Hans Vijlbrief is director-general Energy, Telecommunications and Marketing at the Dutch Ministry of Economic Affairs, Agriculture and Innovation. As the highest- ranking official, he is responsible for Dutch policy on smart grids. DNV KEMA’s director of smart energy, Frits Verheij, spoke with him about the necessary choices and his faith in consumers.
The Dutch government wants to enter into a Green Deal with society to tackle the economic crisis and the climate crisis jointly. To this end, your ministry seeks out projects for energy conservation and local sustainable energy generation which are cost-effective in principle, but don’t reach fruition because of a number of obstacles. How do smart grids fit within this greater whole?
“There is a strong relationship between the Green Deal and smart grid. Smart grid is inextricably linked to dealing sensibly with energy. The problem is that ‘smart grid’ is threatening to become a catchall term covering everything. To me, the concept of smart grids is the intelligent application of ICT to the energy infrastructure. A tremendous added benefit that is created is that local demand and supply are coordinated.That fits extremely well within the Green Deal, despite the fact that we have of course been working on smart grids for much longer.”
Smart grid offers opportunities for the business community, including (or, indeed, particularly) those companies outside the energy sector. Does your ministry envisage a role for itself in getting this off the ground with a focused industry policy?
“The essence of the thinking in the coalition agreement is that we want to promote top areas with the right preconditions. There is a remarkable consistency in the areas in which we score well in Europe. If you look at the European regions around river deltas, you see that they have been among the richest regions not just for a hundred years, but for no less than eight hundred. How is that possible? It has everything to do with the comparative economic advantages. Location on the water is enormously important for energy production, for supplying fuels, such as coal and gas, but also biofuels for example, and for processing and cooling water. It’s not surprising that we are currently a hotspot when it comes to establishing power plants. That also goes for offshore wind energy. The Netherlands might not supply the wind turbines, but we have a strong offshore industry that can build and maintain wind farms at sea. We are also blessed with gas reserves, which we have utilized by developing an entire branch of industry and with it the corres – ponding knowledge institutes. We must continue to exploit that.
The creative industry in the Netherlands has also experienced substantial growth. I see a connection between the inventiveness of people in this industry and information technology. The ICT sector is particularly strong in the Amsterdam region. Here too we have attracted a great deal of talent throughout history. Spinoza could have gone to Brussels in a manner of
speaking, but he chose the Netherlands. You can’t be good at everything. My view is that you have to focus on what you are good at, because as a country you will then become richer than when you try to do everything. Energy is one of those leading areas. And as mentioned, I’m referring specifically to gas, offshore wind energy and a bio-based economy. And smart grids. The combination with the creative industry also makes us good at smart grid. So it’s no coincidence that you’re good at something. And why couldn’t we combine the export of large-scale energy generation with a substantial volume of local, sustainable energy generation? Even that local energy could be exported through our strong network.”
Do you believe that the Netherlands must play a pioneering role in Europe when it comes to smart grid? And, if so, how can your ministry contribute to achieving that?
“With smart grid we can fulfill a pioneering role in Europe, partly because the quality of the energy grids is good and we are in such close proximity to one another. This is supported by a strong knowledge base. The split between production, supply and networks that we have implemented despite a great deal of protest, is now paying off. Grid operators appreciate having a clear mission. I see that they are working actively at developing smart grid. There are therefore various factors making it no surprise that we are good in smart grid. With testing grounds such as the Smart Energy Collective’s smart grid, which we support from the ministry, we are the leaders in Europe. In these testing grounds, we leave the laboratory phase and we involve the behavior of actual users with smart grid. We see our role in smart grids mainly as promoting the bringing together of parties and sustainable technological developments, and promoting the introduction of smart meters.
Demonstrating exemplary behavior is also extremely important, such as the green power that the government buys and the electric car parked just outside the door here. New technologies and services we can probably utilize will also be created for smart grid. I for one am open to serving as an example in this field.”
So far, consumers have only had limited involvement in the energy supply and in increasing its sustainability. Smart grid enables active input from consumers. In your view, how important is the role of consumers in the future energy supply and how does your ministry contribute to achieving that?
