Positive or negative, the last years there is a lot of attention for renewable energy, sustainability and the energy transition. Especially the term ‘energy transition’ is currently very important within government and the industry in the Netherlands. The main question is how we go from ‘Grey to Green’?

The target

When looking at the targets for the share of renewable energy in the total energy mix of the Netherlands, the way from grey to green requires a significant speed up. According to CBS the Dutch energy requirement in 2016 was provided for 5.9% by renewable energy sources. Considering that renewable energy targets lie at 14% in 2020 and at 16% 2023, The Netherlands is running significantly behind.In rankings showing the ‘distance’ to the 2020 targets of the countries in the European Union as of 2014, the Netherlands is the second furthest away from its target. Only France is performing worse. And it’s not that our targets were set very stringent. Our goal for renewable energy in the total mix is relatively low to begin with.

A long term vision

The energy transition is not only interesting from the point of view of national targets, companies can also benefit greatly by becoming more sustainable. By increasing the energy efficiency of a business, optimizing the resource allocation, decreasing the energy need, etc., businesses become more competitive on the long run. A long term ‘energy investment’ towards lower marginal energy costs versus a short term ‘production’ investment. Western society, including the industry, is looking for short term results (return on investment). This creates a barrier for long term strategies like increasing sustainability.Companies and organizations are hesitant to invest although ‘Business as usual’ is becoming less and less applicable because of the increasing pressure from the market, society, the consumer and government. Over time the expectations and demands from the latter will continue to increase. In fact, government regulations will force businesses, especially energy intensive industries and energy providers, to change.

A possible solution

There are possibilities to escape from this stalemate between the push to become more sustainable and short term economic drivers. Actual initiatives don’t get off the ground due to short term thinking or too stringent functional demands (availability, complexity, maintainability). Sometimes organizations are unfamiliar with more sustainable and renewable energy systems. This frustrates companies and their employees taking the next step in their development.

The list of requirements and wishes for new energy systems should be redefined from a fossil based specification to a broader and more open specification. In doing so it can be established what is really important, for which there is willingness to pay, and what has an added value in line with the company’s Corporate Social Responsibility ambitions. One can also look at measures that fulfill more than one function. For example an energy efficiency measure could also improve the indoor climate, which in turn can decrease sick leave and increase productivity.The approach of energy efficiency measures and renewable energy systems should be more inside out. The first focus lies with energy savings in the core processes and the facility building(s) and consecutively with producing energy more sustainably. Also in the organizational approach one can first look at internal opportunities and consecutively continue to look for external partnering with neighbors, utilities, etc. Although partnering with external parties is often assumed to be risky (higher costs, lower quality, less insight and control) a cooperation with external partners should not be avoided. It could be a great opportunity (for instance as a source of investment or for technical risk mitigation) as partners like utility companies strive to become more sustainable as well.A second solution is to allocate capital savings from previous measures to invest in new sustainability measures (revolving fund principle) enabling the financial ‘escape’ from short term economics. This way companies can pre-organize long term funds without having to create financial facilities for each investment decision. A Total Cost of Ownership approach for the new energy systems is necessary to make this work.

Conclusion

If you take the future of your company and its energy transition seriously, start harvesting available solutions to make your company an energy frontrunner. This can be done with proven technologies, possibly with external partners, without financial risks. Share the solution with third parties making it possible to decide on what is the most profitable way to go ahead. Go for a mix of higher energy efficiency and no regret renewable energy. Making these big development steps builds up credibility amongst your share- and stakeholders. This enables you to move forward, and enhance society together. A paradigm shift in thinking will brighten our future!

This blog is written by Gertjan Dahm in co-creation with Edward Pfeiffer,Senior consultant Energy and projectmanager Circular Economy, and Anish Bosch, Junior consultant Energy Systems.