the Elia group operates. The effect of discounting is reflected in the financial result. See Note 9.
3.4. Items in the statement of profit or loss
3.4.1 Income
Revenues
IFRS 15 establishes a five-step model to account for revenue arising from contracts with customers and requires that revenue be
recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or
services to a customer. These are the five steps to consider for each customer contract:
1. Identify the contract(s) with a customer;
2. Identify the performance obligations in the contract(s);
3. Determine the transaction price;
4. Allocate the transaction price to the performance obligations;
5. Recognise revenue when performance obligations are satisfied, or when control of goods or services is transferred to the
customer.
The group’s main revenues are realised by TSOs which operate in accordance with regulatory frameworks and which have de
facto/legal monopolies in their respective control zones. The frameworks which apply in the group’s main countries of activity are
detailed in Note 9 ‘Regulatory framework and tariffs’.
With regard to the regulated business, each service is based on a standard contract with the customer, mostly with a predefined
regulated tariff (unit price multiplied by the volume (injection or offtake) or the reserved capacity (depending on the type of service)), so
pricing is not variable. The allocation of the transaction price over the different performance obligations is therefore straightforward (one-
to-one relationship). Most of these contracts are concluded for an indefinite period and have general payment terms of 15-30 days.
Considering the business of the Elia group, there are no relevant right-of-return and warranty obligations.
For all services provided by the group, Elia is the sole and primary party responsible for executing the service and is thus the principal.
However, in its role as a TSO, Elia Transmission Belgium SA/NV and 50Hertz Transmission GmbH are subject to public service
obligations imposed by the government/regulation mechanisms. These obligations mainly relate to financial support for the development
of renewable energy. TSOs act as agents for these activities, and since the expense/income streams are fully covered by tariffs, they
have no impact on the statement of profit and loss. See section “Levies” of Note 3.3.14 for more information on the accounting
treatment.
The group’s main performance obligations/contract types, their pricing and the revenue recognition method for 2021 can be summarised
as follows:
80
Revenue by category for Elia Transmission Belgium
Revenue stream
Nature, customer and timing of satisfaction of performance obligations
Contract – Price setting
Grid revenues
Grid connection
Technical studies conducted at the request of grid users, connected directly to
the grid with a view to having a new connection built or an existing connection
altered.
The revenue is recognised at the point in time when the study is delivered.
Contract and tariff approved by
regulator.
Fixed amount per type of study.
Last-mile connection is a component of the grid connection contract. At the
request of a future grid user, Elia constructs/adjusts a dedicated/ physical
connection, known as a last-mile connection, to connect the customer’s facility to
Elia’s grid. Although control of the asset is not transferred as such to the grid user,
the grid user obtains direct access to the high-voltage grid. The access right
transferred by Elia is valuable to the grid user, hence why the grid user
compensates Elia in cash.
Since the grid user simultaneously enters into a grid connection contract, the two
activities (access right and grid connection services) are not distinct and constitute
a single performance obligation and interdependence between the contracts.
As the total amount of revenue recognised for this single performance obligation,
which includes grid connection services, is recognised over the life of the assets,
the contract has no specific end date.
This component of the grid connection/grid user contract is presented separately
(not part of the grid connection/revenues from the revenue cap) because the tariff-
setting method is very specific from a regulatory perspective.
Standard contract approved by
regulator, but the price is set on
the basis of the budget for
implementing the connection.
The fees charged to grid users/distribution system operators (DSOs) cover the
maintenance and operating costs relating to the dedicated connection
facilities.
The revenue is recognised over time, as this service is performed continuously
throughout the contractual term.
Contract and tariff approved by
regulator.
Tariff is set per asset type (e.g.
bay, km of cable).
Management and
development of grid
infrastructure
This component of the access contract signed with access holders/DSOs covers
the development and management of the grid with a view to meeting capacity
needs and satisfying demand for electricity transmission.
The revenue is recognised over time, as providing sufficient capacity and a
resilient grid is a service performed continuously throughout the contractual term.
Contract and tariff approved by
regulator.
EUR per kW/KVA for
yearly/monthly peak and power
available at access point.
Management of the
electricity system
This component of the access contract signed with access holders/DSOs covers
the management and operation of the electricity system and the offtake of
additional reactive energy relating to Elia’s grid (different from the connection
assets).
The revenue is recognised over time, as these services are performed
continuously throughout the contractual term.
Contract and tariff approved by
regulator.
EUR per kW/ kVArh at access
point.
Market integration
This component is part of the access contract signed with access holders/DSOs,
and covers (i) services to facilitate the energy market; (ii) services to develop and
enhance the integration of an effective and efficient electricity market; (iii) the
management of interconnections and coordination with neighbouring countries
and the European authorities; and (iv) the publication of data, as required by
transparency obligations.
The revenue is recognised over time, as these services are performed
continuously throughout the contractual term.
Contract and tariff approved by
regulator.
EUR per kW at access point.
Compensation for
imbalances
As defined in the BRP contract, the BRP (Balance Responsible Party) has a
commitment to ensure a perfect balance between offtake and injection on the grid.
In the event of an imbalance caused by a BRP, Elia has to activate the ancillary
services, which are then invoiced to the BRP.
The revenue is recognised at the point in time when an imbalance occurs.
Contract and tariff/mechanism
approved by regulator.
Based on market prices, EUR per
kW imbalance at access point.
International revenues
Grid use on individual borders is organised through half-yearly, quarterly, monthly,
weekly, weekend, daily and intra-day auctions. Elia and the regulators decide
which auctions are conducted on individual borders. Auctions are organised
through an auction office, which acts as an agent. The auction office collects the
revenues paid by the European energy traders, which are ultimately shared
between neighbouring TSOs based on the volumes imported/exported on the
border.
The revenue is recognised at the point in time when an import/export activity
occurs.
Framework agreement with
parties and auction office.
Price is set based on price
difference in cross-border market
prices.
Elia Group Financial Report 2021 81
Revenue by category for Elia Transmission Belgium
Revenue stream
Nature, customer and timing of satisfaction of performance obligations
Contract – Price setting
Grid revenues
Grid connection
Technical studies conducted at the request of grid users, connected directly to
the grid with a view to having a new connection built or an existing connection
altered.
The revenue is recognised at the point in time when the study is delivered.
Contract and tariff approved by
regulator.
Fixed amount per type of study.
Last-mile connection is a component of the grid connection contract. At the
request of a future grid user, Elia constructs/adjusts a dedicated/ physical
connection, known as a last-mile connection, to connect the customer’s facility to
Elia’s grid. Although control of the asset is not transferred as such to the grid user,
the grid user obtains direct access to the high-voltage grid. The access right
transferred by Elia is valuable to the grid user, hence why the grid user
compensates Elia in cash.
Since the grid user simultaneously enters into a grid connection contract, the two
activities (access right and grid connection services) are not distinct and constitute
a single performance obligation and interdependence between the contracts.
As the total amount of revenue recognised for this single performance obligation,
which includes grid connection services, is recognised over the life of the assets,
the contract has no specific end date.
This component of the grid connection/grid user contract is presented separately
(not part of the grid connection/revenues from the revenue cap) because the tariff-
setting method is very specific from a regulatory perspective.
Standard contract approved by
regulator, but the price is set on
the basis of the budget for
implementing the connection.
The fees charged to grid users/distribution system operators (DSOs) cover the
maintenance and operating costs relating to the dedicated connection
facilities.
The revenue is recognised over time, as this service is performed continuously
throughout the contractual term.
Contract and tariff approved by
regulator.
Tariff is set per asset type (e.g.
bay, km of cable).
Management and
development of grid
infrastructure
This component of the access contract signed with access holders/DSOs covers
the development and management of the grid with a view to meeting capacity
needs and satisfying demand for electricity transmission.
The revenue is recognised over time, as providing sufficient capacity and a
resilient grid is a service performed continuously throughout the contractual term.
Contract and tariff approved by
regulator.
EUR per kW/KVA for
yearly/monthly peak and power
available at access point.
Management of the
electricity system
This component of the access contract signed with access holders/DSOs covers
the management and operation of the electricity system and the offtake of
additional reactive energy relating to Elia’s grid (different from the connection
assets).
The revenue is recognised over time, as these services are performed
continuously throughout the contractual term.
Contract and tariff approved by
regulator.
EUR per kW/ kVArh at access
point.
Market integration
This component is part of the access contract signed with access holders/DSOs,
and covers (i) services to facilitate the energy market; (ii) services to develop and
enhance the integration of an effective and efficient electricity market; (iii) the
management of interconnections and coordination with neighbouring countries
and the European authorities; and (iv) the publication of data, as required by
transparency obligations.
The revenue is recognised over time, as these services are performed
continuously throughout the contractual term.
Contract and tariff approved by
regulator.
EUR per kW at access point.
Compensation for
imbalances
As defined in the BRP contract, the BRP (Balance Responsible Party) has a
commitment to ensure a perfect balance between offtake and injection on the grid.
In the event of an imbalance caused by a BRP, Elia has to activate the ancillary
services, which are then invoiced to the BRP.
The revenue is recognised at the point in time when an imbalance occurs.
Contract and tariff/mechanism
approved by regulator.
Based on market prices, EUR per
kW imbalance at access point.
International revenues
Grid use on individual borders is organised through half-yearly, quarterly, monthly,
weekly, weekend, daily and intra-day auctions. Elia and the regulators decide
which auctions are conducted on individual borders. Auctions are organised
through an auction office, which acts as an agent. The auction office collects the
revenues paid by the European energy traders, which are ultimately shared
between neighbouring TSOs based on the volumes imported/exported on the
border.
The revenue is recognised at the point in time when an import/export activity
occurs.
Framework agreement with
parties and auction office.
Price is set based on price
difference in cross-border market
prices.
Revenue by category for 50 Hertz Transmission
Revenue stream
Nature and timing of satisfaction of performance obligations
Contract – Price setting
Grid revenues
The ‘grid use fee’ is charged to grid users/DSOs connected to the grid for the
volume of injection and/or offtake on the onshore grid. This contract is signed with
grid users.
The revenue is recognised over time, as this service is a performed continuously
throughout the contractual term.
Standard contract and grid tariffs
defined by regulator.
Revenues from incentive
regulation
Last-mile connection is a component of the ‘grid use fee’ contract. At the
request of a future grid user, Elia constructs a dedicated/physical connection,
known as a last-mile connection, to create an interface point to the grid. Although
control of the asset is not transferred as such to the grid user, the grid user
obtains direct access to the high-voltage grid. The access right transferred by Elia
is valuable to the grid user, hence why the grid user compensates Elia in cash.
Since the grid user simultaneously enters into a grid connection contract, the two
activities (access right and grid connection services) are not distinct and
constitute a single performance obligation and interdependence between the
contracts.
As the total amount of revenue recognised for this single performance obligation,
which includes grid connection services, is recognised over the life of the assets,
the contract has no specific end date.
This component of the grid connection/grid user contract is presented separately
(not part of the grid connection/revenues from the revenue cap) because the tariff-
setting method is very specific from a regulatory perspective.
Standard contract approved by
regulator, but the price is set on
the basis of the budget for
implementing the connection.
Revenues from offshore
regulation
This component comprises tariffs charged to grid users/DSOs to cover grid
connection costs for offshore wind farms.
The revenue is recognised over time, as this service is performed continuously
throughout the contractual term
Contract and tariffs predefined in
regulatory mechanism.
Energy revenues
This revenue stream consists of different components
Congestion management and redispatch fees are paid by market participants
for use of the capacity made available by 50Hertz on specific lines (including use
of cross-border assets). This allocation mechanism is governed by transparent,
market-oriented procedures.
The revenue is recognised at the point in time when it is generated
Standard contracts approved by
regulator and tariff mechanism
defined in regulatory schemes.
Compensation for imbalances
Market participants (BRPs) have a commitment to ensure a perfect balance
between offtake and injection on the grid. In the event of an imbalance, 50Hertz
invoices the market participant to compensate for the costs incurred.
The revenue is recognised at the point in time when an imbalance occurs.
Standard contracts approved by
regulator and tariff mechanism
defined in regulatory schemes.
Horizontal reimbursement of lignite back-up costs
In its role as a TSO, 50Hertz charges fees to other TSOs for services related to
the reserve power required by the legal framework.
The revenue is recognised over time, as this service is performed continuously
throughout the contractual term.
82
Other revenues
Revenue stream
Nature and timing of satisfaction of performance obligations
Contract – Price setting
Other revenues
Others
This mainly covers other services than those described above.
The revenue is recognised at the point in time when the service is complete.
Consequently, all revenue components contain revenue from contracts with customers, i.e. parties that have contracted with Elia to
obtain services resulting from Elia’s ordinary activities in exchange for a consideration.
Other income
Other income is recognised when the related service is performed and no further performance obligations arise.
Net regulatory income (expense) from settlement mechanism
Since the tariffs are based on estimates, there is always a difference between the tariffs that are actually charged and the tariffs that
should have been charged (tariff setting is agreed with the regulator) to cover all the system operator’s reasonable costs, including a
reasonable profit margin for the shareholders.
If the applied tariffs result in a surplus or deficit at the end of the year, this means that the tariffs charged to consumers/the general
public could have been lower or higher. This surplus or deficit is therefore reported in the settlement mechanism deferral account.
The release of this deferral account will impact future tariffs: where regulatory liabilities are incurred, future tariffs will be lower, and
where regulatory assets are incurred, future tariffs will be higher. The net movement in the regulatory deferral accounts for the period is
presented separately in the statement of profit or loss in the line 'Net income (expense) from settlement mechanism'. See also Note
3.3.17.
Elia Group Financial Report 2021 83
Other revenues
Revenue stream
Nature and timing of satisfaction of performance obligations
Contract – Price setting
Other revenues
Others
This mainly covers other services than those described above.
The revenue is recognised at the point in time when the service is complete.
Consequently, all revenue components contain revenue from contracts with customers, i.e. parties that have contracted with Elia to
obtain services resulting from Elia’s ordinary activities in exchange for a consideration.
Other income
Other income is recognised when the related service is performed and no further performance obligations arise.
Net regulatory income (expense) from settlement mechanism
Since the tariffs are based on estimates, there is always a difference between the tariffs that are actually charged and the tariffs that
should have been charged (tariff setting is agreed with the regulator) to cover all the system operator’s reasonable costs, including a
reasonable profit margin for the shareholders.
If the applied tariffs result in a surplus or deficit at the end of the year, this means that the tariffs charged to consumers/the general
public could have been lower or higher. This surplus or deficit is therefore reported in the settlement mechanism deferral account.
The release of this deferral account will impact future tariffs: where regulatory liabilities are incurred, future tariffs will be lower, and
where regulatory assets are incurred, future tariffs will be higher. The net movement in the regulatory deferral accounts for the period is
presented separately in the statement of profit or loss in the line 'Net income (expense) from settlement mechanism'. See also Note
3.3.17.
3.4.2. Expenses
Other expenses
Property taxes are directly recognised in full as soon as ownership is certain (generally on 1 January of the year in question). However,
these costs, which are considered non-controllable costs under the regulatory framework, are recorded as revenue through the
settlement mechanism for the same amount, resulting in zero impact in terms of profit or loss.
Finance income and expenses
Finance expenses comprise interest payable on borrowings (calculated using the effective interest rate method), interest on lease
liabilities, foreign-exchange losses, gains on currency hedging instruments offsetting currency losses, results on interest-rate hedging
instruments, losses on hedging instruments that are not part of a hedge accounting relationship, losses on financial assets classified as
being for trading purposes and impairment losses on financial assets as well as any losses from hedge ineffectiveness.
Finance income includes interest receivables on bank deposits, which are recognised in profit or loss using the effective interest rate
method as they accrue.
Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognised in
profit or loss using the effective interest method.
Income taxes
Income taxes comprise current and deferred tax. Income tax expense is recognised in profit or loss, except where it relates to items
recognised directly in equity. Taxes on hybrid coupons are recognised in the statement of profit and loss as these are a tax on profits
whereas the hybrid coupon itself is recognised directly in equity.
Current tax is the expected tax payable on taxable income for the year, using tax rates enacted or substantively enacted at the end of
the reporting period, and any adjustments to tax payable in respect of previous years.
Deferred tax is recognised, using the balance sheet method, on temporary differences arising between the carrying amounts of assets
and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the
following temporary differences: the initial recognition of assets or liabilities in a transaction that is not a business combination and that
affects neither accounting nor taxable profit; and differences relating to investments in subsidiaries and joint ventures where these will
probably not be reversed in the foreseeable future. In addition, deferred tax is not recognised for taxable temporary differences arising
from initial recognition of goodwill. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences
when they are reversed, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets
and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets and the deferred items relate to
income taxes levied by the same tax authority on the same taxable entity or on different tax entities, but they are intended to settle
current tax liabilities and assets on a net basis, or their tax assets and liabilities will be realised simultaneously.
A deferred tax asset is recognised only to the extent that it is likely that future taxable profits will be available against which the asset
can be utilised. Deferred tax assets are reduced to the extent that it is no longer likely that the related tax benefit will be realised.
Additional income taxes that arise from the distribution of dividends are recognised at the same time as the liability to pay the related
dividend.
3.5 Statement of comprehensive income and statement of changes in equity
The statement of comprehensive income presents an overview of all revenues and expenses recognised in the consolidated statement
of profit or loss and in the consolidated statement of changes in equity. The group has elected to present comprehensive income using
the two-statement approach, i.e. the statement of profit or loss immediately followed by the statement of other comprehensive income.
As a result of this approach, the content of the statement of changes in equity is restricted to owner-related changes.
84
4. Segment reporting
4.1. Basis for segment reporting
The group has opted for a segment reporting in conformity with the different regulatory frameworks that currently exist within the group.
This reporting approach closely reflects the group’s operational activities and is also in line with the group’s internal reporting to the
Chief Operating Decision Maker (CODM), enabling the CODM to better evaluate and assess the group’s performance and activities in a
transparent way.
Pursuant to IFRS 8, the group has identified the following operating segments based on the aforementioned criteria:
• Elia Transmission (Belgium), which comprises the activities based on the Belgian regulatory framework: the regulated
activities of Elia Transmission Belgium SA/NV, Elia Asset SA/NV, Elia Engineering SA/NV, Elia Re SA, HGRT SAS and
Coreso SA/NV, whose activities are directly linked to the role of Belgian transmission system operator and are subject to the
regulatory framework applicable in Belgium – see Section 9.1.3.
• 50Hertz Transmission (Germany), which comprises the activities based on the German regulatory framework: Eurogrid GmbH,
50Hertz Transmission GmbH and 50Hertz Offshore GmbH, whose activities are directly linked to the role of transmission system
operator in Germany – see Section 9.2.3.
• Non-regulated activities and Nemo Link, comprising:
o Elia Group SA/NV, mainly consisting of the holding activities in the Elia Transmission (Belgium) and 50Hertz Transmission
(Germany) segment;
o Eurogrid International SA/NV;
o the holding activities in Nemo Link Ltd. This company comprises and manages the Nemo project, which connects the UK
and Belgium using high-voltage electricity cables, enabling power to be exchanged between the two countries and for
which a specific regulatory framework has been set up – see Section 9.3 for more details;
o the non-regulated activities of the Elia Transmission (Belgium) segment. ’Non-regulated activities’ refers to activities which
are not directly related to the role of TSO – see Section 9.1;
o EGI (Elia Grid International SA/NV, Elia Grid International GmbH, Elia Grid International Pte. Ltd Singapore and Elia Grid
International LLC Saudi Arabia), companies supplying specialists in consulting, services, engineering and procurement,
creating value by delivering solutions based on international best practice while fully complying with regulated business
environments;
o Re.Alto-Energy BV/SRL and Re.Alto-Energy GmbH, a start-up founded in August 2019 which is building a platform to
facilitate users to exchange energy data and services.
The CODM has been identified by the group as the Boards of Directors, CEOs and Management Committees of each segment. The
CODM periodically reviews the performance of the group's segments using various indicators such as revenue, EBITDA and operating
profit.
The information presented to the CODM follows the group's IFRS accounting policies, so no reconciling items have to be disclosed.
Elia Group Financial Report 2021 85
4. Segment reporting
4.1. Basis for segment reporting
The group has opted for a segment reporting in conformity with the different regulatory frameworks that currently exist within the group.
This reporting approach closely reflects the group’s operational activities and is also in line with the group’s internal reporting to the
Chief Operating Decision Maker (CODM), enabling the CODM to better evaluate and assess the group’s performance and activities in a
transparent way.
Pursuant to IFRS 8, the group has identified the following operating segments based on the aforementioned criteria:
• Elia Transmission (Belgium), which comprises the activities based on the Belgian regulatory framework: the regulated
activities of Elia Transmission Belgium SA/NV, Elia Asset SA/NV, Elia Engineering SA/NV, Elia Re SA, HGRT SAS and
Coreso SA/NV, whose activities are directly linked to the role of Belgian transmission system operator and are subject to the
regulatory framework applicable in Belgium – see Section 9.1.3.
• 50Hertz Transmission (Germany), which comprises the activities based on the German regulatory framework: Eurogrid GmbH,
50Hertz Transmission GmbH and 50Hertz Offshore GmbH, whose activities are directly linked to the role of transmission system
operator in Germany – see Section 9.2.3.
• Non-regulated activities and Nemo Link, comprising:
o Elia Group SA/NV, mainly consisting of the holding activities in the Elia Transmission (Belgium) and 50Hertz Transmission
(Germany) segment;
o Eurogrid International SA/NV;
o the holding activities in Nemo Link Ltd. This company comprises and manages the Nemo project, which connects the UK
and Belgium using high-voltage electricity cables, enabling power to be exchanged between the two countries and for
which a specific regulatory framework has been set up – see Section 9.3 for more details;
o the non-regulated activities of the Elia Transmission (Belgium) segment. ’Non-regulated activities’ refers to activities which
are not directly related to the role of TSO – see Section 9.1;
o EGI (Elia Grid International SA/NV, Elia Grid International GmbH, Elia Grid International Pte. Ltd Singapore and Elia Grid
International LLC Saudi Arabia), companies supplying specialists in consulting, services, engineering and procurement,
creating value by delivering solutions based on international best practice while fully complying with regulated business
environments;
o Re.Alto-Energy BV/SRL and Re.Alto-Energy GmbH, a start-up founded in August 2019 which is building a platform to
facilitate users to exchange energy data and services.
The CODM has been identified by the group as the Boards of Directors, CEOs and Management Committees of each segment. The
CODM periodically reviews the performance of the group's segments using various indicators such as revenue, EBITDA and operating
profit.
The information presented to the CODM follows the group's IFRS accounting policies, so no reconciling items have to be disclosed.
4.2. Elia Transmission (Belgium)
The table below shows the 2021 consolidated results for Elia Transmission (Belgium)
Results Elia Transmission (in € million) −
Period ended 31 December
2021
2020
Difference (%)
Revenue, other income and net income (expense) from
settlement mechanism
1,199.5 1,004.7 19.4%
Revenues 1,009.8 858.1 17.7%
Other income 68.3 57.5 18.8%
Net income (expense) from settlement mechanism 121.4 89.1 36.3%
Depreciation, amortisation, impairment and changes in
provisions
(205.1) (188.3) 8.9%
Results from operating activities 224.8 235.6 (4.6%)
Equity accounted investees 2.3 1.9 21.1%
EBIT 227.1 237.5 (4.4%)
Adjusted items 0.0 0.0 n.r.
Adjusted EBIT 227.1 237.5 (4.4%)
EBITDA 432.2 425.8 1.5%
Finance income 1.7 2.3 (26.1%)
Finance costs (64.8) (68.7) (5.7%)
Income tax expenses (32.9) (46.3) (28.9%)
Net profit 131.0 124.8 5.0%
Adjusted items 0.0 0.0 n.r.
Adjusted net profit 131.0 124.8 5.0%
Consolidated statement of financial position
(in € million)
31 December 2021
31 December 2020
Difference (%)
Total assets 7,153.5 7,008.4 2.1%
Capital expenditures 417.2 365.6 14.1%
Net financial debt 3,441.0 3,305.6 4.1%
The tariff methodology approved by the regulator CREG on 7 November 2019 came into force in 2020. The methodology is applicable
for a four-year period (2020 – 2023). See Note 9.1 for more information about the new regulated framework.
Financial
Elia Transmission's revenue was up 19.4% compared with 2020, increasing from €1,004.7 million to €1,199.5 million. This revenue was
impacted by a higher regulated net profit, higher depreciations linked to the growing asset base and higher costs for ancillary services,
driven by the high gas prices and an energy mix characterised by a high nuclear base load and more onshore wind and solar
generation. This was partially offset by lower financial costs which were driven in 2020 by the refinancing of a shareholder loan and
lower taxes due to higher Innovation Income Deduction, which were all passed through into revenue.
86
The table below provides more details on the changes in the various revenue components:
(in € million) 2021 2020 Difference (%)
Grid revenue:
1,006.0
848.2
18.6%
Grid connection
45.1
46.4
(2.8%)
Management and development of grid infrastructure
480.6
484.8
(0.9%)
Management of the electrical system
149.0
129.6
15.0%
Compensation for imbalances
220.6
131.2
68.2%
Market integration
23.2
22.1
5.0%
International revenue
87.5
34.2
156.1%
Last mile connection
2.9
2.8
5.4%
Other revenue
0.8
7.1
(88.2%)
Subtotal revenue
1,009.8
858.1
17.7%
Other income
68.3
57.5
18.7%
Net income (expense) from settlement mechanism
121.4
89.1
36.3%
Total revenue and other income
1,199.5
1,004.7
19.4%
Revenues from the management and development of grid infrastructure, market integration and grid connection revenues
remained flat compared to 2020.
Services rendered in the context of energy management and individual balancing of balancing groups are paid under revenues from
compensation for imbalances. These revenues, which increased from €131.2 million to €220.6 million (+68.2%), were largely due to
the tariff for maintaining and restoring the residual balance of individual access responsible parties (+€80.0 million). First, there were the
higher balance activation costs due to the increase in prices that were mainly caused by the maintenance of the COO plant in the
second quarter of 2021. Moreover, the imbalance volume increased because of the increase in the share occupied by renewables in the
generation mix (offshore wind in particular). Finally, the imbalance prices increased in 2021 due to high activation costs. The increase in
the net grid offtake (+€2.6 million), which demonstrated recovery from the COVID-19 crisis, and the higher nuclear availability in 2021
which increased the net grid injection (+€6.9 million) are additional drivers of the compensation for imbalances revenue increases.
Revenues from the management of the electrical system increased from €129.6 million to €149.0 million (+15.0%), caused by the
increase in the net grid offtake (+€7.2 million) and the introduction of a new tariff for additional reactive energy by zone for distribution
system operator (+€10.9 million).
International revenue increased to €87.5 million (+156.1%), mainly due to high congestion income generated by the combination of
high prices and frequent high price spreads in the Central Western European (CWE) region, mainly on the French borders in the last
quarter of 2021.
The last mile connection (previously called transfer of asset from customers) was down slightly compared to the previous year,
while other revenue dropped by €6.3 million, mainly due to a decrease in works delivered to third parties.
The settlement mechanism increased from €89.1 million in 2020 to €121.4 million in 2021 and encompassed both deviations in the
current year from the budget approved by the regulator (+€39.9 million) and the settlement of net surpluses from the previous tariff
period (+€81.4 million). The operating deficit (+€39.9 million), with respect to budgeted costs and revenue authorised by the regulator,
will be recovered from consumers in a future tariff period. The deficit was primarily the result of higher costs for ancillary services (€67.4
million), higher influencable costs (€91.1 million) and a higher net profit (+€14.8 million) and was partially offset by an increase in tariff
sales (+€99.3 million), which was mainly driven by imbalance compensations, higher international sales (+€32.4 million) and lower taxes
(€5.2 million).
EBITDA rose slightly to €432.2 million (+1.5%) due to a higher regulated net profit and higher depreciations linked to the growing asset
base and was offset by lower financial costs and income tax that are all passed through into revenue. The decrease in EBIT (-4.4%)
was driven by depreciations of assets not covered by tariffs like the intangible assets acquired during the previous regulatory period and
activated under IFRS (€7.4 million), leasing contracts (€7.9 million) and capitalised borrowing costs (€2.4 million). The contribution of
equity-accounted investments rose slightly to €2.3 million due to a higher contribution from HGRT.
Net finance cost decreased by €3.3 million (-5.0%) compared to the previous year, mainly driven by the one-off unwinding of an
interest rate swap linked to the repayment of the shareholder loan (€5.2 million) in 2020 and costs for setting up a sustainability-linked
RCF (€1.5 million) in 2020. This was partially offset by higher interest costs following last year’s Eurobond issue (€800 million) in April
and a lower activation of borrowing costs (€3.4 million) since some major commissioning in 2020. Elia Transmission Belgium has a well-
balanced debt maturity profile with no upcoming near-term maturities. The average cost of debt was 1.91% at the end of 2021
compared to 1.93% at the end of 2020, benefitting consumers.
Elia Group Financial Report 2021 87
The table below provides more details on the changes in the various revenue components:
(in € million)
2021
2020
Difference (%)
Grid revenue:
1,006.0
848.2
18.6%
Grid connection
45.1
46.4
(2.8%)
Management and development of grid infrastructure
480.6
484.8
(0.9%)
Management of the electrical system
149.0
129.6
15.0%
Compensation for imbalances
220.6
131.2
68.2%
Market integration
23.2
22.1
5.0%
International revenue
87.5
34.2
156.1%
Last mile connection
2.9
2.8
5.4%
Other revenue
0.8
7.1
(88.2%)
Subtotal revenue
1,009.8
858.1
17.7%
Other income
68.3
57.5
18.7%
Net income (expense) from settlement mechanism
121.4
89.1
36.3%
Total revenue and other income
1,199.5
1,004.7
19.4%
Revenues from the management and development of grid infrastructure, market integration and grid connection revenues
remained flat compared to 2020.
Services rendered in the context of energy management and individual balancing of balancing groups are paid under revenues from
compensation for imbalances. These revenues, which increased from €131.2 million to €220.6 million (+68.2%), were largely due to
the tariff for maintaining and restoring the residual balance of individual access responsible parties (+€80.0 million). First, there were the
higher balance activation costs due to the increase in prices that were mainly caused by the maintenance of the COO plant in the
second quarter of 2021. Moreover, the imbalance volume increased because of the increase in the share occupied by renewables in the
generation mix (offshore wind in particular). Finally, the imbalance prices increased in 2021 due to high activation costs. The increase in
the net grid offtake (+€2.6 million), which demonstrated recovery from the COVID-19 crisis, and the higher nuclear availability in 2021
which increased the net grid injection (+€6.9 million) are additional drivers of the compensation for imbalances revenue increases.
Revenues from the management of the electrical system increased from €129.6 million to €149.0 million (+15.0%), caused by the
increase in the net grid offtake (+€7.2 million) and the introduction of a new tariff for additional reactive energy by zone for distribution
system operator (+€10.9 million).
International revenue increased to €87.5 million (+156.1%), mainly due to high congestion income generated by the combination of
high prices and frequent high price spreads in the Central Western European (CWE) region, mainly on the French borders in the last
quarter of 2021.
The last mile connection (previously called transfer of asset from customers) was down slightly compared to the previous year,
while other revenue dropped by €6.3 million, mainly due to a decrease in works delivered to third parties.
The settlement mechanism increased from €89.1 million in 2020 to €121.4 million in 2021 and encompassed both deviations in the
current year from the budget approved by the regulator (+€39.9 million) and the settlement of net surpluses from the previous tariff
period (+€81.4 million). The operating deficit (+€39.9 million), with respect to budgeted costs and revenue authorised by the regulator,
will be recovered from consumers in a future tariff period. The deficit was primarily the result of higher costs for ancillary services (€67.4
million), higher influencable costs (€91.1 million) and a higher net profit (+€14.8 million) and was partially offset by an increase in tariff
sales (+€99.3 million), which was mainly driven by imbalance compensations, higher international sales (+€32.4 million) and lower taxes
(€5.2 million).
EBITDA rose slightly to €432.2 million (+1.5%) due to a higher regulated net profit and higher depreciations linked to the growing asset
base and was offset by lower financial costs and income tax that are all passed through into revenue. The decrease in EBIT (-4.4%)
was driven by depreciations of assets not covered by tariffs like the intangible assets acquired during the previous regulatory period and
activated under IFRS (€7.4 million), leasing contracts (€7.9 million) and capitalised borrowing costs (€2.4 million). The contribution of
equity-accounted investments rose slightly to €2.3 million due to a higher contribution from HGRT.
Net finance cost decreased by €3.3 million (-5.0%) compared to the previous year, mainly driven by the one-off unwinding of an
interest rate swap linked to the repayment of the shareholder loan (€5.2 million) in 2020 and costs for setting up a sustainability-linked
RCF (€1.5 million) in 2020. This was partially offset by higher interest costs following last year’s Eurobond issue (€800 million) in April
and a lower activation of borrowing costs (€3.4 million) since some major commissioning in 2020. Elia Transmission Belgium has a well-
balanced debt maturity profile with no upcoming near-term maturities. The average cost of debt was 1.91% at the end of 2021
compared to 1.93% at the end of 2020, benefitting consumers.
Adjusted net profit increased by 5.0% to €131.0 million, mainly due to the following:
•
•
A higher fair remuneration (+€6.2 million) due to asset growth and higher quality.
•
•
An increase in incentives (+€5.1 million), reflecting a strong operational performance and efficiency primarily with respect to
incentives linked to interconnection capacity, the availability of the grid, the timely commissioning of projects, innovation and
controllable costs. This was partly offset by lower performance on data quality incentive and balancing. Additionally, the
average tax rate decreased due to a higher innovation income deduction, leading to a higher net contribution from incentives.
•
•
Lower capitalised borrowing costs due to a lower level of assets under construction and lower average cost of debt (-€3.8
million).
•
•
Less major damage to electrical installations compared to the previous year (+€3.7 million).
•
•
Employee and tax provisions (-€8.8 million), which were mainly driven by a lower contribution from employee benefits to
plan assets. Additionally, last year’s provision benefited from a one-off change in plan assets of a defined benefit plan (€3.9
million) and the reversal of a tax provision (€1.6 million).
•
•
A lower depreciation of software acquired prior to 2020 (+1.6 million), as some of the assets acquired during the previous
regulatory period and covered by its regulatory methodology were written off.
•
•
Other (+€2.3 million): this was primarily due to the depreciation of issuance costs linked to the previous year’s Eurobond issue
while fully covered by tariffs (-€2.3 million) and offset by lower share-based payment expenses for a capital increase in favour
of the members of the personnel (+€1.4 million) and deferred tax effects (+€3.1 million).
Total assets rose by €145.1 million to €7,153.5 million, mainly due to execution of the investment programme. The net financial debt
increased to €3,441.0 million (+4.1%), as Elia’s CAPEX programme was mainly financed by cash flows from operating activities and the
drawing of commercial paper (€60 million). The sustainability-linked RCF (€650 million) is fully undrawn while a significant portion of the
commercial paper programme (€240 million) remains unused. Elia Transmission Belgium is rated BBB+ with a stable outlook by
Standard & Poor’s.
88
4.3. 50Hertz Transmission (Germany)
The table below shows the 2021 consolidated results for 50Hertz Transmission (Germany) system operator activities in Germany.
Results 50Hertz Transmission (Germany) (in € million) −
Period ended 31 December
2021
2020
Difference (%)
Revenue, other income and net income (expense) from
settlement mechanism
1,716.9 1,454.9 17.9%
Revenues
1,569.9
1,353.6
16.0%
Other income
95.1
90.1
5.5%
Net income (expense) from settlement mechanism 51.9 11.2 n.r.
Depreciation, amortisation, impairment and changes in
provisions
(261.2) (238.6) 9.5%
Results from operating activities
272.9
340.1
(19.8%)
EBIT
272.9
340.1
(19.8%)
Adjusted items
0.0
0.0
n.r.
Adjusted EBIT
272.9
340.1
(19.8%)
EBITDA
534.0
578.6
(7.7%)
Finance income
2.1
4.1
(48.8%)
Finance costs
(36.9)
(66.7)
(44.7%)
Income tax expenses
(72.8)
(84.9)
(14.3%)
Net profit
165.4
192.6
(14.1%)
Of which attributable to the Elia Group 132.3 154.1 (14.1%)
Adjusted items
0.0
0.0
n.r.
Adjusted net profit
165.4
192.6
(14.1%)
Consolidated statement of financial position
(in € million)
31 December 2021
31 December 2020
Difference (%)
Total assets
9,941.3
7,028.4
41.4%
Capital expenditures
880.4
715.9
23.0%
Net financial debt
1,014.9
3,756.6
(73.0%)
50Hertz Transmission’s total revenue and other income was up on the previous year (+7.0%).
Total revenues are detailed in the table below.
(in € million) 2021 2020 Difference (%)
Grid revenue:
1,561.3
1,349.1
15.7%
Revenue from incentive regulation
911.8
802.3
13.6%
Revenue from offshore regulation
294.7
300.0
(1.8%)
Energy revenue
354.9
246.8
43.8%
Other revenue (incl. last mile connection)
8.6
4.5
91.3%
Subtotal revenue
1,569.9
1,353.6
16.0%
Other income
95.1
90.1
5.5%
Net income (expense) from settlement mechanism
51.9
11.2
362.7%
Total revenue and other income
1,716.9
1,454.9
18.0%
Revenues from incentive regulation consist of grid tariffs before the settlement mechanism and are driven primarily by the regulatory
remuneration for onshore activities (revenue cap).
Revenues from incentive regulation rose by +€109.5 million, as the allowance for onshore investments increased (+€34.3 million). The
compensation of pass-through energy costs went up as well (+€60.4 million), mainly due to a higher allowance for redispatching costs.
The infeed of renewable energy into the distribution grid was lower than expected, leading to higher volumes in the transmission grid.
Consequently, the volume effect was higher than in previous years (+€98.6 million), which included lower volumes due to the impact of
COVID-19. These effects were partly offset by a higher payback for old regulatory balances via the regulatory account (-€20.5 million).
Furthermore, pass-through paybacks related to the old regulatory offshore mechanism increased (-€62.2 million).
Elia Group Financial Report 2021 89
4.3. 50Hertz Transmission (Germany)
The table below shows the 2021 consolidated results for 50Hertz Transmission (Germany) system operator activities in Germany.
Results 50Hertz Transmission (Germany) (in € million) −
Period ended 31 December
2021
2020
Difference (%)
Revenue, other income and net income (expense) from
settlement mechanism
1,716.9
1,454.9
17.9%
Revenues
1,569.9
1,353.6
16.0%
Other income
95.1
90.1
5.5%
Net income (expense) from settlement mechanism
51.9
11.2
n.r.
Depreciation, amortisation, impairment and changes in
provisions
(261.2)
(238.6)
9.5%
Results from operating activities
272.9
340.1
(19.8%)
EBIT
272.9
340.1
(19.8%)
Adjusted items
0.0
0.0
n.r.
Adjusted EBIT
272.9
340.1
(19.8%)
EBITDA
534.0
578.6
(7.7%)
Finance income
2.1
4.1
(48.8%)
Finance costs
(36.9)
(66.7)
(44.7%)
Income tax expenses
(72.8)
(84.9)
(14.3%)
Net profit
165.4
192.6
(14.1%)
Of which attributable to the Elia Group
132.3
154.1
(14.1%)
Adjusted items
0.0
0.0
n.r.
Adjusted net profit
165.4
192.6
(14.1%)
Consolidated statement of financial position
(in € million)
31 December 2021
31 December 2020
Difference (%)
Total assets
9,941.3
7,028.4
41.4%
Capital expenditures
880.4
715.9
23.0%
Net financial debt
1,014.9
3,756.6
(73.0%)
50Hertz Transmission’s total revenue and other income was up on the previous year (+7.0%).
Total revenues are detailed in the table below.
(in € million)
2021
2020
Difference (%)
Grid revenue:
1,561.3
1,349.1
15.7%
Revenue from incentive regulation
911.8
802.3
13.6%
Revenue from offshore regulation
294.7
300.0
(1.8%)
Energy revenue
354.9
246.8
43.8%
Other revenue (incl. last mile connection)
8.6
4.5
91.3%
Subtotal revenue
1,569.9
1,353.6
16.0%
Other income
95.1
90.1
5.5%
Net income (expense) from settlement mechanism
51.9
11.2
362.7%
Total revenue and other income
1,716.9
1,454.9
18.0%
Revenues from incentive regulation consist of grid tariffs before the settlement mechanism and are driven primarily by the regulatory
remuneration for onshore activities (revenue cap).
Revenues from incentive regulation rose by +€109.5 million, as the allowance for onshore investments increased (+€34.3 million). The
compensation of pass-through energy costs went up as well (+€60.4 million), mainly due to a higher allowance for redispatching costs.
