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Seven insights for the energy transition: Berenschot looks back on 2017

The year 2017 has once again delivered new insights for the energy transition in the Netherlands. Berenschot collected the most important lessons from the past year’s projects for you. Benefit from our seven insights.

The year 2017 has once again delivered new insights for the energy transition in the Netherlands. Berenschot collected the most important lessons from the past year’s projects for you. Benefit from our seven insights.

  1. Hybrid heat pumps can reduce the demand for natural gas in existing homes and buildings at an accelerated rate by 14 billion cubic metres (over 90%).
  2. CO2-free ‘blue hydrogen’ from gas provides good opportunities for the decarbonisation of Dutch industry and electricity production.
  3. Electrification in the process industry is promising if further development, financial instruments and Energy Service Companies (ESCOs) will be the main focus.
  4. Open heat networks are possible by using smart funding with transport rights.
  5. Municipalities and regions still need to take the necessary steps for realising the energy transition. This will require more concrete measures and government facilitation.
  6. A shortage of qualified personnel threatens the energy transition.
  7. Investments in the home constitute the largest cost item in the electrification of the heat demand.
  1. Hybrid heat pumps can reduce the demand for natural gas in existing homes and buildings by 14 billion cubic metres (over 90%).

The demand for natural gas in existing homes and buildings can be reduced at an accelerated rate: from 15 billion cubic metres now to 1 billion cubic metres in 2035 (plus the use of 3 billion cubic metres of sustainable green gas). This reduction can be achieved by calling a halt to the regular replacement of central heating boilers (400,000 homes per year) and installing a hybrid heat pump instead. Berenschot came to this conclusion by calculating four different growth paths for existing buildings. Two of these calculations were based on the assumption of direct implementation of all-electric heat pumps. The other two solutions were based on a smaller heat pump working beside the central heating boiler (hybrid heat pump), after which a number of homes would switch to an all-electric heat pump at a later stage. Calculated projections indicate that CO2 emissions in all growth paths (hybrid or all-electric) will have decreased by over 95% in 2050. Using hybrid as a first step would allow for a faster and cheaper transition for residents, as well as a higher total reduction over the entire period. A direct all-electric approach would be more expensive for residents and would lead to a slower reduction of the demand for natural gas, but it would allow for a more complete transition by 2050. It should be noted that all four growth paths assume that new builds will directly be fitted with an all-electric heat pump.

The phasing out of central heating boilers for existing homes to allow for a transition to hybrids has recently been debated in the Dutch House of Representatives.

Read more about the increased sustainability of the built environment.

  1. CO2-free ‘blue hydrogen’ from gas provides good opportunities for the decarbonisation of Dutch industry and electricity production.

Berenschot and TNO believe that there are promising opportunities for the production of CO2-free ‘blue hydrogen’ by decomposing high-calorific gas (sourced from the North Sea, import or LNG) into hydrogen and CO2. The CO2 is subsequently stored offshore and underground, while the released hydrogen is stored and transported via the gas network to the consumers. This technology is called ‘pre-combustion CCS’ and will be available soon. Pre-combustion capture of CO2 is energy efficient, as the process works with high concentrations. Moreover, in certain cases this technology is cheaper than capturing CO2 at the point where it is expelled from the chimney after combustion. This new technology is especially effective for power stations and industry with a flexible process, and for small-size industry. Major industry can also benefit from pre-combustion CO2 capture. In that case, the industry itself does not need to invest, as the CO2-free ‘blue hydrogen’ is purchased from other parties, such as the energy sector. This method also requires less infrastructure for the removal of CO2. Instead, there is an accelerated transition to a hydrogen infrastructure, which supports the use of ‘green’ hydrogen from sustainable sources. The Netherlands are highly suitable for the deployment of this concept.

This option can contribute to the goals that were stipulated in the Dutch coalition agreement (18 Mton/year CCS).

  1. Electrification in the process industry is promising if further development, financial instruments and Energy Service Companies (ESCOs) are being focused on.

The Dutch process industry accounts for 46% of total energy use in the Netherlands and as such is a key player in achieving the Paris Agreement’s climate objectives. Research conducted by Berenschot, CE Delft, Industrial Energy Experts and Energy Matters indicates that the Dutch industry should be able to electrify a large part of its processes by 2050. This is one of the transition pathways towards achieving a completely decarbonised energy supply, assuming that electricity will be available cheap and fully CO2-neutral in the future. A distinction has to be made between different electrification strategies (flex or baseload), and system and process innovations are also required. This includes the further development of high-temperature heat pumps, new business models and market roles for ESCOs (for services), the adjustment of the power rate structure and more room for experimentation.

Read more about the electrification in the process industry.

