The energy transition is inevitable. EU countries face extremely rigid targets, striving towards cutting their greenhouse gas (GHG) emissions by 80-95% by 2050. And yet many currently lack sufficient insight to be able to get there. The Dutch government is still deliberating where to invest, and how best to achieve our environmental goals over the coming years. And so are many companies that see the necessity to transform and adapt themselves for the new future reality.
Because fossil fuels and industrial processes are responsible for 65 percent of the global GHG emissions, the energy sector is at the beginning of a transition. The key questions for companies and organisations are therefore – Where is the energy transition going? What funding is required to make investments in renewable energy systems? Who will fund these investments? How can I best prepare my business model for the changes which are to come?
But what if there was a way to map the different scenarios and their impact to reduce the risk of making the wrong investments? Consultants at Royal HaskoningDHV have done exactly that, by creating an innovative energy scenario tool which ultimately provides companies with insight about the alternative energy options available to them, which investments to make, together with possible roadmaps.
The energy transition is unavoidable on both a macro and micro level – countries, communities and companies alike have to act now in order to pinpoint where best to focus their future energy investments.
Ronald de Vries, Senior Consultant at Royal HaskoningDHV: “We know that some companies do indeed already have plans in place on the road to Energy Transition. Shell, for example, is aiming to halve CO₂ emissions resulting from the use of its products by 2050. But, if we take the power sector as just one example, most companies are not even sure where to start. If you’re not as big a player in the market as Shell, what do you do? How do you best decide which investments to make?”
Our first step to embarking on the energy transition is to identify a strategy. How will you lead your organisation into the future?
Second to this, companies need to have the power and the insight to implement that strategy. And that’s where Royal HaskoningDHV’s new scenario tool can help, too.
The tool consists of several models that take into account various macroeconomic and financial assumptions, government policies and technological developments.
It provides unparalleled insight into how the power sector, for example, could evolve in the years to come, and works by developing unique individual roadmaps for those embarking upon the energy transition. Based on a number of variables we can model how it could be possible to achieve our country’s ambitious targets up to 2050.
Once this stage is complete, companies are then able to determine where they need to invest in new technology or maximise existing assets, develop new business models or potentially even change the way they work in order to help them conduct their key business.
The future landscape
The scenario tool is a result of a research project completed in co-creation with Rabobank and TU Delft. The aim of the research was to understand the future and help companies to identify their own approach to the energy transition.
De Vries continued: “Rather than limiting ourselves to simply predict the future, our aim is to understand it. As such, we’ve used different scenarios in order to help us understand the future energy landscape. That way, we can provide companies with more insight about the alternative energy options available to them together with possible roadmaps.”
The ideal scenario
In its initial phase of development, Royal HaskoningDHV has explored three different scenarios for the Netherlands – outlining what the future energy mix could look like, how much it would cost to achieve, as well as potential risks associated with the different approaches.
De Vries concluded: “Our tool has shown us that the energy transition in the Netherlands alone will require major investment at very short notice. The optimal energy system for the long-term future is not yet defined but it is clear that key decisions need to be made now in order to ensure a sustainable future for our country.
“Our aim is to translate this model and use our scenario tool to help companies and even public bodies across the Netherlands and Western Europe to learn quickly and optimise the use of current assets in the energy transition.”
Ronald de Vries
Strategic Consultant Energy Transition