Dilemmas and lessons learned

Alliander always aims to perform its duties and carry out its activities to the best of its ability. In so doing, we are faced with dilemmas that can influence the way we plan and are able to carry out our work. Moreover, certain incidents, developments and events can have unforeseen consequences for our day-to-day work. By being aware of this and learning from it, we can continue to enhance the quality of our company. In this chapter, we present a few of the dilemmas and events we had to deal with in 2023.

Dilemmas

1. When collective and individual interests differ

The major challenges faced by the Netherlands require coordinated and structured decisions when it comes to spatial planning, energy and timing on a national, provincial and municipal level. This is because the policy goals can only be achieved in a structured and therefore efficient manner if: (i) space is provided in a coherent and timely manner for matters such as the housing challenge, the energy transition and the climate challenge, (ii) clear choices are made regarding the socially most logical energy carriers per district, area and sector, and (iii) the time frames for improving sustainability are clarified. Such an approach requires firm choices to be made based on collective interests, but in practice these may also clash with individual interests or wishes. Individuals may object to the installation of new cable connections on their land. Local residents may take issue with the construction of a substation or a transformer substation in their neighbourhood. Or district residents may protest against the energy carriers planned for their district. In the absence of clear rules for this, we need to choose the lesser of two evils: (i) opt for the most collectively desirable option, with the risk of individuals or groups of individuals trying to obstruct or stop the process through political or legal channels, or (ii) continue to seek consensus and then arrive at suboptimal results (late) after prolonged negotiations. 

2. The transition is putting existing objectives under pressure 

We stand for an energy supply system where everyone has access to reliable, affordable and renewable energy on equal terms. In 2017 we invested €666 million in our networks, we spent €1.4 billion in 2023 and in the years to come our investment level will be rising well above €2 billion per year. TenneT is making huge investments, including in offshore wind, which are partly charged to us and therefore also to our customers. This leads to rising network management costs per connection, especially for electricity, also because the electricity network costs are rising more rapidly than the number of connections. Between now and 2030, the network management costs are expected to rise by more than 70% (not adjusted for inflation). These kinds of increases are a serious point for attention, especially in times when so much focus is on socioeconomic security. At the same time, we cannot deny that these investments are required to achieve a reliable and sustainable energy system for the future. This means that, on the one hand, we are facing the challenge of achieving this massive and therefore costly overhaul of the energy system and, on the other, we need to keep the transition affordable, both for households and companies.

3. Within the planetary boundaries

Science tells us that human activity has pushed the conditions on our planet beyond the limits of what is safe for humans. As an organisation we are very well aware of this and are extremely worried about it. As Alliander we try and make sustainable and responsible choices in that regard, with a particular focus on society. At the same time, we are working on massively expanding and upgrading our networks, which undeniably puts great material pressure on the earth, even though this pressure should be greatly reduced very soon if we truly want to respect the limits of our planet. It is also clear that we are constructing infrastructure for a society that disproportionately consumes the natural resources of our planet. The question here is also whether there are enough raw materials at all to achieve the planned energy system of the future and what the effects on our planet will be of extracting all of those raw materials. Wind turbines, solar panels and batteries also still generate a lot of non-recyclable waste at the end of their service life. So on the one hand we are working hard to achieve the climate objectives, but on the other hand this is worsening the ecological crisis, which according to scientists is at least equally disastrous. The question is whether and how we as an organisation can truly operate within the planetary boundaries and which role we should and could play in this ‘broader’ discussion, while at the same time facing such a massive operational challenge. 

What have we learned?

1. Continuing to learn and improve

It was not that long ago that we prepared our investment plans relatively ‘autonomously’ as network operators. Each of us did this separately, and even though the plans were subject to consultations, there was only limited truly active interaction with the outside world. On the one hand, this led to stakeholders feeling insufficiently heard and regularly criticising the plans and, on the other, this kind of approach does not align with the fact that we need to achieve the energy transition together. Against this background, we asked our most important external stakeholders last year to actively share their thoughts in advance on the challenges we face. This was quite an exciting process, which saw us discuss our plans and expectations during various stakeholder sessions. Even though the various parties were critical on the outside, we generally had a lot of good and constructive discussions in the end, and we also improved our understanding of our stakeholders’ expectations and their understanding of our working methods and challenges. Setting up our work process through the external stakeholder sessions also enabled us to achieve quicker results. As network operators, we had to share more information with each other as well. We are now really forced to use the same set of scenarios, which has also strengthened the mutual collaboration between the network operators. This process has shown us that you can actually achieve more and do things faster together! At the same time, there really is room for further improvement and we need to continue working on both increasing the legibility of our investment plans, which are still considered to be too technical, and the substantiation of the choices and decisions we make.

2. Really making a difference

In late 2022 we saw an increasing number of households get into financial trouble due to the high energy prices. The result of this was that energy suppliers were forced to terminate contracts, so the number of supply termination notifications increased at our end. As a network operator we are legally required to disconnect households if they no longer have a contract with an energy supplier. Of course we want to prevent this, but the question is which role a network operator is able and willing to play within these broad(er) issues. Eventually we started collaborating with the municipality of Amsterdam in a pilot project to help residents whose energy contracts were terminated due to payment issues. The success of the pilot with the municipality of Amsterdam has contributed to national legislative amendments, as a result of which energy suppliers are now required to report people who are at risk of being disconnected. We also launched a similar pilot with the municipality of Arnhem, in which we are investigating how we can optimise the current implementation of laws and regulations. We do this to prevent people from ending up in a void between social legislation and energy legislation. We share the results of our study with the Ministry of Economic Affairs and Climate Policy, with the aim of improving existing laws and regulations, and preventing energy poverty as much as possible. This process shows that, by looking beyond the confines of our own four walls, we can really put the broad corporate social responsibility that we all feel to good use, so we can truly make a difference in the lives of individual people and households. 

3. Helping more customers by not helping them individually

Last year, the sunny spring also saw increased numbers of voltage-related complaints. From the perspective of customer-friendliness, we handled these complaints on an individual basis and also tried to help customers on an individual basis. However, the nature and scale of this challenge led to a new insight during the year: this approach does not work in the current context and you can sometimes help your customers more by not helping them right away. Our current ‘modus operandi’ therefore is to register all voltage-related complaints, so that we are aware where the issues are, but no longer handle and resolve them individually. We now tackle these issues on a district or neighbourhood basis, allowing us to work much more efficiently and resolve a much higher number of complaints in the end. This approach was a huge change, for us as well, and entailed a major challenge in terms of communication to optimise the way in which we inform customers about when voltage issues in their area are resolved. But last year convinced us that this is the best way to overcome the issues, from a customer perspective as well. And we can also apply this lesson to the energy transition in a broader sense: the exponential upscaling of energy infrastructure requires a more structured and systematic approach, with us being able to get much more work done and ultimately serve many more customers, even though this will not always be at the desired time.