The infeed of renewable energy into the distribution grid was lower than expected, leading to higher volumes in the transmission grid.
Consequently, the volume effect was higher than in previous years (+€98.6 million), which included lower volumes due to the impact of
COVID-19. These effects were partly offset by a higher payback for old regulatory balances via the regulatory account (-€20.5 million).
Furthermore, pass-through paybacks related to the old regulatory offshore mechanism increased (-€62.2 million).
Revenues from offshore surcharge include all revenues derived from the offshore grid surcharge. This includes regulatory
remuneration for the connection of offshore wind farms, reimbursement of offshore liability payments and offshore costs charged to
50Hertz by third parties, e.g. other TSOs.
The offshore surcharge revenues slightly decreased compared to the previous year (-€5.3 million). While the remuneration of 50Hertz’s
own offshore grid connection costs increased (+€7.3 million), driven by the ongoing CAPEX programme (mainly Ostwind 2) and higher
maintenance costs (cost-plus regulation), the pass-through costs charged to 50Hertz by third parties fell compared to the same period
last year (-€12.6 million).
Energy revenues include all revenues related to system operation and are mostly corresponding costs charged on to third parties, such
as redispatch measures, costs for reserve power plants or control power costs. Revenues generated from auctioning interconnector
capacity are also included in this section.
Energy revenues increased strongly compared to the previous year (+€108.1 million), due to the soaring energy prices in the second
half of 2021. The charges to other TSOs for redispatch measures increased (+€27.1 million), as did revenues from the compensation of
involuntary exchange at the grid’s borders (+€14.7 million). Furthermore, higher control power costs were charged to the balancing
groups (+€19.8 million) and revenues from the auctioning of interconnector capacities benefitted from the price developments (+€26.1
million).
Other revenues (including last-mile connection) rose (+€4.1 million), mainly due to higher revenues received from the “Inter-
Transmission System Operator Compensation” (ITC). The ITC mechanism is based on an EU regulation and compensates TSOs for the
costs of hosting cross-border electricity flows on their networks. TSOs contribute/receive funds based on electricity flows onto/from their
national transmission systems.
Other income rose (+€5.0 million) as own work capitalised increased due to the staffing to execute and manage the investment
programme (+€2.7 million). Furthermore, revenues from subsidies and grants increased (+€2.0 million), due to the amortisation of EU
subsidies for the Kriegers Flak Combined Grid Solution interconnector as of July 2021.
The net regulatory income (expense) from settlement mechanism neutralises regulatory time lags. It consists of two components:
firstly, the neutralisation of differences between cost allowances in the tariffs and the actual costs incurred for the current year (-€9.7
million); secondly, the balancing of said differences from prior years (+€61.6 million).
EBITDA decreased to €534.0 million (-7.7%). The growing asset base benefitted the investment remuneration (+€13.6 million), but the
business expansion led to pressure on the operating expenses. Onshore maintenance costs increased (-€12.3 million), driven by a peak
in the maintenance cycle. As the grid was expanded and reinforced, old onshore assets were taken out of operation and
decommissioned, leading to higher losses from sale and disposal (-€7.7 million). Furthermore, personnel costs rose, as we kept
expanding our talent pool to deliver on the energy transition and manage the increasing complexity of system operations (-€19.9
million). In order to efficiently manage this growing complexity, the digitalisation of the business is progressing, as reflected by higher IT
expenses (-€4.2 million). After the COVID-19 measures in 2020, the company returned to full speed in 2021. Consequently, operational
expenses for areas such as consulting, external services and travelling increased (-€13.9 million). Furthermore, 2020 included revenues
from a penalty payment (-€6.8 million). Finally, EBITDA benefitted from one-off revenues from the regulatory settlement and related
provisions amounting to €42.4 million (+€5.1 million); €10.5 million of this originated from the settlement for the year 2018 and €31.7
million originated from the refund of clawback amounts (“Abzugsbeträge”). The clawback payments are part of the regulatory
“Investment Measures” mechanism, which will be phased out as of 2024 and replaced by the Capital Cost Adjustment model. As part of
the transition, the ordinance includes a partial refund of historical clawback amounts, which was accrued in 2021.
There was a more proncounced decrease in EBIT (-€67.2 million) due to increasing depreciations (-€15.1 million) following the
commissioning of projects, such as the Kriegers Flak Combined Grid Solution. Furthermore, the change in operating provisions was
lower than for the previous year (-€7.5 million). No adjusted items occurred in 2021.
Adjusted net profit declined to €165.4 million (-14.1%) as a result of:
• Higher onshore OPEX and other costs (-€35.3 million), driven by the expansion and digitalisation of the business, a peak in
the maintenance cycle and losses from asset disposal.
• Higher personnel costs (-€14.0 million), mainly from increases in staff numbers.
• Increased depreciations (-€10,6 million), driven by the commissioning of projects.
These effects were partially compensated by:
• Higher regulatory settlements and related provisions (+€3.6 million).
• Higher investment remuneration (+9.6 million) following the growth of the asset base.
• Higher financial results (+€19.5 million), as a high interest rate bond was refinanced with more favourable conditions (+€6.0
million). Additionally, forward interest rates increased, leading to lower interest costs on provisions (+€13.5 million).
Total assets rose by €2,912.9 million compared to 2020 mainly due to a favorable development of the EEG business and further
progress on the investment programme. The free cash flow totalled €2,889.4 million and was heavily affected by the high cash inflow
for the EEG account (+€2,918.9 million). In 2021, 50Hertz received three federal payments (€2,160.0 million) to cover the cash deficit
build up in 2020 and pay back the revolving credit facilities (€700 million) contracted at the end of last year to cover this EEG deficit. The
EEG cash flow was further uplifted by the strong increase in energy prices during the second half of 2021, leading to higher cash-in than
expected.
The investment programme was mostly financed from the operating cash flow and a €500 million senior bond with a 12-year tenor and a
fixed interest rate of 0.741% was issued in April. Taking into account the EEG position, the Net financial debt dropped by €2,741.7
million. The EEG cash position as of December 2021 amounted to €2,110.0 million.
90
4.4. Non-regulated activities and Nemo Link
The table below shows the 2021 consolidated results for the ‘Non-regulated activities and Nemo Link’ segment.
Results Non-regulated activities and Nemo Link
(in € million) −
Period ended 31 December
2021
2020
Difference (%)
Total revenues 28.7 5.1 463.4%
Other income 8.1 29.6 (72.5%)
Depreciation, amortisation, impairment and changes in
provisions
(0.5) (0.2) 150.0%
Results from operating activities (6.8) (6.5) 4.6%
Share of profit of equity accounted investees
(net of income tax)
47.1 7.4 n.r.
EBIT 40.3 0.9 4377.8%
Adjusted items 0.0 (0.3) (100.0%)
Adjusted EBIT 40.3 1.2 3258.3%
EBITDA 40.8 1.1 3609.1%
Finance income 0.1 0.1 0.0%
Finance costs (9.0) (12.7) (29.1%)
Income tax expenses 0.5 2.2 n.r.
Net profit 31.9 (9.5) n.r.
Of which attributable to the Elia Group 31.9 (9.5) n.r.
Adjusted items 0.0 (0.2) n.r.
Adjusted net profit 31.9 (9.3) n.r.
Consolidated statement of financial position
(in € million)
31 December 2021
31 December 2020
Difference (%)
Total assets 1,654.0 1,766.7 (6.4%)
Capital expenditures 1.6 0.9 n.r.
Net financial debt 430.4 402.9 6.8%
Non-regulated revenue increased by 6.1% to €36.8 million compared to 2020. This is the result of lower revenues generated by Elia
Grid International (‘EGI’) (-€7.3 million), as the international consulting business was negatively impacted by the COVID-19 restrictions,
leading to a delay in projects and offset by higher intersegment transactions mainly between Elia Group SA, Elia Transmission Belgium
and 50Hertz. The effect of these intersegment transactions is disclosed in ‘Note 4.5. Segment reconciliation’.
Equity-accounted investments contributed €47.1 million to the Group’s result, which is almost entirely attributable to Nemo Link. With
an availability rate of 99.1%, Nemo Link continues to be one of the highest performing assets of its kind. Strong nuclear availability in
continental Europe, increased gas and carbon prices and general scarcity in the UK positively affected market price-spread, at the
benefit of the congestion market, main revenue stream of the asset. Nemo Link performed strongly, leading to a total net profit of €94.0
million and a contribution of €47.0 million to Elia Group’s net profit.
Adjusted EBIT rose to €40.3 million (+€39.1 million). This increase was entirely due to the higher contribution from Nemo Link (+€39.7
million), a lower operating loss for re.alto due to lower development costs and the generation of initial fee income (+€0.5 million); it was
partially offset by higher operating costs at the holding linked to the pursuit of inorganic growth ambitions (-€0.9 million). Despite the
drop in revenues, EGI’s EBIT remained flat, reflecting the cost control measures in COVID times.
Net finance cost fell to €8.9 million, primarily comprising the interest cost linked to the senior bond (€4.7 million), the cost linked to the
Nemo Link private placement (€2.9 million) and other financial costs linked to Elia Group SA. The previous year’s financial costs were
mainly impacted by regulatory settlements which amounted to €3.4 million.
Adjusted net profit increased strongly by €41.2 million to €31.9 million, mainly as a result of:
• Higher contribution from Nemo Link (+€39.7 million).
• Lower regulatory settlements for 2020 (+€2.2 million).
• Lower loss of re.alto (+€0.4 million), due to lower costs and initial fee income.
• Higher holding costs driven by business development activities (-€1.0 million).
• Other items (-€0.1million) driven by lower other non-regulated costs while EGI remained flat year-over-year.
Total assets dropped slightly to €1,654.0 million (-6.4%) and the net financial debt increased to €430.4 million (+6.8%), driven by the
use of liquidity by Elia Group SA to pay for last year’s dividend; it was partially offset by the yearly reimbursement of the Nemo Link
amortising loan.
Elia Group Financial Report 2021 91
4.4. Non-regulated activities and Nemo Link
The table below shows the 2021 consolidated results for the ‘Non-regulated activities and Nemo Link’ segment.
Results Non-regulated activities and Nemo Link
(in € million) −
Period ended 31 December
2021
2020
Difference (%)
Total revenues
28.7
5.1
463.4%
Other income
8.1
29.6
(72.5%)
Depreciation, amortisation, impairment and changes in
provisions
(0.5)
(0.2)
150.0%
Results from operating activities
(6.8)
(6.5)
4.6%
Share of profit of equity accounted investees
(net of income tax)
47.1
7.4
n.r.
EBIT
40.3
0.9
4377.8%
Adjusted items
0.0
(0.3)
(100.0%)
Adjusted EBIT
40.3
1.2
3258.3%
EBITDA
40.8
1.1
3609.1%
Finance income
0.1
0.1
0.0%
Finance costs
(9.0)
(12.7)
(29.1%)
Income tax expenses
0.5
2.2
n.r.
Net profit
31.9
(9.5)
n.r.
Of which attributable to the Elia Group
31.9
(9.5)
n.r.
Adjusted items
0.0
(0.2)
n.r.
Adjusted net profit
31.9
(9.3)
n.r.
Consolidated statement of financial position
(in € million)
31 December 2021
31 December 2020
Difference (%)
Total assets
1,654.0
1,766.7
(6.4%)
Capital expenditures
1.6
0.9
n.r.
Net financial debt
430.4
402.9
6.8%
Non-regulated revenue increased by 6.1% to €36.8 million compared to 2020. This is the result of lower revenues generated by Elia
Grid International (‘EGI’) (-€7.3 million), as the international consulting business was negatively impacted by the COVID-19 restrictions,
leading to a delay in projects and offset by higher intersegment transactions mainly between Elia Group SA, Elia Transmission Belgium
and 50Hertz. The effect of these intersegment transactions is disclosed in ‘Note 4.5. Segment reconciliation’.
Equity-accounted investments contributed €47.1 million to the Group’s result, which is almost entirely attributable to Nemo Link. With
an availability rate of 99.1%, Nemo Link continues to be one of the highest performing assets of its kind. Strong nuclear availability in
continental Europe, increased gas and carbon prices and general scarcity in the UK positively affected market price-spread, at the
benefit of the congestion market, main revenue stream of the asset. Nemo Link performed strongly, leading to a total net profit of €94.0
million and a contribution of €47.0 million to Elia Group’s net profit.
Adjusted EBIT rose to €40.3 million (+€39.1 million). This increase was entirely due to the higher contribution from Nemo Link (+€39.7
million), a lower operating loss for re.alto due to lower development costs and the generation of initial fee income (+€0.5 million); it was
partially offset by higher operating costs at the holding linked to the pursuit of inorganic growth ambitions (-€0.9 million). Despite the
drop in revenues, EGI’s EBIT remained flat, reflecting the cost control measures in COVID times.
Net finance cost fell to €8.9 million, primarily comprising the interest cost linked to the senior bond (€4.7 million), the cost linked to the
Nemo Link private placement (€2.9 million) and other financial costs linked to Elia Group SA. The previous year’s financial costs were
mainly impacted by regulatory settlements which amounted to €3.4 million.
Adjusted net profit increased strongly by €41.2 million to €31.9 million, mainly as a result of:
• Higher contribution from Nemo Link (+€39.7 million).
• Lower regulatory settlements for 2020 (+€2.2 million).
• Lower loss of re.alto (+€0.4 million), due to lower costs and initial fee income.
• Higher holding costs driven by business development activities (-€1.0 million).
• Other items (-€0.1million) driven by lower other non-regulated costs while EGI remained flat year-over-year.
Total assets dropped slightly to €1,654.0 million (-6.4%) and the net financial debt increased to €430.4 million (+6.8%), driven by the
use of liquidity by Elia Group SA to pay for last year’s dividend; it was partially offset by the yearly reimbursement of the Nemo Link
amortising loan.
4.5. Reconciliation of information on reportable segments to IFRS amounts
Consolidated results (in € million) −
Year ended 31 December
2021 2021 2021 2021 2021
Elia
Transmission
50Hertz
Transmission
Non-
regulated
activities and
Nemo Link
Consolidation
entries &
intersegment
transactions
Elia Group
( a )
( b )
( c )
( d )
( a ) + ( b ) +
( c ) + ( d )
Revenue
1,009.8
1,569.9
28.7
(57.1)
2,551.2
Other income
68.3
95.1
8.1
(36.4)
135.1
Net income (expense) from
settlement mechanism
121.4 51.9 0.0 0.0 173.3
Depreciation, amortisation, impairment and changes in
provisions
(205.1) (261.2) (0.5) 0.0 (466.8)
Results from operating activities
224.8
272.9
(6.8)
(0.2)
490.7
Share of profit of equity accounted investees, net of tax
2.3
0.0
47.1
0.0
49.3
Earnings before interest and tax (EBIT)
227.1
272.9
40.3
(0.2)
540.1
Earnings before depreciation, amortisation, interest
and tax (EBITDA)
432.2 534.0 40.8 (0.2) 1,006.9
Finance income
1.7
2.1
0.1
0.0
3.9
Finance costs
(64.8)
(36.9)
(9.0)
0.2
(110.5)
Income tax expenses
(32.9)
(72.8)
0.5
0.0
(105.1)
Profit attributable to the owners of the company
131.0
132.3
31.9
0.0
295.2
Consolidated statement of financial position
(in € million)
31.12.2021
31.12.2021
31.12.2021
31.12.2021
31.12.2021
Total assets
7,153.5
9,941.3
1,654.0
(604.4)
18,144.4
Capital expenditures
417.2
880.4
1.6
0.0
1,299.2
Net financial debt
3,441.0
1,014.9
430.4
0.0
4,886.3
Consolidated results (in € million) −
Year ended 31 December
2020
2020
2020
2020
2020
Elia
Transmission
50Hertz
Transmission
Non-
regulated
activities and
Nemo Link
Consolidation
entries &
intersegment
transactions
Elia Group
( a )
( b )
( c )
( d )
( a ) + ( b ) +
( c ) + ( d )
Revenue
858.1
1,353.6
5.1
(7.2)
2,209.6
Other income
57.5
90.1
29.6
(13.5)
163.6
Net income (expense) from
settlement mechanism
89.1 11.2 0.0 0.0 100.3
Depreciation, amortisation, impairment and changes in
provisions
(188.3) (238.6) (0.2) 0.0 (427.1)
Results from operating activities 235.6 340.1 (6.5) (0.0) 569.2
Share of profit of equity accounted investees, net of tax
1.9
0.0
7.4
0.0
9.3
Earnings before interest and tax (EBIT)
237.5
340.1
0.9
(0.0)
578.4
Earnings before depreciation, amortisation, interest
and tax (EBITDA)
425.8 578.6 1.1 (0.0) 1,005.5
Finance income
2.3
4.1
0.1
0.0
6.5
Finance costs
(68.7)
(66.7)
(12.7)
0.0
(148.1)
Income tax expenses
(46.3)
(84.9)
2.2
0.0
(129.0)
Profit attributable to the owners of the company
124.8
154.1
(9.5)
(0.0)
269.4
Consolidated statement of financial position
(in € million)
31.12.2020
31.12.2020
31.12.2020
31.12.2020
31.12.2020
Total assets
7,008.4
7,028.4
1,766.7
(637.9)
15,165.6
Capital expenditures 365.6 715.9 0.9 0.0 1,082.4
Net financial debt 3,305.6 3,756.6 402.9 0.0 7,465.1
There are no significant intersegment transactions.
The Group has no concentration of customers in either of the operating segments.
92
4.6. Adjusted items – reconciliation table
(in € million) − Period ended 31 December
2021
Elia
Transmission
50Hertz
Transmission
Non-
regulated
activities
and Nemo
Link
Consolidation
entries
Elia Group
Adjusted items
Corporate reorganisation
0.0
0.0
0.0
0.0
0.0
Adjusted EBIT
0.0
0.0
0.0
0.0
0.0
Tax impact
0.0
0.0
0.0
0.0
0.0
Net profit – adjusted items
0.0
0.0
0.0
0.0
0.0
(in € million) − Period ended 31 December
2020
Elia
Transmission
50Hertz
Transmission
Non-
regulated
activities
and Nemo
Link
Consolidation
entries
Elia Group
Adjusted items
Corporate reorganisation
0.0
0.0
(0.3)
0.0
(0.3)
Adjusted EBIT
0.0
0.0
(0.3)
0.0
(0.3)
Tax impact
0.0
0.0
0.1
0.0
0.1
Net profit – adjusted items
0.0
0.0
(0.2)
0.0
(0.2)
Elia Group Financial Report 2021 93
4.6. Adjusted items – reconciliation table
(in € million) − Period ended 31 December
2021
Elia
Transmission
50Hertz
Transmission
Non-
regulated
activities
and Nemo
Link
Consolidation
entries
Elia Group
Adjusted items
Corporate reorganisation
0.0
0.0
0.0
0.0
0.0
Adjusted EBIT
0.0
0.0
0.0
0.0
0.0
Tax impact
0.0
0.0
0.0
0.0
0.0
Net profit – adjusted items
0.0
0.0
0.0
0.0
0.0
(in € million) − Period ended 31 December
2020
Elia
Transmission
50Hertz
Transmission
Non-
regulated
activities
and Nemo
Link
Consolidation
entries
Elia Group
Adjusted items
Corporate reorganisation
0.0
0.0
(0.3)
0.0
(0.3)
Adjusted EBIT
0.0
0.0
(0.3)
0.0
(0.3)
Tax impact
0.0
0.0
0.1
0.0
0.1
Net profit – adjusted items
0.0
0.0
(0.2)
0.0
(0.2)
5. Items in the consolidated statement of profit or loss and
other comprehensive income
There were no changes in the basis of preparation and therefore no restatements of figures from previous years were required.
5.1. Revenue, net income (expense) from settlement mechanism and other income
(in € million) 2021 2020
Revenue, excluding net income from settlement mechanism
2,724.6
2,309.9
Grid revenue:
2,711.1
2,286.2
Last mile connection
4.3
4.3
Other revenue
9.3
19.4
Net income (expense) from settlement mechanism
173.3
100.3
Other income
135.1
163.6
Services and technical expertise
(2.2)
(3.1)
Own production
82.1
72.8
Optimal use of assets
15.8
17.2
Other
37.8
76.2
Gain on sale PPE
1.5
0.6
We refer to the segment reports for a detailed analysis of the group’s recognised revenues at segment level. The Elia Transmission
(Belgium) segment reported revenues and other income of €1,199.5 million (Note 4.2), the 50Hertz Transmission (Germany) segment
reported revenues and other income of €1,716.9 million (Note 4.3) and the ‘Non-regulated activities and Nemo Link’ segment reported
revenues and other income of €36.8 million (Note 4.4). The reported revenues and other income amount to €2,859.7 million.
No further geographical information is provided as revenues are generated in the countries where the grid infrastructure is located,
which substantially corresponds to the segments mentioned above.
The group’s own production relates to time spent on investment projects by group employees.
The group recognised €5.7 million of revenue in the reporting period that was included in the contract liability balance at the beginning of
the period (€137.3 million). Additional information is provided in Note 6.15. The group did not recognise any substantial revenues in the
reporting period with respect to performance obligations in previous periods.
5.2. Operating expenses
COST OF MATERIALS, SERVICES AND OTHER GOODS
(in € million) 2021 2020
Raw materials, consumables and goods for resale
83.1
86.2
Purchase of ancillary services
1,067.7
654.5
Services and other goods (excl. purchase of ancillary services)
375.9
397.2
Total
1,526.7
1,137.9
The group’s costs for ‘Raw materials, consumables and goods for resale’ decreased to €83.1 million for financial year 2021. In 2021, the
costs are attributable to the Belgian segment for €5.2 million (€6.5 million in 2020), the German segment for €77.9 million (€66.1 million)
and EGI for €5.9 million (€13.5 million in 2020).
Purchase of ancillary services’ includes the costs for services which enable the group to balance generation with demand, maintain
constant voltage levels and manage congestion on its grids. The cost incurred in 2021 by Elia Transmission (Belgium) increased to
€294.0 million (from €139.0 million in 2020) mainly because of increased prices to cover electricity losses and increased activations to
balance the grid in a context of strong energy prices. 50Hertz Transmission (Germany) incurred increased costs of €773.1 million in
2021 compared to €515.4 million in 2020 also because of higher electricity prices.
‘Services and other goods’ relates to maintenance of the grid, services provided by third parties, insurance and consultancy, and others.
The cost decreased by €21.3 million to €375.9 million. The decrease was driven by the German segment, whose costs for this category
amounted to €124.5 million in 2021 compared to €143.5 million in 2020.
94
PERSONNEL EXPENSES
(in € million) 2021 2020
Salaries and wages
242.2
219.6
Social security contributions
50.8
48.0
Pension costs
22.6
27.5
Other personnel expenses
5.9
5.2
Share-based payments expenses
0.2
1.4
Employee benefits (excl. pensions)
12.4
5.5
Total
334.1
307.2
The second tranche of the 2020 capital increase for Elia employees was completed in March 2021. The capital increase resulted in the
creation of 7,360 additional shares without nominal value. The group's employees were granted a 16.66% reduction on the quoted
share price, which resulted in a €35.8 thousands reduction overall.
Personnel expenses for Elia Transmission (Belgium) amounted to €166.5 in 2021, up from €162.3 million in 2020. 50Hertz Transmission
(Germany) accounted for €151.4 million of the group’s personnel expenses for 2021 (previous year: €131.5 million) and the non-
regulated activities and Nemo Link accounted for €16.2 million (previous year: €13.4 million). All three segments saw an increase as a
consequence of a continued growth in headcount.
See Note 6.13 ‘Employee benefits’ for more information about pension costs and employee benefits.
DEPRECIATION, AMORTISATION, IMPAIRMENT AND CHANGES IN PROVISIONS
(in € million) 2021 2020
Amortisation of intangible assets
24.5
23.0
Depreciation of property, plant and equipment
443.1
409.4
Total depreciation and amortisation
467.5
432.5
Impairment of inventories
0.6
0.1
Total impairment
0.6
0.1
Provisions for litigations
(0.5)
(5.1)
Environmental provisions
(0.2)
(0.4)
Changes in provisions
(0.8)
(5.5)
Depreciation, amortisation, impairment and changes in provisions
467.4
427.1
The total ‘depreciation, amortisation, impairment and changes in provisions’ increased from €427.1 million in 2020 to €467.4 million in
2021, mainly because of an increase in depreciation of property, plant and equipment due to increasing fixed assets.
A detailed description and movement schedule is provided in other sections for 'Intangible assets' (see Note 6.2), 'Property, plant and
equipment' (see Note 6.1) and 'Provisions' (see Note 6.14).
OTHER EXPENSES
(in € million) 2021 2020
Taxes other than income tax
14.0
14.5
Loss on disposal/sale of property, plant and equipment
19.1
10.9
Impairment on receivables
0.5
1.2
Other
7.7
5.5
Total
41.4
32.1
In 2021, the share of Elia Transmission (Belgium) in the group’s other expenses was €21.6 million (€22.1 million in 2020), 50Hertz
Transmission (Germany)’s total share amounted to €19.7 million (€9.8 million in 2020) and the share of the non-regulated activities and
Nemo Link segment accounted for €0.1 million (€0.2 million in 2020).
Taxes other than income tax mainly consist of property taxes.
Losses on disposal for property, plant and equipment totalled €9.0 million for Elia Transmission (Belgium), compared with €9.1 million
the previous year. 50Hertz Transmission (Germany) recorded €10.1 million of losses on disposal for property, plant and equipment in
2021, from €1.8 million in 2020. In 2021, significant replacement projects and inventory measures were carried out.
The amount of impairment on trade receivables is explained in Note 8.1 ‘Financial risk and derivative management’.
Elia Group Financial Report 2021 95
PERSONNEL EXPENSES
(in € million)
2021
2020
Salaries and wages
242.2
219.6
Social security contributions
50.8
48.0
Pension costs
22.6
27.5
Other personnel expenses
5.9
5.2
Share-based payments expenses
0.2
1.4
Employee benefits (excl. pensions)
12.4
5.5
Total
334.1
307.2
The second tranche of the 2020 capital increase for Elia employees was completed in March 2021. The capital increase resulted in the
creation of 7,360 additional shares without nominal value. The group's employees were granted a 16.66% reduction on the quoted
share price, which resulted in a €35.8 thousands reduction overall.
Personnel expenses for Elia Transmission (Belgium) amounted to €166.5 in 2021, up from €162.3 million in 2020. 50Hertz Transmission
(Germany) accounted for €151.4 million of the group’s personnel expenses for 2021 (previous year: €131.5 million) and the non-
regulated activities and Nemo Link accounted for €16.2 million (previous year: €13.4 million). All three segments saw an increase as a
consequence of a continued growth in headcount.
See Note 6.13 ‘Employee benefits’ for more information about pension costs and employee benefits.
DEPRECIATION, AMORTISATION, IMPAIRMENT AND CHANGES IN PROVISIONS
(in € million)
2021
2020
Amortisation of intangible assets
24.5
23.0
Depreciation of property, plant and equipment
443.1
409.4
Total depreciation and amortisation
467.5
432.5
Impairment of inventories
0.6
0.1
Total impairment
0.6
0.1
Provisions for litigations
(0.5)
(5.1)
Environmental provisions
(0.2)
(0.4)
Changes in provisions
(0.8)
(5.5)
Depreciation, amortisation, impairment and changes in provisions
467.4
427.1
The total ‘depreciation, amortisation, impairment and changes in provisions’ increased from €427.1 million in 2020 to €467.4 million in
2021, mainly because of an increase in depreciation of property, plant and equipment due to increasing fixed assets.
A detailed description and movement schedule is provided in other sections for 'Intangible assets' (see Note 6.2), 'Property, plant and
equipment' (see Note 6.1) and 'Provisions' (see Note 6.14).
OTHER EXPENSES
(in € million)
2021
2020
Taxes other than income tax
14.0
14.5
Loss on disposal/sale of property, plant and equipment
19.1
10.9
Impairment on receivables
0.5
1.2
Other
7.7
5.5
Total
41.4
32.1
In 2021, the share of Elia Transmission (Belgium) in the group’s other expenses was €21.6 million (€22.1 million in 2020), 50Hertz
Transmission (Germany)’s total share amounted to €19.7 million (€9.8 million in 2020) and the share of the non-regulated activities and
Nemo Link segment accounted for €0.1 million (€0.2 million in 2020).
Taxes other than income tax mainly consist of property taxes.
Losses on disposal for property, plant and equipment totalled €9.0 million for Elia Transmission (Belgium), compared with €9.1 million
the previous year. 50Hertz Transmission (Germany) recorded €10.1 million of losses on disposal for property, plant and equipment in
2021, from €1.8 million in 2020. In 2021, significant replacement projects and inventory measures were carried out.
The amount of impairment on trade receivables is explained in Note 8.1 ‘Financial risk and derivative management’.
5.3. Net finance costs
(in € million) 2021 2020
Finance income
3.9
6.6
Interest income on cash and cash equivalents and granted loans
1.1
2.3
Other financial income
2.8
4.2
Finance costs
(110.5)
(148.1)
Interest expense on eurobonds and other bank borrowings
(110.4)
(113.3)
Interest expense on derivatives
(0.6)
(5.2)
Interest cost on leasing
(1.8)
(1.8)
Other financial costs
2.3
(27.8)
Net finance costs
(106.6)
(141.5)
Finance income decreased from €6.6 million in 2020 to €3.9 million in 2021. 50Hertz Transmission (Germany)’s contribution to finance
income amounted to €2.1 million, Elia Transmission (Belgium)’s contribution to €1.7 million and the non-regulated activities and Nemo
Link segment’s contribution to €0.1 million for 2021.
The interest expenses on Eurobonds and other bank borrowings decreased by €2.9 million compared to the previous year. See Note
6.12 for more details regarding the loans outstanding and the interest paid in 2021.
The interest expense incurred in 2020 was related to the settlement of two loans in June 2020 (the loan from Synatom for €453.6 million
and the loan from Publi-Part (€42.1 million). In settling these, a one-off interest expense on derivatives of €4.4 million was incurred.
The interest cost on leasing remained stable in comparison with the previous year.
Other financial costs decreased from €27.8 million in 2020 to -€2.3 million in 2021. This was mainly related to the net interest on
regulatory issues booked in Germany which amounts to -€6.5 million (credit) compared to €11.9 million (debit) in 2020. This variation is
driven by a change in the interest rate applicable to revenue for congestion management. The remaining impact is mainly explained by
the non-recurrent items recorded in 2020 relating to regulatory settlements in Belgium (€3.4 million) and costs for setting up a
sustainability-linked RCF (€1.5 million).
We refer to Note 6.12 for more details about net debt and loans.
5.4. Income taxes
RECOGNISED IN PROFIT OR LOSS
The consolidated income statement includes the following taxes:
(in € million) 2021 2020
Current year
98.8
124.7
Adjustments for prior years
(4.1)
2.5
Total current income tax expenses
94.7
127.2
Origination from and reversal of temporary differences
10.5
1.9
Total deferred taxes expenses
10.5
1.9
Total income taxes and deferred taxes recognised in profit and loss
105.2
129.1
Total income tax expenses were lower in 2020 than in 2021. The decrease in tax expenses was mainly driven by higher Innovation
Income Deduction.
96
RECONCILIATION OF THE EFFECTIVE TAX RATE
The tax on the Group's profit (loss) before tax differs from the theoretical amount that would arise using the Belgian statutory tax rate
applicable to profits (losses) of the consolidated companies:
(in € million) 2021 2020
Profit before income tax
433.5
437.0
Domestic corporate income tax
25%
25%
Income tax, using the domestic corporate tax rate
(108.4)
(109.3)
Effect of the foreign tax rate
(11.6)
(13.0)
Share of profit of equity accounted investees, net of tax
12.3
2.3
Non-deductible expenses
(10.6)
(4.4)
Adjustments for prior years
4.4
(2.2)
Tax credits and other tax reductions
5.6
0.4
Effect of unrecognized deferred tax assets on tax loss carry-forwards
(1.9)
(1.1)
Tax on hybrid securities
4.8
4.8
Corporate interest restriction
0.0
(6.1)
Other
0.1
(0.6)
Total income taxes and deferred taxes recognised in profit and loss
(105.2)
(129.1)
* The income tax rate in Germany amounts to 29.72% in 2021 and 29.65% in 2020
In 2021, the income tax expense was lower than the theoretical income tax expense (calculated using the nominal tax rate) mainly due
to the impact of the Innovation Income Deduction for a total of €9.6 million reported under “Adjustment for prior years” and “Tax credits
and other tax reductions”.
Deferred income taxes are discussed further in Note 6.6.
5.5. Earnings per share (EPS)
BASIC EPS
Basic earnings per share are calculated by dividing the net profit attributable to the Company’s shareholders (after adjustment for the
distribution on hybrid securities) (€276.0 million) by the weighted average number of ordinary shares outstanding during the year.
2021 2020
Profit attributable to equity holders of ordinary shares 276.0 250.1
Effect of dilutive potential ordinary shares 0
Earnings for the purposes of diluted earnings per share 276.0 250.1
Ordinary shares issued on 1 January 68,720,695 68,652,938
Treasury shares as at 1 January 0
Ordinary shares issued in December 2020
67,757
Ordinary shares issued in March 2021 7,360
Treasury shares - net movement for the year -7,248
Outstanding ordinary shares as at 31 December 68,720,807 68,720,695
Weighted average of outstanding ordinary shares (basic) 68,722,476 68,654,980
Effect of dilutive potential ordinary shares 0 0
Weighted average number of outstanding ordinary shares (diluted) 68,722,476 68,654,980
Basic earnings per share (in €) 4.02 3.64
Diluted earnings per share (in €) 4.02 3.64
DILUTED EPS
Elia Group Financial Report 2021 97
RECONCILIATION OF THE EFFECTIVE TAX RATE
The tax on the Group's profit (loss) before tax differs from the theoretical amount that would arise using the Belgian statutory tax rate
applicable to profits (losses) of the consolidated companies:
(in € million)
2021
2020
Profit before income tax
433.5
437.0
Domestic corporate income tax
25%
25%
Income tax, using the domestic corporate tax rate
(108.4)
(109.3)
Effect of the foreign tax rate
(11.6)
(13.0)
Share of profit of equity accounted investees, net of tax
12.3
2.3
Non-deductible expenses
(10.6)
(4.4)
Adjustments for prior years
4.4
(2.2)
Tax credits and other tax reductions
5.6
0.4
Effect of unrecognized deferred tax assets on tax loss carry-forwards
(1.9)
(1.1)
Tax on hybrid securities
4.8
4.8
Corporate interest restriction
0.0
(6.1)
Other
0.1
(0.6)
Total income taxes and deferred taxes recognised in profit and loss
(105.2)
(129.1)
* The income tax rate in Germany amounts to 29.72% in 2021 and 29.65% in 2020
In 2021, the income tax expense was lower than the theoretical income tax expense (calculated using the nominal tax rate) mainly due
to the impact of the Innovation Income Deduction for a total of €9.6 million reported under “Adjustment for prior years” and “Tax credits
and other tax reductions”.
Deferred income taxes are discussed further in Note 6.6.
5.5. Earnings per share (EPS)
BASIC EPS
Basic earnings per share are calculated by dividing the net profit attributable to the Company’s shareholders (after adjustment for the
distribution on hybrid securities) (€276.0 million) by the weighted average number of ordinary shares outstanding during the year.
2021
2020
Profit attributable to equity holders of ordinary shares
276.0
250.1
Effect of dilutive potential ordinary shares
0
Earnings for the purposes of diluted earnings per share
276.0
250.1
Ordinary shares issued on 1 January
68,720,695
68,652,938
Treasury shares as at 1 January
0
Ordinary shares issued in December 2020
67,757
Ordinary shares issued in March 2021
7,360
Treasury shares - net movement for the year
-7,248
Outstanding ordinary shares as at 31 December
68,720,807
68,720,695
Weighted average of outstanding ordinary shares (basic)
68,722,476
68,654,980
Effect of dilutive potential ordinary shares
0
0
Weighted average number of outstanding ordinary shares (diluted)
68,722,476
68,654,980
Basic earnings per share (in €)
4.02
3.64
Diluted earnings per share (in €)
4.02
3.64
DILUTED EPS
Diluted earnings per share are determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average
number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, which comprise share options and
convertible bonds.
Diluted earnings per share are equal to basic earnings per share, since there are no share options or convertible bonds.
5.6. Other comprehensive income
Total comprehensive income includes both the result of the period recognised in the statement of profit or loss and other comprehensive
income recognised in equity. ‘Other comprehensive income’ includes all changes in equity other than owner-related changes, which are
reported in the statement of changes in equity.
The total other comprehensive income for 2021 amounts to €270.8 million positive impact, representing a significant increase compared
with the previous year (€12.8 million positive impact). The most important drivers are described below.
Cash flow hedges
The fair value change of the cash flow hedges had a positive impact of €250.4 million on other comprehensive income. Due to a change
in accounting policy, hedge accounting is applied, as of 2021, to future contracts entered into by 50Hertz for the purpose of reducing the
risk of fluctuations in the expected amount of grid losses. This change, which occurred against a background of high energy prices,
resulted in the recognition of the fair value of these contracts for a gross amount of €355.6 million at the end of 2021. Considering a
deferred tax effect, a hedge reserve amounting to €249.9 million was recorded in other comprehensive income.
Financial assets measured at fair value through other comprehensive income
The measurement at fair value of the participation of EEX, in which 50Hertz Transmission holds a 5.4% stake, remains stable, resulting
in no impact as of 31 December 2021 (€14.9 million as of 31 December 2020).
Remeasurements of post-employment benefit obligations
The other comprehensive income on post-employment obligations had a positive impact of €27.4 million. This impact is mainly
explained by changes in the discount rate and the positive return of the plan assets. See Note 6.13 for more details.
The related tax on these elements amounts to €7.0 million.
98
6. Items in the consolidated statement of financial position
6.1. Property, plant and equipment
(in € million)
Land and
buildings
Machinery
and
equipment
Furniture
and
vehicles
Other
tangible
assets
Leasing
and similar
rights
Assets
under
construction
Total
ACQUISITION VALUE
Balance at 1 January 2020
428.4
10,419.3
310.2
27.1
107.2
1,501.3
12,793.4
Additions
3.7
254.0
30.1
0.2
10.2
772.1
1,070.3
Disposals
(3.0)
(41.4)
(3.2)
0.0
(0.4)
(0.4)
(48.4)
Transfers
1.7
547.6
6.7
4.2
0.0
(559.9)
0.2
Balance at 31 December
2020
430.8
11,179.4
343.8
31.5
117.0
1,713.0
13,815.6
Balance at 1 January 2021
430.8
11,179.4
343.8
31.5
117.0
1,713.0
13,815.6
Additions
10.6
179.8
36.0
0.9
49.6
956.0
1,232.8
Disposals
(3.3)
(87.1)
(42.6)
(0.2)
(0.4)
0.0
(133.6)
Transfers
27.6
503.0
35.1
2.9
0.0
(570.1)
(1.5)
Balance at 31 December
2021
465.8
11,775.0
372.3
35.1
166.1
2,098.8
14,913.2
ACCUMULATED DEPRECIATION AND IMPAIRMENT
Balance at 1 January 2020
(32.0)
(3,098.4)
(173.7)
(24.5)
(19.1)
0.0
(3,347.7)
Depreciation
(5.8)
(351.7)
(35.2)
(1.6)
(15.2)
(409.4)
Disposals
1.7
31.0
3.1
0.0
0.1
36.0
Transfers
0.0
3.0
0.0
(3.0)
0.0
0.0
Balance at 31 December
2020
(36.1)
(3,416.0)
(205.7)
(29.2)
(34.2)
0.0
(3,721.2)
Balance at 1 January 2021
(36.1)
(3,416.0)
(205.7)
(29.2)
(34.2)
0.0
(3,721.2)
Depreciation
(6.6)
(381.5)
(39.7)
(1.1)
(14.8)
(443.6)
Disposals
2.2
68.6
39.7
0.1
0.4
111.1
Transfers
0.0
2.3
0.0
(2.3)
0.0
0.0
Balance at 31 December
2021
(40.5)
(3,726.6)
(205.7)
(32.4)
(48.6)
0.0
(4,053.7)
CARRYING AMOUNT
Balance at 1 January 2020
396.3
7,320.8
136.5
2.6
88.4
1,501.3
9,446.0
Balance at 31 December 2020
394.7
7,763.3
138.1
2.3
82.8
1,713.1
10,094.4
Balance at 1 January 2021
394.7
7,763.4
138.1
2.3
82.8
1,713.1
10,094.4
Balance at 31 December 2021
425.3
8,048.4
166.6
2.8
117.5
2,098.9
10,859.5
Large-scale (onshore and offshore) infrastructure projects in both Belgium and Germany are underway, enabling the establishment of
an integrated European energy system that includes large amounts of distributed renewable production and cross-border electricity
flows. The COVID-19 measures did not impede progress on these projects.