“I believe that the consumer perspective needs to play a more central role. The European Union’s director-general for energy, Philip Lowe, recently said that the energy sector was still in the
‘dark ages.’ What he meant was that energy companies still don’t focus enough on customers. There are utilities that still need to get used to the idea that it’s not about connections but about customers. As consumers though, we don’t behave the way we do in the supermarket. When my wife wanted to switch energy suppliers, I caught myself thinking: where does she get these new-fangled ideas? We are still not always aware that this is a market.”
Smart meters are indispensable for making smart grid a success. To achieve the objective of an 80 percent penetration by 2020, perhaps more is needed than purchasing on a voluntary basis. What’s your opinion on this?
“Because privacy is such a sensitive subject in the Netherlands, I believe that the political decision to make this voluntary is a sensible one. Will we achieve that 80 percent? I have complete confidence that people will make full use of smart meters. As a consumer, I’m a major proponent of smart metering and I’m convinced that, if people see what they can do with these meters, they will buy a smart meter. Other services will be offered; that’s definitely going to happen. New players perceive opportunities. I believe in the wholesome influence of competition. You see that among cable television operators. Now that there’s more competition, the operators are starting to differentiate, prices come down and there are more choices. Or the newspaper. Initially everyone read the same newspaper, and now you get a digital, customized newspaper on subjects that you feel are important. That’s also going to happen with smart meters.”
Demand Response, or Demand Side Management, is seen as one of the services delivering added value to a smart grid. For this, time-variable rates and the introduction of price and other incentives are unavoidable. What’s your opinion on whether or not to modify the law and regulations to create greater flexibility in the tariff structure?
“I have a great deal of confidence in people. If you give them the tools to modify their energy consumption easily, they’ll use them. Money will play a role, but they’ll also do it because it’s fun. It is for me, at least. And if that happens automatically then it’s really easy. We as a government must offer them a picture of how the future will look.
I’m not a great believer in instruments to force people to do things. If consumers can save money because they can profit from price fluctuations in the market, that’s sure to help. But the price incentive is not the decisive factor for consumers. I also don’t believe that the legislation and regulations must be specially modified to achieve this, but should it be necessary, we are of course prepared to do that. To a certain degree, because of course legislation and regulations also serve other purposes.”
The Netherlands is predominantly a gas-oriented country. The flexibility of gas, the development of gas and the invention of ‘micro CHP’ all increase the opportunities for smart grid. What are your thoughts on the relationship between gas and electricity in the future energy supply?
“I don’t believe in hard contrasts. Some people say we should stop using gas. That’s a remarkable position if you think that we now possess a supply of gas and an extensive infrastructure. Gas and electricity must move in tandem; that’s more of an advantage than a disadvantage. Gas is a flexible fuel that is important for the energy transition. Moreover, we are also on our way towards ‘greening’ gas. The question would be relevant in other countries where they have no gas.”
We are on the brink of a significant shift towards a sustainable energy supply. To allow this shift to succeed, a great deal of knowledge development needs to be done. What role do you see your ministry playing in shaping the knowledge economy?
“In the Dutch ‘Top-areas approach’ that we recently formulated, nine leading areas are identified where the Netherlands can distinguish itself. For the top area Energy, the Van der Veer committee must map out the ‘golden triangle’ of government/industry/knowledge: What knowledge is available? Where is cohesion lacking? We must consider carefully what energy fields we want to develop. I am optimistic about the energy research applied. As I see it however, the fundamental energy research is really too fragmented. Every university is working on energy, because the future-oriented and idealistic perspective is very attractive for many students. I applaud the initiative to create a Faculty of Energy in Groningen; it is wise to bundle knowledge.
As a commercial company, DNV KEMA is part of the knowledge infrastructure. My preference is for a division of tasks and clustering activities. It can’t be a good thing, for example, that the knowledge institutes TNO and ECN do the same thing. There is a great deal of knowledge on energy present and we have all the potential to make energy a top area. The government wants to focus more on those areas that we are good at, which is also why the government chose this top area. And the conditions that history has assigned us help us towards this.”