Improving the sustainability of the energy system

The transition to a sustainable energy system and achievement of the climate objectives entails major changes in every sector of our economy. It affects every household and business, and requires a large-scale overhaul of the energy system. Together with stakeholders, the network operators explored what the overhaul might look like in the Integral Infrastructure Survey for 2030-2050. The Dutch government’s National Energy System Plan explains where we are heading as a country, with fundamental choices to commit fully to saving energy, production of sustainable energy in the Netherlands (both centralised and decentralised) and direct electrification. Direct electrification means that fossil fuels are replaced directly with electricity, for example, when replacing a gas boiler with an electric boiler or heat pump. The overhaul of the energy system should basically be 80 to 90% complete during the period 2035-2040. This is a major challenge for the energy sector, the industry, mobility, agriculture and house building. There is a huge need for additional infrastructure to make this possible. The focus on lots of renewable power, energy savings and electrification also requires us to handle energy differently in the future. Soon the wind and the sun will determine in which direction we turn. 

Unabated growth in the number of customers generating renewable energy

High energy prices are rapidly boosting demand for sustainable solutions

Issues like the energy crisis and high energy prices since the war in Ukraine started have prompted many of our customers to look for sustainable solutions over the past year. This applies both to households and to businesses. Sustainable solutions are often geared towards reducing energy usage by improving the insulation of homes and buildings, reducing process losses in industry and switching to electric solutions.  

Insulation is the first step 

Reducing energy usage is a crucial step in the transition to a sustainable energy system. In 2023, the government provided additional resources for measures to promote energy savings and to keep the energy bills of households and businesses affordable, making us less dependent on other countries and avoiding overcrowding of the electricity grid. This is important: insulation is a crucial building block for reducing the energy usage of buildings, since most of the energy consumed in the built environment is used to heat homes and other premises in the winter. Reducing the demand for energy will also reduce peak loads on the networks, which is crucial.

Choosing electric solutions 

Demand for electric solutions has risen dramatically. In the built environment this is reflected, for example, in the increased number of heat pump installations. On our roads, the number of electric vehicles rose by about a third in 2023 compared to 2022. The rapid growth in electrification is difficult for us as network operators: it means that we need to be working everywhere at once, but we cannot do that. This is why we are calling on public authorities to manage this development more and adopt a more structured approach. We call this energy planning. In November we therefore presented the National Implementation Agenda for Regional Infrastructure as part of Netbeheer Nederland. We are currently discussing the suggested approaches with our partners. 

High and volatile energy prices lead to new contract types

The high energy prices and the growing share of sustainably generated energy are leading to major fluctuations in the price of electricity during the day. This affects some of our customers and provides certain opportunities for us. The large price differences are accelerating the use of flexibility and thus also the demand for new contract types. Part of energy usage and energy feed-in is not flexible. We have noticed that the energy price can sometimes be zero or negative. The number of energy storage projects increased rapidly to allow more flexible balancing of energy generation and consumption. The number of households in the Netherlands with a dynamic energy contract also rose in 2023. The hourly prices in these contracts are agreed with the suppliers the day before. They are particularly beneficial for customers with flexible loads, such as electric boilers, electric cars or home batteries. The increase in the number of dynamic price contracts may be the start of a future trend that could potentially have a major effect on our network load.

Our customers are requesting solutions for balancing supply and demand locally

Our business customers are increasingly asking us for solutions that make it possible to exchange energy locally in response to the available local network capacity. These customers are open to the idea of organising as groups in ‘energy hubs’ or energy communities. By coordinating generation and demand locally, less network capacity is required and industrial estates can expand or become more sustainable. In our vision of the energy system, we view these local exchanges as an essential part of the energy system’s overall balancing challenge. Alliander is developing innovative ways of facilitating this approach and working on making the data and market facilitation systems suitable for this. We aim to establish partnerships in which other parties deploy solutions and we add our own solutions such as ENTRNCE, a local market platform. We are working on making group transmission agreements possible, in which network users start sharing transmission capacity between themselves to balance local supply and demand, and to reduce network loads as a result.

Electrification in the area of mobility 

The number of electric vehicles continues to grow. The government’s aim is to ensure that 100% of new cars sold are zero-emission by 2030. In order to charge all of these cars, the principle of smart charging should be made mandatory for all public and private charging points. The essence of smart charging is that charging electric vehicles should not contribute significantly to the peak loads on the power grid, as charging is only performed within the capacity limits of the power grid.

Zero Emission zones

From 2025, the logistics sector will have to deal with Zero Emission (ZE) zones in a few dozen cities. These zones will accelerate the transition to zero-emission cargo transport. In 2030, the number of electric vans is expected to rise to about 225,000 and the number of electric trucks to about 24,000. 85% of the electricity demand for the vans and trucks is supplied in the evenings and at night, which are often relatively ‘quiet times’ on the power grid. Liander is responding to this by offering new contract types.