In Belgium, Elia Transmission made investments totalling €381.9 million in property, plant and equipment. Of particular importance were
the investments in its onshore and offshore grid infrastructure to facilitate the integration of large volumes of renewable generation into
the grid, in order to sustainably electrify our society. This included the upgrade of the Massenhoven-Van Eyck corridor (€35.6 million)
and reinforcement works undertaken along the 380 kV backbone between Mercator and France via Horta-Avelgem (€13.6 million). In
order to increase the interconnection capacity between Belgium and the Netherlands, reinforcement works also took place at the
Zandvliet 380 kV substation (€ 13.1 million) and at the 150 kV grid in the port of Antwerp (Brabo project, €26.7 million).
Elia Group Financial Report 2021 99
6. Items in the consolidated statement of financial position
6.1. Property, plant and equipment
(in € million)
Land and
buildings
Machinery
and
equipment
Furniture
and
vehicles
Other
tangible
assets
Leasing
and similar
rights
Assets
under
construction
Total
ACQUISITION VALUE
Balance at 1 January 2020
428.4
10,419.3
310.2
27.1
107.2
1,501.3
12,793.4
Additions
3.7
254.0
30.1
0.2
10.2
772.1
1,070.3
Disposals
(3.0)
(41.4)
(3.2)
0.0
(0.4)
(0.4)
(48.4)
Transfers
1.7
547.6
6.7
4.2
0.0
(559.9)
0.2
Balance at 31 December
2020
430.8
11,179.4
343.8
31.5
117.0
1,713.0
13,815.6
Balance at 1 January 2021
430.8
11,179.4
343.8
31.5
117.0
1,713.0
13,815.6
Additions
10.6
179.8
36.0
0.9
49.6
956.0
1,232.8
Disposals
(3.3)
(87.1)
(42.6)
(0.2)
(0.4)
0.0
(133.6)
Transfers
27.6
503.0
35.1
2.9
0.0
(570.1)
(1.5)
Balance at 31 December
2021
465.8
11,775.0
372.3
35.1
166.1
2,098.8
14,913.2
ACCUMULATED DEPRECIATION AND IMPAIRMENT
Balance at 1 January 2020
(32.0)
(3,098.4)
(173.7)
(24.5)
(19.1)
0.0
(3,347.7)
Depreciation
(5.8)
(351.7)
(35.2)
(1.6)
(15.2)
(409.4)
Disposals
1.7
31.0
3.1
0.0
0.1
36.0
Transfers
0.0
3.0
0.0
(3.0)
0.0
0.0
Balance at 31 December
2020
(36.1)
(3,416.0)
(205.7)
(29.2)
(34.2)
0.0
(3,721.2)
Balance at 1 January 2021
(36.1)
(3,416.0)
(205.7)
(29.2)
(34.2)
0.0
(3,721.2)
Depreciation
(6.6)
(381.5)
(39.7)
(1.1)
(14.8)
(443.6)
Disposals
2.2
68.6
39.7
0.1
0.4
111.1
Transfers
0.0
2.3
0.0
(2.3)
0.0
0.0
Balance at 31 December
2021
(40.5)
(3,726.6)
(205.7)
(32.4)
(48.6)
0.0
(4,053.7)
CARRYING AMOUNT
Balance at 1 January 2020
396.3
7,320.8
136.5
2.6
88.4
1,501.3
9,446.0
Balance at 31 December 2020
394.7
7,763.3
138.1
2.3
82.8
1,713.1
10,094.4
Balance at 1 January 2021
394.7
7,763.4
138.1
2.3
82.8
1,713.1
10,094.4
Balance at 31 December 2021
425.3
8,048.4
166.6
2.8
117.5
2,098.9
10,859.5
Large-scale (onshore and offshore) infrastructure projects in both Belgium and Germany are underway, enabling the establishment of
an integrated European energy system that includes large amounts of distributed renewable production and cross-border electricity
flows. The COVID-19 measures did not impede progress on these projects.
In Belgium, Elia Transmission made investments totalling €381.9 million in property, plant and equipment. Of particular importance were
the investments in its onshore and offshore grid infrastructure to facilitate the integration of large volumes of renewable generation into
the grid, in order to sustainably electrify our society. This included the upgrade of the Massenhoven-Van Eyck corridor (€35.6 million)
and reinforcement works undertaken along the 380 kV backbone between Mercator and France via Horta-Avelgem (€13.6 million). In
order to increase the interconnection capacity between Belgium and the Netherlands, reinforcement works also took place at the
Zandvliet 380 kV substation (€ 13.1 million) and at the 150 kV grid in the port of Antwerp (Brabo project, €26.7 million).
In Germany, 50Hertz Transmission invested €836.5 million in property, plant and equipment. The most significant onshore investments
comprised the DC SuedOstLink line (€66.9 million); the upgrading of high-voltage pylons to boost operational safety (€51.5 million); the
Northring line close to Berlin (€45.7 million); the overhead line in the southern Uckermark region (€40.3 million); and the 380 kV cable in
Berlin (€33.1 million). Offshore investments mainly focused on the Ostwind 2 project (€278.9 million), with good progress on being made
on the next offshore wind farm connection (Ostwind 3; €18.4 million). Furthermore, replacement CAPEX was invested in the Kontek
interconnector cable to Denmark (€17.3 million).
During 2021, €18.0 million of borrowing costs were capitalised on assets under construction. An amount of €4.3 million based on an
average interest rate of 1.92% originates from the Elia Transmission Belgium segment (€7.8 million at 2.03% in 2020). An amount of
€13.5 million based on an average interest rate of 0.98% was accounted for in the 50Hertz Transmission segment (€11.4 million at
1.13% in 2020).
There were no mortgages, pledges or similar securities on PP&E relating to loans.
Outstanding capital expenditure commitments are described in Note 8.2. The analysis of lease liabilities is presented in note 6.18.
6.2. Intangible assets
(in € million)
Development
costs of software
Licenses/
concessions
Other intangible
assets
Total
ACQUISITION VALUE
Balance at 1 January 2020
180.1
26.4
0.0
206.5
Additions
29.2
3.1
0.0
32.3
Disposals
(0.0)
(0.0)
0.0
(0.0)
Transfers
(0.2)
0.0
0.0
(0.2)
Balance at 31 December 2020
209.0
29.6
0.0
238.5
Balance at 1 January 2021
209.0
29.6
0.0
238.5
Additions
61.5
4.9
0.0
66.4
Disposals
(2.7)
0.0
0.0
(2.7)
Transfers
0.6
0.0
0.9
1.5
Balance at 31 December 2021
268.4
34.5
0.9
303.8
ACCUMULATED DEPRECIATION AND IMPAIRMENT
Balance at 1 January 2020
(104.4)
(5.7)
0.0
(110.1)
Depreciation
(20.9)
(2.1)
0.0
(23.0)
Balance at 31 December 2020
(125.4)
(7.8)
0.0
(133.1)
Balance at 1 January 2021
(125.4)
(7.8)
0.0
(133.1)
Depreciation
(21.4)
(2.9)
(0.2)
(24.5)
Disposals
2.5
(0.2)
0.0
2.4
Balance at 31 December 2021
(144.2)
(10.8)
(0.2)
(155.2)
CARRYING AMOUNT
Balance at 1 January 2020
75.6
20.7
0.0
96.4
Balance at 31 December 2020
83.6
21.8
0.0
105.4
Balance at 1 January 2021
83.6
21.8
0.0
105.4
Balance at 31 December 2021
124.2
23.6
0.8
148.6
Software comprises both IT applications developed by the Company for operating the grid and software for the Group's normal business
operations.
100
The group invested a total amount of €66.4 million, of which €35.3 million in Elia Transmission Belgium, €30.4 million in 50Hertz
Transmission and €0.7 million in the non-regulated activities and Nemo Link segment.
During 2021, €0.3 million in borrowing costs were capitalised on software in development (compared with €0.2 million in 2020) in the
Elia Transmission Belgium segment, based on an average interest rate of 1.92% (2.03% in 2020). No borrowing costs on software in
development were capitalised in the 50Hertz Transmission segment.
The group does not hold individual intangible asset that is material to its financial statements, except capacity entitlements in the Kontek
cable (Denmark) for €16.5 million (with a remaining useful life of 11 years (until 2033)).
6.3. Goodwill
There were no changes in goodwill during the years 2020-2021. The carrying amount is the following:
CARRYING AMOUNT
Balance at 1 January 2020
2,411.1
Balance at 31 December 2020
2,411.1
Balance at 1 January 2021
2,411.1
Balance at 31 December 2021
2,411.1
The goodwill relates to the following business combinations and is allocated to the cash generating unit (CGU) Elia Transmission for the
acquisition of Elia Asset and Elia Engineering and to the CGU 50Hertz Transmission for the acquisition of the 20% stake in Eurogrid
International:
(in € million) 2021
Acquisition Elia Asset – 2002
1,700.1
Acquisition Elia Engineering – 2004
7.7
Acquisition Eurogrid International – 2018
703.4
Total
2,411.1
IMPAIRMENT TEST FOR CASH-GENERATING UNITS CONTAINING GOODWILL
According to IFRS rules, goodwill should be tested for impairment on at least an annual basis or upon the occurrence of a triggering
event. Goodwill is allocated to the CGUs Elia Transmission and 50Hertz Transmission for impairment testing. Cash-generating units to
which goodwill has been allocated are tested for impairment at least annually.
The recoverable amount of CGUs is determined by reference to a value in use that is calculated based on different methods
(Discounted Cash Flow and Discounted Dividend Model) using cash flow projections drawn up on the basis of the 2021 reforecast
and the 2022-2026 business plan, as approved by the Management Committee and the Board of Directors, and on extrapolated cash
flows beyond that time frame.
The forecasts and projections included in the reference scenario were determined on the basis of the estimated investment plans,
remuneration defined in the regulatory frameworks, market evolution, market share and margin evolution. As the group’s asset base
consists of assets with long useful lives, the business plan’s projection period was set to encompass the coming two regulatory periods.
The discount rates used correspond to the weighted average cost of capital, which is adjusted in order to reflect the business, market,
country and currency risk relating to each goodwill CGU reviewed. The discount rates used are consistent with available external
information sources..
The growth rates associated with the terminal values do not exceed the inflation rate or the long-term average growth rate for the
market to which the CGU is dedicated.
More details are provided below by CGU.
Acquisition of Elia Asset and Elia Engineering
In 2002, the acquisition of Elia Asset by the Company for €3,304.1 million resulted in a positive consolidation difference of
€1,700.1 million. This positive consolidation difference was the result of the difference between the acquisition value of this entity and
the carrying amount of its assets. This difference consists of various aspects such as the fact that (i) Elia was appointed as a TSO for a
period of 20 years (ii) Elia had unique resources in Belgium as it owns the whole of extra-high-voltage grid and owns 94% of the high-
voltage grid (or has the right to use this), and hence only Elia is entitled to put forward a development plan and (iii) Elia had the relevant
TSO know-how.
At the date of acquisition, the description or the quantification in euros of these aspects could not be performed on an objective,
transparent and reliable basis and, the difference could not therefore be allocated to specific assets and was considered unallocated.
This difference has consequently been recognised as goodwill since the initial adoption of IFRS in 2005. The regulatory framework, in
Elia Group Financial Report 2021 101
The group invested a total amount of €66.4 million, of which €35.3 million in Elia Transmission Belgium, €30.4 million in 50Hertz
Transmission and €0.7 million in the non-regulated activities and Nemo Link segment.
During 2021, €0.3 million in borrowing costs were capitalised on software in development (compared with €0.2 million in 2020) in the
Elia Transmission Belgium segment, based on an average interest rate of 1.92% (2.03% in 2020). No borrowing costs on software in
development were capitalised in the 50Hertz Transmission segment.
The group does not hold individual intangible asset that is material to its financial statements, except capacity entitlements in the Kontek
cable (Denmark) for €16.5 million (with a remaining useful life of 11 years (until 2033)).
6.3. Goodwill
There were no changes in goodwill during the years 2020-2021. The carrying amount is the following:
CARRYING AMOUNT
Balance at 1 January 2020
2,411.1
Balance at 31 December 2020
2,411.1
Balance at 1 January 2021
2,411.1
Balance at 31 December 2021
2,411.1
The goodwill relates to the following business combinations and is allocated to the cash generating unit (CGU) Elia Transmission for the
acquisition of Elia Asset and Elia Engineering and to the CGU 50Hertz Transmission for the acquisition of the 20% stake in Eurogrid
International:
(in € million)
2021
Acquisition Elia Asset – 2002
1,700.1
Acquisition Elia Engineering – 2004
7.7
Acquisition Eurogrid International – 2018
703.4
Total
2,411.1
IMPAIRMENT TEST FOR CASH-GENERATING UNITS CONTAINING GOODWILL
According to IFRS rules, goodwill should be tested for impairment on at least an annual basis or upon the occurrence of a triggering
event. Goodwill is allocated to the CGUs Elia Transmission and 50Hertz Transmission for impairment testing. Cash-generating units to
which goodwill has been allocated are tested for impairment at least annually.
The recoverable amount of CGUs is determined by reference to a value in use that is calculated based on different methods
(Discounted Cash Flow and Discounted Dividend Model) using cash flow projections drawn up on the basis of the 2021 reforecast
and the 2022-2026 business plan, as approved by the Management Committee and the Board of Directors, and on extrapolated cash
flows beyond that time frame.
The forecasts and projections included in the reference scenario were determined on the basis of the estimated investment plans,
remuneration defined in the regulatory frameworks, market evolution, market share and margin evolution. As the group’s asset base
consists of assets with long useful lives, the business plan’s projection period was set to encompass the coming two regulatory periods.
The discount rates used correspond to the weighted average cost of capital, which is adjusted in order to reflect the business, market,
country and currency risk relating to each goodwill CGU reviewed. The discount rates used are consistent with available external
information sources..
The growth rates associated with the terminal values do not exceed the inflation rate or the long-term average growth rate for the
market to which the CGU is dedicated.
More details are provided below by CGU.
Acquisition of Elia Asset and Elia Engineering
In 2002, the acquisition of Elia Asset by the Company for €3,304.1 million resulted in a positive consolidation difference of
€1,700.1 million. This positive consolidation difference was the result of the difference between the acquisition value of this entity and
the carrying amount of its assets. This difference consists of various aspects such as the fact that (i) Elia was appointed as a TSO for a
period of 20 years (ii) Elia had unique resources in Belgium as it owns the whole of extra-high-voltage grid and owns 94% of the high-
voltage grid (or has the right to use this), and hence only Elia is entitled to put forward a development plan and (iii) Elia had the relevant
TSO know-how.
At the date of acquisition, the description or the quantification in euros of these aspects could not be performed on an objective,
transparent and reliable basis and, the difference could not therefore be allocated to specific assets and was considered unallocated.
This difference has consequently been recognised as goodwill since the initial adoption of IFRS in 2005. The regulatory framework, in
particular the offsetting in the tariffs of the decommissioning of fixed assets, applicable from 2008 onwards, did not have an impact on
this accounting treatment. The goodwill described above and the goodwill resulting from the acquisition of Elia Engineering in 2004 were
allocated to the single cash-generating unit for the impairment test determined, since the income and expenses were generated by one
activity, specifically 'regulated activity in Belgium', which will also be considered one CGU.
As a result, the group assigned the carrying amount of the goodwill to one unit, namely the regulated activity in Belgium. Since 2004,
annual impairment tests have been conducted and have not resulted in the recognition of any impairment losses.
The impairment test was conducted by an independent expert. This impairment test is based on the value in use and uses two main
valuation methods to estimate the recoverable amount, 1) a discounted cash flows method (DCF) and 2) a dividend discount model
(DDM), both of which are further detached in valuation variants depending on the terminal value calculation.
Future cash flows and future dividends are based on a business plan for the period 2021-2030. As the group’s asset base consists of
assets with long useful lives, the business plan’s projection period was set to encompass the coming two regulatory periods. Note that
the regulatory framework within which Elia operates is characterised by an allowed revenues basis structured around 1) a fair
remuneration of the regulated asset base and 2) incentives to guarantee the continuity of supply and improve efficiency. Considering
that the regulator will allow a fair remuneration of the regulated asset base consistent with market expectations, the estimated regulated
asset base for the last forecast year can be considered an indication of the terminal value. This approach does not take account of
potential cash flows generated by meeting or beating future efficiency targets.
The valuation methods are subject to different assumptions, the most important are outlined below.
1. Discounting of future cash flows (DCF-models):
• Discount rate:
o Cost of Equity of 6.9%;
▪ Risk-free-rate: 0.0%
▪ Beta 0.83
▪ Equity market risk premium 5.5%
▪ Country risk premium 0.6%
▪ Small firm premium 1.8%
o Pre-tax Cost of Debt of 1.4%;
o Corporate tax rate of 25%;
o Target gearing (D/(D+E)): 60%;
o Post-tax WACC: 3.4%.
• Terminal value based on two variants:
o Terminal value based on a 1.17x RAB multiple in 2030
NB: as such, the RAB itself does not take into account the contribution that the incentive remuneration makes to the value
creation process.
o Terminal value based on a perpetual growth rate of 1.5% reflecting the long-term inflation expectation reported by
the International Monetary Fund (IMF).
2. Discounting of future dividends (DDM-models):
• Discount rate:
o Cost of Equity of 6.9%
• Terminal value based on two variants:
o Terminal value based on 1.17x RAB multiple in 2030.
NB: as such, the RAB itself does not take account of the contribution of the incentive remuneration to the value creation
process.
o Terminal value based on a perpetual growth rate of 1.5%. This approach assumes that the residual value consists
of profit after tax less investments and considers net borrowings (in relation to the investments). However, profit
and thus dividend payments in FY30 most likely does not yet reflect the (positive) impact of the investments
planned in FY25-FY30.
Conclusion:
• Neither the independent analysis, which was based on a (€3,004 million) midpoint of the different valuation approaches and
variants used, nor the sensitivity analysis resulted in the identification of an impairment of goodwill in the financial year 2021.
Moreover, market multiples (based on current enterprise values and current/forecasted EBITDA) were applied for plausibility.
• As the median and the average of the different methods presented above were relatively far apart (€2.335 million and €3.674
million respectively), mainly due to differences in assumptions for the terminal value, the expert’s mid-point is based on 75%
of the median and 25% of the average, bearing in mind, among other factors, that the median alone might not appropriately
reflect the impact of incentive remuneration on the terminal value (see above for more details).
• Given the regulated nature of the businesses grouped within the CGU, a reasonable change in any of the valuation inputs
would not result in impairment losses.
102
Acquisition of Eurogrid International
• In April 2018, the acquisition of an extra 20% stake in Eurogrid International by the group for €988.7 million resulted in a
goodwill of €703.4 million, being the difference between the acquisition value of this stake and the proportional carrying
amount of its assets. The goodwill resulting from the additional 20% stake in Eurogrid International was allocated to the CGU
50Hertz Transmission, since it comprises all income and expenses generated thereof.
• The impairment test was conducted by an independent expert. This impairment test is based on two main valuation methods,
1) a discounted cash flows (DCF) method and 2) a dividend discount model (DDM). Both of these are further detached in
valuation variants depending on the terminal value calculation. Future cash flows and future dividends are based on a
business plan for the period 2021-2031 (two regulatory periods). As the group’s asset base consists of assets with long useful
lives, the business plan’s projection period was set to encompass the next two regulatory periods.
The valuation methods are subject to different assumptions, most importantly:
1. Discounting of future cash flows (DCF-models):
• Discount rate:
o Cost of Equity: 6.3%;
▪ Risk-free-rate: 0.0%
▪ Beta 0.83
▪ Equity market risk premium 5.5%
▪ Country risk premium 0.0%
▪ Small firm premium 1.8%
o Pre-tax Cost of Debt: 1.4%;
o Corporate tax rate: 30%;
o Target gearing (D/(D+E)): 60%;
o WACC: 3.1%.
• Terminal value based on three variants:
o Terminal value based on a 1.17x RAB multiple in 2031;
o Terminal value based on a value driver approach, assuming any new CAPEX after 2031 will generate a return
equal to the WACC of 3.1%;
o Terminal value based on a perpetual growth rate of 1.5%.
2. Discounting of future dividends (DDM-models):
• Discount rate:
o Cost of Equity: 6.3%
• Terminal value based on two variants:
o Terminal value based on 1.17x RAB multiple in 2031;
o Terminal value based on a perpetual growth rate of 1.5%.
Conclusion:
• Neither the independent analysis, which was based on a (€2,682 million) midpoint of the different valuation approaches and
variants used, nor the sensitivity analysis resulted in the identification of an impairment of goodwill in the financial year 2021.
Moreover, market multiples (based on current enterprise values and current/forecasted EBITDA) were applied for plausibility.
• The median of the different methods presented above were relatively close (€2,682 million and €2,946 million respectively),
as the assumptions for the terminal value were similar. Neither the independent analysis based on a median of the different
valuation approaches and variants used, nor the sensitivity analysis resulted in the identification of an impairment of goodwill
in the financial year 2021.
• Given the regulated nature of the businesses grouped within the CGU, a reasonable change in any of the valuation inputs
would not result in impairment losses.
Elia Group Financial Report 2021 103
Acquisition of Eurogrid International
• In April 2018, the acquisition of an extra 20% stake in Eurogrid International by the group for €988.7 million resulted in a
goodwill of €703.4 million, being the difference between the acquisition value of this stake and the proportional carrying
amount of its assets. The goodwill resulting from the additional 20% stake in Eurogrid International was allocated to the CGU
50Hertz Transmission, since it comprises all income and expenses generated thereof.
• The impairment test was conducted by an independent expert. This impairment test is based on two main valuation methods,
1) a discounted cash flows (DCF) method and 2) a dividend discount model (DDM). Both of these are further detached in
valuation variants depending on the terminal value calculation. Future cash flows and future dividends are based on a
business plan for the period 2021-2031 (two regulatory periods). As the group’s asset base consists of assets with long useful
lives, the business plan’s projection period was set to encompass the next two regulatory periods.
The valuation methods are subject to different assumptions, most importantly:
1. Discounting of future cash flows (DCF-models):
• Discount rate:
o Cost of Equity: 6.3%;
▪ Risk-free-rate: 0.0%
▪ Beta 0.83
▪ Equity market risk premium 5.5%
▪ Country risk premium 0.0%
▪ Small firm premium 1.8%
o Pre-tax Cost of Debt: 1.4%;
o Corporate tax rate: 30%;
o Target gearing (D/(D+E)): 60%;
o WACC: 3.1%.
• Terminal value based on three variants:
o Terminal value based on a 1.17x RAB multiple in 2031;
o Terminal value based on a value driver approach, assuming any new CAPEX after 2031 will generate a return
equal to the WACC of 3.1%;
o Terminal value based on a perpetual growth rate of 1.5%.
2. Discounting of future dividends (DDM-models):
• Discount rate:
o Cost of Equity: 6.3%
• Terminal value based on two variants:
o Terminal value based on 1.17x RAB multiple in 2031;
o Terminal value based on a perpetual growth rate of 1.5%.
Conclusion:
• Neither the independent analysis, which was based on a (€2,682 million) midpoint of the different valuation approaches and
variants used, nor the sensitivity analysis resulted in the identification of an impairment of goodwill in the financial year 2021.
Moreover, market multiples (based on current enterprise values and current/forecasted EBITDA) were applied for plausibility.
• The median of the different methods presented above were relatively close (€2,682 million and €2,946 million respectively),
as the assumptions for the terminal value were similar. Neither the independent analysis based on a median of the different
valuation approaches and variants used, nor the sensitivity analysis resulted in the identification of an impairment of goodwill
in the financial year 2021.
• Given the regulated nature of the businesses grouped within the CGU, a reasonable change in any of the valuation inputs
would not result in impairment losses.
6.4. Equity-accounted investees
The movements in the equity-accounted investees are summarised as follows:
(in € million)
2021
2020
Equity accounted investees (opening balance)
323.1
342.8
Profit for the year
49.4
9.2
Dividends received by the Group
(30.9)
(13.7)
Capital repayment of equity accounted investee
(30.5)
(15.3)
Investment in equity accounted investee
0.4
Sale of equity accounted investee
(1.5)
(0.5)
Equity accounted investees (closing balance)
309.6
323.1
Of which joint ventures
292.1
304.6
Of which associates
17.5
18.5
Details are given in the subchapters below.
6.4.1. Joint ventures
Nemo Link Ltd
On 27 February 2015, Elia System Operator and National Grid signed a joint venture agreement to build the Nemo Link Interconnector
between Belgium and the UK. This project consists of subsea and underground cables connected to a converter station and an
electricity substation in each country, allows electricity to flow in either direction between the two countries and give the UK and Belgium
improved reliability and access to electricity and sustainable generation. Each shareholder holds a 50% stake in Nemo Link Ltd, a UK
company. The interconnection was commissioned in late January 2019.
To finance the project both shareholders have provided funding to Nemo Link Ltd since 2016 via equity contributions and loans (divided
on a 50/50 basis). In June 2019, the loans were incorporated in the share capital (loan swap to equity).
In 2021, Nemo Link Ltd reduced its share capital by €61.0 million. In addition to these capital reduction rounds, dividends totalling €58.0
million were paid out to its shareholders.
The following table summarises the financial information of the joint venture, based on its IFRS financial statements and reconciliation
with the carrying amount for the group's interest in the consolidated financial statements.
(in € million)
2021
2020
Percentage ownership interest
50.0%
50.0%
Non-current assets
617.4
643.3
Current assets
19.5
27.5
Non-current liabilities
41.0
42.3
Current liabilities
11.6
19.2
Equity
584.2
609.2
Group's carrying amount for the interest
292.1
304.6
Revenues and other income
151.1
69.2
Total depreciation and amortisation
(27.0)
(27.0)
Other operating expenses
(7.7)
(14.5)
Net finance costs
(1.0)
(0.2)
Profit before income tax
115.3
27.5
Income tax expense
(21.2)
(12.7)
Profit for the year
94.0
14.7
Total comprehensive income for the year
94.0
14.7
Group's share of profit for the year
47.0
7.4
Dividends received by the Group
29.0
12.0
104
6.4.2. Associates
As of 31 December 2021, the group has 2 associates, both being equity-accounted investees.
• The group has a 22.2% stake in Coreso SA/NV. Coreso SA/NV is a company that provides coordination services aimed at
facilitating the secure operation of the high-voltage grid in several European countries.
• The group holds a 17.0% stake in HGRT SAS. HGRT SAS is a French company with a 49.0% stake in Epex Spot, the
exchange for power spot trading in Germany, France, Austria, Switzerland, Luxembourg and (through its 100% associate
APX) the UK, Netherlands and Belgium. As one of the founding partners of HGRT, the group has a 'golden share', giving it a
minimum number of representatives on HGRT’s Board of Directors. This constitutes a significant influence and therefore
HGRT is accounted for using the equity method. In 2021, the group received a dividend of €1.9 million from HGRT (€1.7
million in 2020).
None of these companies are listed on any public exchange.
The following scope changes are to be reported:
• The investment in Enervalis NV (16,5%), a start-up that develops innovative software for smart control of energy sources, was
sold in April 2021 resulting in a gain of €0.15 million
• In August 2020, the group sold its 20.5% stake in Ampacimon SA, a Belgian company working on developing innovative
monitoring systems for TSOs and DSOs.
The following table illustrates the summarised financial information of the group's investment in these companies, based on their
respective financial statements prepared in accordance with IFRS.
(in € million)
Enervalis Ampacimon Coreso HGRT
2020 2020 2020 2020
Percentage ownership interest
16.5%
22.2%
17.0%
Non-current assets
9.0
94.3
Current assets
9.1
4.4
1.0
Non-current liabilities
0.0
0.0
Current liabilities
9.7
0.0
Equity
9.1
3.7
95.3
Group's carrying amount for the interest
1.5
0.8
16.2
Revenue
20.1
0.0
Other operating expenses
(19.2)
11.1
Profit before income tax
(0.5)
0.9
11.1
Income tax expense
(0.3)
(0.1)
Profit for the year
(0.5)
0.6
11.0
Total comprehensive income for the year
(0.5)
0.6
11.0
Group's share of profit for the year
(0.1)
0.1
1.9
Dividends received by the Group
1.7
Elia Group Financial Report 2021 105
6.4.2. Associates
As of 31 December 2021, the group has 2 associates, both being equity-accounted investees.
• The group has a 22.2% stake in Coreso SA/NV. Coreso SA/NV is a company that provides coordination services aimed at
facilitating the secure operation of the high-voltage grid in several European countries.
• The group holds a 17.0% stake in HGRT SAS. HGRT SAS is a French company with a 49.0% stake in Epex Spot, the
exchange for power spot trading in Germany, France, Austria, Switzerland, Luxembourg and (through its 100% associate
APX) the UK, Netherlands and Belgium. As one of the founding partners of HGRT, the group has a 'golden share', giving it a
minimum number of representatives on HGRT’s Board of Directors. This constitutes a significant influence and therefore
HGRT is accounted for using the equity method. In 2021, the group received a dividend of €1.9 million from HGRT (€1.7
million in 2020).
None of these companies are listed on any public exchange.
The following scope changes are to be reported:
• The investment in Enervalis NV (16,5%), a start-up that develops innovative software for smart control of energy sources, was
sold in April 2021 resulting in a gain of €0.15 million
• In August 2020, the group sold its 20.5% stake in Ampacimon SA, a Belgian company working on developing innovative
monitoring systems for TSOs and DSOs.
The following table illustrates the summarised financial information of the group's investment in these companies, based on their
respective financial statements prepared in accordance with IFRS.
(in € million)
Enervalis
Ampacimon
Coreso
HGRT
2020
2020
2020
2020
Percentage ownership interest
16.5%
22.2%
17.0%
Non-current assets
9.0
94.3
Current assets
9.1
4.4
1.0
Non-current liabilities
0.0
0.0
Current liabilities
9.7
0.0
Equity
9.1
3.7
95.3
Group's carrying amount for the interest
1.5
0.8
16.2
Revenue
20.1
0.0
Other operating expenses
(19.2)
11.1
Profit before income tax
(0.5)
0.9
11.1
Income tax expense
(0.3)
(0.1)
Profit for the year
(0.5)
0.6
11.0
Total comprehensive income for the year
(0.5)
0.6
11.0
Group's share of profit for the year
(0.1)
0.1
1.9
Dividends received by the Group
1.7
(in € million)
Coreso
HGRT
2021
2021
Percentage ownership interest
22.2%
17.0%
Non-current assets
8.2
96.5
Current assets
4.5
0.8
Current liabilities
8.2
0.0
Equity
4.5
97.3
Group's carrying amount for the interest
1.0
16.5
Revenue
25.7
0.0
Other operating expenses
(24.6)
13.2
Profit before income tax
1.1
13.2
Income tax expense
(0.4)
(0.1)
Profit for the year
0.7
13.1
Total comprehensive income for the year
0.7
13.1
Group's share of profit for the year
0.2
2.2
Dividends received by the Group
1.9
6.5. Other financial assets
(in € million) 2021 2020
Immediately claimable deposits
7.0
7.0
Reimbursement rights
46.2
53.8
Other shareholdings
43.8
43.8
Non-current derivatives
39.4
0.0
Other financial assets (non-current)
136.3
104.5
Current derivatives
316.2
0.0
Other financial assets (current)
316.2
0.0
Provisions for risks liabilities and charges
452.5
104.5
The total other financial assets increased by €348.0 million compared with the previous year. In 2021, 50Hertz began applying hedge
accounting on future contracts for grid losses. The fair value of these derivatives is dependent on the energy prices which knew a strong
increase at year end. This change in accounting policy resulted in the recognition of the fair value of these contracts for a gross amount
of €355.6 million at the end of 2021, including €39.4 million classified in long-term and €316 million classified in short-term. See Note 8.1
for more info on these derivatives.
Immediately claimable deposits are measured at fair value. The risk profile of these investments is discussed in Note 8.1.
The reimbursement rights are linked to the obligations regarding (i) the retired employees falling under specific benefit schemes
(Scheme B - unfunded plan) and for (ii) health plan and reduced energy pricing plans for retired staff members. See Note 6.13:
‘Employee benefits’. The reimbursement rights are recoverable through the regulated tariffs. The following principle applies: all incurred
pension costs for 'Scheme B' retired employees and the costs linked to healthcare and reduced energy pricing plans for retired Elia staff
members are defined by the regulator (CREG) as non-controllable expenses that are recoverable through the regulatory tariffs. The
increase in the carrying value of this asset is disclosed in Note 6.13: ‘Employee benefits’. Considering the nature (regulatory asset) of
these financial assets, they are not considered to be at risk of impairment.
The group holds 5.3% (at 100%) of the shares in European Energy Exchange (EEX), Leipzig, Germany, of a total value of €42.7 million
as of the reporting date. These shares are disclosed under Other shareholdings in addition to an 8.0% (at 100%) shareholding in JAO
Joint Allocation Office SA, a 6.7% (at 100%) shareholding in TSCNET Services GmbH (Munich, Germany) and a 10.4% (at 100%)
shareholding in the foundation Stiftung Kurt-Sanderling-Akademie des Konzerthausorchesters foundation (Berlin, Germany). Other
investments are measured at fair value. At each reporting date, a re-measurement is performed to re-evaluate these investments. Any
deviation from the previous period is recorded under other comprehensive income.
106
6.6. Deferred tax assets and liabilities
RECOGNISED DEFERRED TAX ASSETS AND LIABILITIES
(in € million) 2021 2020
Assets Liability Assets Liability
Property, plant and equipment
25.2 (245.8) 4.3 (215.0)
Intangible assets
(15.4) 0.0 (6.3)
Non-current trade and other receivables
1.3 (0.0) 1.1 (0.3)
Interest-bearing loans and other non-current financial liabilities
41.8 (5.6) 33.5 (6.0)
Employee benefits
26.7 (11.8) 32.5 (13.5)
Provisions
30.2
46.8
Deferred revenue
25.9 (1.5) 24.5 (2.0)
Regulatory liabilities
22.3
22.7
Deferred tax on investment grants
(1.0)
(1.0)
Losses carried forward
14.0
0.8
Other items
0.7 (8.9) 1.0 (7.4)
Tax asset/liability before offsetting
188.1 (395.8) 167.0 (251.5)
Offsetting of tax
(186.2) 186.2 (162.0) 162.0
Net tax asset/(liability)
1.9
(209.7)
5.0
(89.5)
The changes in deferred tax assets and liabilities can be presented as follows:
CHANGES IN DEFERRED TAX ASSETS AND LIABILITIES RESULTING FROM MOVEMENTS IN TEMPORARY
DIFFERENCES DURING THE FINANCIAL YEAR
(in € million)
Net tax
asset/(liability)
Recognised
in income
statement
Recognised in
comprehensive
income
Other Total
2020
Property, plant and equipment
(208.4) (2.2)
(210.6)
Intangible assets
(8.6) 2.3
(6.3)
Non-current trade and other receivables
1.2 (0.4)
0.8
Interest-bearing loans and other non-current financial liabilities
22.1 (2.8) (1.4) 9.6 27.6
Employee benefits
16.3 0.5 2.2
19.0
Provisions
47.4 (0.6)
46.8
Deferred revenue
29.3 3.0
(9.9) 22.5
Regulatory liabilities
25.3 (2.7)
22.6
Deferred tax on investment grants
(1.1) 0.0
(1.1)
Losses carried forward
0.4 0.4
0.8
Other items
(7.2) 0.4
0.3 (6.5)
Total
(83.3)
(2.0)
0.9
(84.5)
Elia Group Financial Report 2021 107
6.6. Deferred tax assets and liabilities
RECOGNISED DEFERRED TAX ASSETS AND LIABILITIES
(in € million)
2021
2020
Assets
Liability
Assets
Liability
Property, plant and equipment
25.2
(245.8)
4.3
(215.0)
Intangible assets
(15.4)
0.0
(6.3)
Non-current trade and other receivables
1.3
(0.0)
1.1
(0.3)
Interest-bearing loans and other non-current financial liabilities
41.8
(5.6)
33.5
(6.0)
Employee benefits
26.7
(11.8)
32.5
(13.5)
Provisions
30.2
46.8
Deferred revenue
25.9
(1.5)
24.5
(2.0)
Regulatory liabilities
22.3
22.7
Deferred tax on investment grants
(1.0)
(1.0)
Losses carried forward
14.0
0.8
Other items
0.7
(8.9)
1.0
(7.4)
Tax asset/liability before offsetting
188.1
(395.8)
167.0
(251.5)
Offsetting of tax
(186.2)
186.2
(162.0)
162.0
Net tax asset/(liability)
1.9
(209.7)
5.0
(89.5)
The changes in deferred tax assets and liabilities can be presented as follows:
CHANGES IN DEFERRED TAX ASSETS AND LIABILITIES RESULTING FROM MOVEMENTS IN TEMPORARY
DIFFERENCES DURING THE FINANCIAL YEAR
(in € million)
Net tax
asset/(liability)
Recognised
in income
statement
Recognised in
comprehensive
income
Other
Total
2020
Property, plant and equipment
(208.4)
(2.2)
(210.6)
Intangible assets
(8.6)
2.3
(6.3)
Non-current trade and other receivables
1.2
(0.4)
0.8
Interest-bearing loans and other non-current financial liabilities
22.1
(2.8)
(1.4)
9.6
27.6
Employee benefits
16.3
0.5
2.2
19.0
Provisions
47.4
(0.6)
46.8
Deferred revenue
29.3
3.0
(9.9)
22.5
Regulatory liabilities
25.3
(2.7)
22.6
Deferred tax on investment grants
(1.1)
0.0
(1.1)
Losses carried forward
0.4
0.4
0.8
Other items
(7.2)
0.4
0.3
(6.5)
Total
(83.3)
(2.0)
0.9
(84.5)
2021
Property, plant and equipment
(210.6) (10.4)
(221.0)
Intangible assets
(6.3) (9.1)
(15.4)
Financial assets
(105.7)
(105.7)
Non-current trade and other receivables
0.8 0.3
1.1
Interest-bearing loans and other non-current financial liabilities
27.6 18.9 (0.2)
46.3
Employee benefits
19.0 2.9 (7.0)
14.9
Provisions
46.8 (2.2)
44.6
Deferred revenue
22.5 (7.8)
14.6
Regulatory liabilities
22.6 (0.4)
22.2
Deferred tax on investment grants
(1.1)
0.1
(1.0)
Losses carried forward
0.8 0.2
1.0
Other items
(6.5) (2.8)
(9.3)
Total
(84.5)
(10.5)
(112.8)
(207.8)
The deferred tax liability on right-of-use assets from IFRS 16 leases is shown under ‘Property, plant and equipment’, whilst the deferred
tax asset on finance lease liability is shown under ’Interest-bearing loans and other non-current financial liabilities’.
UNRECOGNISED DEFERRED TAX ASSETS OR LIABILITIES
As at 31 December 2021, there is an unrecognised deferred tax asset of €12.3 million and €2.7 million relating to non-deductible
interests carried forward (Corporate Interest Restriction rule) and Dividend Received Deduction carried forward at Elia Group SA/NV
level, respectively.
EGI SA/NV has also an unrecognised deferred tax asset of €0.1 million and €0.5 million relating to losses carried forward and Dividend
Received Deduction carried forward, respectively.
There is also an unrecognised deferred tax asset of €0.1 million Dividend Received Deduction carried forward at Eurogrid International
SA/NV level.
These unused tax losses carried forward, Dividend Received Deduction carried forward and non-deductible interests carried forward
(Corporate Interest Restriction rule) have no expiry date. An assessment is conducted each year to determine the probability that these
fiscal deductions could be used in the future to lower the tax base.
6.7. Inventories
(in € million)
2021
2020
Raw materials and consumables
35.6
34.6
Work in progress
1.9
19.8
Write-downs
(15.9)
(15.4)
Total
21.6
39.0
The warehouse primarily stores replacement and spare parts for maintenance and repair work along the group's high-voltage
substations, overhead lines and underground cables. It also consists of work-in-progress balances. These work-in-progress balances
decreased by €17.8 million with the final commissioning of the Altdöbern substation at Elia Grid International GmbH. Other inventories
increased slightly by €0.9 million.
Write-downs are recorded following the non-utilisation of stock items based on their underlying rotation. These were slightly higher than
in 2020.
