Towards a sustainable future: building solutions to the complex issues surrounding energy transition
The energy transition is one of the significant operations of our time. It is a comprehensive issue with a profound effect on the economy and society as a whole. Achieving the Paris Agreement climate targets is crucial for the future of our planet. Due to our strategic location on the North Sea, our ports and the existing infrastructure serving the developing hydrogen chain, the Netherlands will play an essential role in the European switch to clean energy sources.
Hans, can you tell us a bit about your experience in the energy sector?
"Before KPMG, I was segment leader of Energy & Utilities for over a decade, roughly from 2000. In those years, electricity generation was still largely fossil, and the wind industry was emerging. Alliander and Enexis were split off from NUON and Essent, respectively; then both parent companies were sold to Vattenfall and E.on. As lead partner on behalf of KPMG for, among others, Eneco, NUON (and their shareholders), TenneT and several water and waste companies, I witnessed these developments up close. I experienced the semi-public, multi-stakeholder environment as very interesting. After KPMG, I worked at Eneco for seven years from 2015, including as director of Corporate Development & Venturing. There, I experienced the demerger of Stedin, supervised Eneco's expansion in Germany, was involved in the sale of Eneco to Mitsubishi and was a supervisory board member at Greenchoice, JedLix and Eneco e-mobility, among others. For the last 2.5 years, I have also gained line experience as a member of the board of LichtBlick (from Hamburg), which has allowed me to be active in the sector both as an advisor, supervisor and board member."
Who are the key players in the energy transition?
"These can be divided into four groups: policy makers (national and regional government institutions), grid operators (TSO/DSOs), producers/suppliers and end users (B2B/B2C). Producers/suppliers produce and supply electricity, gas and heat. To do so, they have historically mainly used fossil fuels as feedstock in (mostly gas-fired) power plants, but in the last, say, ten years, have increasingly invested in renewable energy sources such as solar and wind energy (onshore and offshore). TSOs and DSOs are responsible for transmission to users. They build, operate and maintain the central and regional infrastructure and ensure energy is distributed safely, reliably and efficiently. B2B and B2C energy consumers are the last link in the energy supply chain, consuming energy for their daily activities and needs. Public authorities play a crucial role in the energy transition by establishing policies, regulations and financial incentives that promote the development and adoption of renewable energy. They are also involved in overseeing the energy market and ensuring compliance with environmental standards. The national government is also increasingly becoming an active investor in the challenges of the energy transition, evidenced by its recent participation in Stedin and the long-term financing for Tennet.
What steps still need to be taken to complete the energy transition?
The energy transition cries out for a longer-term approach. A future-proof transition of the sector, one where we say goodbye to fossil fuels for good and switch to fully renewable energy. Electricity availability is a pressing issue. Due to the phase-out of gas and the increase in renewable energy, Dutch households and businesses will use substantially more electricity over the next decade. The current energy grid cannot cope with this; this is where grid operators have a crucial role to play. The most topical issues here are (1) grid congestion, (2) the heat transition and (3) energy storage.
Grid congestion refers to overloading in electricity networks.
It can occur when the electricity demand exceeds the capacity of the electricity grid, which can lead to various problems, including power cuts or voltage fluctuations. To avoid such issues, grid operators currently do not accept new or heavier connections in many places in the Netherlands. This inhibits sustainability through electrification and, thus, the economy as a whole. Our entire electricity network therefore needs a significant upgrade in the following (7-10) years. The DSOs, TenneT, and Gasunie are investing many billions to realise these required reinforcements.
The heat transition concerns transitioning from traditional and often polluting heating and hot water supply systems to more sustainable, energy-efficient and environmentally friendly solutions. As an alternative to heat sources and fossil fuels, hydrogen will play a role alongside electricity. This also requires infrastructural adaptations; for instance, the port structure needs to be adapted to make it suitable for hydrogen storage and distribution of (green) ammonia, among other things.
Finally, renewable energy sources such as solar and wind power are not constantly available. Developing efficient energy storage technologies is crucial to increasing the reliability of renewable energy and ultimately achieving a truly sustainable energy system.
Does this also mean we need to commit to energy conservation?
"Optimising our energy consumption is a crucial part of the transition. Besides well-known solutions such as heat pumps, there are now more and more innovations that allow consumers to use energy more optimally in and around the home. Smart charging of an electric car that prevents overloading the grid, recharging energy for home energy use and choosing the right moment to use energy (spot pricing), for instance, are innovations that can soon be rolled out more widely in the Netherlands. Less energy wastage also means more efficient use of natural resources, such as fuel and water. In addition, it reduces pressure on all other problem areas; if we use less energy, there is also less need to be reprocessed, stored and transported."
What role can Boer & Croon play in the energy transition?
"We mainly support DSOs, TSOs and producers/suppliers. But also infra-parties such as port companies, fund investors and pension funds. The issues vary greatly between these players. At producers/suppliers, for instance, we support the implementation of new business models and optimise their portfolio management. Whereas previously, the focus was mainly on supplying electricity and gas as efficiently as possible, we now see a shift towards optimising customer interactions and developing new products and services. Suppliers are increasingly taking on the role of service providers. This requires a new business model. At network operators, we notice a great need for process optimisation and experienced (interim) project managers. This sector faces the challenge of realising extreme grid expansions with limited human resources. Designing processes smarter and finding qualified technical staff is a key priority. We provide solutions to these challenges, both with our young professionals, experienced interim managers and from our executive search competence."
The energy transition calls for big thinkers and doers who can and dare look further. It is a highly complex task requiring cooperation between the chain's various stakeholders. We understand better than anyone that the energy transition plays a central role in shaping a sustainable future, and we are actively committed to facilitating this transition. We have the expertise to advise and guide organisations and governments in developing and implementing sustainable energy projects. We make the difference when the current approach no longer works, realisation lags behind ambition, and the pressure becomes high. Boer & Croon realise sustainable performance improvements with professionals who do the job. The result: grip on the challenge and a future-proof organisation. Our promise: we get it done!"
