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 2022.
Do we accommodate peak loads, or do we transition to a flexible system?
The government is aiming for a 55% reduction in CO2 by 2030. In its report on the Climate and Energy Outlook of the Netherlands, the PBL Netherlands Environmental Assessment Agency states that this goal is not yet on course to be achieved. Faster implementation of the plans and additional policies are needed to achieve the goal. For Alliander, this probably means a further significant increase in the size of our work package. Yet implementing the energy transition is already very challenging due to the shortage of technicians, space and materials. In addition, the energy system is physically reaching its limits in many places, both in terms of supply and feed-in, and the total installed capacity of solar power is already almost equal to the peak demand in the Netherlands.
One consequence of this is that the so-called ‘copper plate principle’ is no longer applicable in practice. This principle states that the system must be able to transmit and distribute all the electricity that a company or household wants to produce and/or use – regardless of the quantity or location – at any time. A number of parties value upholding this principle, and to date our market has always been based on it. If we are to continue to guarantee the ‘copper plate principle’, network operators will have to invest heavily in the electricity network to ensure that it can always transmit electricity during peak demand or peak generation. Significant effort is being put into expanding the electricity network, but it is not clear whether focusing exclusively on network upgrades will be enough to achieve the 2030 goals on time. It is also debatable whether such an approach is the most appropriate solution from a spatial planning perspective.
We face a clear dilemma: do we continue to look at the task based on the ‘old’ way of thinking or do we opt for a new approach, which is likely to clash with the principles currently in force? We think that it is legitimate to ask whether steering where and when electricity can be transmitted and distributed is perhaps a better solution from a social perspective. This is not only because of the infrastructure limitations and the social costs, but also because in the near future we will have to take a much more integrated look at the energy system and the availability of energy will fluctuate a great deal. This is obviously a broad societal issue that has an impact on the basic principle on which our energy system is built and deserves further attention in the coming time. This in no way diminishes the fact that we remain fully committed to upgrading and expanding our networks. And as long as our task exceeds what we can realistically build and implement, we will communicate clearly and transparently what we can do and when, and what we cannot do.
Capacity: do we go for availability or reliability?
In many places, there is no capacity available in our networks for connecting new customers at the present time. That is why we are fully committed to developing, applying and scaling up smart solutions that help make better use of the capacity available in our networks. If we are to get the most out of the existing networks, we must push past the old boundaries and establish new ones, in the knowledge that this might have an adverse effect on network reliability. For example, we want to safely increase the load on selected facilities: cables, transformers and – in congested areas – substations. The challenge is to achieve a socially acceptable trade-off weighing up the importance of energy availability on the one hand and the importance of reliability on the other. A further issue is the level of reliability that we can guarantee in a sustainable energy system, which is affected by weather conditions, seasonal changes and even by the day-and-night cycle. Solutions that offer flexibility, such as batteries and converting energy into hydrogen or heat, play an important role here. But the question remains whether we can maintain the current level of availability of 99.99% into the future and whether we as a society – in the light of the challenge we face and the importance of the energy transition – are prepared to adapt accordingly.
Achieving our social mission: do we choose a rigid or flexible approach?
Huge numbers of customers require electricity connections. We sincerely want to connect them and are disappointed that this cannot always be done quickly enough. The exponential growth in our work package and the severe shortage of staff and materials mean that we have to carefully weigh up where we allocate our resources. Moreover, using all our available resources to meet connection deadlines now may adversely affect implementation of the required network extensions and reinforcements. This would amount to a failure to take sufficient account of the interests of future customers. We try to find the best possible balance in this interplay of conflicting requirements. By implementing large-scale expansions now, we help bring about the energy transition and we ensure that connections can be made more smoothly in the future. This choice does mean that we are not always able to connect customers on time at present, and that connection lead times are increasing. Obviously, we are far from happy with this situation. We therefore recommend that customers contact us as early as possible. Timely consultation when making plans allows us to better match supply to demand. Our objective is to ensure that parties experience the least possible inconvenience due to the current shortages.
What have we learned?
Improve customer communication
The energy transition is increasingly affecting households and business owners. That means that customers have more questions and different questions. The large increase in customer contacts at our customer service centre in 2022 – 500,000 as opposed to 260,000 the year before – clearly illustrates this. In response, we significantly increased the capacity of our customer service centre in 2022. Customers always want to know where they stand, and we aim to answer their questions quickly and unambiguously. That is why we will take action in 2023 to improve our customer communications and create a system in which all information relating to a customer is available to us in one place. The system will give employees and customers information about the status of their request and communication.
Assign responsibilities at the level where consequences can best be overseen
The energy transition is in full swing. The task is enormous and requires our internal organisation to work in an even more result-oriented manner. Two years ago, we implemented a reorganisation in order to serve our different types of customer better and more effectively according to clearly defined processes.
After working in this new manner for two years now, we find that we have become more agile, reduced disruption in our operational process chains, increased production output and scaled up our internal digitalisation activities. But more is needed. We need to achieve effective results, fully understand the purpose of everyone's efforts and results and make this part of Alliander's culture. We can achieve this by focusing more proactively on results and becoming more effective in how we achieve those results. The implications for our organisation are that we must work more cross-departmentally in multidisciplinary teams, develop at a fast pace and take decisions quickly, and accept that mistakes may sometimes be made. We also need to look more fundamentally at underlying IT systems, rather than automatically building on what is already there. That will help us operate even more decisively as Alliander. We will continue to work on this transition during the years to come. This process is one of trial and error. We give each team and each colleague opportunities to learn and take responsibility in this respect.
In the energy transition, no single party oversees or directs everything
Last year, we and the NSOB Netherlands School of Public Administration analysed the energy transition from an ecosystem perspective. Among other things, this clearly revealed that social transitions, such as the energy transition, are the result of continuous individual actions and sometimes more collective movements, with no clear ‘control tower’ coordinating everything. In the energy transition, there is no single party that oversees or directs everything. In practice, we often expect the government to assume a lead role in transitions. However, the government is not capable of controlling all aspects on its own. Indeed, the call for more intervention and control on the part of the government is often an excuse for not taking action oneself. Parties involved in the energy transition can and should influence and change the system to a significant extent through their own actions and initiatives. This requires all the players in the energy system to show initiative and boldness, including network companies such as Alliander.