108
6.8. Current trade and other receivables, deferred charges and accrued revenues
(in € million) 2021 2020
Contract assets
2.9
9.5
Trade receivables
716.5
435.2
Advance payments
1.0
3.5
Levies
36.6
948.8
VAT and other taxes
79.1
44.3
Other
25.1
34.1
Trade and other receivables
861.3
1,475.4
Deferred charges
18.1
13.7
Deferred charges and accrued revenues
18.1
13.7
Total
879.4
1,489.1
The total current trade and other receivables, deferred charges and accrued revenues decreased by €609.7 million compared with the
previous year. This is mainly explained by the significant variation observed in the levies (-€912.2 million), partly offset by an increase of
trade receivables (€283.1 million).
Contract assets are mainly related to EGI's business and transmission system operations. The position decreased from €9.5 million in
the previous year to €2.9 million at year-end.
Trade receivables are non-interest-bearing and generally have payment terms of 15 to 30 days. The increase is driven by both Belgian
and German segments against a background of high activity and a significant increase in energy prices.
The decrease in the levies is mainly attributable to Germany, where the EEG deficit was settled in January 2021 with three federal
compensation payments
to pay back the revolving credit facilities that were temporarily contracted to finance the EEG deficit at the end
of 2020. Only the offshore contribution was in a receivable position (€20.9 million) at year end in 2021 in Germany (booked within
‘Other’). In Belgium the levies decreased from €144.3 million to €36.6 million due to lower volumes of purchased green certificates.
‘Other receivables’ mainly relate to other regulatory assets of the German segments.
The group's exposure to credit and currency risks, and impairment losses related to trade receivables are shown in Note 8.1.
At 31 December, the ageing analysis of trade receivables is as follows:
(in € million) 2021 2020
Not past due
687.4
409.1
Past due 0-30 days
15.1
22.3
Past due 31-60 days
2.4
0.3
Past due 61 days - one year
11.1
2.8
Past due one year - two years
2.1
2.0
Total (excl. impairment)
718.1
436.6
Doubtful amounts
201.4
201.6
Amounts write-offs
(200.8)
(201.0)
Allowance for expected credit losses
(2.1)
(1.9)
Total
716.5
435.2
See Note 8.1 for a detailed analysis of the credit risk incurred in connection with these trade receivables.
Considering the nature (as regulatory assets) and/or the risk profile of the counterparties (Belgian/German state) of the most significant
other receivables, they are not subject to impairment risk and no specific provision is recorded in relation to these amounts.
Elia Group Financial Report 2021 109
6.8. Current trade and other receivables, deferred charges and accrued revenues
(in € million)
2021
2020
Contract assets
2.9
9.5
Trade receivables
716.5
435.2
Advance payments
1.0
3.5
Levies
36.6
948.8
VAT and other taxes
79.1
44.3
Other
25.1
34.1
Trade and other receivables
861.3
1,475.4
Deferred charges
18.1
13.7
Deferred charges and accrued revenues
18.1
13.7
Total
879.4
1,489.1
The total current trade and other receivables, deferred charges and accrued revenues decreased by €609.7 million compared with the
previous year. This is mainly explained by the significant variation observed in the levies (-€912.2 million), partly offset by an increase of
trade receivables (€283.1 million).
Contract assets are mainly related to EGI's business and transmission system operations. The position decreased from €9.5 million in
the previous year to €2.9 million at year-end.
Trade receivables are non-interest-bearing and generally have payment terms of 15 to 30 days. The increase is driven by both Belgian
and German segments against a background of high activity and a significant increase in energy prices.
The decrease in the levies is mainly attributable to Germany, where the EEG deficit was settled in January 2021 with three federal
compensation payments to pay back the revolving credit facilities that were temporarily contracted to finance the EEG deficit at the end
of 2020. Only the offshore contribution was in a receivable position (€20.9 million) at year end in 2021 in Germany (booked within
‘Other’). In Belgium the levies decreased from €144.3 million to €36.6 million due to lower volumes of purchased green certificates.
‘Other receivables’ mainly relate to other regulatory assets of the German segments.
The group's exposure to credit and currency risks, and impairment losses related to trade receivables are shown in Note 8.1.
At 31 December, the ageing analysis of trade receivables is as follows:
(in € million)
2021
2020
Not past due
687.4
409.1
Past due 0-30 days
15.1
22.3
Past due 31-60 days
2.4
0.3
Past due 61 days - one year
11.1
2.8
Past due one year - two years
2.1
2.0
Total (excl. impairment)
718.1
436.6
Doubtful amounts
201.4
201.6
Amounts write-offs
(200.8)
(201.0)
Allowance for expected credit losses
(2.1)
(1.9)
Total
716.5
435.2
See Note 8.1 for a detailed analysis of the credit risk incurred in connection with these trade receivables.
Considering the nature (as regulatory assets) and/or the risk profile of the counterparties (Belgian/German state) of the most significant
other receivables, they are not subject to impairment risk and no specific provision is recorded in relation to these amounts.
6.9. Current tax assets and liabilities
(in € million)
2021
2020
Tax receivables
10.1
3.4
Tax liabilities
(26.8)
(13.6)
Net tax asset/(liability)
(16.7)
(10.2)
Tax receivables increased compared with the previous year. The €10.1 million income tax receivables recorded on 31 December 2021
mainly relates to advances on corporate tax to be recovered in the financial year 2022. Income tax liabilities increased from €13.6
million to €26.8 million in 2021.
6.10. Cash and cash equivalents
(in € million)
2021
2020
Short-term deposits
2,486.2
222.0
Balance at bank
563.2
368.1
Total
3,049.5
590.1
Cash and cash equivalents have increased by €2,459.3 million. This increase was mainly due a higher contribution of 50Hz
Transmission (Germany) explained by a significant change in EEG, KWK and StromNEV (levies) position, from a €737.2 million
receivable to a €2,132,1 million payable position.
Short-term deposits are invested for periods varying from a few days or weeks to several months (generally not exceeding three
months), depending on immediate cash requirements, and earn interest in accordance with the interest rates for short-term deposits.
Bank account balances earn or pay interest in line with the variable rates of interest on the basis of daily bank deposit interest rates. The
group's interest rate risk and the sensitivity analysis for financial assets and liabilities are discussed in Note 8.2.
The cash and cash equivalents disclosed above and in the statement of cash flows include €34.7 million held by Elia RE of which €1.0
million is restricted in use.
6.11. Shareholders’ equity
6.11.1. Equity attributable to the owners of the Company
SHARE CAPITAL AND SHARE PREMIUM
Number of shares 2021 2020
Outstanding on 1 January
68,720,695
68,652,938
Issued against cash payment
7,360
67,757
Number of issued shares at the end of the year
68,728,055
68,720,695
Number of treasury shares at the end of the year
7,248
0
Number of outstanding shares at the end of the year
68,720,807
68,720,695
The extraordinary shareholder' meeting held on 19 May 2020 decided to execute a capital increase in two steps/periods (one in 2020 for
a maximum of €5.0 million and the other in 2021 for a maximum of €1.0 million), for a total maximum amount of €6.0 million for its
Belgian employees. The first tranche of this capital increase for employees took place in December 2020. The transaction resulted in
the creation of 67,757 new shares for a total amount of €5.0 million, consisting of €1.7 million capital increase and a €3.3 million
increase in share premium.
The second tranche of the 2020 capital increase for Elia employees was completed in March 2021. The capital increase resulted in the
creation of 7,360 additional shares without nominal value for a total amount of 0.2 million capital increase and a €0.4 million increase in
share premium.
RESERVES
In line with Belgian legislation, 5% of the Company's statutory net profit must be transferred to the legal reserve each year until the legal
reserve represents 10% of the capital. As at 31 December 2021 the Group's legal reserve amounts to €173.0 million and represents
10% of the capital.
110
The Board of Directors can propose the pay-out of a dividend to shareholders up to a maximum of the available reserves plus the profit
carried forward from the Company’s previous financial years, including the profit for the financial year ending on 31 December 2021.
Shareholders must approve the dividend payment at the Annual General Meeting of Shareholders.
HEDGING RESERVE
The hedging reserve comprises the effective portion of the cumulative net change in fair value of cash flow hedging instruments with
regard to hedged transactions that have not yet occurred.
The increase in 2021 is explained by a change in accounting policy. As of 2021, hedge accounting is applied to future contracts entered
into by 50Hertz for the purpose of reducing the risk of fluctuations in the expected amount of grid losses. This change, taking place
against a background of high energy prices, resulted in the recognition of the fair value of these contracts for a gross amount of €355.6
million at the end of 2021. Considering a deferred tax effect, a hedge reserve amounting to €249.9 million was recorded in other
comprehensive income. However, as the costs for grid losses are almost fully passed through to the tariffs, the fair value of the future
contracts has no relevance for the current or future profitability of the company.
TREASURY SHARES
The reserve for the Company’s treasury shares comprises the cost of the Company’s shares held by the group. On 31 December 2021,
the group held 7.248 of the Company’s shares.
Number of treasury shares 2021 2020
On 1 January
0.0
Repurchased during the year
270,331
Sold during the year
-263,083
Number of treasury shares at the end of the year
7,248
0.0
SHARE-BASED PAYMENTS
At 31 May 2021, Eurogrid International SA/NV has granted 1,640 stock options to employees of RealTo BV/SRL and RealTo GmbH at a
strike price of €100 per stock option at exercise date 31 March 2024. In total, 1,620 stock options have been accepted, worth €1,0 million.
The share-based payments cost amounted to €0.2 million in 2021. As the stock option plan concerns shares in RealTo BV/SRL and the
parent company Elia Group SA/NV, the share-based payments are not presented separately in the statement of equity.
DIVIDEND
After the reporting date, the Board of Directors will put forward the dividend proposal indicated below.
Dividend (in €) 2021 2020
Per ordinary share entitled to dividend
1.75
1.71
It was proposed and approved, at the Shareholders’ Meeting convened to approve the Elia Group SA/NV financial statements for the
year ended 31 December 2020 to pay a dividend of €1.71 per share, representing a total payout of €117.5 million.
The Board of Directors meeting on 24 March 2022 proposed a gross dividend of €1.75 per share in respect of 2021. This dividend is
subject to approval by shareholders at the Annual General Meeting on 17 May 2022 and is not included as a liability in the Group’s
consolidated financial statements.
The total dividend, calculated based on the number of shares outstanding on 24 March 2022 corresponds to a total of €120.3 million.
6.11.2. Hybrid securities
In September 2018, the group issued hybrid securities to finance the additional 20% stake in 50Hertz Transmission (Germany). The
issue resulted in a €700 million increase in the group’s equity.
The hybrid securities bear an optional, cumulative coupon of 2.75%, payable at the group’s discretion annually on 5 December of each
year, with the first payment on 5 December 2019. As at 31 December 2021, the unpaid cumulative dividend amounted to €1.4 million.
(2020: €1.4 million). A coupon of €19.3 million was paid to the holders of hybrid securities in December 2021.
The hybrid securities have an initial call date in December 2023 with a reset every five years thereafter.
The hybrid securities are structured as perpetual instruments, have junior ranking to all senior debt and are recorded as equity in the
group’s accounts pursuant to IFRS.
Elia Group Financial Report 2021 111
The Board of Directors can propose the pay-out of a dividend to shareholders up to a maximum of the available reserves plus the profit
carried forward from the Company’s previous financial years, including the profit for the financial year ending on 31 December 2021.
Shareholders must approve the dividend payment at the Annual General Meeting of Shareholders.
HEDGING RESERVE
The hedging reserve comprises the effective portion of the cumulative net change in fair value of cash flow hedging instruments with
regard to hedged transactions that have not yet occurred.
The increase in 2021 is explained by a change in accounting policy. As of 2021, hedge accounting is applied to future contracts entered
into by 50Hertz for the purpose of reducing the risk of fluctuations in the expected amount of grid losses. This change, taking place
against a background of high energy prices, resulted in the recognition of the fair value of these contracts for a gross amount of €355.6
million at the end of 2021. Considering a deferred tax effect, a hedge reserve amounting to €249.9 million was recorded in other
comprehensive income. However, as the costs for grid losses are almost fully passed through to the tariffs, the fair value of the future
contracts has no relevance for the current or future profitability of the company.
TREASURY SHARES
The reserve for the Company’s treasury shares comprises the cost of the Company’s shares held by the group. On 31 December 2021,
the group held 7.248 of the Company’s shares.
Number of treasury shares
2021
2020
On 1 January
0.0
Repurchased during the year
270,331
Sold during the year
-263,083
Number of treasury shares at the end of the year
7,248
0.0
SHARE-BASED PAYMENTS
At 31 May 2021, Eurogrid International SA/NV has granted 1,640 stock options to employees of RealTo BV/SRL and RealTo GmbH at a
strike price of €100 per stock option at exercise date 31 March 2024. In total, 1,620 stock options have been accepted, worth €1,0 million.
The share-based payments cost amounted to €0.2 million in 2021. As the stock option plan concerns shares in RealTo BV/SRL and the
parent company Elia Group SA/NV, the share-based payments are not presented separately in the statement of equity.
DIVIDEND
After the reporting date, the Board of Directors will put forward the dividend proposal indicated below.
Dividend (in €)
2021
2020
Per ordinary share entitled to dividend
1.75
1.71
It was proposed and approved, at the Shareholders’ Meeting convened to approve the Elia Group SA/NV financial statements for the
year ended 31 December 2020 to pay a dividend of €1.71 per share, representing a total payout of €117.5 million.
The Board of Directors meeting on 24 March 2022 proposed a gross dividend of €1.75 per share in respect of 2021. This dividend is
subject to approval by shareholders at the Annual General Meeting on 17 May 2022 and is not included as a liability in the Group’s
consolidated financial statements.
The total dividend, calculated based on the number of shares outstanding on 24 March 2022 corresponds to a total of €120.3 million.
6.11.2. Hybrid securities
In September 2018, the group issued hybrid securities to finance the additional 20% stake in 50Hertz Transmission (Germany). The
issue resulted in a €700 million increase in the group’s equity.
The hybrid securities bear an optional, cumulative coupon of 2.75%, payable at the group’s discretion annually on 5 December of each
year, with the first payment on 5 December 2019. As at 31 December 2021, the unpaid cumulative dividend amounted to €1.4 million.
(2020: €1.4 million). A coupon of €19.3 million was paid to the holders of hybrid securities in December 2021.
The hybrid securities have an initial call date in December 2023 with a reset every five years thereafter.
The hybrid securities are structured as perpetual instruments, have junior ranking to all senior debt and are recorded as equity in the
group’s accounts pursuant to IFRS.
6.12. Interest-bearing loans, borrowings and lease liabilities
(in € million) 2021 2020
Non-current borrowings
7,658.2
7,177.2
Lease liabilities − non-current
83.7
72.4
Subtotal non-current borrowings
7,741.7
7,249.6
Current borrowings
82.3
722.7
Lease liabilities − current
35.1
11.8
Accrued interest
76.4
71.0
Subtotal current loans and borrowings
194.0
805.5
Total
7,935.7
8,055.1
The tables below show the changes in the group's liabilities arising from financing activities, including changes arising from both cash
flows and non-cash changes.
(in € million)
Current interst-bearing loans
and borrowings
Non-current interst-bearing
loans and borrowings
Total
Balance at 1 January 2020
1,119.2
5,378.9
6,498.1
Cash flow: repayment of borrowings
(1,073.0)
(246.5)
(1,319.5)
Cash flow: proceeds from withdrawal borrowings
725.0
2,149.5
2,874.5
Accrued interest
8.2
0.0
8.2
Other
26.1
(32.3)
(6.2)
Balance at 31 December 2020
805.5
7,249.6
8,055.1
Balance at 1 January 2021
805.5
7,249.6
8,055.1
Cash flow: repayment of borrowings
(722.3)
(15.4)
(737.7)
Cash flow: proceeds from withdrawal borrowings
60.0
498.0
558.0
Accrued interest
5.4
5.4
Other
45.4
9.5
54.9
Balance at 31 December 2021
193.9
7,741.7
7,935.7
During the year, the group (Eurogrid GmbH) paid back the revolving credit facilities (€700 million) that were temporarily contracted to
finance the EEG deficit at the end of 2020.
Elia Group has issued an Eurobond of €500.0 million with maturity date 2033 and an interest rate of 0.88% respectively. The group also
issued commercial papers for total amount of €60.0 million with maturity date 2022 and an interest rate of -0.15% under its commercial
paper program of €300.0 million.
Movements in 'Other' in the financial year 2021 mainly relates to reclassifications of long-term debt to short-term debt based on when
instruments become due in 2022.
112
Information on the terms and conditions of outstanding interest-bearing loans and borrowings is given below:
(in € million) Maturity
Redemption
schedule
Amount Interest rate
Eurobond issues 2013/15 years 2028 At maturity 547.7 3.25%
Eurobond issues 2013/20 years 2033 At maturity 199.2 3.50%
Eurobond issues 2014/15 years 2029 At maturity 347.2 3.00%
Eurobond issues 2015/8.5 years 2024 At maturity 499.1 1.38%
Eurobond issues 2017/10 years 2027 At maturity 248.2 1.38%
Senior bond 2018/10 years 2028 At maturity 297.9 1.50%
Eurobond issues 2019/7 years 2026 At maturity 498.6 1.38%
Eurobond issues 2020/10 years 2030 At maturity 789.7 0.88%
Amortising term loan 2033 Linear 181.7 1.80%
Amortising bond - 7,7 years 2028 Linear 58.7 1.56%
Amortising bond - 23,7 years 2044 Linear 132.3 1.56%
European Investment Bank 2025 At maturity 100.0 1.08%
Commercial Paper 2022 At maturity 60.0 -0.15%
Bond as part of Debt Issuance Programme 2015 2025 At maturity 498.6 1.88%
Bond as part of Debt Issuance Programme 2015 2023 At maturity 749.4 1.63%
Bond as part of Debt Issuance Programme 2015 2030 At maturity 139.3 2.63%
Bond as part of Debt Issuance Programme 2016 2028 At maturity 747.7 1.50%
Bond as part of Debt Issuance Programme 2020 2032 At maturity 747.4 1.11%
Bond as part of Debt Issuance Programme 2020 2040 At maturity 199.4 0.88%
Bond as part of Debt Issuance Programme 2021 2033 At maturity 498.1 0.88%
Registered bond 2014 2044 At maturity 50.0 3.00%
Loan with KfW 2026 At maturity 150.0 0.90%
Total
7,740.5
Lease debts
118.8
Accrued interests
76.4
Total Loans and Borrowings (Current and Non-current)
7,935.7
Elia Group Financial Report 2021 113
Information on the terms and conditions of outstanding interest-bearing loans and borrowings is given below:
(in € million)
Maturity
Redemption
schedule
Amount
Interest rate
Eurobond issues 2013/15 years
2028
At maturity
547.7
3.25%
Eurobond issues 2013/20 years
2033
At maturity
199.2
3.50%
Eurobond issues 2014/15 years
2029
At maturity
347.2
3.00%
Eurobond issues 2015/8.5 years
2024
At maturity
499.1
1.38%
Eurobond issues 2017/10 years
2027
At maturity
248.2
1.38%
Senior bond 2018/10 years
2028
At maturity
297.9
1.50%
Eurobond issues 2019/7 years
2026
At maturity
498.6
1.38%
Eurobond issues 2020/10 years
2030
At maturity
789.7
0.88%
Amortising term loan
2033
Linear
181.7
1.80%
Amortising bond - 7,7 years
2028
Linear
58.7
1.56%
Amortising bond - 23,7 years
2044
Linear
132.3
1.56%
European Investment Bank
2025
At maturity
100.0
1.08%
Commercial Paper
2022
At maturity
60.0
-0.15%
Bond as part of Debt Issuance Programme 2015
2025
At maturity
498.6
1.88%
Bond as part of Debt Issuance Programme 2015
2023
At maturity
749.4
1.63%
Bond as part of Debt Issuance Programme 2015
2030
At maturity
139.3
2.63%
Bond as part of Debt Issuance Programme 2016
2028
At maturity
747.7
1.50%
Bond as part of Debt Issuance Programme 2020
2032
At maturity
747.4
1.11%
Bond as part of Debt Issuance Programme 2020
2040
At maturity
199.4
0.88%
Bond as part of Debt Issuance Programme 2021
2033
At maturity
498.1
0.88%
Registered bond 2014
2044
At maturity
50.0
3.00%
Loan with KfW
2026
At maturity
150.0
0.90%
Total
7,740.5
Lease debts
118.8
Accrued interests
76.4
Total Loans and Borrowings (Current and Non-current)
7,935.7
6.13. Employee benefits
The group has various legal and constructive defined benefit obligations linked to its Belgian and German operations.
The total net liability for employee-benefit obligations is as follows:
(in € million) 2021 2020
Belgium
Germany
Total
Belgium
Germany
Total
Defined benefit plans
28.6
34.0
62.6
17.9
32.9
50.8
Post-employment benefits other than pensions
36.2
7.9
44.0
73.9
7.3
81.2
Total provisions for employee benefits
64.8
41.8
106.6
91.8
40.2
132.0
Of the €106.6 million in employee benefit provisions recognised at the end of financial year 2021, €104.9 million is presented in the long
term and €1.7 million in the short term (see Note 6.14).
BELGIUM
DEFINED-CONTRIBUTION PLANS
Employees remunerated based on a salary scale and recruited after 1 June 2002, as well as management staff recruited after 1 May
1999 are covered by two defined-contribution pension plans (Powerbel and Enerbel):
• The Enerbel plan is a plan for salaried employees hired after 1 June 2002, to which the employee and the employer contribute
based on predefined formula.
• The Powerbel plan is a plan for managers hired after 1 May 1999. The contributions of the employee and employer are based
on a fixed percentage of the employee’s salary.
The new law regarding occupational pension plans, published at the end of 2015, made various changes to the guaranteed return on
defined-contribution plans. For payments made after 1 January 2016, the law requires employers to guarantee an average annual return
of at least 1.75% (up to 3.75% depending on who contributes) over the course of the career.
For insured plans the minimum guaranteed return until 31 December 2015 still needs to be equivalent to at least 3.25% for the
employer’s contribution and 3.75% for the employee's contribution, with any shortfall being covered by the employer.
As a result of the above change and as mentioned in the accounting policies, all defined-contribution pension plans under Belgian
pension legislation are classified as defined-benefit plans for accounting purposes due to the legal minimum return to be guaranteed by
the employer, which represents a plan amendment. They are accounted for with the Projected Unit Credit method (PUC-method). For
each plan, the fair value of assets equals the sum of the accrued individual reserves (if any) and the value of the collective fund(s) (if
any), hence no application of IAS 19 § 115. In addition, with the exception of Enerbel, the defined-contributions (DC) plans are not
backloaded, as such these plans are valued without projection of future contributions. The Enerbel DC plan is backloaded and this plan
is valued with projection of future contributions.
Elia Transmission Belgium has transferred certain acquired reserves guaranteed by the insurers to 'Cash balance – best off' plans since
2016. The main objective of these plans is to guarantee for every subscriber a minimum guaranteed return of 3.25% on the acquired
reserves until retirement age.
Both employee' and employer' contributions are paid on a monthly basis for the base plans. The employee' contribution is deducted
from the salary and paid to the insurer by the employer. The amount of future cash flows depends on wage growth.
DEFINED-BENEFIT PLANS
For a closed population, collective agreements in the electricity and gas industries provide ‘pension supplements’ based on the annual
salary and an employee’s career within a company (partially revertible to the inheritor in case of early death of the employee).The
benefits granted are linked to Elia’s operating result. There is no external pension fund or group insurance for these liabilities, which
means that no reserves are constituted with third parties. The obligations are classified as a defined-benefit.
The collective agreement determines that active staff hired between 1 January 1993 and 31 December 2001 and all
managerial/executive staff hired prior to 1 May 1999 will be granted the same guarantees via a defined-benefit pension scheme (Elgabel
and Pensiobel – closed plans). Obligations under these defined-benefit pension plans are funded by a number of pension funds for the
electricity and gas industries and by insurance companies.
As mentioned above, Elia Transmission Belgium has transferred certain acquired reserves guaranteed by the insurers to 'Cash balance
– best off' plans since 2016. As this guarantee is an obligation by the employer, these plans represent defined-benefit plans.
Both employees' and employers' contributions are paid on a monthly basis for the base plans. The employee's contribution is deducted
from the salary and paid to the insurer by the employer.
OTHER PERSONNEL OBLIGATIONS
Elia Transmission (Belgium) has also granted staff certain early-retirement schemes and other post-employment benefits such as
reimbursement of medical expenses and a contribution to energy prices, as well as other long-term benefits (seniority payments). Not all
of these benefits are funded and, in accordance with IAS 19, these post-employment benefits are classified as defined-benefit plans.
114
GERMANY
DEFINED CONTRIBUTION PLANS
In the case of externally financed defined contribution plans, 50Hertz Transmission (Germany)’s obligation is limited to paying the agreed
contributions. For those defined contribution plans recognised in the form of direct guarantees, there are pledged congruent employer’s
liability insurance policies in place.
• Pension obligations for executives (agreement with staff representatives from 2003 onwards): individual contractual pension
obligations based on an agreement with representatives;
• Pension obligations for executives (agreement with staff representatives from 19 August 2008 onwards): individual contractual
pension obligations relating to a company pension plan with the Vattenfall Europe Group;
• Collective bargaining agreement on the company pension scheme: obligations based on the collective bargaining agreement
on 50Hertz Transmission’s company pension scheme, concluded on 28 November 2007
• Direct insurance: direct insurance policies for all former employees who worked at Vereinigte Energiewerke AG (VEAG) from
1993 to 31 December 2004, with the exception of managers;
• Individual commitments: individual commitments which are financed exclusively by external pension funds (welfare fund and
pension fund).
DEFINED-BENEFIT PLANS
Defined-benefit plans entitle employees to make direct pension claims against 50Hertz Transmission. Provisions for these are
recognised in the statement of financial position. If plan assets are created for the sole purpose of fulfilling pension obligations, the
amount is offset against the present value of the obligation. The following defined-benefit plans exist in Germany:
• Group works agreement on the company pension scheme
In accordance with the group works agreement on the company pension scheme, employees are granted a company pension plan on
the basis of a defined-contribution plan (effective 1 January 2007). This agreement applies to all employees within the meaning of Sec.
5 (1) of the German Work Constitution Act (BetrVG) and came into effect at the Company on 1 January 2007. Participation in the
scheme is voluntary. The scheme grants pension benefits upon reaching the statutory retirement age, upon taking early retirement from
statutory pension insurance, and in the event of occupational disability for death. Current pension benefits are increased by 1% p.a., so
the scheme is classified as a defined-benefit plan.
• TVV Energie
This pension plan relates to direct guarantees resulting from a collective bargaining agreement concluded on 16 October 1992. It was
closed to new hires on 1 January 1993. This contribution plan applies to employees who worked at Vereinigte Energiewerke AG until 30
November 2001 and whose vested benefits were allocated to Vattenfall Europe Transmission GmbH (now 50Hertz Transmission
GmbH). The scheme covers pension obligations, based on years of service and remuneration level and grants retirement and disability
pensions, but no pension for surviving dependants. It is not possible to index current post-employment benefits falling due for the first
time after 1 January 1993.
OTHER PERSONNEL OBLIGATIONS
50Hertz Transmission also has following obligations, which are listed under ‘Other personnel obligations’:
• Obligations for long-service benefits;
• Obligations from German phased retirement schemes;
• Obligations for working lifetime accounts.
Not all of these benefits are funded and, in accordance with IAS 19, these post-employment benefits are classified as defined-benefit
plans.
Elia Group Financial Report 2021 115
GERMANY
DEFINED CONTRIBUTION PLANS
In the case of externally financed defined contribution plans, 50Hertz Transmission (Germany)’s obligation is limited to paying the agreed
contributions. For those defined contribution plans recognised in the form of direct guarantees, there are pledged congruent employer’s
liability insurance policies in place.
• Pension obligations for executives (agreement with staff representatives from 2003 onwards): individual contractual pension
obligations based on an agreement with representatives;
• Pension obligations for executives (agreement with staff representatives from 19 August 2008 onwards): individual contractual
pension obligations relating to a company pension plan with the Vattenfall Europe Group;
• Collective bargaining agreement on the company pension scheme: obligations based on the collective bargaining agreement
on 50Hertz Transmission’s company pension scheme, concluded on 28 November 2007
• Direct insurance: direct insurance policies for all former employees who worked at Vereinigte Energiewerke AG (VEAG) from
1993 to 31 December 2004, with the exception of managers;
• Individual commitments: individual commitments which are financed exclusively by external pension funds (welfare fund and
pension fund).
DEFINED-BENEFIT PLANS
Defined-benefit plans entitle employees to make direct pension claims against 50Hertz Transmission. Provisions for these are
recognised in the statement of financial position. If plan assets are created for the sole purpose of fulfilling pension obligations, the
amount is offset against the present value of the obligation. The following defined-benefit plans exist in Germany:
• Group works agreement on the company pension scheme
In accordance with the group works agreement on the company pension scheme, employees are granted a company pension plan on
the basis of a defined-contribution plan (effective 1 January 2007). This agreement applies to all employees within the meaning of Sec.
5 (1) of the German Work Constitution Act (BetrVG) and came into effect at the Company on 1 January 2007. Participation in the
scheme is voluntary. The scheme grants pension benefits upon reaching the statutory retirement age, upon taking early retirement from
statutory pension insurance, and in the event of occupational disability for death. Current pension benefits are increased by 1% p.a., so
the scheme is classified as a defined-benefit plan.
• TVV Energie
This pension plan relates to direct guarantees resulting from a collective bargaining agreement concluded on 16 October 1992. It was
closed to new hires on 1 January 1993. This contribution plan applies to employees who worked at Vereinigte Energiewerke AG until 30
November 2001 and whose vested benefits were allocated to Vattenfall Europe Transmission GmbH (now 50Hertz Transmission
GmbH). The scheme covers pension obligations, based on years of service and remuneration level and grants retirement and disability
pensions, but no pension for surviving dependants. It is not possible to index current post-employment benefits falling due for the first
time after 1 January 1993.
OTHER PERSONNEL OBLIGATIONS
50Hertz Transmission also has following obligations, which are listed under ‘Other personnel obligations’:
• Obligations for long-service benefits;
• Obligations from German phased retirement schemes;
• Obligations for working lifetime accounts.
Not all of these benefits are funded and, in accordance with IAS 19, these post-employment benefits are classified as defined-benefit
plans.
EMPLOYEE BENEFIT OBLIGATIONS AT GROUP LEVEL
The group’s net liability for employee benefit obligations is as follows:
(in € million) Pensions Other
2021
2020
2021
2020
Present value of funded defined-benefit obligation
(298.9)
(292.3)
(100.1)
(110.8)
Fair value of plan assets
236.3
241.4
56.1
29.6
Net employee benefit liability
(62.6)
(50.8)
(44.0)
(81.2)
The net employee benefit liability decreased in total by €25.4 million, of which €27.0 million on Belgian level partly offset by €1.6 million
increase on German level.
In Belgium, the impact is mainly explained by the decrease in discount rate compared with 2020 and the higher return on plan assets.
In Germany, despite the decrease in the discount rate, the net variation is an increase mainly due to the continuing increase in full time
equivalents for which employee benefits are to be paid.
Movement in the present value of the defined benefit obligation Pensions Other
(in € million) 2021 2020 2021 2020
At the beginning of the period
(292.3)
(278.1)
(110.8)
(98.5)
Current service cost
(15.2)
(12.8)
(10.4)
(8.0)
Interest cost/income
(1.7)
(2.1)
(0.6)
(1.0)
Contributions from plan participants
(0.9)
(1.2)
0.0
0.0
Including remeasurement gains/(losses) in OCI and in
Statement of profit or loss, arising from
1) Changes in demographic assumptions
0.0
(1.1)
0.0
(1.1)
2) Changes in financial assumptions
17.7
(10.7)
3.7
(3.8)
3) Changes from experience adjustments
(5.3)
5.1
(0.3)
(0.9)
Past service cost
0.1
0.0
0.0
(6.3)
Payments from the plan
16.8
14.7
2.8
2.7
Transfers
(18.2)
(6.1)
15.5
6.1
At the end of the period
(298.9)
(292.3)
(100.1)
(110.8)
Movement in the fair value of the plan assets Pensions Other
(in € million) 2021 2020 2021 2020
At the beginning of the period
241.4
231.0
29.6
25.9
Interest income
1.0
1.7
0.1
0.0
Remeasurement gains/losses in OCI arising from:
Return of plan assets (excluding interest income on plan assets)
12.0
(0.1)
3.7
2.5
Contributions from employer
10.2
19.2
9.7
6.4
Contributions from plan participants
0.9
1.2
0.0
0.0
Transfers
(13.1)
2.6
15.8
(2.6)
Benefit payments
(16.2)
(14.1)
(2.7)
(2.7)
At the end of the period
236.3
241.4
56.1
29.6
116
Amounts recognised in comprehensive income Pensions Other
(in € million) 2021 2020 2021 2020
Service cost
Current service cost
(15.2)
(12.8)
(4.1)
(4.1)
Past service cost
0.1
0.0
0.0
(6.3)
Settlements
0.6
0.6
0.1
0.0
Net interest on the net defined-benefit liability/(asset)
(0.7)
(0.4)
(0.5)
(1.0)
Interest cost on defined-benefit obligation
(1.7)
(2.1)
(0.6)
(1.0)
Interest income on plan assets
1.0
1.7
0.1
0.0
Other
(0.0)
(0.0)
0.3
2.1
Defined-benefit costs recognised in profit or loss
(15.1)
(12.6)
(4.2)
(9.2)
Actuarial gains(/losses) on defined obligations arising from:
1) Changes in demographic assumptions
0.0
(1.1)
0.0
(0.8)
2) Changes in financial assumptions
17.7
(10.7)
3.1
(3.4)
3) Changes from experience adjustments
(5.3)
5.1
(0.1)
(1.2)
Return on plan assets (excluding interest income on plan assets)
12.0
(0.1)
3.7
(0.1)
Remeasurements of net defined benefit (liability)/asset
recognised in other comprehensive income (OCI)
24.5
(6.8)
6.6
(5.5)
Total
9.4
(19.4)
2.4
(14.7)
Considering the actuarial gains or losses recognized in other comprehensive income for the reimbursement rights (€3.8 million for 2021
- see hereafter), the net impact of the remeasurement of post employments benefit obligations amounts to €27.4 million.
(in € million) 2021 2020
Breakdown of defined-benefit obligation by type of plan participants
(399.0)
(403.1)
Active plan participants
(314.9)
(311.3)
Terminated plan participants with def.-benefit entitlements
(24.8)
(21.6)
Retired plan participants and beneficiaries
(59.3)
(70.2)
Breakdown of defined-benefit obligation by type of benefits
(399.0)
(403.1)
Retirement and death benefits
(288.2)
(299.5)
Other post-employment benefits
(57.3)
(87.3)
Seniority payments
(53.6)
(16.2)
When determining the appropriate discount rate, the group considers the interest rates of corporate bonds in currencies consistent with
the currencies of the post-employment benefit obligation with at least an 'AA' rating or above, as set by an internationally acknowledged
rating agency, and extrapolated as needed along the yield curve to correspond with the expected term of the defined benefit obligation.
A stress test is performed annually. This test verifies that the minimum funding requirements are covered to deal with 'shocks' with
probabilities of occurrence of 0.5%.
The members (mostly) contribute to the financing of the retirement benefits by paying a personal contribution.
The annual balance of the defined benefit lump sum is financed by the employer through a recurrent allowance expressed as a
percentage of the total payroll of the participants. This percentage is defined by the aggregate cost method and is reviewed annually.
This method of financing involves smoothing future costs over the remaining period of the plan. The costs are estimated on a projected
basis (taking into account salary growth and inflation). The assumptions related to salary increase, inflation, employee turnover and age
term are defined on the basis of historical data from the Company. The mortality tables used are those corresponding to the observed
experience within the financing vehicle and take into consideration expected changes in mortality. The group calculates the net interest
on the net defined benefit liability (asset) using the same high-quality bond discount rate (see above) used to measure the defined
benefit obligation (net interest approach). These assumptions are challenged on a regular basis.
Exceptional events (such as modification of the plan, change of assumptions and overly short coverage terms) can eventually lead to
outstanding payments from the sponsor.
Elia Group Financial Report 2021 117
Amounts recognised in comprehensive income
Pensions
Other
(in € million)
2021
2020
2021
2020
Service cost
Current service cost
(15.2)
(12.8)
(4.1)
(4.1)
Past service cost
0.1
0.0
0.0
(6.3)
Settlements
0.6
0.6
0.1
0.0
Net interest on the net defined-benefit liability/(asset)
(0.7)
(0.4)
(0.5)
(1.0)
Interest cost on defined-benefit obligation
(1.7)
(2.1)
(0.6)
(1.0)
Interest income on plan assets
1.0
1.7
0.1
0.0
Other
(0.0)
(0.0)
0.3
2.1
Defined-benefit costs recognised in profit or loss
(15.1)
(12.6)
(4.2)
(9.2)
Actuarial gains(/losses) on defined obligations arising from:
1) Changes in demographic assumptions
0.0
(1.1)
0.0
(0.8)
2) Changes in financial assumptions
17.7
(10.7)
3.1
(3.4)
3) Changes from experience adjustments
(5.3)
5.1
(0.1)
(1.2)
Return on plan assets (excluding interest income on plan assets)
12.0
(0.1)
3.7
(0.1)
Remeasurements of net defined benefit (liability)/asset
recognised in other comprehensive income (OCI)
24.5
(6.8)
6.6
(5.5)
Total
9.4
(19.4)
2.4
(14.7)
Considering the actuarial gains or losses recognized in other comprehensive income for the reimbursement rights (€3.8 million for 2021
- see hereafter), the net impact of the remeasurement of post employments benefit obligations amounts to €27.4 million.
(in € million)
2021
2020
Breakdown of defined-benefit obligation by type of plan participants
(399.0)
(403.1)
Active plan participants
(314.9)
(311.3)
Terminated plan participants with def.-benefit entitlements
(24.8)
(21.6)
Retired plan participants and beneficiaries
(59.3)
(70.2)
Breakdown of defined-benefit obligation by type of benefits
(399.0)
(403.1)
Retirement and death benefits
(288.2)
(299.5)
Other post-employment benefits
(57.3)
(87.3)
Seniority payments
(53.6)
(16.2)
When determining the appropriate discount rate, the group considers the interest rates of corporate bonds in currencies consistent with
the currencies of the post-employment benefit obligation with at least an 'AA' rating or above, as set by an internationally acknowledged
rating agency, and extrapolated as needed along the yield curve to correspond with the expected term of the defined benefit obligation.
A stress test is performed annually. This test verifies that the minimum funding requirements are covered to deal with 'shocks' with
probabilities of occurrence of 0.5%.
The members (mostly) contribute to the financing of the retirement benefits by paying a personal contribution.
The annual balance of the defined benefit lump sum is financed by the employer through a recurrent allowance expressed as a
percentage of the total payroll of the participants. This percentage is defined by the aggregate cost method and is reviewed annually.
This method of financing involves smoothing future costs over the remaining period of the plan. The costs are estimated on a projected
basis (taking into account salary growth and inflation). The assumptions related to salary increase, inflation, employee turnover and age
term are defined on the basis of historical data from the Company. The mortality tables used are those corresponding to the observed
experience within the financing vehicle and take into consideration expected changes in mortality. The group calculates the net interest
on the net defined benefit liability (asset) using the same high-quality bond discount rate (see above) used to measure the defined
benefit obligation (net interest approach). These assumptions are challenged on a regular basis.
Exceptional events (such as modification of the plan, change of assumptions and overly short coverage terms) can eventually lead to
outstanding payments from the sponsor.
The defined benefit plans expose the Company to actuarial risks such as investment risk, interest-rate risk, longevity risk and salary risk.
Investment risk
The present value of the defined benefit plan liability is calculated using a discount rate determined based on high-quality corporate
bonds. The difference between the actual return on assets and the interest income on plan assets is included in the remeasurements
component (OCI). Currently the plan has a relatively balanced range of investments, as shown below:
(in € million) 2021 2020
Investments quoted in an active market
71.02%
72.53%
Shares - Eurozone
13.99%
13.99%
Shares - outside Eurozone
17.98%
18.36%
Government bonds - Eurozone
1.31%
1.26%
Other bonds - Eurozone
24.85%
25.78%
Other bonds - outside Eurozone
12.89%
13.14%
Unquoted investments
28.98%
27.47%
Qualifying insurance contracts
10.91%
9.41%
Property
2.50%
2.41%
Cash and cash equivalents
2.82%
2.73%
Other
12.76%
12.92%
Total (in %)
100.00%
100.00%
Due to the long-term nature of the plan liabilities, it is considered appropriate that a reasonable portion of the plan assets be invested in
equity securities to leverage the return generated by the fund. In Germany, all plan assets are invested in insurance agreements.
