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“More decisive collaboration in energy landscape saves billions”

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The energy supply in the Netherlands requires annual investments of as much as approx. 2 billion Euros. More decisive collaboration between the authorities, grid operators, utilities and new market parties could prevent more billion-Euros investments being needed in the current energy network.

No one benefits from a sub-optimal energy transition that would cause the Netherlands to waste billions on unnecessarily strengthening of the electricity grid. And there is no need for it either. Numerous parties have already come up with good ideas that carry part of the solution, but these do have to be utilised. In their exploration of the energy landscape, DNV GL and KPMG recommend decisive collaboration in the short term between the authorities, grid operators, utilities and new market parties, in order to prevent unnecessary investments. They would have to focus on the following four high-priority subjects and provide a specific structure for them. The first subject is to strengthen platforms for substantive consultation with a facilitator, and the joint tackling and elaboration of initiatives for the energy transition. The second aims to realise an open platform on which new (energy) services for end users can be positioned. DNV GL and KPMG specify the third task as the development of a market model in which ‘flexibility’ can be used to its full potential, and the corresponding coordination with legislation. Finally, it will be necessary to set up a practical roadmap for the transition of the current energy system to a system that fully integrates subjects two and three. 

“The Dutch market is currently being confronted with a mismatch”, concludes Frits Verheij, Director Smart Green Cities of DNV GL. Verheij: “Senior management of grid operators are aware that change is needed in order to still be able to make good use of the electricity grid. Utilities however, still lack a business case as a direct reason for change. There are still no specific opportunities yet either for aggregators for instance, who can use the flexibility of energy demand of ‘small’ consumers. However, the change is needed not only to be able to make good use of the central and local networks later, but also to guarantee supply reliability, as the use of solar and wind energy may create a bigger imbalance in the electricity network. In order to safeguard reliability in the changing energy landscape too, a market for flexibility may provide a solution.” 

According to Mark Lof, partner at KPMG IT Advisory, it is clear that no one benefits from a sub-optimal energy transition, which would cause the Netherlands to waste billions of Euros on unnecessarily strengthening of the energy network. Lof: “So, there’s a lot at stake and things are developing fast. Developments that are also encouraged by disruptive technologies and business models. That is why we see a multitude of start-ups. The Netherlands will prevent major investments if these new technologies too are used in the extensive chain of production, transport and consumption in order to proactively control the balance. This means that supply and demand are united in such a way that energy transport is minimised.” DNV GL and KPMG aim to play a facilitating and inspiring role when the aforementioned matters are set up, a role based on their specific expertise. The report (in Dutch: ‘Samenwerking in energielandschap kan miljardeninvestering voorkomen’) can be downloaded here.