  1. Open heat networks are possible by using smart funding with transport rights.

A good system of heat transport rights is one of the main prerequisites for a financeable open heat network. This is one of the findings of the research that Berenschot conducted on behalf of a large-scale open heat network in the west of the Dutch Province of Noord-Brabant. To allow a starting or existing heat network to develop into an open heat network with third-party access, the initial choices are crucial. The most important thing is a system of transport rights that one the hand provides certainty for investors and suppliers, and on the other hand ensures good access for new competitors by reserving some capacity for them and by applying the use-it-or-lose-it principle. These principles should be predetermined, so that investors as well as new competitors know where they stand. This can be done for new and existing heat networks alike, independent of how they are managed. Other important factors are temperature levels in the heat network and the option of introducing heat into return pipes with low temperature levels.

  1. Municipalities and regions still need to take the necessary steps for realising the energy transition. This will require more concrete measures and government facilitation.

In accordance with the Paris Agreement, municipalities, provinces and regions often have ambitious objectives regarding climate or energy neutrality in the future. Berenschot assists in the acceleration of the energy transition in various ways. In the case of the municipality of ‘s-Hertogenbosch, for instance, Berenschot provides expert advice regarding promising (new) policy instruments that suit the challenges and energy potential of the area. Based on an analysis of the area, local policies and instruments and on the calculated projection of a local energy scenario advice is given with regards to options, instruments, impact and organisational costs. The municipality uses this in the run-up to the municipal elections and coalition forming. Another example: the province of Friesland cooperates with municipalities and the Wetterskip Fryslân (a regional water board) to develop an energy strategy that is supported by businesses, social partners and the many Frisian energy cooperatives. Even though local governments and regions are taking steps towards becoming climate neutral, a Berenschot publication analysing the experiences from regional projects of the past year indicates that only a limited number of concrete measures and projects are being launched. This goes to show that it is essential that the government provides the right preconditions, like providing funding, laws and regulations. In order to achieve a programme-based approach for the energy transition in the region, as is incorporated in the coalition agreement, the government and the region will need to engage in conversation in order to realise the actual implementation of the local and regional energy transition.

  1. A shortage of qualified personnel threatens the energy transition.

There is a substantial shortage of well-trained personnel that is needed to facilitate the energy transition. Does this endanger the energy transition? Berenschot is convinced that it does. That is why we are committed to working with various parties to turn the tide. This requires insight into which personnel is required to achieve the energy transition. How many people are needed? What competencies should they have? Topsector Energie, for instance, shows us that various sectors (wind and solar energy, networks, biogas and energy saving) require over 50,000 working years (period 2014-2020), varying from vocational to university-level education. That certainly is not all. Are these employees also available? Is there enough influx of newly trained personnel? And are all current employees in the energy sector also employable for the energy transition? Berenschot would like to answer these questions, together with stakeholders in the energy transition. We would especially like to answer the most important question: what can be done to ensure that there is sufficient qualified personnel to achieve the energy transition? We believe that collaboration between businesses, education, sector associations and regional parties is the key in this regard. An example of this from another sector is the Human Capital Roadmap that Berenschot developed for Photon Delta. The roadmap for this new photonics sector is mainly concerned with attracting new students (via summer schools for universities, the development of minors for higher professional education and setting up electives for ROCs (Regional Training Centres), for instance) and further development of the skills of the current staff. In order to implement these recommendations, the pooling of resources is vital. Existing networks and platforms can play a leading role here. From these partnerships, connections can be formed between businesses and educational institutions, a dialogue may be established and a productive platform for initiatives is created.

  1. Investments in the home constitute the largest cost item in the electrification of the heat demand.

Based on various studies, Berenschot concluded that the electrification of the heat demand in existing homes mainly requires investments in the home itself. Insulation, the installation of heat pumps (hybrid of electric) and heat systems (underfloor heating or adjustments to radiators) make up 75% of the total costs for the system. The remaining part mainly consists of electricity costs and costs for the network. The impact to the costs of energy networks can be quite significant in the network sector, but to the total costs for the entire home, these investments are usually not determinant. Furthermore, the peak demand for electricity can increase quite drastically, because of the high additional peak demand in a cold winter (17,000 MW with an all-electric heat pump; significantly less with a hybrid solution). Berenschot advises to expressly take the interests of home and building owners into account in the energy transition.

Would you like to know more?

Do you have any questions about what the energy transition means for your organisation? And would you like to know how Berenschot can support you with it? Please contact Bert den Ouden, Sector Leader Energy at Berenschot, + 31 6 5199 4286 or b.denouden@berenschot.nl. More background information and reports can be found on Berenschot’s website and in the energy newsletter.

More information