Interest risk
A decrease in the bond interest rate will increase the plan liability. However, this will be partially offset by an increase in the return on the
plan’s assets, of which approximately 95% is now invested in pension funds with an expected return of 3.12%.
Longevity risk
The present value of the defined benefit plan liability is calculated based on the best estimate of the life expectancy of plan participants
both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan's liability. The
prospective mortality tables from the IA/BE are used in Belgium and the 2018 Heubeck tables are uesed in Germany.
Salary risk
The present value of the defined benefit plan liability is calculated based on the future salaries of plan participants. As such, an increase
in the salary of the plan participants will increase the plan’s liability.
118
ACTUARIAL ASSUMPTIONS
(in % and years) Belgium Germany
2021 2020 2021 2020
Discount rate
- Pensions - defined benefit plans and cash balance -
best off plans
0.83%
0.36%
1.26%
0.97%
- Pensions - defined contribution plans
1.12%
0.66%
-
-
- Other
1.14%
0.70%
1.26%
0.97%
Expected average salary increase (excluding inflation)
1.00%
1.00%
2.15%
2.00%
Expected inflation
1.75%
1.75%
2.00%
2.00%
Expected increase in health benefits (including inflation)
2.75%
2.75%
2.25%
2.25%
Expected increase in tariff advantages
1.75%
1.75%
-
-
Average assumed retirement age
- Employee
63
63
65
65
- Manager
65
65
65
65
Life expectancy in years of a pensioner retiring at age
65 at closing date:*
Life expectancy for a 65 year old male
19.9
19.9
20.5
20.4
Life expectancy for a 65 year old female
23.6
23.6
24.0
23.9
*Mortality tables used: IABE in Belgium, 2018 Heubeck in Germany
(in years ) Belgium Germany
2021 2020 2021 2020
Weighted average duration of the defined benefit obligation
8.5
8.8
28.7
28.5
Weighted average duration of the defined contribution plans
9.7
9.7
n.r.
n.r.
Weighted average duration of the post-employment benefits other than pensions
13.2
13.4
14.0
13.8
In Germany, the liability of the defined contribution plans is completely covered by the plan assets. Therefore, no weighted average
duration is necessary and thus not calculated.
The actual return on plan assets in percentage terms for 2021 was in the range of 2.7% to 12.0% (compared with a range of 0.9% to
2.8% in 2020).
Below is an overview of the expected cash outflows for the DB plans:
Future expected cash outflows < 12 months 1-5 years 6 - 10 years
Pensions
(4.0)
(17.7)
(21.3)
Other
(2.0)
(9.0)
(10.6)
Total (in € million)
(6.0)
(26.7)
(31.9)
There is some degree of uncertainty linked to the above expected cash outflows which can be explained by the following factors:
• Differences between assumptions and actual data can occur, e.g. retirement age and future salary increase;
• The expected cash outflows shown above are based on a closed population and therefore do not incorporate future new
hires;
• Future premiums are calculated based on the last known aggregate cost rate, which is reviewed on an annual basis and
varies depending on the return on plan assets, the actual salary increase as opposed to the assumptions, and unexpected
changes in the population.
Elia Group Financial Report 2021 119
ACTUARIAL ASSUMPTIONS
(in % and years)
Belgium
Germany
2021
2020
2021
2020
Discount rate
- Pensions - defined benefit plans and cash balance -
best off plans
0.83%
0.36%
1.26%
0.97%
- Pensions - defined contribution plans
1.12%
0.66%
-
-
- Other
1.14%
0.70%
1.26%
0.97%
Expected average salary increase (excluding inflation)
1.00%
1.00%
2.15%
2.00%
Expected inflation
1.75%
1.75%
2.00%
2.00%
Expected increase in health benefits (including inflation)
2.75%
2.75%
2.25%
2.25%
Expected increase in tariff advantages
1.75%
1.75%
-
-
Average assumed retirement age
- Employee
63
63
65
65
- Manager
65
65
65
65
Life expectancy in years of a pensioner retiring at age
65 at closing date:*
Life expectancy for a 65 year old male
19.9
19.9
20.5
20.4
Life expectancy for a 65 year old female
23.6
23.6
24.0
23.9
*Mortality tables used: IABE in Belgium, 2018 Heubeck in Germany
(in years )
Belgium
Germany
2021
2020
2021
2020
Weighted average duration of the defined benefit obligation
8.5
8.8
28.7
28.5
Weighted average duration of the defined contribution plans
9.7
9.7
n.r.
n.r.
Weighted average duration of the post-employment benefits other than pensions
13.2
13.4
14.0
13.8
In Germany, the liability of the defined contribution plans is completely covered by the plan assets. Therefore, no weighted average
duration is necessary and thus not calculated.
The actual return on plan assets in percentage terms for 2021 was in the range of 2.7% to 12.0% (compared with a range of 0.9% to
2.8% in 2020).
Below is an overview of the expected cash outflows for the DB plans:
Future expected cash outflows
< 12 months
1-5 years
6 - 10 years
Pensions
(4.0)
(17.7)
(21.3)
Other
(2.0)
(9.0)
(10.6)
Total (in € million)
(6.0)
(26.7)
(31.9)
There is some degree of uncertainty linked to the above expected cash outflows which can be explained by the following factors:
• Differences between assumptions and actual data can occur, e.g. retirement age and future salary increase;
• The expected cash outflows shown above are based on a closed population and therefore do not incorporate future new
hires;
• Future premiums are calculated based on the last known aggregate cost rate, which is reviewed on an annual basis and
varies depending on the return on plan assets, the actual salary increase as opposed to the assumptions, and unexpected
changes in the population.
SENSITIVITY ANALYSIS
Effect on defined benefit obligation Belgium Germany
(in € million)
Increase (+) /
Decrease (-)
Increase (+) /
Decrease (-)
Impact on the net defined-benefit obligation of an increase in:
Discount rate (0.5% movement)
20.1
7.0
Average salary increase - excl. inflation (0.5% movement)
(9.7)
(2.8)
Inflation (0.25% movement)
(5.9)
(0.4)
Increase of healthcare care benefits (1.0% movement)
(0.6)
n.r.
Life expectancy of pensions (1 year)
(3.4)
(1.6)
REIMBURSEMENT RIGHTS (BELGIUM)
As described in Note 6.5, a non-current asset (within other financial assets) is recognised as reimbursement rights linked to the defined
benefit obligation for the population benefitting from the interest scheme and medical plan liabilities and tariff benefits for retired Elia
employees. Each change in these liabilities equally affects the corresponding reimbursement rights under non-current other financial
assets.
The change in reimbursement rights is presented below:
Movement in the present value of the reimbursement rights Pensions Other
(in € million) 2021 2020 2021 2020
At the beginning of the period
(22.6)
(23.1)
(31.2)
(30.0)
Current service costs
Interest cost/income
(0.1)
(0.1)
(0.2)
(0.3)
Actuarial gains(/losses) on defined obligations arising from:
1) Changes in demographic assumptions
0.0
0.0
0.0
0.0
2) Changes in financial assumptions
0.7
(0.5)
2.2
(1.8)
3) Changes from experience adjustments
0.4
(1.6)
0.5
(0.2)
Payments from the plan
2.5
2.8
1.6
1.1
At the end of the period
(19.0)
(22.6)
(27.2)
(31.2)
The sum of ‘Pensions’ (€19.0 million) and ‘Other’ (€27.2 million) reimbursement rights amounted to €46.2 million in 2021 (2020: € 53.8
million), which reconciles with the reimbursement rights listed in Note 6.5.
120
6.14. Provisions
(in € million)
Environment Elia Re
Easement
provision
Dismantling
Obligations
Employee
benefits
Other Total
Balance at 1 January 2020
12.0
3.3
6.0
108.2
1.5
7.0
137.9
Increase
1.4
6.8
0.0
7.6
0.5
2.4
18.7
Reversals
(1.0)
(2.7)
(5.9)
(1.4)
0.0
(3.0)
(14.0)
Utilisation
(0.9)
(2.0)
(0.1)
0.0
(0.0)
(0.8)
(3.8)
Discounting of provisions
0.0
0.0
0.0
1.8
0.0
0.0
1.8
Balance at 31 December 2020
11.5
5.4
(0.0)
116.3
1.9
5.6
140.7
Long-term portion
9.3
5.4
0.0
116.3
0.0
2.4
133.3
Short-term portion
2.2
0.0
0.0
0.0
1.9
3.3
7.4
Balance at 1 January 2021
11.5
5.4
(0.0)
116.3
1.9
5.6
140.7
Increase
0.3
1.0
0.0
2.1
(0.1)
1.9
5.2
Reversals
(0.4)
(2.0)
0.0
(9.6)
0.0
(0.8)
(12.9)
Utilisation
(0.1)
(0.4)
0.0
0.0
(0.1)
(0.7)
(1.2)
Discounting of provisions
(0.0)
0.0
0.0
1.4
0.0
0.0
1.4
Balance at 31 December 2021
11.2
4.1
(0.0)
110.1
1.7
6.1
133.2
Long-term portion
9.1
4.1
0.0
110.1
0.0
2.2
125.6
Short-term portion
2.1
0.0
0.0
0.0
1.7
3.9
7.7
The group has recognised provisions for the following:
Environment: The environmental provision provides for existing exposure with respect to land decontamination. The €11.2 million
provision mainly relates to the Belgian segment, with only a €2.2 million provision relating to the German segment. There were no
significant movements in the environmental provisions in 2021.
More specifically for the Belgian segment, Elia has conducted soil surveys on over 200 sites in Flanders in accordance with contractual
agreements and Flemish legislation. Significant soil contamination was found on a number of sites, with this being mainly attributable to
historical pollution arising from earlier or nearby industrial activities (gas plants, incinerators, chemicals, etc.). In the Brussels-Capital
and Walloon Regions, Elia also carried out analyses and studies to detect contamination at a number of substations and a number of
plots occupied by pylons for overhead power lines. Based on the analyses and studies it conducted, Elia has made provisions for
possible future soil remediation costs in line with the relevant legislation.
Environmental provisions are recognised and measured based on an expert appraisal bearing in mind BATNEEC (Best Available
Techniques Not Entailing Excessive Costs) as well as on the circumstances known at the end of the reporting period. The timing of the
settlement is unclear but for the premises where utilisations occur, the underlying provision is classified as a short-term provision.
Elia Re: An amount of €4.1 million is included at year-end for Elia Re, a captive reinsurance company. €0.7 million of this is linked to
claims for overhead lines, and €3.4 million to electrical installations. The expected timing of the related cash outflow depends on the
progress and duration of the respective procedures.
Easement provisions: The easement provision relates to payments likely to be made to landowners as a compensation for overland
lines crossing their property. These easement rights were recognised within the German segment for overland lines built by the former
owners of 50Hertz Transmission, with exposure resulting from section 9 of the German Land Register Amendment Act (GBBerG.). The
estimates are based on the value of claims filed or on the estimated amount of the risk exposure. The expected timing of the related
cash outflow depends on the progress and duration of the claim filed. A re-assessment of the remaining expected payments in 2020 led
to a complete reversal of the provision through profit and loss in 2020.
Dismantling provisions: As part of the Group’s CAPEX programme, the Group is exposed to decommissioning obligations; most of
which are related to offshore projects. These provisions take into account the effect of discounting and the expected cost of dismantling
and removing the equipment from sites or from the sea. The carrying amount of the provision as at 31 December 2021 was €110.1
million. The decrease is mainly due to the higher discount rate for discounting of the provisions. The Group has applied a case-by-case
approach to estimate the cash outflow needed to settle the liability.
Elia Group uses corporate bond rates (minimum AA rating) and sets them out to match the lifetime of the provisions in order to discount
the dismantling provisions. In case the discount rate is below 0%, the rate is floored at 0%. The discount rates used in 2021 were in the
range of 1.08% to 1.26% depending on the lifetime of the asset to dismantle. Should the discount rate fall to 0% the dismantling
provisions would increase by €24.3 million.
Elia Group Financial Report 2021 121
6.14. Provisions
(in € million)
Environment
Elia Re
Easement
provision
Dismantling
Obligations
Employee
benefits
Other
Total
Balance at 1 January 2020
12.0
3.3
6.0
108.2
1.5
7.0
137.9
Increase
1.4
6.8
0.0
7.6
0.5
2.4
18.7
Reversals
(1.0)
(2.7)
(5.9)
(1.4)
0.0
(3.0)
(14.0)
Utilisation
(0.9)
(2.0)
(0.1)
0.0
(0.0)
(0.8)
(3.8)
Discounting of provisions
0.0
0.0
0.0
1.8
0.0
0.0
1.8
Balance at 31 December 2020
11.5
5.4
(0.0)
116.3
1.9
5.6
140.7
Long-term portion
9.3
5.4
0.0
116.3
0.0
2.4
133.3
Short-term portion
2.2
0.0
0.0
0.0
1.9
3.3
7.4
Balance at 1 January 2021
11.5
5.4
(0.0)
116.3
1.9
5.6
140.7
Increase
0.3
1.0
0.0
2.1
(0.1)
1.9
5.2
Reversals
(0.4)
(2.0)
0.0
(9.6)
0.0
(0.8)
(12.9)
Utilisation
(0.1)
(0.4)
0.0
0.0
(0.1)
(0.7)
(1.2)
Discounting of provisions
(0.0)
0.0
0.0
1.4
0.0
0.0
1.4
Balance at 31 December 2021
11.2
4.1
(0.0)
110.1
1.7
6.1
133.2
Long-term portion
9.1
4.1
0.0
110.1
0.0
2.2
125.6
Short-term portion
2.1
0.0
0.0
0.0
1.7
3.9
7.7
The group has recognised provisions for the following:
Environment: The environmental provision provides for existing exposure with respect to land decontamination. The €11.2 million
provision mainly relates to the Belgian segment, with only a €2.2 million provision relating to the German segment. There were no
significant movements in the environmental provisions in 2021.
More specifically for the Belgian segment, Elia has conducted soil surveys on over 200 sites in Flanders in accordance with contractual
agreements and Flemish legislation. Significant soil contamination was found on a number of sites, with this being mainly attributable to
historical pollution arising from earlier or nearby industrial activities (gas plants, incinerators, chemicals, etc.). In the Brussels-Capital
and Walloon Regions, Elia also carried out analyses and studies to detect contamination at a number of substations and a number of
plots occupied by pylons for overhead power lines. Based on the analyses and studies it conducted, Elia has made provisions for
possible future soil remediation costs in line with the relevant legislation.
Environmental provisions are recognised and measured based on an expert appraisal bearing in mind BATNEEC (Best Available
Techniques Not Entailing Excessive Costs) as well as on the circumstances known at the end of the reporting period. The timing of the
settlement is unclear but for the premises where utilisations occur, the underlying provision is classified as a short-term provision.
Elia Re: An amount of €4.1 million is included at year-end for Elia Re, a captive reinsurance company. €0.7 million of this is linked to
claims for overhead lines, and €3.4 million to electrical installations. The expected timing of the related cash outflow depends on the
progress and duration of the respective procedures.
Easement provisions: The easement provision relates to payments likely to be made to landowners as a compensation for overland
lines crossing their property. These easement rights were recognised within the German segment for overland lines built by the former
owners of 50Hertz Transmission, with exposure resulting from section 9 of the German Land Register Amendment Act (GBBerG.). The
estimates are based on the value of claims filed or on the estimated amount of the risk exposure. The expected timing of the related
cash outflow depends on the progress and duration of the claim filed. A re-assessment of the remaining expected payments in 2020 led
to a complete reversal of the provision through profit and loss in 2020.
Dismantling provisions: As part of the Group’s CAPEX programme, the Group is exposed to decommissioning obligations; most of
which are related to offshore projects. These provisions take into account the effect of discounting and the expected cost of dismantling
and removing the equipment from sites or from the sea. The carrying amount of the provision as at 31 December 2021 was €110.1
million. The decrease is mainly due to the higher discount rate for discounting of the provisions. The Group has applied a case-by-case
approach to estimate the cash outflow needed to settle the liability.
Elia Group uses corporate bond rates (minimum AA rating) and sets them out to match the lifetime of the provisions in order to discount
the dismantling provisions. In case the discount rate is below 0%, the rate is floored at 0%. The discount rates used in 2021 were in the
range of 1.08% to 1.26% depending on the lifetime of the asset to dismantle. Should the discount rate fall to 0% the dismantling
provisions would increase by €24.3 million.
Employee benefits: See Note 6.14, for more details of these short-term employee benefits.
‘Other' consists of various provisions for litigation to cover likely payment where legal proceedings have been instituted against the
Group by a third party or where the Group is involved in legal proceedings. These estimates are based on the value of claims filed or on
the estimated level of risk exposure. The expected timing of the related cash outflow depends on the progress and duration of the
associated proceedings.
No assets have been recognised in connection with the recovery of certain provisions.
6.15. Other non-current liabilities
(in € million)
2021
2020
Investment grants
147.2
82.8
Non-current deferred income
140.5
137.3
Other
1.8
1.0
Total
289.5
221.1
Of the total investment grants, €143.9 million relates to 50Hertz Transmission (Germany). The investment grants are spread over
several assets. The two largest items are SuedOstLink and Kriegers Flak Combined Grid Solution. Both were subsidized by the
European Union. The grants are released in profit and loss based on the useful lives of the assets to which they relate. Terms and
conditions of the grants were monitored and met as per 31 December 2021.
Contract liabilities remained stable. They relate to upfront payment for last mile connection. At the end of 2021, a liability of €103.8
million was recognised within Elia Transmission (Belgium) and a liability of €36.7 million within 50Hertz Transmission (Germany). The
income is released over the lifetime of the asset where the last mile connection relates to. As already disclosed in note 5.1, the group
has recognised €5.7 million of revenue in the reporting period that was included in the contract liability balance at the beginning of the
period (€137.3 million), including €4.3 million from non-current contract liabilities.
6.16. Trade and other payables
(in € million)
2021
2020
Trade debts
905.3
648.8
VAT and other taxes
21.1
14.9
Remuneration and social security
40.9
34.1
Dividends payable
1.2
1.2
Levies
2,177.6
121.9
Other
536.0
131.0
Accrued liabilities
14.2
57.2
Total
3,696.4
1,009.0
The trade debts increased by €256.5 million against a background of increased activity levels and significant increase in energy prices
in the second half of 2021.
The amount for levies can be split into levies related to 50Hertz Transmission (€2,153.0 million) and levies related to Elia Transmission
(€24.6 million).
The levies for Elia Transmission decreased compared with the previous year (€52.8 million). The levies include federal levies, which
totalled €6.2 million at 31 December 2021 (€24.3 million in 2020). Levies for the Walloon government decreased to €17.0 million, (€26.3
million in 2020). The remaining balance mainly consists of strategic reserves (€1.0 million).
The levies for 50Hertz Transmission decreased compared to previous year (€538.1 million) due to the significant increase of the EEG
balance. The 2020 levies mainly include EEG (€2,093.4 million), KWK (€23.4 million), §19StromNEV (€32.4 million).
The other payables mainly related to margin calls on derivatives hedging grid losses of the German segment (€356 million as of 31
December 2021 compared to €16.8 million last year) and other regulatory liabilities.
122
6.17. Financial instruments – fair values
The following table shows the carrying amounts and fair values of financial assets and liabilities, including their levels in the fair value
hierarchy.
Carrying amount Fair value
(in € million)
Designated
at fair value
Fair value
through OCI
Amortised
cost
Other
financial
liabilities at
amortised
cost
Total
Level 1
Level 2
Level 3
Total
Balance at 31 December 2020
Other financial assets
7.0
43.7
53.8
104.5
7.0
43.7
50.7
Equity instruments at fair value through
other comprehensive income
43.7
43.7
43.7
43.7
Equity instruments at fair value through
income
7.0
7.0
7.0
7.0
Regulatory assets
53.8
53.8
Trade and other receivables (Current
and Non-current)
1,475.9
1,475.9
Cash and cash equivalents
590.1
590.1
Loans and borrowings (Current and
Non-Current)
0.0
0.0
0.0
(8,055.1)
(8,055.1)
(8,633.5)
(8,633.5)
Unsecured bond issues
(6,753.6)
(6,753.6)
(7,487.1)
(7,487.1)
Unsecured financial bank loans and
other loans
(1,146.4)
(1,146.4)
(1,146.4)
(1,146.4)
Lease liabilities
(84.2)
(84.2)
Accrued interests
(71.0)
(71.0)
Trade and other payables
(1,009.0)
(1,009.0)
Total
7.0
43.7
2,119.8
(9,064.1)
(6,893.7)
n.r.
n.r.
n.r.
n.r.
Balance at 31 December 2021
Other financial assets
7.0
399.4
46.2
452.5
362.6
43.8
406.4
Equity instruments at fair value through
other comprehensive income
43.8
43.8
43.8
43.8
Equity instruments at fair value through
income
7.0
7.0
7.0
7.0
Derivatives
355.6
355.6
355.6
355.6
Regulatory assets
46.2
46.2
Trade and other receivables (Current
and Non-current)
861.8
861.8
Cash and cash equivalents
3,049.5
3,049.5
Loans and borrowings (Current and
Non-Current)
0.0
0.0
0.0
(7,935.7)
(7,935.7)
(7,968.8)
(247.8)
(8,216.6)
Unsecured bond issues
(7,248.5)
(7,248.5)
(7,476.8)
(247.8)
(7,724.6)
Unsecured financial bank loans and
other loans
(492.0)
(492.0)
(492.0)
(492.0)
Lease liabilities
(118.8)
(118.8)
Accrued interests
(76.4)
(76.4)
Trade and other payables
(3,696.4)
(3,696.4)
Total
7.0
399.4
3,957.5
(11,632.0)
(7,268.2)
n.r.
n.r.
n.r.
n.r.
The above tables do not include fair value information for financial assets and liabilities not measured at fair value, such as cash and
cash equivalents, trade and other receivables, and trade and other payables, as their carrying amount is a reasonable approximation of
fair value. The fair value of finance lease liabilities is not required to be disclosed.
Elia Group Financial Report 2021 123
6.17. Financial instruments – fair values
The following table shows the carrying amounts and fair values of financial assets and liabilities, including their levels in the fair value
hierarchy.
Carrying amount
Fair value
(in € million)
Designated
at fair value
Fair value
through OCI
Amortised
cost
Other
financial
liabilities at
amortised
cost
Total
Level 1
Level 2
Level 3
Total
Balance at 31 December 2020
Other financial assets
7.0
43.7
53.8
104.5
7.0
43.7
50.7
Equity instruments at fair value through
other comprehensive income
43.7
43.7
43.7
43.7
Equity instruments at fair value through
income
7.0
7.0
7.0
7.0
Regulatory assets
53.8
53.8
Trade and other receivables (Current
and Non-current)
1,475.9
1,475.9
Cash and cash equivalents
590.1
590.1
Loans and borrowings (Current and
Non-Current)
0.0
0.0
0.0
(8,055.1)
(8,055.1)
(8,633.5)
(8,633.5)
Unsecured bond issues
(6,753.6)
(6,753.6)
(7,487.1)
(7,487.1)
Unsecured financial bank loans and
other loans
(1,146.4)
(1,146.4)
(1,146.4)
(1,146.4)
Lease liabilities
(84.2)
(84.2)
Accrued interests
(71.0)
(71.0)
Trade and other payables
(1,009.0)
(1,009.0)
Total
7.0
43.7
2,119.8
(9,064.1)
(6,893.7)
n.r.
n.r.
n.r.
n.r.
Balance at 31 December 2021
Other financial assets
7.0
399.4
46.2
452.5
362.6
43.8
406.4
Equity instruments at fair value through
other comprehensive income
43.8
43.8
43.8
43.8
Equity instruments at fair value through
income
7.0
7.0
7.0
7.0
Derivatives
355.6
355.6
355.6
355.6
Regulatory assets
46.2
46.2
Trade and other receivables (Current
and Non-current)
861.8
861.8
Cash and cash equivalents
3,049.5
3,049.5
Loans and borrowings (Current and
Non-Current)
0.0
0.0
0.0
(7,935.7)
(7,935.7)
(7,968.8)
(247.8)
(8,216.6)
Unsecured bond issues
(7,248.5)
(7,248.5)
(7,476.8)
(247.8)
(7,724.6)
Unsecured financial bank loans and
other loans
(492.0)
(492.0)
(492.0)
(492.0)
Lease liabilities
(118.8)
(118.8)
Accrued interests
(76.4)
(76.4)
Trade and other payables
(3,696.4)
(3,696.4)
Total
7.0
399.4
3,957.5
(11,632.0)
(7,268.2)
n.r.
n.r.
n.r.
n.r.
The above tables do not include fair value information for financial assets and liabilities not measured at fair value, such as cash and
cash equivalents, trade and other receivables, and trade and other payables, as their carrying amount is a reasonable approximation of
fair value. The fair value of finance lease liabilities is not required to be disclosed.
FAIR VALUE HIERARCHY
Fair value is the amount for which an asset could be exchanged or a liability settled in an arm's-length transaction. IFRS 7 requires, for
financial instruments that are measured in the statement of financial position at fair value and for financial instruments measured at
amortised cost for which the fair value has been disclosed, the disclosure of fair value measurements by level in the following fair value
measurement hierarchy:
• Level 1: The fair value of a financial instrument that is traded in an active market is measured based on quoted (unadjusted)
prices for identical assets or liabilities. A market is considered active if quoted prices are readily and regularly available from
an exchange, dealer, broker, industry group, pricing service or regulatory agency, and those prices represent actual and
regularly occurring market transactions on an arm’s-length basis.
• Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation
techniques. These maximise the use of observable market data where these are available and rely as little as possible on
entity-specific estimates. If all significant inputs required to assess the fair value of an instrument are observable, either
directly (i.e. as prices) or indirectly (i.e. derived from prices), the instrument is included in level 2.
• Level 3: If one or more of the significant inputs used in applying the valuation technique is not based on observable market
data, the financial instrument is included in level 3. The fair value amount included under ‘Other financial assets’ has been
determined by referring to either (i) recent transaction prices, known by the group, for similar financial assets or (ii) valuation
reports issued by third parties.
The fair value of financial assets and liabilities, other than those presented in the above table, approximates to their carrying amounts
largely due to the short-term maturities of these instruments.
The fair value of other financial assets increased by €355.7 million compared to previous year. The increase mainly results from the fair
value of the future contracts entered into by 50Hertz for the purpose of reducing the risk of fluctuations in the expected amount of grid
losses (€355.6 million). Due to a change in accounting policy, hedge accounting is applied, as of 2021, to those contracts. The fair value
of the Sicav and the group’s stake in EEX remain stable.
The fair value of the bank loans and bond issues decreased by €417.9 million, due to the lower nominal value and a lower pricing on the
market.
The fair value of sicavs falls into level 1, i.e. valuation is based on the listed market price on an active market for identical instruments.
The derivative from the price hedge for grid loss procurement, which is measured at fair value in OCI without affecting profit or loss, falls
under level 1 of the measurement hierarchy. Its value is determined on the basis of the reporting date valuation of the existing futures
contracts, which are fully contracted via the EEX electricity exchange and quoted there. Credit and default risks are avoided with this
form of price hedging via exchange transactions. The group recognizes derivatives for an amount of EUR 355.6m. The futures contracts
were concluded during the fiscal year at prices between € 40 and € 145 per MWh. As of the balance sheet date, the futures were quoted
on the EEX at € 220 per MWh, resulting in a correspondingly high positive derivative value. As of the balance sheet date, the group had
already price-hedged a volume of 3.2 TWh for its expected physical demand for grid loss energy in subsequent years.
The fair value of the bonds is €7.724.6 million (prior year: €7.487,1 million). Fair value was determined by reference to published price
quotations in an active market (classified as level 1 in the fair value hierarchy). The fair value of the registered bond is €64.0 million as
of 31 December 2021 and was determined by reference to third party information, such as pricing services (classified as level 3 in the
fair value hierarchy). The fair value of the private placement amounts to EUR 183.8m (classified as level 3 in the fair value hierarchy).
The fair value of other bank loans approximates to their carrying amounts largely due to the short-term maturities of these instruments.
6.18. Leasing
THE GROUP AS A LESSEE
The group mainly leases buildings, cars and optical fibres. It also has some rights to use (portions) of land and overhead lines. The
valuation period used is based on the contractual term. Where a fixed term has not been set and an ongoing extension is subject to the
contract, the relevant department has assumed a termination date. In the event that the lease contract contains a lease extension option,
the group assesses whether it is reasonably certain of exercising the option and makes its best estimate of the termination date.
The COVID-19 pandemic did not affected the contractual clauses of Elia Group’s lease contracts and there were no indications leading
to changes in the assessment (which was used in previous reporting period) related to the extension of the contracts.
Information about leases for which the group is a lessee is presented below.
124
Right-of-use assets
Right-of-use assets are presented separately within ‘Property, plant and equipment’ and can be broken down in the table below, with the
discounted lease liability for comparison. The split between current and non-current lease liabilities also provided:
(in € million)
Use of land
and
overhead
lines
Rent of
buildings /
offices
Cars
Optical fiber
Other
Total
As of 1 January 2020
40.7
26.3
12.3
6.7
2.1
88.1
Additions and remeasurements
0.5
1.8
7.4
1.0
1.1
11.7
Depreciation
(1.2)
(3.0)
(5.3)
(3.9)
(1.9)
(15.2)
Derecognition of right-of-use assets
0.0
(1.5)
(0.4)
0.0
0.0
(1.9)
As of 31 December 2020
40.0
23.6
14.1
3.7
1.4
82.8
(in € million)
Use of land
and
overhead
lines
Rent of
buildings /
offices
Cars
Optical fiber
Other
Total
As of 1 January 2021
40.0
23.6
14.1
3.7
1.4
82.8
Additions and remeasurements
3.4
16.7
6.1
23.4
0.0
49.6
Depreciation
(1.2)
(5.3)
(5.5)
(2.6)
(0.2)
(14.8)
As of 31 December 2021
42.1
35.0
14.7
24.5
1.2
117.5
The right-of-use assets are briefly described below:
• The use of land and overhead lines constitutes a right for the group to use a well identified piece of land to build on someone’s
property. Only the contracts where the group has the full right to control the use of the identified asset are in scope.
• The group leases buildings and offices in which corporate functions are performed.
• The group has car leasing contracts which are used by employees for business and private activities.
• The group leases optical fibres to transmit data. Only cables that are clearly identified are in scope.
• Other lease contracts: printer lease contracts and strategic reserves contracts. Strategic reserves are contracts where the
Group has the right to control the use of a power plant to maintain a balance on the grid
The group only has lease contracts with fixed lease payments and assesses whether it is reasonable to extend a lease contract. If so, the
lease contract is valued as if the extension were exercised.
Lease liabilities
Information concerning the maturity of the contractual undiscounted cash flows is given below:
Maturity analysis - contractual undiscounted cash flows
(in € million)
2021
2020
< 1 year
32.9
12.6
1-5 years
30.2
30.0
> 5 years
58.0
62.4
Total undiscounted lease liabilities at 31 December
121.1
105.1
Lease liabilities in the statement of financial position at 31 December
118.8
84.1
Current
35.1
11.6
Non-current
83.7
72.5
The discount rate used to discount the lease liabilities is the group’s best estimate of the weighted average incremental borrowing rate
and ranges from 0.26% to 2.94%. The group made use of the practical expedients, i.e. a single discount rate per group of contracts,
summarised per their duration.
The group has assessed the extension options concluded in the lease contracts and considers it reasonably likely that these extension
options will be executed. The Group has therefore considered the lease contract as if the extension option is exercised in the lease
liability.
The group has no lease contracts with variable payments nor residual value guarantees. The group did not commit to any lease that has
not yet commenced. The group has no contracts which include contingent rental payments nor include any escalation clauses or
restrictions that are significant regarding the use of the asset in question.
Elia Group Financial Report 2021 125
Right-of-use assets
Right-of-use assets are presented separately within ‘Property, plant and equipment’ and can be broken down in the table below, with the
discounted lease liability for comparison. The split between current and non-current lease liabilities also provided:
(in € million)
Use of land
and
overhead
lines
Rent of
buildings /
offices
Cars
Optical fiber
Other
Total
As of 1 January 2020
40.7
26.3
12.3
6.7
2.1
88.1
Additions and remeasurements
0.5
1.8
7.4
1.0
1.1
11.7
Depreciation
(1.2)
(3.0)
(5.3)
(3.9)
(1.9)
(15.2)
Derecognition of right-of-use assets
0.0
(1.5)
(0.4)
0.0
0.0
(1.9)
As of 31 December 2020
40.0
23.6
14.1
3.7
1.4
82.8
(in € million)
Use of land
and
overhead
lines
Rent of
buildings /
offices
Cars
Optical fiber
Other
Total
As of 1 January 2021
40.0
23.6
14.1
3.7
1.4
82.8
Additions and remeasurements
3.4
16.7
6.1
23.4
0.0
49.6
Depreciation
(1.2)
(5.3)
(5.5)
(2.6)
(0.2)
(14.8)
As of 31 December 2021
42.1
35.0
14.7
24.5
1.2
117.5
The right-of-use assets are briefly described below:
• The use of land and overhead lines constitutes a right for the group to use a well identified piece of land to build on someone’s
property. Only the contracts where the group has the full right to control the use of the identified asset are in scope.
• The group leases buildings and offices in which corporate functions are performed.
• The group has car leasing contracts which are used by employees for business and private activities.
• The group leases optical fibres to transmit data. Only cables that are clearly identified are in scope.
• Other lease contracts: printer lease contracts and strategic reserves contracts. Strategic reserves are contracts where the
Group has the right to control the use of a power plant to maintain a balance on the grid
The group only has lease contracts with fixed lease payments and assesses whether it is reasonable to extend a lease contract. If so, the
lease contract is valued as if the extension were exercised.
Lease liabilities
Information concerning the maturity of the contractual undiscounted cash flows is given below:
Maturity analysis - contractual undiscounted cash flows
(in € million)
2021
2020
< 1 year
32.9
12.6
1-5 years
30.2
30.0
> 5 years
58.0
62.4
Total undiscounted lease liabilities at 31 December
121.1
105.1
Lease liabilities in the statement of financial position at 31 December
118.8
84.1
Current
35.1
11.6
Non-current
83.7
72.5
The discount rate used to discount the lease liabilities is the group’s best estimate of the weighted average incremental borrowing rate
and ranges from 0.26% to 2.94%. The group made use of the practical expedients, i.e. a single discount rate per group of contracts,
summarised per their duration.
The group has assessed the extension options concluded in the lease contracts and considers it reasonably likely that these extension
options will be executed. The Group has therefore considered the lease contract as if the extension option is exercised in the lease
liability.
The group has no lease contracts with variable payments nor residual value guarantees. The group did not commit to any lease that has
not yet commenced. The group has no contracts which include contingent rental payments nor include any escalation clauses or
restrictions that are significant regarding the use of the asset in question.
In 2021, an optical fibre lease contract coming to maturity was prolonged and a purchase option for a value of €22.0 million was added.
The purchase option came to maturity end of February 2022. It is very likely that the group will exercise the option, as a result the
purchase price has been added to the right of use asset and lease liability.
Amounts recognised in profit and loss
The following amounts were recognised in profit and loss for the financial year:
(in € million)
2021
2020
Depreciation expense of right-of-use assets
14.7
15.2
Interest on lease liabilities
1.8
1.8
Expenses relating to short-term leases
0.7
0.0
Expenses relating to low-value assets
0.5
0.2
Total recognised in profit and loss
17.8
17.2
A total of €17.8 million in lease expenses was recognised in the statement of profit or loss in 2021. There were no variable lease
payments included in the measurement of lease liabilities.
The total cash outflow for leases amounted to €15.4 million in 2021 (€15.2 million in 2020). This amount is included in the “Repayment
of borrowings” of the cash flow statement.
THE GROUP AS A LESSOR
The group leases out optical fibres, land and buildings presented as part of ‘Property, plant and equipment’. Leasing is only an ancillary
business. Rental income is presented under ‘Other income’.
Contracts that do not relate to separately identifiable assets or under which the customer cannot directly the use of the asset or does not
obtain substantially all the economic benefits associated with the use of the asset do not constitute a lease. The new lease definition led
to the exclusion of some telecommunication equipment
The group has classified these leases as operating leases as they do not substantially transfer all the risks and rewards incidental to the
ownership of the assets.
The following table sets out a maturity analysis of lease payments, showing the undiscounted lease payments to be received after the
reporting date and considering the best estimate of the contractual term:
(in € million) 2021 2020
Within 1 year
12.9
14.6
1 to 2 years
12.2
0.9
2 to 3 years
12.1
0.7
3 to 4 years
12.0
0.6
4 to 5 years
11.9
0.6
More than 5 years
308.6
6.8
Total
369.8
24.2
The COVID-19 pandemic did not affect the contractual clauses of Elia Group’s contracts as a lessor and there were no indicators to
change the cash flows as mentioned here above.
The group recognised €15.0 million in rental income in 2021 (2020: €16.0 million).
126
6.19. Accruals and deferred income
(in € million) 2021 2020
Accruals and deferred income
11.4
29.1
Deferral account from settlement mechanism Belgian regulatory framework
353.5
474.0
Deferral account from settlement mechanism German regulatory framework
444.9
503.2
Total
809.8
1,006.3
The movements in deferral account from settlement mechanism are as follows:
(in € million)
Regulatory
claims
Regulatory
obligations
Total
Balance at 1 January 2021
51.3
(1,028.5)
(977.3)
Increase
64.0
(148.0)
(84.0)
Reversals
(22.3)
201.5
179.1
Utilisation
0.0
81.5
81.5
Other (e.g. discounting)
0.0
2.3
2.3
Balance at 31 December 2021
92.9
(891.3)
(798.4)
In the Elia Transmission segment, the deferral account from settlement mechanism (€353.5 million) decreased compared with year
end 2020 (€474.0 million). The decrease in deferral account from settlement mechanism encompasses the settlement of net surpluses
from the prior tariff period (-€81.5 million), the review of the regulator on previous year’ settlement mechanism (+€4.1 million) and
deviations in the current year from the budget approved by the regulator (-€43.1 million). Any operating excess, in relation to the budget
of the costs and revenues authorised by the regulator, needs to be returned to the consumers and therefore does not form part of the
revenues.
In 2021, there was an operational deficit (€ 50.5 million), which is offset against the outstanding regulatory obligation. The operating
deficit compared to the budget is primarily a result of the higher regulated net profit (€22.1 million) and higher net operating costs
against a background of a significant increase in energy prices during the second half of 2021 (net impact of €84.9 million). This was
partly offset by increased cross-border revenues (€32.4 million) and higher tariff sales (€18.4 million).
In the 50Hertz Transmission segment, the deferral accounts from settlement mechanism (€444.9 million) is the nominal amount of
€447.1 million (€498.2 million as of 31 December 2021) less an interest effect of €2.2 million. The net position decreased compared to
year end 2020 (€503.2 million). This is mainly due to significant reversals of prior years regulatory positions (€61.3 million) partly offset
by additional net liabilities (€9.7 million).
The release of the deferral account is determined in the tariff setting process. The amounts on the deferral account are recognised on a
yearly basis and the release depends on the source of the deferral, some are released in T+1, whilst others are released in T+2 and
some are released after a longer period of time.
The future release of deferral account from settlement mechanism to the future tariffs is set out in the table below (situation at 31
December 2021):
(in € million)
Belgian regulatory
framework
German regulatory
framework
To be refunded to the tariffs in the current regulatory period
282.4
252.1
To be refunded to the tariffs in the next regulatory period (or after)
63.9
192.8
Other regulatory transfer
7.3
Total regulatory deferral account
353.5
444.9
*Belgium: from 2020 to 2023 ;Germany: from 2019 to 2023
The other regulatory transfer relates to a revenue from incentive regulation which is subject to uncertainty in the particular context of
strong increase of energy prices and for which the calculation method should be further assessed with the Belgian regulator.
Elia Group Financial Report 2021 127
6.19. Accruals and deferred income
(in € million)
2021
2020
Accruals and deferred income
11.4
29.1
Deferral account from settlement mechanism Belgian regulatory framework
353.5
474.0
Deferral account from settlement mechanism German regulatory framework
444.9
503.2
Total
809.8
1,006.3
The movements in deferral account from settlement mechanism are as follows:
(in € million)
Regulatory
claims
Regulatory
obligations
Total
Balance at 1 January 2021
51.3
(1,028.5)
(977.3)
Increase
64.0
(148.0)
(84.0)
Reversals
(22.3)
201.5
179.1
Utilisation
0.0
81.5
81.5
Other (e.g. discounting)
0.0
2.3
2.3
Balance at 31 December 2021
92.9
(891.3)
(798.4)
In the Elia Transmission segment, the deferral account from settlement mechanism (€353.5 million) decreased compared with year
end 2020 (€474.0 million). The decrease in deferral account from settlement mechanism encompasses the settlement of net surpluses
from the prior tariff period (-€81.5 million), the review of the regulator on previous year’ settlement mechanism (+€4.1 million) and
deviations in the current year from the budget approved by the regulator (-€43.1 million). Any operating excess, in relation to the budget
of the costs and revenues authorised by the regulator, needs to be returned to the consumers and therefore does not form part of the
revenues.
In 2021, there was an operational deficit (€ 50.5 million), which is offset against the outstanding regulatory obligation. The operating
deficit compared to the budget is primarily a result of the higher regulated net profit (€22.1 million) and higher net operating costs
against a background of a significant increase in energy prices during the second half of 2021 (net impact of €84.9 million). This was
partly offset by increased cross-border revenues (€32.4 million) and higher tariff sales (€18.4 million).
In the 50Hertz Transmission segment, the deferral accounts from settlement mechanism (€444.9 million) is the nominal amount of
€447.1 million (€498.2 million as of 31 December 2021) less an interest effect of €2.2 million. The net position decreased compared to
year end 2020 (€503.2 million). This is mainly due to significant reversals of prior years regulatory positions (€61.3 million) partly offset
by additional net liabilities (€9.7 million).
The release of the deferral account is determined in the tariff setting process. The amounts on the deferral account are recognised on a
yearly basis and the release depends on the source of the deferral, some are released in T+1, whilst others are released in T+2 and
some are released after a longer period of time.
The future release of deferral account from settlement mechanism to the future tariffs is set out in the table below (situation at 31
December 2021):
(in € million)
Belgian regulatory
framework
German regulatory
framework
To be refunded to the tariffs in the current regulatory period
282.4
252.1
To be refunded to the tariffs in the next regulatory period (or after)
63.9
192.8
Other regulatory transfer
7.3
Total regulatory deferral account
353.5
444.9
*Belgium: from 2020 to 2023 ;Germany: from 2019 to 2023
The other regulatory transfer relates to a revenue from incentive regulation which is subject to uncertainty in the particular context of
strong increase of energy prices and for which the calculation method should be further assessed with the Belgian regulator.
7. Group structure
OVERVIEW OF GROUP STRUCTURE
SUBSIDIARIES
Elia Group SA/NV has direct and indirect control of the subsidiaries listed below.
Re.Alto-Energy BV/SRL set up a second office in Düsseldorf in 2020 (Re.Alto-Energy GmbH) in order to be closer to the German
market. It is a direct subsidiary of Re.Alto-Energy BV/SRL and has developped a platform which enables users to exchange energy data
and services.
The stake in Ampacimon, which offers grid-monitoring solutions, was sold in August 2020. The stake in Enervalis NV, a start-up that
develops innovative software for the smart control of energy sources, was sold in April 2021.
Elia Grid International LLC (Qatar) ceased operations in October 2020. Elia Grid International SA/NV set up an office in Riyadh (Elia
Grid International LLC Saudi Arabia) in 2021, to coordinate the activities of Elia Grid International in the Middle-East.
128
All the entities keep their accounts in euros and have the same reporting date as Elia Group SA/NV.
Name
Country of
establishment
Headquarters Stake %
2021 2020
Subsidiaries
Elia Transmission Belgium
SA/NV
Belgium
Bd de l’Empereur 20, 1000 Brussels
99.99
99.99
Elia Asset SA/NV
Belgium
Bd de l’Empereur 20, 1000 Brussels
99.99
99.99
Elia Engineering SA/NV
Belgium
Bd de l’Empereur 20, 1000 Brussels
100.00
100.00
Elia Re SA
Luxembourg
Rue de Merl 65, 2146 Luxembourg
100.00
100.00
Elia Grid International SA/NV
Belgium
Bd de l’Empereur 20, 1000 Bussels
90.00
90.00
Elia Grid International GmBH
Germany
Heidestraße 2, 10557 Berlin
90.00
90.00
Elia Grid International LLC
Saudi Arabia
Al Akaria Plaza Olaya Street,
Al Olaya Riyadh 11622
90.00
-
Elia Grid International Pte. Ltd.
Singapore
20 Collyer Quay #09-01, Singapore 049319
90.00
90.00
Eurogrid International SA/NV
Belgium
Bd de l’Empereur 20, 1000 Brussels
100.00
100.00
Eurogrid GmbH
Germany
Heidestraße 2, 10557 Berlin
80.00
80.00
50Hertz Transmission GmbH
Germany
Heidestraße 2, 10557 Berlin
80.00
80.00
50Hertz Offshore GmbH
Germany
Heidestraße 2, 10557 Berlin
80.00
80.00
Re.Alto-Energy BV/SRL
Belgium
Bd de l’Empereur 20, 1000 Brussels
100.00
100.00
Re.Alto-Energy GmbH
Germany
Ratingstraße 9, 40213 Dusseldorf
100.00
100.00
Investments accounted for using the equity-method – Joint Ventures
Nemo Link Ltd.
United Kingdom
Strand 1-3, London WC2N 5EH
50.00
50.00
Investments accounted for using the equity-method – Associates
H.G.R.T S.A.S.
France
1 Terrasse Bellini, 92919 La Défense Cedex
17.00
17.00
Coreso SA/NV
Belgium
Avenue de Cortenbergh 71, 1000 Brussels
22.16
22.16
Enervalis NV
Belgium
Centrum-Zuid 1111, 3530 Houthalen-Helchteren
-
16.52
Investments accounted for using IFRS9 - other shareholdings
JAO SA
Luxembourg
2, Rue de Bitbourg, 1273 Luxembourg Hamm
7.20
7.20
European Energy Exchange
(EEX)
Germany
Augustusplatz 9, 0409 Leipzig
4.32
4.32
TSCNET Services GmbH
Germany
Dingolfinger Strasse 3, 81673 Munich
5.36
5.36
Kurt-Sanderling-Akademie des
Konzerthausorchester Berlin
Germany
Gendarmenmarkt, 10117 Berlin
8.32
8.32
Elia Group Financial Report 2021 129
All the entities keep their accounts in euros and have the same reporting date as Elia Group SA/NV.
Name
Country of
establishment
Headquarters
Stake %
2021
2020
Subsidiaries
Elia Transmission Belgium
SA/NV
Belgium
Bd de l’Empereur 20, 1000 Brussels
99.99
99.99
Elia Asset SA/NV
Belgium
Bd de l’Empereur 20, 1000 Brussels
99.99
99.99
Elia Engineering SA/NV
Belgium
Bd de l’Empereur 20, 1000 Brussels
100.00
100.00
Elia Re SA
Luxembourg
Rue de Merl 65, 2146 Luxembourg
100.00
100.00
Elia Grid International SA/NV
Belgium
Bd de l’Empereur 20, 1000 Bussels
90.00
90.00
Elia Grid International GmBH
Germany
Heidestraße 2, 10557 Berlin
90.00
90.00
Elia Grid International LLC
Saudi Arabia
Al Akaria Plaza Olaya Street,
Al Olaya Riyadh 11622
90.00
-
Elia Grid International Pte. Ltd.
Singapore
20 Collyer Quay #09-01, Singapore 049319
90.00
90.00
Eurogrid International SA/NV
Belgium
Bd de l’Empereur 20, 1000 Brussels
100.00
100.00
Eurogrid GmbH
Germany
Heidestraße 2, 10557 Berlin
80.00
80.00
50Hertz Transmission GmbH
Germany
Heidestraße 2, 10557 Berlin
80.00
80.00
50Hertz Offshore GmbH
Germany
Heidestraße 2, 10557 Berlin
80.00
80.00
Re.Alto-Energy BV/SRL
Belgium
Bd de l’Empereur 20, 1000 Brussels
100.00
100.00
Re.Alto-Energy GmbH
Germany
Ratingstraße 9, 40213 Dusseldorf
100.00
100.00
Investments accounted for using the equity-method – Joint Ventures
Nemo Link Ltd.
United Kingdom
Strand 1-3, London WC2N 5EH
50.00
50.00
Investments accounted for using the equity-method – Associates
H.G.R.T S.A.S.
France
1 Terrasse Bellini, 92919 La Défense Cedex
17.00
17.00
Coreso SA/NV
Belgium
Avenue de Cortenbergh 71, 1000 Brussels
22.16
22.16
Enervalis NV
Belgium
Centrum-Zuid 1111, 3530 Houthalen-Helchteren
-
16.52
Investments accounted for using IFRS9 - other shareholdings
JAO SA
Luxembourg
2, Rue de Bitbourg, 1273 Luxembourg Hamm
7.20
7.20
European Energy Exchange
(EEX)
Germany
Augustusplatz 9, 0409 Leipzig
4.32
4.32
TSCNET Services GmbH
Germany
Dingolfinger Strasse 3, 81673 Munich
5.36
5.36
Kurt-Sanderling-Akademie des
Konzerthausorchester Berlin
Germany
Gendarmenmarkt, 10117 Berlin
8.32
8.32
8. Other notes
8.1. Financial risk and derivative management
PRINCIPLES OF FINANCIAL RISK MANAGEMENT
The Group aims to identify each risk and set out strategies to control the economic impact on the Group's results.
The Risk Management Department defines the risk management strategy, monitors risk analyses and reports to management and the
Audit Committee. The financial risk policy is implemented by determining appropriate policies and setting up effective control and
reporting procedures. Selected derivative hedging instruments are used depending on the assessment of the risk involved. Derivatives
are used exclusively as hedging instruments. The regulatory framework in which the Group operates significantly restricts their effects
on profit or loss (see the section 'Regulatory framework and tariffs'). The major impact of increased interest rates, credit risk, etc. can be
settled in the tariffs, in accordance with the applicable legislation.
MARKET RISK
The market risk takes into account negative effects on the financial position and cash flows of the group arising as a result of price
changes on the market which cannot be avoided otherwise. The activities of the group extend to the electricity market – in particular as
part of selling the electricity generated from renewable energies as well as procurement of energy to cover grid energy losses – as well
as to the market for short-term deposits. In Germany, the group counteracts the procurement price risk for grid loss energy by hedging
prices at an early stage using futures contracts on the EEX electricity exchange
Foreign currency risk
The group is not exposed to any significant currency risk, either from transactions or from exchanging foreign currencies into euro, since
it has no material foreign investments or activities and less than 1% of its costs are expressed in currencies other than euro.
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market
interest rates. The Group's exposure to the risk of changes in market interest rates relates primarily to its long-term debt obligations with
floating interest rates. As at 31 December 2021, no interest-rate swaps were outstanding. The interest rate swaps on the other loan and
the loan with Publi-Part to cover a nominal debt amount of €300 million were settled in June 2020, together with the repayment of the
loans.
See Note 6.12 for a summary of the outstanding loans with their respective interest rates.
CREDIT RISK
Credit risk encompasses all forms of counterparty exposure, i.e. where counterparties may default on their obligations to the group in
relation to lending, hedging, settlement and other financial activities. The group is exposed to credit risk from its operating activities and
treasury activities. With regards to its operating activities, the group has a credit policy in place, which takes into account customer’s risk
profiles. The exposure to credit risk is monitored on an ongoing basis, resulting in a request to issue bank guaranties from the
counterparty for some major contracts.
At the end of the reporting period there were no significant concentrations of credit risks. The maximum credit risk is the carrying
amount for each financial asset, including derivative financial instruments.
(in € million) Note 2021 2020
Immediately claimable deposits
7.0
7.0
Reimbursement rights
46.2
53.8
Other shareholdings
43.8
43.8
Derivatives (Current and Non-current)
355.6
0.0
Other financial assets (Current and Non-current)
(6.5)
452.5
104.5
Non-current trade and other receivables
0.5
0.5
Trade and other receivables
(6.8)
861.3
1,475.4
Current tax assets
(6.9)
10.1
3.4
Cash and cash equivalents
(6.10)
3,049.5
590.1
Deferred charges
(6.8)
18.1
13.7
Total
4,392.0
2,187.6
130
The movement in the allowance for expected credit losses with respect to trade receivables during the year was as outlined in the table
below:
(in € million)
Bad debtors Impairment losses Remaining balance
Balance at 1 January 2020
199.6
(199.1)
0.5
Changes during the year
1.9
(1.9)
0.0
Balance at 31 December 2020
201.5
(201.0)
0.5
Balance at 1 January 2021
201.5
(201.0)
0.4
Changes during the year
(0.1)
0.2
0.1
Balance at 31 December 2021
201.4
(200.8)
0.5
Almost all bad debtors are related to outstanding receivables linked to the regulatory levies in Germany. If a debtor bankrupt, 50Hertz
Transmission is compensated by the regulator for the loss incurred.
The group believes that the unimpaired amounts overdue by more than 30 days are still collectible, based on historical payment
behaviour and extensive analysis of customer credit risk, including customers' underlying credit ratings, when available. The credit
quality of trade and other receivables is assessed based on a credit policy.
IFRS 9 requires the group to impair financial assets based on a forward-looking expected credit loss (ECL) approach.
The group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance
for all trade receivables.
An impairment analysis is performed at each reporting date using a provision matrix to measure expected credit losses. The provision
rates are based on days past due for all customers. No segmentation of customers is performed as all customers show similar loss
patterns. Intercompany trade receivables are excluded as there is no credit risk. In addition, trade receivables connected with a pending
commercial dispute are excluded to avoid double provisioning (provision for risks and charges).
The provision rates are based on the payment profiles of sales over a period of 36 months before 31 December 2020 or 31 December
2021 and the corresponding historical credit losses experienced within this period. As the sales and payment profile of the Group’s
customers has remained very stable over the years, the group considers historical credit losses to be a good proxy for future (expected)
credit losses. Moreover, Elia Group did not see any changes in payment behaviour, nor an increase in bad debtors as a consequence of
the COVID-19 crisis in 2020 nor in 2021 and does not expect any major impact related to the pandemic to arise in the coming years.
Subsequently, a loss given default is calculated as the percentage of the amount of trade receivables that is not covered by a bank
guarantee. The total outstanding amount of trade receivables covered by a bank guarantee totals €97.1 million. The loss given default is
multiplied by the outstanding trade receivables.
On that basis, the loss allowance at 31 December 2020 and 2021 for trade receivables was determined as outlined in the table below:
Balance at 31
December 2020
Not past
due
Past due 0-
30 days
Past due
31-60 days
Past due 61
days - one year
Past due
one year -
two years
Past due
more than
two years
Total
Expected loss rate (%)
0.0%
0.3%
2.7%
14.0%
73.7%
91.4%
Carrying amount - trade
receivables
409.1
22.3
0.3
2.8
1.2
0.8
436.6
Loss given default
86.5%
86.5%
86.5%
86.5%
86.5%
86.5%
Loss allowance
0.1
0.1
0.0
0.3
0.8
0.6
1.9
Balance at 31
December 2021
Not past
due
Past due 0-
30 days
Past due
31-60 days
Past due 61
days - one year
Past due
one year -
two years
Past due
more than
two years
Total
Expected loss rate (%)
0.0%
0.3%
5.9%
12.3%
90.1%
32.6%
Carrying amount - trade
receivables
690.3
15.7
0.7
9.3
0.8
1.3
718.1
Loss given default
86.6%
86.6%
86.6%
86.6%
86.6%
86.6%
Loss allowance
0.1
0.0
0.0
1.0
0.6
0.4
2.2
This simplified approach is deemed relevant, especially since the group operates in a regulated and quite predictable business, with a
limited number of clients and few changes in the client portfolio. This is supported by a good track records as the group did not incur
significant write-offs over the past 3 years. Furthermore, any losses would be recoverable through the tariffs.
The model is applied to the trade receivables, all other financial assets being not assessed at risk of impairment considering their nature
(regulatory assets, amounts recoverable through future tariffs in compliance with the regulatory frameworks), risk profile (reliable
counterparty being for the levies the Belgian/German state) or measurement method (at fair value). More details are provided in the
different notes.
Elia Group Financial Report 2021 131
The movement in the allowance for expected credit losses with respect to trade receivables during the year was as outlined in the table
below:
(in € million)
Bad debtors
Impairment losses
Remaining balance
Balance at 1 January 2020
199.6
(199.1)
0.5
Changes during the year
1.9
(1.9)
0.0
Balance at 31 December 2020
201.5
(201.0)
0.5
Balance at 1 January 2021
201.5
(201.0)
0.4
Changes during the year
(0.1)
0.2
0.1
Balance at 31 December 2021
201.4
(200.8)
0.5
Almost all bad debtors are related to outstanding receivables linked to the regulatory levies in Germany. If a debtor bankrupt, 50Hertz
Transmission is compensated by the regulator for the loss incurred.
The group believes that the unimpaired amounts overdue by more than 30 days are still collectible, based on historical payment
behaviour and extensive analysis of customer credit risk, including customers' underlying credit ratings, when available. The credit
quality of trade and other receivables is assessed based on a credit policy.
IFRS 9 requires the group to impair financial assets based on a forward-looking expected credit loss (ECL) approach.
The group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance
for all trade receivables.
An impairment analysis is performed at each reporting date using a provision matrix to measure expected credit losses. The provision
rates are based on days past due for all customers. No segmentation of customers is performed as all customers show similar loss
patterns. Intercompany trade receivables are excluded as there is no credit risk. In addition, trade receivables connected with a pending
commercial dispute are excluded to avoid double provisioning (provision for risks and charges).
The provision rates are based on the payment profiles of sales over a period of 36 months before 31 December 2020 or 31 December
2021 and the corresponding historical credit losses experienced within this period. As the sales and payment profile of the Group’s
customers has remained very stable over the years, the group considers historical credit losses to be a good proxy for future (expected)
credit losses. Moreover, Elia Group did not see any changes in payment behaviour, nor an increase in bad debtors as a consequence of
the COVID-19 crisis in 2020 nor in 2021 and does not expect any major impact related to the pandemic to arise in the coming years.
Subsequently, a loss given default is calculated as the percentage of the amount of trade receivables that is not covered by a bank
guarantee. The total outstanding amount of trade receivables covered by a bank guarantee totals €97.1 million. The loss given default is
multiplied by the outstanding trade receivables.
On that basis, the loss allowance at 31 December 2020 and 2021 for trade receivables was determined as outlined in the table below:
Balance at 31
December 2020
Not past
due
Past due 0-
30 days
Past due
31-60 days
Past due 61
days - one year
Past due
one year -
two years
Past due
more than
two years
Total
Expected loss rate (%)
0.0%
0.3%
2.7%
14.0%
73.7%
91.4%
Carrying amount - trade
receivables
409.1
22.3
0.3
2.8
1.2
0.8
436.6
Loss given default
86.5%
86.5%
86.5%
86.5%
86.5%
86.5%
Loss allowance
0.1
0.1
0.0
0.3
0.8
0.6
1.9
Balance at 31
December 2021
Not past
due
Past due 0-
30 days
Past due
31-60 days
Past due 61
days - one year
Past due
one year -
two years
Past due
more than
two years
Total
Expected loss rate (%)
0.0%
0.3%
5.9%
12.3%
90.1%
32.6%
Carrying amount - trade
receivables
690.3
15.7
0.7
9.3
0.8
1.3
718.1
Loss given default
86.6%
86.6%
86.6%
86.6%
86.6%
86.6%
Loss allowance
0.1
0.0
0.0
1.0
0.6
0.4
2.2
This simplified approach is deemed relevant, especially since the group operates in a regulated and quite predictable business, with a
limited number of clients and few changes in the client portfolio. This is supported by a good track records as the group did not incur
significant write-offs over the past 3 years. Furthermore, any losses would be recoverable through the tariffs.
The model is applied to the trade receivables, all other financial assets being not assessed at risk of impairment considering their nature
(regulatory assets, amounts recoverable through future tariffs in compliance with the regulatory frameworks), risk profile (reliable
counterparty being for the levies the Belgian/German state) or measurement method (at fair value). More details are provided in the
different notes.
LIQUIDITY RISK
Liquidity risk is the risk that the group may be unable to meet its financial obligations. The group limits this risk by constantly monitoring
cash flows and ensuring that there are always sufficient credit-line facilities available.
The group’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank loans, confirmed and
unconfirmed credit facilities, commercial paper programmes, etc. For medium- to long-term funding, the group uses bonds. The maturity
profile of the debt portfolio is spread over several years. The Group Treasury frequently assesses its funding resources taking into
account its own credit rating and general market conditions.
Bond issuances realised in 2020 and loan contracts signed with EIB and other banks in 2020 prove that the group has access to
different sources of funding.
(in € million)
Face
value
Closing
balance
Expected
cash
outflows
6 months
6-12
months
1-2 years 2-5 years > 5 years
Non-derivative financial liabilities
9,016.4
8,980.0
(9,885.3)
(1,826.6)
(25.4)
(143.2)
(2,242.4)
(5,647.7)
Unsecured bond issues
6,790.0
6,753.6
(7,689.8)
(99.0)
(23.6)
(123.5)
(2,084.3)
(5,359.3)
Unsecured financial bank loans and
interest accruals
1,217.4
1,217.4
(1,186.5)
(718.5)
(1.8)
(19.8)
(158.1)
(288.4)
Trade and other payables
1,009.0
1,009.0
(1,009.0)
(1,009.0)
0.0
0.0
0.0
0.0
Total at 31 December 2020
9,016.4
8,980.0
(9,885.3)
(1,826.6)
(25.4)
(143.2)
(2,242.4)
(5,647.7)
(in € million)
Face
value
Closing
balance
Expected
cash
outflows
6 months
6-12
months
1-2 years 2-5 years > 5 years
Non-derivative financial liabilities
11,546.5
11,513.3
(12,352.6)
(3,878.3)
(25.6)
(897.5)
(2,128.6)
(5,422.6)
Unsecured bond issues
7,281.7
7,248.5
(8,124.1)
(103.6)
(23.6)
(877.1)
(1,820.6)
(5,299.2)
Unsecured financial bank loans and
interest accruals
568.4
568.4
(532.1)
(78.4)
(2.0)
(20.4)
(308.0)
(123.4)
Trade and other payables
3,696.4
3,696.4
(3,696.4)
(3,696.4)
0.0
0.0
0.0
0.0
Total at 31 December 2021
11,546.5
11,513.3
(12,352.6)
(3,878.3)
(25.6)
(897.5)
(2,128.6)
(5,422.6)
Details of the used and unused back-up credit facilities are set out below:
(in € million) Maturity Available amount Average basic interest Amount used Amount not used
Sustainable Revolving Credit Facility
10/12/2023
650.0
Euribor + 0.325%
0.0
650.0
Confirmed credit line
2/26/2025
750.0
Euribor + 0,275%
0.0
750.0
Confirmed credit line
12/14/2026
150.0
Euribor + 0,275%
150.0
0.0
Straight Loan EGI
unlimited
2.5
Euribor + 0.75%
0.0
2.5
Confirmed credit line
unlimited
35.0
Eurribor + 0.2%
0.0
35.0
Confirmed credit line
unlimited
150.0
av. 1M-Euribor +0.275%
0.0
150.0
Total
1,737.5
150.0
1,587.5
In 2020, the group incurred increased current outstanding receivables related to levies (see Note 6.9) which were financed using the
back-up facilities mentioned here above. Despite the COVID-19 pandemic, the group managed to set up a sustainable credit facility for
€ 650 million for 3 years, with the potential to renew this for one additional year twice and further strengthened its liquidity position by
contracting three RCFs, one €400 million facility and two other facilities of €150 million each to finance its EEG deficit. The EEG cash
position as of December was in deficit at -€806.2 million.
The EEG deficit was settled in January 2021 with the payment of a federal grant allowing the pay-back of all external facilities. Two
additional grant payments are planned in May and October 2021. Generally, any deficits from the EEG mechanism are temporary and
are settled with the surcharge revenues of the following year as are the corresponding costs.
The high volume of futures contracts contracted by 50Hertz Transmission (Germany) also has an impact on the Group's liquidity
management. The daily cash settlement of futures contracts with the exchange can have short-term effects on liquidity, which largely
follow the general price trend on the electricity market.
132
HEDGING ACTIVITIES AND DERIVATIVES
The group is exposed to certain risks relating to its ongoing business operations. The primary risk managed using derivative instruments
is interest rate risk.
All financial derivatives entered into by the Group relate to an underlying transaction or forecast exposure, depending on the expected
impact on the statement of profit or loss, and if the IFRS 9 criteria are met, the group decides on a case-by-case basis whether hedge
accounting will be applied.
Derivatives not designated as hedging instruments
The group had no derivatives which were not designated as hedging instruments.
Derivatives designated as hedging instruments
In 2018, the group hedged the interest rate risk linked to the acquisition of a 20% stake in 50Hertz Transmission (Germany) for which a
bridge loan was initially put in place. To cover the potential exposure to interest rate risk, the group entered into a pre-hedge interest
rate swap agreement in June 2018 to lock in market interest rates at the moment of the issuance of the € 300 million senior bond. The
group applied hedge accounting as the derivative transaction met the requirements under IFRS 9. Upon the settlement of the
transaction in September 2018, the portion of the gain or loss on the derivative was recognised within hedging reserves and had an
impact of €5.7million.
These hedging reserves are recycled into profit and loss over the lifetime of the underlying hedged instrument, i.e. the senior bond with
10-year maturity. In 2021, an amount of €0.6 million was recycled into profit and loss.
Three interest rate swaps for a total nominal value of €300 million were concluded for the loan with Publi-Part (€42.1 million) and for
loans with third parties (‘Other loans’, €453.6 million) to hedge the Euribor interest rate risk on these loans. All three interest rate swaps
are designated as cash flow hedges under IFRS 9. These interest rate swaps were unwinded at the end of June 2020 with the
repayment of both loans. With the settlement, an interest expense on derivatives of €4.4 million was incurred.
The group recognises derivatives to hedge the price for the future procurement of the physical requirement for grid losses that is
expected in subsequent periods and is covered in each case by short-term procurement transactions on the spot market. These
derivatives are measured at fair value in OCI with no effect on profit or loss as part of cash flow hedge accounting; they serve as price
hedging of the physical demand for electrical energy to cover grid losses (underlying transaction). Due to the availability and liquidity of
futures trading, the hedging period for intended price hedging covers a period of up to two years from the balance sheet date. In this
context, the Group pursues a conservative hedging strategy oriented towards the regulatory framework and the ability to roll over the
electricity procurement costs incurred, which enables timely and predictable price hedging.
The critical term match method measures effectiveness. If the valuation-relevant parameters of the hedged item and hedging instrument
match, it is assumed that an effective hedging relationship exists and that changes in value from both items offset each other. The group
strives for full price hedging of the expected volume of grid loss energy (hedge ratio 1:1).
CAPITAL RISK MANAGEMENT
The purpose of the group's capital-structure management is to ensure that the debt and equity ratios related to the regulated activities
are as closely aligned as possible with the recommended level set by the relevant regulatory frameworks.
The Company's dividend guidelines involve optimising dividend payments while bearing in mind that self-financing capacity is needed to
carry out its legal mission as transmission system operator, finance future CAPEX projects and, more generally, implement the group’s
strategy.
The Company offers its employees the opportunity to subscribe to capital increases that are exclusively reserved for them.
SUSTAINABILITY
Sustainability lies at the heart of Elia strategy with the ActNow program, which sets out the long-term sustainability objectives of the
group. These are guided by the UN Sustainable Development Goals (SDGs) and have been translated into KPIs which are reported to
the market and grouped under the following five dimensions: Climate Action; Environment and Circular Economy; Health and Safety;
Diversity, Equity and Inclusion; and Governance, Ethics and Compliance.
Furthermore, as a driver of the energy transition, Elia Group is committed to ensuring that its activities are strongly aligned with the EU
Taxonomy, a classification system for sustainable economic activities. Elia Group therefore published in 2021 a white paper which
outlines the company’s eligibility and alignment with the EU Taxonomy. The paper includes the methodology used for the assessment,
highlights the group’s implementation of sustainable tools and practices, and reinforces its commitment to operating its businesses in a
sustainable way.
We refer to our Integrated Report, the Elia Group EU Taxonomy Case Study issued on 24 November 2021 and our Sustainability Report
for further information.
Elia Group Financial Report 2021 133
HEDGING ACTIVITIES AND DERIVATIVES
The group is exposed to certain risks relating to its ongoing business operations. The primary risk managed using derivative instruments
is interest rate risk.
All financial derivatives entered into by the Group relate to an underlying transaction or forecast exposure, depending on the expected
impact on the statement of profit or loss, and if the IFRS 9 criteria are met, the group decides on a case-by-case basis whether hedge
accounting will be applied.
Derivatives not designated as hedging instruments
The group had no derivatives which were not designated as hedging instruments.
Derivatives designated as hedging instruments
In 2018, the group hedged the interest rate risk linked to the acquisition of a 20% stake in 50Hertz Transmission (Germany) for which a
bridge loan was initially put in place. To cover the potential exposure to interest rate risk, the group entered into a pre-hedge interest
rate swap agreement in June 2018 to lock in market interest rates at the moment of the issuance of the € 300 million senior bond. The
group applied hedge accounting as the derivative transaction met the requirements under IFRS 9. Upon the settlement of the
transaction in September 2018, the portion of the gain or loss on the derivative was recognised within hedging reserves and had an
impact of €5.7million.
These hedging reserves are recycled into profit and loss over the lifetime of the underlying hedged instrument, i.e. the senior bond with
10-year maturity. In 2021, an amount of €0.6 million was recycled into profit and loss.
Three interest rate swaps for a total nominal value of €300 million were concluded for the loan with Publi-Part (€42.1 million) and for
loans with third parties (‘Other loans’, €453.6 million) to hedge the Euribor interest rate risk on these loans. All three interest rate swaps
are designated as cash flow hedges under IFRS 9. These interest rate swaps were unwinded at the end of June 2020 with the
repayment of both loans. With the settlement, an interest expense on derivatives of €4.4 million was incurred.
The group recognises derivatives to hedge the price for the future procurement of the physical requirement for grid losses that is
expected in subsequent periods and is covered in each case by short-term procurement transactions on the spot market. These
derivatives are measured at fair value in OCI with no effect on profit or loss as part of cash flow hedge accounting; they serve as price
hedging of the physical demand for electrical energy to cover grid losses (underlying transaction). Due to the availability and liquidity of
futures trading, the hedging period for intended price hedging covers a period of up to two years from the balance sheet date. In this
context, the Group pursues a conservative hedging strategy oriented towards the regulatory framework and the ability to roll over the
electricity procurement costs incurred, which enables timely and predictable price hedging.
The critical term match method measures effectiveness. If the valuation-relevant parameters of the hedged item and hedging instrument
match, it is assumed that an effective hedging relationship exists and that changes in value from both items offset each other. The group
strives for full price hedging of the expected volume of grid loss energy (hedge ratio 1:1).
CAPITAL RISK MANAGEMENT
The purpose of the group's capital-structure management is to ensure that the debt and equity ratios related to the regulated activities
are as closely aligned as possible with the recommended level set by the relevant regulatory frameworks.
The Company's dividend guidelines involve optimising dividend payments while bearing in mind that self-financing capacity is needed to
carry out its legal mission as transmission system operator, finance future CAPEX projects and, more generally, implement the group’s
strategy.
The Company offers its employees the opportunity to subscribe to capital increases that are exclusively reserved for them.
SUSTAINABILITY
Sustainability lies at the heart of Elia strategy with the ActNow program, which sets out the long-term sustainability objectives of the
group. These are guided by the UN Sustainable Development Goals (SDGs) and have been translated into KPIs which are reported to
the market and grouped under the following five dimensions: Climate Action; Environment and Circular Economy; Health and Safety;
Diversity, Equity and Inclusion; and Governance, Ethics and Compliance.
Furthermore, as a driver of the energy transition, Elia Group is committed to ensuring that its activities are strongly aligned with the EU
Taxonomy, a classification system for sustainable economic activities. Elia Group therefore published in 2021 a white paper which
outlines the company’s eligibility and alignment with the EU Taxonomy. The paper includes the methodology used for the assessment,
highlights the group’s implementation of sustainable tools and practices, and reinforces its commitment to operating its businesses in a
sustainable way.
We refer to our Integrated Report, the Elia Group EU Taxonomy Case Study issued on 24 November 2021 and our Sustainability Report
for further information.
8.2. Commitments and contingencies
CAPITAL-EXPENDITURE COMMITMENT
As at 31 December 2021, the group had a commitment of €2,068.4 million (€1,987.5 million in 2020) relating to purchase contracts for
the installation of property, plant and equipment for further grid extensions.
OTHER CONTINGENCIES AND COMMITMENTS
As at 31 December 2021, the group had a commitment of €263.5 million (€217.4 million in 2020) relating to purchase contracts for
general expenses, maintenance and repair costs.
Having received approval from the Walloon government and from the CREG, on 22 June 2015 Elia entered into an agreement with
Solar Chest for the sale of Walloon green certificates with a total value of €275 million. Solar Chest's mission is to buy, hold and sell
Walloon green certificates for periods of five, six and seven years. In accordance with legislation, Solar Chest conducted several
auctions.
At the end of each period (30 June 2020, 30 June 2021 and 30 June 2022 respectively), any unsold certificates will be bought back by
Elia. Due to these auctions, Elia did not have to buy back any certificates at the end of June 2020, nor end of June 2021. At reporting
date, the outstanding balance is +/- 1.4 million of green certificates coming to maturity June 2022 (+/- € 91.8 million). Solar chest
announced a new auction in February 2022. CREG confirmed and guaranteed to Elia that at the end of each reservation period, the
cost of and any expense incurred by repurchasing non-marketable certificates may be recovered fully through the tariffs for levies, and
as a consequence the potential repurchase by Elia will have no impact on the Company's financial performance.
In September 2017, Elia sold 2.8 million green certificates to the Walloon Region (i.e. the Walloon Agency for Air and Climate, or AwAC)
leading to a net cash inflow of €176.2 million. This was a result of the Decree of 29 June 2017 amending the Decree of 12 April 2011
relating to the organisation of the regional electricity market and the Decree of 5 March 2008 relating to the creation of the Walloon
Agency for Air and Climate. The green certificates transferred by Elia can be gradually resold by the AwAC from 2022 onwards, taking
into account the market conditions that exist for green certificates at that time. The legislation also envisages the green certificates being
held by the AwAC for a period of up to nine years, after which Elia is required to buy back any unsold certificates. These repurchase
commitments will have no impact on Elia's financial performance, as the cost and expense for the repurchase will be fully recovered
through the tariffs for levies.
In November 2018, Elia sold another €0.7 million in green certificates to the Walloon Region (i.e. the AwAC) which resulted in a net
cash inflow of €43.3 million. As with the transaction in September 2017, Elia might be required to buy back some of the certificates sold
from 2023 onwards. Any repurchase will be covered through the tariffs for levies. There were no transactions with the AwAC in 2019,
2020 or 2021.
In Germany, offshore expenses between 50Hertz and TenneT TSO arising from the horizontal settlement has given rise to financial
obligations for 50Hertz in future periods. The total amount of these future cumulative amounts comes to €3.9 million (prior year: €10.5
million) and will be reflected in 50Hertz’s network user charge calculations over the coming years following the corresponding billing by
TenneT TSO.
8.3. Related parties
CONTROLLING ENTITIES
The core shareholder of Elia Group is Publi-T and this remained unchanged from 2020. Other than the yearly dividend payment, no
transactions occurred with the core shareholder in 2021.
The shareholder structure of the group can be found in the present report p.16.
TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL
Key management personnel include Elia's Board of Directors and Elia’s Management Committee, both of which have a significant
influence across the entire Elia Group.
At 50Hertz Transmission (Germany), key management personnel include Eurogrid International SA/NV’s Board of Directors, who are
responsible for monitoring the activities of 50Hertz Transmission (Germany). Key management personnel also include the Board of
Management of 50Hertz Transmission and the Supervisory Board, which was established in the German segment.
The members of Elia’s Board of Directors are not employees of the group. The remuneration for their mandate is detailed in the
Corporate Governance Statement forming part of this Annual Report (see the remuneration report). The members of Eurogrid
International SA/NV’s Board of Directors are not remunerated.
The other members of key management personnel are hired as employees. The components of their remuneration are detailed below
(i.e. excluding the directors who are not employees).
The names of the key management personnel are included in the Corporate Governance report.
134
Key management personnel did not receive stock options, special loans or other advances from the group throughout the year.
(in € million) 2021 2020
Short-term employee benefits 2.5 2.6
Basic remuneration 1.7 1.6
Variable remuneration 0.8 1.1
Long-term employee benefits 0.5 0.0
Post-employment benefits 0.4 0.4
Other variable remuneration 0.2 0.1
Total gross remuneration 3.5 3.1
Number of persons (in units) 5 5
Average gross remuneration per person 0.7 0.6
Number of shares (in units) held as at 31 December 2021 7,849 7,393
TRANSACTIONS WITH JOINT VENTURES AND ASSOCIATES
Transactions between the Company and subsidiaries that are related parties were eliminated during consolidation and therefore are not
recognised in this note.
Transactions with joint ventures and associates (as defined in Note 7.1.) were not eliminated, so details of these transactions are shown
below:
(in € million) 2021 2020
Transactions with joint ventures and associates
(4.5)
(2.1)
Sales of goods
0.1
2.4
Purchases of goods
(4.6)
(4.4)
Outstanding balances with joint ventures and associates
(0.9)
0.2
Trade debtors
(0.7)
0.6
Trade debts
(0.2)
(0.4)
In 2021, entities of the Elia Group had transactions with Nemo Link Ltd. and Coreso SA/NV. The sale of goods relates to corporate
services (SLAs) rendered by Elia to Nemo Link Ltd and Coreso SA/NV. Nemo Link Ltd. also rents a building (Herdersbrug) from Elia
Asset SA/NV (see also note 6.18). Purchases of goods mostly relates to services rendered by Coreso SA/NV to the group.
TRANSACTIONS WITH SHAREHOLDERS
There were no transactions with shareholders in 2021, except for the dividend payment.
TRANSACTIONS WITH RELATED PARTIES
Elia's Management Committee also assessed whether transactions occurred with entities in which they or members of the Board of
Directors exercise a significant influence (e.g. positions as CEO, CFO, vice-chair of the Management Committee, etc.).
There were some significant transactions in 2021 in which the key management personnel of the group has a significant influence. All
these transactions took place in the normal course of Elia’s business activities. The total value of realised sales was €0.6 million and
related to regulated sales contracts with prices that had been predefined by the regulator. The total value of expenses amounted to
€0.7 million. As at 31 December 2021, there were no outstanding trade-receivable position nor outstanding trade-debt positions with
related parties.
8.4. Subsequent events
There are no significant events to report after 31 December 2021.
Elia Group Financial Report 2021 135
Key management personnel did not receive stock options, special loans or other advances from the group throughout the year.
(in € million)
2021
2020
Short-term employee benefits
2.5
2.6
Basic remuneration
1.7
1.6
Variable remuneration
0.8
1.1
Long-term employee benefits
0.5
0.0
Post-employment benefits
0.4
0.4
Other variable remuneration
0.2
0.1
Total gross remuneration
3.5
3.1
Number of persons (in units)
5
5
Average gross remuneration per person
0.7
0.6
Number of shares (in units) held as at 31 December 2021
7,849
7,393
TRANSACTIONS WITH JOINT VENTURES AND ASSOCIATES
Transactions between the Company and subsidiaries that are related parties were eliminated during consolidation and therefore are not
recognised in this note.
Transactions with joint ventures and associates (as defined in Note 7.1.) were not eliminated, so details of these transactions are shown
below:
(in € million)
2021
2020
Transactions with joint ventures and associates
(4.5)
(2.1)
Sales of goods
0.1
2.4
Purchases of goods
(4.6)
(4.4)
Outstanding balances with joint ventures and associates
(0.9)
0.2
Trade debtors
(0.7)
0.6
Trade debts
(0.2)
(0.4)
In 2021, entities of the Elia Group had transactions with Nemo Link Ltd. and Coreso SA/NV. The sale of goods relates to corporate
services (SLAs) rendered by Elia to Nemo Link Ltd and Coreso SA/NV. Nemo Link Ltd. also rents a building (Herdersbrug) from Elia
Asset SA/NV (see also note 6.18). Purchases of goods mostly relates to services rendered by Coreso SA/NV to the group.
TRANSACTIONS WITH SHAREHOLDERS
There were no transactions with shareholders in 2021, except for the dividend payment.
TRANSACTIONS WITH RELATED PARTIES
Elia's Management Committee also assessed whether transactions occurred with entities in which they or members of the Board of
Directors exercise a significant influence (e.g. positions as CEO, CFO, vice-chair of the Management Committee, etc.).
There were some significant transactions in 2021 in which the key management personnel of the group has a significant influence. All
these transactions took place in the normal course of Elia’s business activities. The total value of realised sales was €0.6 million and
related to regulated sales contracts with prices that had been predefined by the regulator. The total value of expenses amounted to
€0.7 million. As at 31 December 2021, there were no outstanding trade-receivable position nor outstanding trade-debt positions with
related parties.
8.4. Subsequent events
There are no significant events to report after 31 December 2021.
8.5. Miscellaneous
Impact of the United Kingdom leaving the European Union
On 30 December 2020, the European Union and the UK signed a Trade and Cooperation Agreement that outlines the terms of future
cooperation between both parties after 1 January 2021 (the official date on which the UK left the EU). According to this agreement, the
UK left the Internal Energy Market (IEM).
One year after Brexit, no impacts on the business of Nemo Link Ltd. had been felt; Nemo Link remained in operation as before. The
profitability of the investment was also largely unaffected due to the cap and floor mechanism (see Note 9.3), which provides certainty
regarding the company’s cash flows over a 25-year time period. There are no import duties on the transport of electricity.
Other than the risk identified above, Brexit has a very limited effect on the consolidated financial statements.
8.6. Services provided by the auditors
The General Meeting of Shareholders appointed as joint auditors BDO Bedrijfsrevisoren BV (represented by Mr. Felix Fank) and Ernst &
Young Bedrijfsrevisoren BV (represented by Mr. Paul Eelen) for the audit of the consolidated financial statements of Elia Group SA/NV
and Elia Transmission Belgium SA/NV and the audit of the statutory financial statements of Elia Group SA/NV, Elia Transmission
Belgium SA/NV, Elia Asset SA/NV, Elia Engineering SA/NV, Elia Grid International SA/NV, Eurogrid International SA/NV and Re.Alto
BV/SRL.
50Hertz Transmission (Germany) appointed BDO AG Wirtschaftsprüfungsgesellschaft for the audit of the consolidated financial
statements of Eurogrid GmbH and the statutory financial statements of Eurogrid GmbH, 50Hertz Transmission GmbH, 50Hertz Offshore
GmbH and Elia Grid International GmbH.
The following table sets out the fees of the joint auditors and their associates in connection with services delivered with respect to the
financial year 2021:
in € Belgium Germany Total
Statutory audit and review of consolidated and parent company financial
statements
280,745 224,000
504,745
Non-audit services, of which: 115,717 158,675 274,392
Services related to legal and regulatory requirements 15,625
15,625
Other audit services 72,290 158,675 230,965
Tax services 27,802
27,802
Total 396,462 382,675 779,137
136
9. Regulatory framework and tariffs
9.1. Regulatory framework in Belgium
9.1.1. Federal legislation
The Electricity Act, which forms the general basis, lays down the core principles of the regulatory framework governing Elia’s activities
as a transmission system operator in Belgium.
This Act was heavily amended on 8 January 2012 by the transposition at federal level of the third package of European directives.
These changes ensure that the Electricity Act:
• sets out the unbundling of transmission operations from generation, distribution and supply activities;
• sets out in greater detail the rules for operating and accessing the transmission system;
• redefines the transmission system operator's legal mission, mainly by expanding it to the offshore areas over which Belgium has
jurisdiction; and
• strengthens the role of the regulatory authority, particularly with regards to the determination of the transmission tariffs.
A number of royal decrees provide more details relating to the regulatory framework that applies to the transmission system operator,
particularly the Royal Decree on the Federal Grid Code. Similarly, the decisions passed by the CREG supplement these provisions to
form the regulatory framework within which Elia operates at federal level.
9.1.2. Regional legislation
Belgium's three regions are primarily responsible for the local transmission of electricity through grids with a voltage of 70 kV or less on
their respective territory. The regional regulators are in charge of the non-tariff aspects of local transmission-system regulation, while
setting and monitoring tariffs falls under federal jurisdiction.
The Flemish Region, the Brussels-Capital Region and the Walloon Region have also transposed into their legislative framework the
provisions of the third European package applying to them. The regional decrees have been supplemented by various other rules and
regulations on matters such as public service obligations, renewable energy and authorisation procedures for suppliers.
9.1.3. Regulatory agencies
As required by EU law, the Belgian electricity market is monitored and controlled by independent regulators.
FEDERAL REGULATOR
CREG is the federal regulator, and its powers with regard to Elia include:
• approving the standardised terms in the three main contracts used by the company at federal level: the connection contract, the
access contract and the ARP contract;
• approving the capacity allocation system at the borders between Belgium and neighbouring countries;
• approving the appointment of the independent members of the Board of Directors;
• determining the tariff methodology to be observed by the system operator when calculating the various tariffs which apply to grid
users;
• certifying that the system operator actually owns the infrastructure it operates and that it meets the regulatory requirements for
independence from generators and suppliers.
REGIONAL REGULATORS
The operation of electricity networks with voltages of 70 kV or less falls under the jurisdiction of the regional regulators. Each of these
may require any operator (including Elia if it operates such networks) to abide by any specific provision of the regional electricity rules
on pain of administrative fines or other sanctions. However, the regional regulators do not have the power to set tariffs for electricity
transmission systems, as tariff-setting falls under the exclusive remit of CREG for these networks.
9.1.4. Tariff setting
A new tariff methodology came into force in early 2020. This methodology is again applicable for a period of four years (2020-2023).
TARIFF REGULATIONS
On 28 June 2018, the CREG issued a decision which set the tariff methodology for the electricity transmission system (including the
offshore system) and the electricity networks which have transmission functions during the regulatory period 2020-2023 (Decision
(Z)1109/10). This methodology is the general framework in accordance with which transmission tariffs are set for these four years.
Elia has prepared its tariff proposal for the regulatory period commencing on 1 January 2020 based on the methodology described
below. This proposal was approved by the CREG on 7 November 2019 (Decision (B)658E/62).
TARIFF REGULATIONS APPLYING IN BELGIUM
As the operator of networks which have transmission functions (covering the transmission system and the local and regional
transmission networks in Belgium), Elia generates most of its income from the regulated tariffs charged for use of these networks (tariff
income), which are approved in advance by the CREG. As of 1 January 2008, the prevailing tariff regulation mechanisms have provided
for approved tariffs that were set for four-year periods, barring specific circumstances.
The tariff mechanism is based on amounts recognised in accordance with Belgian accounting regulations (BE GAAP). The tariffs are
based on budgeted costs minus a number of sources of non-tariff income. These costs are then divided based on an estimate of the
Elia Group Financial Report 2021 137
9. Regulatory framework and tariffs
9.1. Regulatory framework in Belgium
9.1.1. Federal legislation
The Electricity Act, which forms the general basis, lays down the core principles of the regulatory framework governing Elia’s activities
as a transmission system operator in Belgium.
This Act was heavily amended on 8 January 2012 by the transposition at federal level of the third package of European directives.
These changes ensure that the Electricity Act:
• sets out the unbundling of transmission operations from generation, distribution and supply activities;
• sets out in greater detail the rules for operating and accessing the transmission system;
• redefines the transmission system operator's legal mission, mainly by expanding it to the offshore areas over which Belgium has
jurisdiction; and
• strengthens the role of the regulatory authority, particularly with regards to the determination of the transmission tariffs.
A number of royal decrees provide more details relating to the regulatory framework that applies to the transmission system operator,
particularly the Royal Decree on the Federal Grid Code. Similarly, the decisions passed by the CREG supplement these provisions to
form the regulatory framework within which Elia operates at federal level.
9.1.2. Regional legislation
Belgium's three regions are primarily responsible for the local transmission of electricity through grids with a voltage of 70 kV or less on
their respective territory. The regional regulators are in charge of the non-tariff aspects of local transmission-system regulation, while
setting and monitoring tariffs falls under federal jurisdiction.
The Flemish Region, the Brussels-Capital Region and the Walloon Region have also transposed into their legislative framework the
provisions of the third European package applying to them. The regional decrees have been supplemented by various other rules and
regulations on matters such as public service obligations, renewable energy and authorisation procedures for suppliers.
9.1.3. Regulatory agencies
As required by EU law, the Belgian electricity market is monitored and controlled by independent regulators.
FEDERAL REGULATOR
CREG is the federal regulator, and its powers with regard to Elia include:
• approving the standardised terms in the three main contracts used by the company at federal level: the connection contract, the
access contract and the ARP contract;
• approving the capacity allocation system at the borders between Belgium and neighbouring countries;
• approving the appointment of the independent members of the Board of Directors;
• determining the tariff methodology to be observed by the system operator when calculating the various tariffs which apply to grid
users;
• certifying that the system operator actually owns the infrastructure it operates and that it meets the regulatory requirements for
independence from generators and suppliers.
REGIONAL REGULATORS
The operation of electricity networks with voltages of 70 kV or less falls under the jurisdiction of the regional regulators. Each of these
may require any operator (including Elia if it operates such networks) to abide by any specific provision of the regional electricity rules
on pain of administrative fines or other sanctions. However, the regional regulators do not have the power to set tariffs for electricity
transmission systems, as tariff-setting falls under the exclusive remit of CREG for these networks.
9.1.4. Tariff setting
A new tariff methodology came into force in early 2020. This methodology is again applicable for a period of four years (2020-2023).
TARIFF REGULATIONS
On 28 June 2018, the CREG issued a decision which set the tariff methodology for the electricity transmission system (including the
offshore system) and the electricity networks which have transmission functions during the regulatory period 2020-2023 (Decision
(Z)1109/10). This methodology is the general framework in accordance with which transmission tariffs are set for these four years.
Elia has prepared its tariff proposal for the regulatory period commencing on 1 January 2020 based on the methodology described
below. This proposal was approved by the CREG on 7 November 2019 (Decision (B)658E/62).
TARIFF REGULATIONS APPLYING IN BELGIUM
As the operator of networks which have transmission functions (covering the transmission system and the local and regional
transmission networks in Belgium), Elia generates most of its income from the regulated tariffs charged for use of these networks (tariff
income), which are approved in advance by the CREG. As of 1 January 2008, the prevailing tariff regulation mechanisms have provided
for approved tariffs that were set for four-year periods, barring specific circumstances.
The tariff mechanism is based on amounts recognised in accordance with Belgian accounting regulations (BE GAAP). The tariffs are
based on budgeted costs minus a number of sources of non-tariff income. These costs are then divided based on an estimate of the
volumes of electricity taken off the grid and, in the case of some costs, based on estimated volumes of electricity injected into the grid, in
accordance with the terms of the tariff methodology drawn up by the CREG.
The costs taken into account include the forecast value of the authorised remuneration of the invested capital, an estimate of the
amounts allocated to Elia in the form of performance incentives and the predicted values of various cost categories. These costs are
subdivided into three groups: controllable costs, for which Elia is offered a financial incentive to improve its efficiency levels; non-
controllable costs, over which Elia has no influence and for which deviations from the budget are completely allocated to the calculation
of future tariffs; and influenceable costs, to which a hybrid rule applies (see the information provided below with regard to controllable
and non-controllable costs and income and influenceable costs).
FAIR REMUNERATION
Fair remuneration is the return on capital invested in the grid based on the Capital Asset Pricing Model (CAPM). It is based on the
average annual value of the regulated asset base (RAB), which is calculated annually, taking into account new investments,
divestments, depreciations and changes in working capital.
As of 1 January 2020, the formula has changed compared to the previous tariff methodology with regard to the level of leverage and the
OLO interest rate for risk free investment: (i) the regulatory leverage has been increased from 33%. to 40%., and (ii) the OLO has been
set at 2.4%. for the period 2020-2023, instead of taking the average of the year, each year. In the event of a major change in the
Belgian macro-economic situation and/or in its market circumstances, the CREG and Elia can agree on a modification of the fixed OLO
rate.
The formula for the calculation of fair remuneration is as follows:
A: [S (if less than or equal to 40%) x average RAB x [(1 + α) x [(OLO (n) + (β x risk premium)]]]
plus
B: [(S (if above 40%) – 40%) x average RAB x (OLO (n) + 70 base points)]
Where:
• OLO (n) has been fixed at 2.4% and is no longer the average rate of Belgian ten-year linear bonds for the year in question
(subject to modification agreed between CREG and the Issuer as set out above);
• RAB (n) = RAB (n-1) + investments (n) - depreciation (n) - divestments (n) - decommissioning (n) +/- change in working
capital need;
• S = the consolidated average capital and reserves/average RAB, in accordance with Belgian GAAP;
• Alpha (α) = the illiquidity premium set at 10%;
• Beta (β) = calculated over a historical three-year period, taking into account available information on the Issuer's share price
in this period, compared with the Bel20 index over the same period. The value of the beta cannot be lower than 0.53;
• Risk premium remains at 3.5%;
• In respect of A: The rate of remuneration (in %) as set by the CREG for year n is equal to the sum of the risk-free rate, i.e.
the average rate of Belgian ten-year linear bonds for the year in question (OLO (n)) and a premium for market risk for shares,
weighted using the applicable beta factor. Tariff regulation sets the risk premium at 3.5%. The CREG encourages the Elia to
keep its actual capital and reserves as close as possible to 40%., this ratio being used to calculate a reference value of
capital and reserves; and-
• In respect of B: If the Elia's actual capital and reserves are higher than the reference capital and reserves, the surplus
amount is balanced out with a reduced rate of remuneration calculated using the following formula: [(OLO (n) + 70 base
points)].
• Assets related to the MOG are linked to the RABMOG, for which a premium remuneration is applicable in addition to the
above. This is based on the following formula: [S (less than or equal to 40%) x average RABMOG x 1.4%].
Non-controllable costs and revenues
The category of costs and revenues that are outside Elia's direct control are not subject to incentive mechanisms offered by the CREG,
and are an integral part of the costs and revenues used to determine the tariffs. The tariffs are set based on forecast values for these
costs and revenues, and the difference from the actual values is allocated ex post to the tariff calculation for the subsequent period.
The most important non-controllable costs consist of the following items: depreciation of tangible fixed assets, ancillary services (except
for the reservation costs of ancillary services excluding black start, which qualify as influence-able costs), costs related to line relocation
imposed by a public authority, and taxes, partially compensated by revenues from non-tariff activities (e.g. cross border congestion
revenues). In this new tariff period, certain exceptional costs specific to offshore assets (e.g. the MOG) have been added to the list of
non-controllable costs. This also includes financial charges/revenues for which the principle of financial embedded debt has been
confirmed. As a consequence, all actual and reasonable finance costs related to debt financing are included in the tariffs.
Controllable costs and revenues
The costs and revenues over which Elia has direct control are subject to an incentive regulation mechanism, meaning that they are
subject to a sharing rule of productivity and efficiency improvement which may occur during the regulatory period. The sharing factor is
50%. Therefore, Elia is encouraged to control a defined category of its costs and revenue. Any savings with respect to the allowed
(adjusted) budget positively impacts the net profit of the Elia by 50% of the amount (before tax) and, accordingly, any overspending
negatively affects its profit. There have been no changes compared to the previous tariff methodology, except for certain non-recurrent
but controllable costs specific to offshore assets (e.g. the MOG) that can be added to the cost allowance for a given regulatory period.
Influenceable costs
The reservation costs for ancillary services, except for black start, and costs of energy to compensate for grid losses are qualified as
influenceable costs, meaning that efficiency gains create a positive incentive, insofar as they are not caused by a certain list of external
factors. 20% of the difference in expenses between Y-1 and Y constitutes a profit (pre-tax) for the Elia, with a cap of +€6 million. For
each of the two categories of influenceable costs (power reserves and grid losses), the incentive cannot be less than €0.
138
Other incentives
The tariff predefined by the regulator includes, besides the fair remuneration, all the incentives listed below. If Elia does not perform in
line with the targets for these incentives, as set by the regulator, the amount of the incentive allocated to Elia will decrease. The impact
is reflected in the deferred revenues which will generate future tariff decreases, see the description of the settlement mechanism below
(all amounts are pre-tax).
• Market integration: This incentive consists of three elements in the previous regulatory framework: (i) increase of import
capacity, (ii) increase in market welfare due to market coupling and (iii) financial participations. Only the incentive on financial
participations remains. The incentive on market welfare is no longer offered, whereas the one on import capacity has been
replaced by an incentive with a similar objective (increase of cross-border commercial exchange capacity) but with a fairly
different measurement method. Additionally, a new incentive has been created concerning the timely commissioning of
investment projects contributing to market integration. These incentives can contribute positively to the Elia’s profit (from €0 to
€16 million for cross-border capacity, from €0 to €7 million for timely commissioning). The profit (dividends and capital gains)
resulting from financial participations in other companies which CREG has accepted as being part of the RAB, is allocated as
follows: 40% is allocated to future tariff reductions and 60% is allocated to Elia’s profit ).
• Investment programme: This incentive is broadened and is defined as follows: (i) if the average interruption time (AIT) reaches a
target predefined by CREG, Elia’s net profit (pre-tax) could be impacted positively with a maximum of €4.8 million, (ii) should the
availability of the MOG align with the level set by CREG, the incentive can contribute to the Elia’s profit from €0 to €2.53 million
and (iii) Elia could benefit from €0 to €2 million if the predefined portfolio of maintained and redeployed investments is realised in
time and on budget.
• Innovation and grants: The content and the remuneration of this incentive has changed and covers (i) the realisation of
innovative projects which could contribute to the Elia’s remuneration for €0 to €3.7 million (pre-tax) and (ii) the subsidies granted
on innovative projects which could impact the Elia’s profit with a maximum of €0 to €1 million.
• Quality of customer related services: This incentive is broadened and is related to three incentives: (i) the level of client
satisfaction related to the establishment of new grid connections which can generate a profit for Elia of €0 to €1.35 million, (ii)
the level of client satisfaction for the full client base which would contribute €0 to €2.53 million to Elia’s profit and (iii) the quality
of the data that Elia publishes on a regular basis, which can generate remuneration for Elia of €0 to €5 million.
• Enhancement of balance system: This incentive is similar to the discretionary incentive in the previous regulatory framework,
through which Elia is rewarded for implementing certain projects related to system balancing as defined by CREG. This
incentive can generate remuneration between €0 and €2.5 million (pre-tax).
Regulatory framework for the Modular Offshore Grid
The CREG has amended the 2016-2019 tariff methodology to create specific rules applicable to investment in the MOG. A formal
consultation took place in the first weeks of 2018 between CREG and the issuer, and CREG took a decision on 6 December 2018 about
the new parameters to be introduced in the tariff methodology. The main features of said parameters are (i) a specific risk premium to
be applied to this investment (resulting in an additional net return of 1.4%); (ii) a special depreciation rate applicable to MOG assets; (iii)
certain costs specific to the MOG to bear another qualification compared to the costs for onshore activities; (iv) the cost level defined
based on the characteristics of the MOG assets; and (v) dedicated incentives linked to the availability of the offshore assets. For the
tariff period 2020-2023, the regulatory framework for the MOG has been included in the tariff methodology, based on the features
described above, except for the risk premium, which has been applied since 1 January 2020 on a target equity/debt ratio of 40/60.
Regulatory deferral account: deviations from budgeted values
Over the course of a year, the actual volumes of electricity transmitted may differ from the forecast volumes. If the transmitted volumes
are higher (or lower) than those forecast, the deviation is booked to an accrual account during the year in which it occurs. These
deviations from budgeted values (a regulatory debt or a regulatory receivable) are accumulated and will be taken into account when the
tariffs are set for the subsequent tariff period. Regardless of deviations between the forecast parameters for tariff-setting (fair
remuneration, non-controllable elements, controllable elements, influenceable costs, incentive components, cost and revenue allocation
between regulated and non-regulated activities) and the actual incurred costs or revenues related to these parameters, the CREG takes
the final decision each year as to whether the incurred costs/revenue can reasonably be borne by the tariffs. This decision may result in
the rejection of incurred elements. In the event that any incurred elements are rejected, the relevant amount will not be taken into
account when the tariffs are set for the next period. Although Elia can ask for a judicial review of any such decision, if this judicial review
were to be unsuccessful, a rejection may well have an overall negative impact on Elia’s financials.
Cost and revenue allocation between regulated and non-regulated activities
The tariff methodology for 2020-2023 features a mechanism enabling Elia to develop activities outside the Belgian regulated perimeter
and whose costs are not covered by grid tariffs in Belgium. This methodology establishes a mechanism to ensure that Elia's financial
participation in other companies not considered part of the RAB by the CREG (e.g. stakes in regulated or non-regulated activities
outside Belgium) has a neutral impact on Belgian grid users.
Public service obligations
In its role as a TSO, Elia is subject to various public service obligations imposed by the government and/or by regulation mechanisms.
Public authorities/regulation mechanisms identify public service obligations in various fields (such as the promotion of renewable
energy, green certificates, strategic reserves, social support, fees for the use of the public domain, offshore liability) for fulfilment by
TSOs. The costs incurred by the TSO with respect to these obligations are fully covered by the tariff ‘levies’ as approved by the
regulator. The amounts outstanding are reported as levies (see Note 6.9 for other receivables and Note 6.17 for other payables).
Elia Group Financial Report 2021 139
Other incentives
The tariff predefined by the regulator includes, besides the fair remuneration, all the incentives listed below. If Elia does not perform in
line with the targets for these incentives, as set by the regulator, the amount of the incentive allocated to Elia will decrease. The impact
is reflected in the deferred revenues which will generate future tariff decreases, see the description of the settlement mechanism below
(all amounts are pre-tax).
• Market integration: This incentive consists of three elements in the previous regulatory framework: (i) increase of import
capacity, (ii) increase in market welfare due to market coupling and (iii) financial participations. Only the incentive on financial
participations remains. The incentive on market welfare is no longer offered, whereas the one on import capacity has been
replaced by an incentive with a similar objective (increase of cross-border commercial exchange capacity) but with a fairly
different measurement method. Additionally, a new incentive has been created concerning the timely commissioning of
investment projects contributing to market integration. These incentives can contribute positively to the Elia’s profit (from €0 to
€16 million for cross-border capacity, from €0 to €7 million for timely commissioning). The profit (dividends and capital gains)
resulting from financial participations in other companies which CREG has accepted as being part of the RAB, is allocated as
follows: 40% is allocated to future tariff reductions and 60% is allocated to Elia’s profit ).
• Investment programme: This incentive is broadened and is defined as follows: (i) if the average interruption time (AIT) reaches a
target predefined by CREG, Elia’s net profit (pre-tax) could be impacted positively with a maximum of €4.8 million, (ii) should the
availability of the MOG align with the level set by CREG, the incentive can contribute to the Elia’s profit from €0 to €2.53 million
and (iii) Elia could benefit from €0 to €2 million if the predefined portfolio of maintained and redeployed investments is realised in
time and on budget.
• Innovation and grants: The content and the remuneration of this incentive has changed and covers (i) the realisation of
innovative projects which could contribute to the Elia’s remuneration for €0 to €3.7 million (pre-tax) and (ii) the subsidies granted
on innovative projects which could impact the Elia’s profit with a maximum of €0 to €1 million.
• Quality of customer related services: This incentive is broadened and is related to three incentives: (i) the level of client
satisfaction related to the establishment of new grid connections which can generate a profit for Elia of €0 to €1.35 million, (ii)
the level of client satisfaction for the full client base which would contribute €0 to €2.53 million to Elia’s profit and (iii) the quality
of the data that Elia publishes on a regular basis, which can generate remuneration for Elia of €0 to €5 million.
• Enhancement of balance system: This incentive is similar to the discretionary incentive in the previous regulatory framework,
through which Elia is rewarded for implementing certain projects related to system balancing as defined by CREG. This
incentive can generate remuneration between €0 and €2.5 million (pre-tax).
Regulatory framework for the Modular Offshore Grid
The CREG has amended the 2016-2019 tariff methodology to create specific rules applicable to investment in the MOG. A formal
consultation took place in the first weeks of 2018 between CREG and the issuer, and CREG took a decision on 6 December 2018 about
the new parameters to be introduced in the tariff methodology. The main features of said parameters are (i) a specific risk premium to
be applied to this investment (resulting in an additional net return of 1.4%); (ii) a special depreciation rate applicable to MOG assets; (iii)
certain costs specific to the MOG to bear another qualification compared to the costs for onshore activities; (iv) the cost level defined
based on the characteristics of the MOG assets; and (v) dedicated incentives linked to the availability of the offshore assets. For the
tariff period 2020-2023, the regulatory framework for the MOG has been included in the tariff methodology, based on the features
described above, except for the risk premium, which has been applied since 1 January 2020 on a target equity/debt ratio of 40/60.
Regulatory deferral account: deviations from budgeted values
Over the course of a year, the actual volumes of electricity transmitted may differ from the forecast volumes. If the transmitted volumes
are higher (or lower) than those forecast, the deviation is booked to an accrual account during the year in which it occurs. These
deviations from budgeted values (a regulatory debt or a regulatory receivable) are accumulated and will be taken into account when the
tariffs are set for the subsequent tariff period. Regardless of deviations between the forecast parameters for tariff-setting (fair
remuneration, non-controllable elements, controllable elements, influenceable costs, incentive components, cost and revenue allocation
between regulated and non-regulated activities) and the actual incurred costs or revenues related to these parameters, the CREG takes
the final decision each year as to whether the incurred costs/revenue can reasonably be borne by the tariffs. This decision may result in
the rejection of incurred elements. In the event that any incurred elements are rejected, the relevant amount will not be taken into
account when the tariffs are set for the next period. Although Elia can ask for a judicial review of any such decision, if this judicial review
were to be unsuccessful, a rejection may well have an overall negative impact on Elia’s financials.
Cost and revenue allocation between regulated and non-regulated activities
The tariff methodology for 2020-2023 features a mechanism enabling Elia to develop activities outside the Belgian regulated perimeter
and whose costs are not covered by grid tariffs in Belgium. This methodology establishes a mechanism to ensure that Elia's financial
participation in other companies not considered part of the RAB by the CREG (e.g. stakes in regulated or non-regulated activities
outside Belgium) has a neutral impact on Belgian grid users.
Public service obligations
In its role as a TSO, Elia is subject to various public service obligations imposed by the government and/or by regulation mechanisms.
Public authorities/regulation mechanisms identify public service obligations in various fields (such as the promotion of renewable
energy, green certificates, strategic reserves, social support, fees for the use of the public domain, offshore liability) for fulfilment by
TSOs. The costs incurred by the TSO with respect to these obligations are fully covered by the tariff ‘levies’ as approved by the
regulator. The amounts outstanding are reported as levies (see Note 6.9 for other receivables and Note 6.17 for other payables).
9.2. Regulatory framework in Germany
9.2.1. Relevant legislation
The German legal framework is laid down in various pieces of legislation. The key law is the German Energy Act
(Energiewirtschaftsgesetz, EnWG), which defines the overall legal framework for the gas and electricity supply industry in
Germany. The EnWG is complemented by a number of laws, ordinances and regulatory decisions, which provide detailed rules
on the current system of incentive regulation, accounting methods and grid access arrangements, including:
• the Ordinance on Electricity Network Tariffs (Verordnung über die Entgelte für den Zugang zu
Elektrizitätsversorgungsnetzen (Stromnetzentgeltverordnung, StromNEV)), which establishes, among other things,
the principles and methods for the grid-tariff calculations and other obligations applying to system operators;
• the Ordinance on Electricity Network Access (Verordnung über den Zugang zu Elektrizitätsversorgungsnetzen
(Stromnetzzugangsverordnung, StromNZV), which, among other things, sets out further details of how to grant access
to the transmission systems (and other types of networks) by way of establishing the balancing groups, the scheduling
of electricity deliveries, control energy and other general obligations, e.g. congestion management
(Engpassmanagement), publication obligations, metering, minimum requirements for various types of contracts and
the duty of certain system operators to manage the balancing amount system for renewable energy;
• the Ordinance on Incentive Regulation (Verordnung über die Anreizregulierung der Energieversorgungsnetze
(Anreizregulierungsverordnung, ARegV)), which sets out the basic rules for incentive regulation for TSOs and other
system operators (as outlined in more detail below). It also describes in general terms how to benchmark efficiency,
which costs are included in the efficiency benchmarking, how to determine inefficiency and how this translates into
yearly targets for efficiency growth.
9.2.2. Regulatory agencies in Germany
The regulatory agencies for the energy sector in Germany are the Bundesnetzagentur (BNetzA, or Federal Network Agency) in
Bonn for grids to which over 100,000 grid users are directly or indirectly connected and the specific regulatory authorities in the
various federal states for grids to which fewer than 100,000 grid users are directly or indirectly connected. The regulatory
agencies are, among other things, in charge of ensuring non-discriminatory third-party access to grids and monitoring the grid-
use tariffs levied by the TSOs. 50Hertz Transmission and 50Hertz Offshore are subject to the authority of the Federal Network
Agency.
9.2.3. Tariff setting in Germany
The current regulation mechanism is established in Germany by the ARegV. Under the ARegV, grid tariffs are defined to
generate a pre-defined 'revenue cap' as determined by the Federal Network Agency for each TSO and for each regulatory
period. The revenue cap is essentially based on the costs of a base year, and is fixed for the entire regulatory period, except
when it is adjusted to account for specific cases provided for in the ARegV. System operators are not allowed to retain revenue
in excess of their individually determined revenue cap. Each regulatory period lasts five years, with the third regulatory period
starting on 1
st
January 2019 and ending on 31 December 2023. Tariffs are public and cannot be the subject of negotiations with
customers. Only certain customers (under certain set circumstances laid down in the relevant legislation) are allowed to agree to
individual tariffs under Article 19 of the StromNEV (for example, in the case of sole use of a grid asset). The Federal Network
Agency has to approve such individual tariffs.
For the purposes of the revenue cap, the costs incurred by a system operator fall into two categories as follows:
• Permanently non-influenceable costs (PNIC): These costs are fully integrated into the 'revenue cap' and are fully
recovered through the grid tariffs, albeit some of them with a two-year time lag.
o One cost position amongst the PNIC refers to investment measures, meaning costs resulting from new
investments in onshore grid infrastructure. They include return on equity, imputed trade tax, cost of debt,
depreciation and operational costs (currently at a fixed rate of 0.8% of the capitalised investment costs of the
respective onshore investments or 0.2 % for assets under construction within projects approved as of 2019). The
cost of debt related to investment measures is reflected in the interest rate based on acquired debt for the TSO
activity. Since 2012, the costs associated with these investment measures have been based on forecast values.
The differences between the forecast values and the actual values are reflected in the settlement mechanism
deferral account.
o In addition, PNIC include costs relating to ancillary services, grid losses and redispatch costs, as well as European
initiatives and costs from congestion management. These costs and income are included in the revenue cap based
on a procedural regulation mechanism set by the Federal Network Agency in accordance with Article 11(2) of the
ARegV. The regulation process for costs relating to ancillary services, congestion management and grid losses
gives the system operator an incentive to outperform the planned costs through bonus/malus mechanisms.
Moreover, costs resulting from European projects of common interest (PCI) to which Germany is contributing can
be included as PNIC, albeit with a two-year time lag.
• Temporarily non-influenceable costs (TNIC) and influenceable costs (IC): These costs include return on equity,
depreciation, cost of debt, imputed trade tax and other operational expenses and are subject to an incentive mechanism
set by the Federal Network Agency, which features an efficiency factor (only applicable to IC), a productivity improvement
factor and an inflation factor (applicable to both TNIC and IC) over a five-year period. In addition, the current incentive
mechanism provides for the use of a quality factor, but the criteria and implementation mechanism for this factor for TSOs
are yet to be defined by the Federal Network Agency. The various defined factors give the TSOs the medium-term
objective of eliminating what are deemed to be inefficient costs. As regards the cost of debt, the permitted cost of debt
related to influenceable costs needs to be shown to be marketable.
140
As for the return on equity, the relevant laws and regulations set out the provisions relating to the permitted return on equity,
which is included in the TNIC/IC for assets belonging to the regulated asset base and the PNIC for assets approved in
investment measures. In 2021, the BNetzA determined the return on equity applicable to the fourth and coming regulatory
period (2024-2028); the values were significantly down from the third regulatory period, namely to 3.51% (instead of 5.12% in
the third period) for investments made before 2006 and 5.07% (instead of 6.91% in the third period) for investments made
since 2006. The return on equity is calculated before corporate tax and after imputed trade tax.
Separately from the revenue cap, 50Hertz is compensated for costs incurred in connection with its renewable energy
obligations, including EEG and CHP/KWKG obligations and offshore liabilities and offshore grid connection. To this end, various
surcharges (levies) have been implemented that are subject to specific regulatory mechanisms aimed at a balanced treatment
of costs and income.
CHANGES IN TARIFF REGULATIONS
In 2021, a revision of the ARegV entered into force implementing various relevant changes. The revised ARegV changes
several aspects which are relevant to PNIC, such as an implementation of a collective 4-TSO corridor model as an incentive
instrument on congestion management costs and the recognition of costs incurred for joint network operator coordination
projects (Connect+) was extendend by Section 34 (15) ARegV. These costs will be recognized as PNIC until 2023. Moreover,
the revised ARegV contains a new financing model for investment measures, which was formerly only in place for distribution
system operators. The capital cost adjustment model will be used for TSOs in the fourth regulatory period. In order to avoid
distortion effects in the cost base, a transitional arrangement will come into effect. It includes an extensive grandfathering of
existing investment measures during the fourth regulatory period, the elimination and an extensive repayment of the clawback
for expired investment measures, as well as a transitional base for replacement investments in the period of incentive regulation
(2007 to the end of 2021).
As of 31
st
December 2021, 50Hertz had received 92 approvals for an investment volume of approximately € 9.6 billion for the
103 active applications for approval of investment measures submitted since 2008.
TARIFFS
Grid access tariffs for 2021 were calculated based on the respective revenue cap and published in December 2020. They have
increased by an average of 7% from 2020. One key driver for lower tariffs was the third stage of the gradual harmonization of
network tariffs of the german TSOs (see below). However, the increase in tariffs is mainly due to higher investments in the
necessary network expansion.
In recent years, the grid access tariffs of the four German TSOs have developed differently. This has mainly been driven by the
different volumes of renewable energy sources (RES) installed across the control areas, leading to significantly higher tariffs in
those control areas with higher levels of renewable energy. The Act for Modernisation of Grid Tariffs
(Netzentgeltmodernisierungsgesetz, NEMoG) came into force in July 2017. It envisages the gradual harmonisation of the four
German TSOs’ grid access tariffs from 2019 onwards, culminating in uniform transmission tariffs in 2023. Moreover, the NEMoG
eliminates ‘avoided grid fees' (vNNE) for volatile RES generation and creates a new system for offshore grid connections,
shifting the related costs from the revenue-cap tariffs to an offshore revenue based on a fully fledged pass-through mechanism
from 2019 onward.
Elia Group Financial Report 2021 141
As for the return on equity, the relevant laws and regulations set out the provisions relating to the permitted return on equity,
which is included in the TNIC/IC for assets belonging to the regulated asset base and the PNIC for assets approved in
investment measures. In 2021, the BNetzA determined the return on equity applicable to the fourth and coming regulatory
period (2024-2028); the values were significantly down from the third regulatory period, namely to 3.51% (instead of 5.12% in
the third period) for investments made before 2006 and 5.07% (instead of 6.91% in the third period) for investments made
since 2006. The return on equity is calculated before corporate tax and after imputed trade tax.
Separately from the revenue cap, 50Hertz is compensated for costs incurred in connection with its renewable energy
obligations, including EEG and CHP/KWKG obligations and offshore liabilities and offshore grid connection. To this end, various
surcharges (levies) have been implemented that are subject to specific regulatory mechanisms aimed at a balanced treatment
of costs and income.
CHANGES IN TARIFF REGULATIONS
In 2021, a revision of the ARegV entered into force implementing various relevant changes. The revised ARegV changes
several aspects which are relevant to PNIC, such as an implementation of a collective 4-TSO corridor model as an incentive
instrument on congestion management costs and the recognition of costs incurred for joint network operator coordination
projects (Connect+) was extendend by Section 34 (15) ARegV. These costs will be recognized as PNIC until 2023. Moreover,
the revised ARegV contains a new financing model for investment measures, which was formerly only in place for distribution
system operators. The capital cost adjustment model will be used for TSOs in the fourth regulatory period. In order to avoid
distortion effects in the cost base, a transitional arrangement will come into effect. It includes an extensive grandfathering of
existing investment measures during the fourth regulatory period, the elimination and an extensive repayment of the clawback
for expired investment measures, as well as a transitional base for replacement investments in the period of incentive regulation
(2007 to the end of 2021).
As of 31
st
December 2021, 50Hertz had received 92 approvals for an investment volume of approximately € 9.6 billion for the
103 active applications for approval of investment measures submitted since 2008.
TARIFFS
Grid access tariffs for 2021 were calculated based on the respective revenue cap and published in December 2020. They have
increased by an average of 7% from 2020. One key driver for lower tariffs was the third stage of the gradual harmonization of
network tariffs of the german TSOs (see below). However, the increase in tariffs is mainly due to higher investments in the
necessary network expansion.
In recent years, the grid access tariffs of the four German TSOs have developed differently. This has mainly been driven by the
different volumes of renewable energy sources (RES) installed across the control areas, leading to significantly higher tariffs in
those control areas with higher levels of renewable energy. The Act for Modernisation of Grid Tariffs
(Netzentgeltmodernisierungsgesetz, NEMoG) came into force in July 2017. It envisages the gradual harmonisation of the four
German TSOs’ grid access tariffs from 2019 onwards, culminating in uniform transmission tariffs in 2023. Moreover, the NEMoG
eliminates ‘avoided grid fees' (vNNE) for volatile RES generation and creates a new system for offshore grid connections,
shifting the related costs from the revenue-cap tariffs to an offshore revenue based on a fully fledged pass-through mechanism
from 2019 onward.
9.3. Regulatory framework for the Nemo Link interconnector
The key features of the NemoLink Ltd. regulatory framework can be summarised as follows:
• A specific regulatory framework is applicable to the Nemo Link interconnector since the date of operation. The framework is
part of the new tariff methodology issued on 18 December 2014, updated on 5 March 2020 (Cap & Floor final levels), by the
CREG. The cap and floor regime is a revenue-based regime with a term of 25 years. The national regulators in the UK and
Belgium (OFGEM and the CREG respectively) determined the levels of the cap and floor ex-ante and these remain largely
fixed (in real term) for the duration of the regime. Consequently, investors will have certainty about the regulatory framework
throughout the lifetime of the interconnector.
• The cap and floor regime is applicable since 30 January 2019. Every five years the regulators will assess the cumulative
interconnector revenues (net of any market-related costs) over the period against the cumulative cap and floor levels to
determine whether the cap or floor is triggered. If a revenue earned above the cap, it will be returned to the TSO in the UK
(National Electricity Transmission System Operator or ‘NETSO’) and to the TSO in Belgium on a 50/50 basis. The TSOs will
then reduce the grid charges for grid users in their respective countries. If revenue falls below the floor then the interconnector
owners will be compensated by the TSOs. The TSOs will in turn recover the costs through grid charges. National Grid
performs the NETSO role in the UK and the Issuer, the Belgian TSO, in Belgium.
• Each five-year period is considered separately. Cap and floor adjustments in one period will not affect adjustments for future
periods, and total revenue earned in one period is not taken into account in future periods.
• The high-level tariff design is as follows:
Regime length
25 years
Cap and floor levels
Levels are set at the start of the regime and remain fixed in real terms for
25 years from the start of operation. Based on applying mechanistic
parameters to cost-efficiency: a cost of debt benchmark had been
applied to costs to set the floor, and an equity return benchmark was
applied to set the cap.
Assessment period (assessing whether
interconnector revenues are above/below the
cap/floor)
Every five years, with within-period adjustments if needed and justified
by the operator. Within-period adjustments will let operators recover
revenue during the assessment period if revenue is below the floor (or
above the cap) but will still be subject to true-up at the end of the five-
year assessment period.
Mechanism
If revenue is between the cap and floor at the end of the 5-year period,
no adjustment is required. Revenue above the cap is returned to end
customers and any shortfall in revenue below the floor requires payment
from grid users (via grid charges).
142
JOINT AUDITORS’ REPORT ON THE
CONSOLIDATED FINANCIAL STATEMENTS
BDO Bedrijfsrevisoren BV EY Bedrijfsrevisoren BV
The Corporate Village De Kleetlaan 2
Da Vincilaan 9 – Box E.6 B-1831 Diegem
Elsinore Building
B-1930 Zaventem
Joint auditors’ report to the general meeting of Elia Group NV/SA for the year
ended 31 December 2021
As required by law, we report to you as joint statutory auditors of Elia Group NV/SA (the “Company”) and its
subsidiaries (together the “Group”). This report includes our opinion on the consolidated statement of financial
position as at 31 December 2021, the consolidated statement of profit or loss, the consolidated statement of profit or
loss and comprehensive income, the consolidated statement of changes in equity and the consolidated statement of
cash flows for the year ended 31 December 2021 and the notes (all elements together the “Consolidated Financial
Statements”) and includes as well our report on other legal and regulatory requirements. These two reports are
considered as one report and are inseparable.
We have been appointed as joint statutory auditors by the shareholders meeting of 19 May 2020, in accordance with
the proposition by the Board of Directors following recommendation of the Audit Committee and on
recommendation of the workers’ council. Our mandate expires at the shareholders meeting that will deliberate on the
annual accounts for the year ending 31 December 2022. The audit of the Consolidated Financial Statements of the
Group was performed during respectively 20 consecutive years for EY Bedrijfsrevisoren BV and 2 consecutive years
for BDO Bedrijfsrevisoren BV.
Report on the audit of the Consolidated Financial Statements
Unqualified opinion
We have audited the Consolidated Financial Statements
of Elia Group NV/SA, which consists of the
consolidated statement of the financial position as at 31
December 2021, the consolidated statement of profit or
loss, the consolidated statement of profit or loss and
comprehensive income, the consolidated statement of
changes in equity and the consolidated statement of cash
flows for the year ended 31 December 2021 and the
notes, which show a consolidated balance sheet total of
€ 18.144,3 million and of which the consolidated
income statement shows a profit for the period of
€ 328,3 million.
In our opinion the Consolidated Financial Statements of
the Group give a true and fair view of the consolidated
net equity and financial position as at 31 December
2021, as well as its consolidated results and its
consolidated cash flows for the period then ended in
accordance with the International Financial Reporting
Standards as adopted by the European Union (“IFRS”)
and with applicable legal and regulatory requirements in
Belgium.
Basis for the unqualified opinion
We conducted our audit in accordance with International
Standards on Auditing (“ISAs”). Our responsibilities
under those standards are further described in the “Our
responsibilities for the audit of the Consolidated
Financial Statements” section of our report.
We have complied with all ethical requirements that are
relevant to our audit of the Consolidated Financial
Statements in Belgium, including those with respect to
independence.
We have obtained from the Board of Directors and the
officials of the Company the explanations and
information necessary for the performance of our audit
and we believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our
opinion.
Key audit matters
Key audit matters are those matters that, in our
professional judgment, were of most significance in our
audit of the Consolidated Financial Statements of the
current reporting period.
These matters were addressed in the context of our audit
of the Consolidated Financial Statements as a whole and
in forming our opinion thereon, and consequently we do
not provide a separate opinion on these matters.
Calculation of net result
Description
As described in the notes 3.3.17. ‘Regulatory deferral
accounts’, 6.19 ‘Accruals and deferred income’, 9.1.4
‘Tariff Setting’ and 9.2.3 ‘Tarif Setting in Germany’ of
the Consolidated Financial Statements, the net result of
the Belgian and the German segments is determined by
applying calculation methods set by the Belgian federal
regulator, the Commission for Electricity and Gas
Regulation (the “CREG”) and the German federal
Elia Group Financial Report 2021 143
JOINT AUDITORS’ REPORT ON THE
CONSOLIDATED FINANCIAL STATEMENTS
Audit report dated 14 April 2022 on the Consolidated Financial Statements
of Elia Group NV/SA as of and
for the year ended 31 December 2021 (continued)
2
regulator, the Federal Network Agency (the “BNetzA”)
(together the “Tariff Mechanisms”).
Those tariff mechanisms are based on calculation
methods that are complex and require the use of
parameters (the Beta of Elia’s share, return on equity,
...), accounting data of the regulated activities (the
Regulated Asset Base, the regulated equity, capital
expenditure (“CAPEX”), subsidies received) and
external operating data (such as hourly import capacity,
consumer and producer surpluses).
Both Tariff Mechanisms make a distinction between
income and expenses based on the control that the
Group has over the expenses and income. The first type
are the non-controllable elements for which deviations
are fully passed on to future tariffs. The second type are
the controllable elements that the Group can control,
and for which under-and overspending is (partly)
attributable to the shareholders.
Therefore, the calculation methods of the Group’s net
result are complex and require judgement from
management, more particularly related to the use of
correct accounting data, operating data, and parameters
imposed by the regulator. The use of incorrect
accounting and operating data, and deviations in used
assumptions, can have a material impact on the Group’s
net result.
How the matter was addressed in our audit
Amongst others, we have performed the following
procedures:
• Assessing the design and evaluating the operating
effectiveness of key controls relating to the
calculation of the net result, including those related
to (i) the completeness and accuracy of the
underlying data used in the calculation and (ii)
management review controls;
• Evaluating the adequate and consistent
classification of income and expenses by nature
(controllable and non-controllable) as described in
the Tariff Mechanisms;
• Performing independent mathematical
recalculations of the regulated results based on
underlying internal documentation and external
information, and taking into account the formulas
as described in the Tariff Mechanisms;
• Reading and evaluating the accounting implications
of communications and decisions taken by the
CREG and the BNetzA;
• Assessing the adequacy of notes 3.3.17, 6.19, 9.1.4
and 9.2.3 of the Consolidated Financial Statements.
Capitalization of property, plant and equipment
Description
Given the current evolution in the electricity
environment towards green energy production, the
Group has very significant investment projects ongoing
to connect these new productions sites on the Group’s
network. The timely and on-budget progress of these
investment projects is one of the key performance goals
for management as set by the Board of Directors. The
progress of these network projects is equally a key
performance indicator for investors as a key driver of
their return on investment is the maintenance and
expansion of the network. It is also an important
quantitative and qualitative measure for the regulators.
This is further explained and evidenced in Note 6.1
‘PPE’ and in Note 4 ‘Segment reporting’ of the
Consolidated Financial Statements.
These assets are classified as Property, Plant and
Equipment (“PP&E”), with a total capital expenditure of
€ 1,232.8 million in 2021 and a net book value of
€ 10,859.5 million as at 31 December 2021 or 59,8% of
total balance sheet.
The accounting policies describe that all maintenance
expenses are considered to be operating expenses
(“OPEX”) and all new project or replacement
investments are considered capital expenditure
“CAPEX”. As network projects can include both
maintenance and investments, the classification as either
OPEX or CAPEX requires judgement from
management. Given this judgement, the importance of
the amount of PP&E on the total balance sheet, and its
relevance to the users of the financial statements as well
as the prominence in the Group’s communication in
press releases and in investor presentations on the
progress on new projects, this matter is considered a key
audit matter.
How the matter was addressed in our audit
Amongst others, we have performed the following
procedures:
• Assessing the design and evaluating the operating
effectiveness of key controls, including
management review controls, over (i) the
appropriate authorization of capitalization, (ii) the
compliance of capitalization criteria used with the
accounting policies and (iii) the correct
classification of expenditure as CAPEX or OPEX;
• Assessing relevant IT application controls with the
support of our IT specialists;
• Performing substantive analytical procedures on
CAPEX and OPEX by comparing current year
figures with the budgeted figures as approved by
144
Audit report dated 14 April 2022 on the Consolidated Financial Statements
of Elia Group NV/SA as of and
for the year ended 31 December 2021 (continued)
3
the regulator at the level of asset classes and
projects;
• Testing a selection of additions to PP&E, including
those under construction, and assessing whether the
expenditure met the criteria for capitalization under
IFRS as adopted by the European Union and the
Group’s accounting policies and whether the
CAPEX were allocated to the correct projects,
including the assessment of management judgement
in case of a project including both maintenance and
investments;
• Assessing the adequacy of note 4 and 6.1 of the
Consolidated Financial Statements.
Responsibilities of the Board of Directors for
the preparation of the Consolidated Financial
Statements
The Board of Directors is responsible for the
preparation of the Consolidated Financial Statements
that give a true and fair view in accordance with IFRS
and with applicable legal and regulatory requirements in
Belgium as well as internal controls relevant to the
preparation of the Consolidated Financial Statements
that are free from material misstatement, whether due to
fraud or error.
As part of the preparation of the Consolidated Financial
Statements, the Board of Directors is responsible for
assessing the Company’s ability to continue as a going
concern, and provide, if applicable, information on
matters impacting going concern, The Board of
Directors should prepare the financial statements using
the going concern basis of accounting, unless the Board
of Directors either intends to liquidate the Company or
to cease business operations, or has no realistic
alternative but to do so.
Our responsibilities for the audit of the
Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about
whether the Consolidated Financial Statements are free
from material misstatement, whether due to fraud or
error, to express an opinion on these Consolidated
Financial Statements based on our audit. Reasonable
assurance is a high level of assurance, but not a
guarantee that an audit conducted in accordance with
the ISAs will always detect a material misstatement
when it exists. Misstatements can arise from fraud or
error and are considered to be material if, individually
or in the aggregate, they could reasonably be expected
to influence the economic decisions of users taken on
the basis of these Consolidated Financial Statements.
When executing our audit, we respect the legal,
regulatory and normative framework applicable for the
audit of the consolidated financial statements in
Belgium. However, a statutory audit does not guarantee
the future viability of the Group, neither the efficiency
and effectiveness of the management of the Group by
the administrative body. Our responsibilities regarding
the continuity assumption applied by the administrative
body are described below.
As part of an audit, in accordance with ISAs, we
exercise professional judgment and we maintain
professional scepticism throughout the audit. We also
perform the following tasks:
• Identification and assessment of the risks of material
misstatement of the Consolidated Financial
Statements, whether due to fraud or error, the
planning and execution of audit procedures to
respond to these risks and obtain audit evidence
which is sufficient and appropriate to provide a basis
for our opinion. The risk of not detecting material
misstatements is larger when these misstatements are
due to fraud, since fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or
the override of internal control;
• Obtaining insight in the system of internal controls
that are relevant for the audit and with the objective
to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Group’s
internal control;
• Evaluating the selected and applied accounting
policies, and evaluating the reasonability of the
accounting estimates and related disclosures made by
the Board of Directors as well as the underlying
information given by the Board of Directors;
• Conclude on the appropriateness of Board of
Director’s use of the going-concern basis of
accounting, and based on the audit evidence
obtained, whether a material uncertainty exists
related to event or conditions that may cast
significant doubt on the Company or Group’s ability
to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw
attention in our auditor’s report to the related
disclosures in the Consolidated Financial Statements
or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on audit evidence
obtained up to the date of the auditor’s report.
However, future events or conditions may cause the
Company or Group to cease to continue as a going-
concern;
• Evaluating the overall presentation, structure and
content of the Consolidated Financial Statements,
and of whether these financial statements reflect the
Elia Group Financial Report 2021 145
Audit report dated 14 April 2022 on the Consolidated Financial Statements
of Elia Group NV/SA as of and
for the year ended 31 December 2021 (continued)
4
underlying transactions and events in a true and fair
view; and
• Obtain sufficient appropriate audit evidence
regarding the financial information of the entities or
business activities within the Group to express an
opinion on the consolidated financial statements. We
are responsible for the direction, supervision and
performance of the group audit. We remain solely
responsible for our audit opinion.
We communicate with the Audit Committee within the
Board of Directors regarding, among other matters, the
planned scope and timing of the audit and significant
audit findings, including any significant deficiencies in
internal control that we identify during our audit.
We provide the Audit Committee within the Board of
Directors with a statement that we have complied with
relevant ethical requirements regarding independence,
and to communicate with them all relationships and
other matters that may reasonably be thought to bear on
our independence, and where applicable, related
safeguards.
From the matters communicated to the Audit Committee
within the Board of Directors, we determine those
matters that were of most significance in the audit of the
Consolidated Financial Statements of the current period
and are therefore the key audit matters. We describe
these matters in our report, unless the law or regulations
prohibit this.
Report on other legal and regulatory requirements
Responsibilities of the Board of Directors
The Board of Directors is responsible for the
preparation and the content of the Board of Director’s
report and other information included in the annual
report.
Responsibilities of the joint auditors
In the context of our mandate and in accordance with
the additional standard to the ISAs applicable in
Belgium, it is our responsibility to verify, in all material
respects, the Board of Director’s report and other
information included in the annual report, as well as to
report on these matters.
Aspects relating to Board of Director’s report
and other information included in the annual
report
In our opinion, based on specific work performed on the
Board of Director’s report, the Board of Director’s
report is consistent with the Consolidated Financial
Statements for the same financial year and has been
prepared in accordance with article 3:32 of the Code of
companies and associations.
In the context of our audit of the Consolidated Financial
Statements, we are also responsible to consider whether,
based on the information that we became aware of
during the performance of our audit, the Board of
Directors’ report contain any material inconsistencies or
contains information that is inaccurate or otherwise
misleading. In light of the work performed, there are no
material inconsistencies to be reported.
The non-financial information required by article 3:32
§2 of the Code of companies and associations is
included in the chapter Sustainability reporting of the
annual report. The Group has prepared this non-
financial information based on the Global Reporting
Initiative Standards (“GRI”). In accordance with art
3:80 §1, 1st paragraph, 5° of the Companies’ and
Associations’ Code, we do not comment on whether this
non-financial information has been prepared in
accordance with the Global Reporting Initiative
Standards mentioned in the board of directors’ annual
report on the consolidated financial statements.
Independence matters
We, and our respective networks, have not performed
any services that are not compatible with the audit of the
Consolidated Financial Statements and we have
remained independent of the Company and the Group
during the course of our mandate.
The fees for additional services that are compatible with
the audit of the Consolidated Financial Statements
intended by article 3:65 of the Code of companies and
associations have been correctly disclosed and detailed
in the disclosures to the Consolidated Financial
Statements.
European single electronic format (“ESEF”)
In accordance with the standard on the audit of the
conformity of the financial statements with the
European single electronic format (hereinafter "ESEF"),
we have carried out the audit of the compliance of the
ESEF format with the regulatory technical standards set
by the European Delegated Regulation No 2019/815 of
17 December 2018 (hereinafter: "Delegated
Regulation").
The board of directors is responsible for the preparation,
in accordance with the ESEF requirements, of the
146
Audit report dated 14 April 2022 on the Consolidated Financial Statements
of Elia Group NV/SA as of and
for the year ended 31 December 2021 (continued)
5
consolidated financial statements in the form of an
electronic file in ESEF format (hereinafter 'the digital
consolidated financial statements') included in the
annual financial report available on the portal of the
FSMA (https://www.fsma.be/eng/data-portal).
It is our responsibility to obtain sufficient and
appropriate supporting evidence to conclude that the
format and markup language of the digital consolidated
financial statements comply in all material respects with
the ESEF requirements under the Delegated Regulation.
Based on the work performed by us, we conclude that
the format and tagging of information in the digital
consolidated financial statements included in the annual
financial report available on the portal of the FSMA
(https://www.fsma.be/eng/data-portal) of Elia Group
NV/SA per 31 December 2021 are, in all material
respects, in accordance with the ESEF requirements
under the Delegated Regulation.
Other communication
This report is consistent with our additional report to the
Audit Committee as specified in article 11 of the
regulation (EU) nr. 537/2014.
Brussels, 14 April 2022
The joint statutory auditors
EY Bedrijfsrevisoren BV
represented by
Paul Eelen*
Partner
*Acting on behalf of a BV
BDO Bedrijfsrevisoren BV
represented by
Felix Fank*
Partner
*Acting on behalf of a BV
Elia Group Financial Report 2021 147
INFORMATION ABOUT THE PARENT COMPANY
Extracts from the statutory annual accounts of Elia Group SA/NV, drawn up in accordance with Belgian accounting standards, are
provided hereafter in abbreviated form.
Pursuant to Belgian company legislation, the full financial statements, the annual report and the joint auditors' report are filed with the
National Bank of Belgium.
These documents will also be published on the Elia website and can be obtained on request from Elia Group SA/NV, Boulevard de
l’Empereur 20, 1000 Brussels, Belgium. The joint auditors issued an unqualified opinion.
Statement of financial position after distribution of profits
ASSETS (in € million)
2021
2020
FIXED ASSETS
3,318.1
3,317.5
Financial fixed assets
3,318.1
3,317.5
Affiliated companies
3,318.1
3,317.5
Participating interests
3,318.1
3,317.5
Other financial assets
0.0
0.0
CURRENT ASSETS
47.1
92.3
Inventories and contracts in progress
3.1
3.1
Contracts in progress
3.1
3.1
Amounts receivable within one year
2.2
3.1
Trade debtors
1.7
1.9
Other amounts receivable
0.5
1.2
Own shares
0.8
0.0
Cash at bank and in hand
37.2
81.7
Deferred charges and accrued income
3.8
4.4
TOTAL ASSETS
3,365.2
3,409.8
148
EQUITY AND LIABILITIES (in € million)
2021
2020
CAPITAL AND RESERVES
2,235.5
2,282.8
Capital
1,714.2
1,714.0
Issued capital
1,714.2
1,714.0
Share premium account
262.9
262.4
Reserves
176.2
175.4
Legal reserve
173.0
173.0
Repurchase own shares
0.8
0.0
Untaxed reserve
1.6
1.6
Available reserves
0.7
0.8
Profit carried forward
82.2
130.9
LIABILITIES
1,129.7
1,127.0
Amounts payable after one year
998.7
998.5
Financial debts
998.7
998.5
Subordinated debentures
700.0
700.0
Unsubordinated debentures
298.7
298.5
Amounts payable within one year
128.0
125.7
Trade debts
2.0
3.0
Suppliers
2.0
3.0
Advances received on contracts in progress
3.6
3.4
Amounts payable regarding taxes, remuneration and social security costs
0.7
0.5
Taxes
0.0
0.0
Remuneration and social security
0.7
0.5
Other amounts payable
121.7
118.7
Accrued charges and deferred income
3.0
2.8
TOTAL EQUITY AND LIABILITIES
3,365.2
3,409.8
Elia Group Financial Report 2021 149
EQUITY AND LIABILITIES (in € million)
2021
2020
CAPITAL AND RESERVES
2,235.5
2,282.8
Capital
1,714.2
1,714.0
Issued capital
1,714.2
1,714.0
Share premium account
262.9
262.4
Reserves
176.2
175.4
Legal reserve
173.0
173.0
Repurchase own shares
0.8
0.0
Untaxed reserve
1.6
1.6
Available reserves
0.7
0.8
Profit carried forward
82.2
130.9
LIABILITIES
1,129.7
1,127.0
Amounts payable after one year
998.7
998.5
Financial debts
998.7
998.5
Subordinated debentures
700.0
700.0
Unsubordinated debentures
298.7
298.5
Amounts payable within one year
128.0
125.7
Trade debts
2.0
3.0
Suppliers
2.0
3.0
Advances received on contracts in progress
3.6
3.4
Amounts payable regarding taxes, remuneration and social security costs
0.7
0.5
Taxes
0.0
0.0
Remuneration and social security
0.7
0.5
Other amounts payable
121.7
118.7
Accrued charges and deferred income
3.0
2.8
TOTAL EQUITY AND LIABILITIES
3,365.2
3,409.8
Statement of profit or loss
(in € million)
2021
2020
OPERATING INCOME
1.0
7.1
Increase/(decrease) in inventories of finished goods, works and contracts in progress
0.0
0.6
Other operating income
1.0
6.5
OPERATING CHARGES
(6.4)
(11.7)
Services and other goods
(5.0)
(10.6)
Remuneration, social security costs and pensions
(1.4)
(1.0)
Other operating charges
0.0
0.0
OPERATING PROFIT
(5.4)
(4.5)
Financial income
102.9
113.9
Income from financial fixed assets
102.8
113.9
Income from current assets
0.0
0.0
Non-recurring financial income
0.1
0.0
Financial charges
(25.1)
(25.0)
Debt charges
(24.5)
(24.5)
Other financial charges
(0.6)
(0.5)
PROFIT FOR THE PERIOD BEFORE TAXES
72.4
84.4
Income taxes
0.0
0.0
PROFIT FOR THE PERIOD
72.4
84.4
Transfer to untaxed reserves
0.0
0.8
PROFIT FOR THE PERIOD AVAILABLE FOR APPROPRIATION
72.4
85.2
150
Financial terms or Alternative Performance Measures
The Annual Report contains certain financial performance measures that are not defined by IFRS and are used by management to
assess the financial and operational performance of the Group. The main alternative performance measures used by the Group are
explained and/or reconciled with our IFRS measures (Consolidated Financial Statements) in this document.
The following APM’s appearing in the Annual Report are explained in this appendix:
• Adjusted items
• Adjusted EBIT
• Adjusted net profit
• Capex (Capital Expenditures)
• EBIT
• EBITDA
• Equity attributable to the owners of the company
• Free cash flow
• Net finance costs
• Net financial debt
• Regulatory Asset Base (RAB)
• Return on Equity (adj) (%)
Adjusted items
Adjusted items are those items that are considered by management not to relate to items in the ordinary course of activities of the
Group. They are presented separately as they are important for the understanding of users of the consolidated financial statements of
the performance of the Group and this compared to the returns defined in the regulatory frameworks applicable to the Group and its
subsidiaries. Adjusted items relate to:
• Income and expenses resulting from a single material transaction not linked to current business activities (e.g. change in
control in a subsidiary)
• changes to the measurement of contingent considerations in the context of business combinations;
• Restructuring costs linked to the corporate reorganisation of the Group (i.e. reorganisation project to isolate and ring-fence the
regulated activities of Elia in Belgium from the non-regulated activities and regulated activities outside Belgium
Adjusted EBIT
Adjusted EBIT is defined as EBIT excluding the adjusted items.
EBIT (Earnings Before Interest and Taxes) = adjusted result from operating activities, which is used to compare the operational
performance of the Group over the years.
The adjusted EBIT is calculated as total revenue less costs of raw materials, consumables and goods for resale, services and other
goods, personnel expenses and pensions, depreciations, amortisations and impairments, changes in provisions and other operating
expense and plus the share of equity accounted investees – net and plus or minus adjusted items.
(in € million) – Year ended 31 December
2021
Elia
Transmission
50Hertz
Transmission
Non-
regulated
activities
and
Nemo
Link
Consolidation
entries &
intersegment
transactions
Elia Group
Results from operating activities
224.8
272.9
(6.8)
(0.2)
490.7
Share of profit of equity accounted investees (net of tax)
2.3
0.0
47.1
0.0
49.4
EBIT
227.1
272.9
40.3
(0.2)
540.1
Deduct:
Adjusted EBIT
227.1
272.9
40.3
(0.2)
540.1
There are no adjusted items in 2021
Elia Group Financial Report 2021 151
Financial terms or Alternative Performance Measures
The Annual Report contains certain financial performance measures that are not defined by IFRS and are used by management to
assess the financial and operational performance of the Group. The main alternative performance measures used by the Group are
explained and/or reconciled with our IFRS measures (Consolidated Financial Statements) in this document.
The following APM’s appearing in the Annual Report are explained in this appendix:
• Adjusted items
• Adjusted EBIT
• Adjusted net profit
• Capex (Capital Expenditures)
• EBIT
• EBITDA
• Equity attributable to the owners of the company
• Free cash flow
• Net finance costs
• Net financial debt
• Regulatory Asset Base (RAB)
• Return on Equity (adj) (%)
Adjusted items
Adjusted items are those items that are considered by management not to relate to items in the ordinary course of activities of the
Group. They are presented separately as they are important for the understanding of users of the consolidated financial statements of
the performance of the Group and this compared to the returns defined in the regulatory frameworks applicable to the Group and its
subsidiaries. Adjusted items relate to:
• Income and expenses resulting from a single material transaction not linked to current business activities (e.g. change in
control in a subsidiary)
• changes to the measurement of contingent considerations in the context of business combinations;
• Restructuring costs linked to the corporate reorganisation of the Group (i.e. reorganisation project to isolate and ring-fence the
regulated activities of Elia in Belgium from the non-regulated activities and regulated activities outside Belgium
Adjusted EBIT
Adjusted EBIT is defined as EBIT excluding the adjusted items.
EBIT (Earnings Before Interest and Taxes) = adjusted result from operating activities, which is used to compare the operational
performance of the Group over the years.
The adjusted EBIT is calculated as total revenue less costs of raw materials, consumables and goods for resale, services and other
goods, personnel expenses and pensions, depreciations, amortisations and impairments, changes in provisions and other operating
expense and plus the share of equity accounted investees – net and plus or minus adjusted items.
(in € million) – Year ended 31 December
2021
Elia
Transmission
50Hertz
Transmission
Non-
regulated
activities
and
Nemo
Link
Consolidation
entries &
intersegment
transactions
Elia Group
Results from operating activities
224.8
272.9
(6.8)
(0.2)
490.7
Share of profit of equity accounted investees (net of tax)
2.3
0.0
47.1
0.0
49.4
EBIT
227.1
272.9
40.3
(0.2)
540.1
Deduct:
Adjusted EBIT
227.1
272.9
40.3
(0.2)
540.1
There are no adjusted items in 2021
(in € million) – Year ended 31 December
2020
Elia
Transmission
50Hertz
Transmission
Non-
regulated
activities
and
Nemo
Link
Consolidation
entries &
intersegment
transactions
Elia Group
Results from operating activities
235.6
340.1
(6.5)
0.0
569.3
Share of profit of equity accounted investees (net of tax)
1.9
0.0
7.4
0.0
9.2
EBIT
237.5
340.1
0.9
0.0
578.5
Deduct:
Corporate reorganisation
0.0
0.0
(0.3)
0.0
(0.3)
Adjusted EBIT
237.5
340.1
1.2
0.0
578.8
Adjusted net profit
Adjusted net profit is defined as net profit excluding the adjusted items.The adjusted net profit is used to compare the performance of the
Group over the years.
(in € million) – Year ended 31 December
2021
Elia
Transmission
50Hertz
Transmission
Non-regulated
activities and
Nemo Link
Elia Group
Profit for the period
131.0
165.4
31.9
328.3
Deduct:
Adjusted net profit
131.0
165.4
31.9
328.3
There are no adjusted items in 2021
(in € million) – Year ended 31 December
2020
Elia
Transmission
50Hertz
Transmission
Non-regulated
activities and
Nemo Link
Elia Group
Profit for the period
124.8
192.6
(9.5)
307.9
Deduct:
Corporate reorganisation
0.0
0.0
(0.3)
(0.3)
Tax impact
0.0
0.0
0.1
0.1
Adjusted net profit
124.8
192.6
(9.3)
308.1
CAPEX (Capital Expenditures)
CAPEX (Capital Expenditures) = Acquisitions property, plant and equipment and intangible assets minus proceeds from sale of such
items. Capital expenditures, or CAPEX, are investments realised by the Group to acquire, upgrade, and maintain physical assets (such
as property, buildings, an industrial plant, technology, or equipment) and intangible assets. CAPEX is an important metric for the Group
as it affects its Regulated Asset Base (RAB) that serves as basis for its regulatory remuneration.
152
EBIT
EBIT (Earnings Before Interest and Taxes) = result from operating activities, which is used for the operational performance of the Group.
The EBIT is calculated as total revenue less costs of raw materials, consumables and goods for resale, services and other goods,
personnel expenses and pensions, depreciations, amortisations and impairments, changes in provision and other operating expense
and plus the share of equity accounted investees.
(in € million) – Year ended 31 December
2021
Elia
Transmission
50Hertz
Transmission
Non-
regulated
activities
and
Nemo
Link
Consolidation
entries &
intersegment
transactions
Elia Group
Results from operating activities
224.8
272.9
(6.8)
(0.2)
490.7
Share of profit of equity accounted investees (net of tax)
2.3
0.0
47.1
0
49.4
EBIT
227.1
272.9
40.3
(0.2)
540.1
(in € million) – Year ended 31 December
2020
Elia
Transmission
50Hertz
Transmission
Non-
regulated
activities
and
Nemo
Link
Consolidation
entries &
intersegment
transactions
Elia Group
Results from operating activities
235.6
340.1
(6.5)
0.0
569.3
Share of profit of equity accounted investees (net of tax)
1.9
0.0
7.4
0
9.2
EBIT
237.5
340.1
0.9
0.0
578.5
EBITDA
EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortisations) = results from operating activities plus depreciations,
amortisation and impairment plus changes in provisions plus share of profit of equity accounted investees. EBITDA is used as a
measure for the operational performance of the Group, thereby extracting the effect of depreciations, amortisation and changes in
provisions of the Group. EBITDA excludes the cost of capital investments like property, plant, and equipment.
(in € million) – Year ended 31 December
2021
Elia
Transmission
50Hertz
Transmission
Non-
regulated
activities
and
Nemo
Link
Consolidation
entries &
intersegment
transactions
Elia
Group
Results from operating activities
224.8
272.9
(6.8)
(0.2)
490.7
Add:
Depreciation, amortisation and impairment
206.8
260.3
0.5
0.0
467.5
Changes in provisions
(1.7)
0.9
0.0
0.0
(0.7)
Share of profit of equity accounted investees (net of tax)
2.3
0.0
47.1
0.0
49.4
EBITDA
432.2
534.0
40.8
(0.2)
1,006.9
(in € million) – Year ended 31 December
2020
Elia
Transmission
50Hertz
Transmission
Non-
regulated
activities
and
Nemo
Link
Consolidation
entries &
intersegment
transactions
Elia
Group
Results from operating activities
235.6
340.1
(6.5)
0.0
569.3
Add:
Depreciation, amortisation and impairment
187.3
245.1
0.2
0.0
432.6
Changes in provisions
1.1
(6.6)
0.0
0.0
(5.5)
Share of profit of equity accounted investees (net of tax)
1.9
0.0
7.4
0.0
9.2
EBITDA
425.8
578.6
1.1
0.0
1,005.6
Elia Group Financial Report 2021 153
EBIT
EBIT (Earnings Before Interest and Taxes) = result from operating activities, which is used for the operational performance of the Group.
The EBIT is calculated as total revenue less costs of raw materials, consumables and goods for resale, services and other goods,
personnel expenses and pensions, depreciations, amortisations and impairments, changes in provision and other operating expense
and plus the share of equity accounted investees.
(in € million) – Year ended 31 December
2021
Elia
Transmission
50Hertz
Transmission
Non-
regulated
activities
and
Nemo
Link
Consolidation
entries &
intersegment
transactions
Elia Group
Results from operating activities
224.8
272.9
(6.8)
(0.2)
490.7
Share of profit of equity accounted investees (net of tax)
2.3
0.0
47.1
0
49.4
EBIT
227.1
272.9
40.3
(0.2)
540.1
(in € million) – Year ended 31 December
2020
Elia
Transmission
50Hertz
Transmission
Non-
regulated
activities
and
Nemo
Link
Consolidation
entries &
intersegment
transactions
Elia Group
Results from operating activities
235.6
340.1
(6.5)
0.0
569.3
Share of profit of equity accounted investees (net of tax)
1.9
0.0
7.4
0
9.2
EBIT
237.5
340.1
0.9
0.0
578.5
EBITDA
EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortisations) = results from operating activities plus depreciations,
amortisation and impairment plus changes in provisions plus share of profit of equity accounted investees. EBITDA is used as a
measure for the operational performance of the Group, thereby extracting the effect of depreciations, amortisation and changes in
provisions of the Group. EBITDA excludes the cost of capital investments like property, plant, and equipment.
(in € million) – Year ended 31 December
2021
Elia
Transmission
50Hertz
Transmission
Non-
regulated
activities
and
Nemo
Link
Consolidation
entries &
intersegment
transactions
Elia
Group
Results from operating activities
224.8
272.9
(6.8)
(0.2)
490.7
Add:
Depreciation, amortisation and impairment
206.8
260.3
0.5
0.0
467.5
Changes in provisions
(1.7)
0.9
0.0
0.0
(0.7)
Share of profit of equity accounted investees (net of tax)
2.3
0.0
47.1
0.0
49.4
EBITDA
432.2
534.0
40.8
(0.2)
1,006.9
(in € million) – Year ended 31 December
2020
Elia
Transmission
50Hertz
Transmission
Non-
regulated
activities
and
Nemo
Link
Consolidation
entries &
intersegment
transactions
Elia
Group
Results from operating activities
235.6
340.1
(6.5)
0.0
569.3
Add:
Depreciation, amortisation and impairment
187.3
245.1
0.2
0.0
432.6
Changes in provisions
1.1
(6.6)
0.0
0.0
(5.5)
Share of profit of equity accounted investees (net of tax)
1.9
0.0
7.4
0.0
9.2
EBITDA
425.8
578.6
1.1
0.0
1,005.6
Free cash flow
Free cash flow = Cash flows from operating activities minus cash flows from investment activities. Free cash flow provides an indication
of the cash flows generated by the Group.
(in € million) – Year ended 31 December
2021
Elia
Transmission
50Hertz
Transmission
Non-regulated
activities and
Nemo Link
Elia Group
Net cash from operating activities
262.3
3,720.7
(29.8)
3,953.1
Deduct:
Net cash used in investing activities
379.9
831.4
(153.3)
1,057.9
Free cash flow
(117.6)
2,889.4
123.6
2,895.2
(in € million) – Year ended 31 December
2020
Elia
Transmission
50Hertz
Transmission
Non-regulated
activities and
Nemo Link
Elia Group
Net cash from operating activities
84.5
(796.3)
(24.6)
(736.6)
Deduct:
Net cash used in investing activities
345.4
730.1
(134.2)
941.3
Free cash flow
(260.8)
(1,526.4)
109.6
(1,677.8)
Net finance costs
Represents the net financial result (finance costs minus finance income) of the company.
Net financial debt
Net Financial Debt = Non-current and current interest-bearing loans and borrowings (incl. lease liability under IFRS 16) minus cash and
cash equivalents. Net financial debt is an indicator of the amount of interest-bearing debt of the Group that would remain if readily
available cash or cash instruments were used to repay existing debt.
(in € million) – Year ended 31
December
2021
2020
Elia
Transmission
50Hertz
Transmission
Non-
regulated
activities
and
Nemo
Link
Elia
Group
Total
Elia
Transmission
50Hertz
Transmission
Non-
regulated
activities
and
Nemo
Link
Elia
Group
Total
Non-current liabilities:
Loans and borrowings
3,421.9
3,838.6
481.3
7,741.7
3,433.6
3,327.2
488.8
7,249.6
Add:
Current Liabilities:
Loans and borrowings
147.6
33.5
12.9
194.0
67.7
725.9
11.9
805.5
Deduct:
Current Assets:
Cash and cash equivalents
128.5
2,857.2
63.8
3,049.4
195.7
296.6
97.8
590.1
Net financial debt
3,441.0
1,014.9
430.4
4,886.3
3,305.6
3,756.6
402.9
7,465.0
EEG surplus (levies)
2,110.0
2,110.0
EEG deficit (levies)
808.9
808.9
Net financial debt, exl. EEG
position
3,441.0
3,124.8
430.4
6,996.3
3,305.6
2,496.7
3,305.6
6,656.2
154
Regulated Asset Base (RAB)
Regulated asset base (RAB) is a regulatory concept and an important driver to determine the return on the invested capital in the TSO
through regulatory schemes. The RAB is determined as follows: RAB
i
(initial RAB determined by regulator at a certain point in time) and
evolves with new investments, depreciations, divestments and changes in working capital on a yearly basis using the local gaap
accounting principles applicable in the regulatory schemes. In Belgium when setting the initial RAB, a certain amount of revaluation
value (i.e. goodwill) was taken into account which evolves from year to year based on divestments and/or depreciations.
Return on Equity (adj.) (%)
Return on Equity (RoE adj.) = Net profit attributable to ordinary shareholders divided by equity attributable to ordinary shareholders. The
return on equity is adjusted to exclude the accounting impact of hybrid securities in IFRS (i.e. exclude the hybrid security from equity
and consider the interest costs as part of comprehensive income). The RoE adj. provides an indication of the ability of the Group to
generate profits relative to its invested equity.
(in € million) – Year ended 31 December
2021
2020
Profit for the period
328.3
307.9
Deduct:
Profit attributable to holders of hybrid securities
19.2
19.3
Profit attributable to non-controlling interests
33.1
38.5
Profit attributable to equity holders of ordinary shares (A)
276.0
250.1
Divided by:
Equity attributable to ordinary shares
3,850.6
3,471.7
Deduct:
Hedging reserve in equity
199.9
Adjusted equity attributable to ordinary shares (B)
3,650.7
3,471.7
Return on Equity (adj.) (%) = (A) / (B)
7.56%
7.20%
549300S1MP1NFDIKT4602021-01-012021-12-31549300S1MP1NFDIKT4602020-01-012020-12-31549300S1MP1NFDIKT4602021-12-31549300S1MP1NFDIKT4602020-12-31549300S1MP1NFDIKT4602019-12-31ifrs-full:IssuedCapitalMember549300S1MP1NFDIKT4602020-01-012020-12-31ifrs-full:IssuedCapitalMember549300S1MP1NFDIKT4602020-12-31ifrs-full:IssuedCapitalMember549300S1MP1NFDIKT4602019-12-31ifrs-full:SharePremiumMember549300S1MP1NFDIKT4602020-01-012020-12-31ifrs-full:SharePremiumMember549300S1MP1NFDIKT4602020-12-31ifrs-full:SharePremiumMember549300S1MP1NFDIKT4602019-12-31ifrs-full:ReserveOfCashFlowHedgesMember549300S1MP1NFDIKT4602020-01-012020-12-31ifrs-full:ReserveOfCashFlowHedgesMember549300S1MP1NFDIKT4602020-12-31ifrs-full:ReserveOfCashFlowHedgesMember549300S1MP1NFDIKT4602019-12-31ifrs-full:OtherReservesMember549300S1MP1NFDIKT4602020-12-31ifrs-full:OtherReservesMember549300S1MP1NFDIKT4602019-12-31ifrs-full:RetainedEarningsMember549300S1MP1NFDIKT4602020-01-012020-12-31ifrs-full:RetainedEarningsMember549300S1MP1NFDIKT4602020-12-31ifrs-full:RetainedEarningsMember549300S1MP1NFDIKT4602019-12-31ELI:EquityAttributableToOrdinaryEquityHoldersOfParentEntityMember549300S1MP1NFDIKT4602020-01-012020-12-31ELI:EquityAttributableToOrdinaryEquityHoldersOfParentEntityMember549300S1MP1NFDIKT4602020-12-31ELI:EquityAttributableToOrdinaryEquityHoldersOfParentEntityMember549300S1MP1NFDIKT4602019-12-31ELI:HybridCapitalMember549300S1MP1NFDIKT4602020-12-31ELI:HybridCapitalMember549300S1MP1NFDIKT4602019-12-31ifrs-full:EquityAttributableToOwnersOfParentMember549300S1MP1NFDIKT4602020-01-012020-12-31ifrs-full:EquityAttributableToOwnersOfParentMember549300S1MP1NFDIKT4602020-12-31ifrs-full:EquityAttributableToOwnersOfParentMember549300S1MP1NFDIKT4602019-12-31ifrs-full:NoncontrollingInterestsMember549300S1MP1NFDIKT4602020-01-012020-12-31ifrs-full:NoncontrollingInterestsMember549300S1MP1NFDIKT4602020-12-31ifrs-full:NoncontrollingInterestsMember549300S1MP1NFDIKT4602019-12-31549300S1MP1NFDIKT4602021-01-012021-12-31ifrs-full:IssuedCapitalMember549300S1MP1NFDIKT4602021-12-31ifrs-full:IssuedCapitalMember549300S1MP1NFDIKT4602021-01-012021-12-31ifrs-full:SharePremiumMember549300S1MP1NFDIKT4602021-12-31ifrs-full:SharePremiumMember549300S1MP1NFDIKT4602021-01-012021-12-31ifrs-full:ReserveOfCashFlowHedgesMember549300S1MP1NFDIKT4602021-12-31ifrs-full:ReserveOfCashFlowHedgesMember549300S1MP1NFDIKT4602021-12-31ifrs-full:OtherReservesMember549300S1MP1NFDIKT4602021-01-012021-12-31ifrs-full:TreasurySharesMember549300S1MP1NFDIKT4602021-12-31ifrs-full:TreasurySharesMember549300S1MP1NFDIKT4602021-01-012021-12-31ifrs-full:RetainedEarningsMember549300S1MP1NFDIKT4602021-12-31ifrs-full:RetainedEarningsMember549300S1MP1NFDIKT4602021-01-012021-12-31ELI:EquityAttributableToOrdinaryEquityHoldersOfParentEntityMember549300S1MP1NFDIKT4602021-12-31ELI:EquityAttributableToOrdinaryEquityHoldersOfParentEntityMember549300S1MP1NFDIKT4602021-01-012021-12-31ELI:HybridCapitalMember549300S1MP1NFDIKT4602021-12-31ELI:HybridCapitalMember549300S1MP1NFDIKT4602021-01-012021-12-31ifrs-full:EquityAttributableToOwnersOfParentMember549300S1MP1NFDIKT4602021-12-31ifrs-full:EquityAttributableToOwnersOfParentMember549300S1MP1NFDIKT4602021-01-012021-12-31ifrs-full:NoncontrollingInterestsMember549300S1MP1NFDIKT4602021-12-31ifrs-full:NoncontrollingInterestsMemberiso4217:EURiso4217:EURxbrli:shares