In conversation with Jan-Willem van den Beukel & Danny Benima

The climate targets, RESs and the financing challenge facing grid managers are driving increasingly closer cooperation with municipalities. In this double interview between Jan-Willem van de Beukel, alderman responsible for finance of the municipality of Lansingerland, and Stedin CFO Danny Benima, they delve more deeply into that cooperation. The joint conclusion is clear, ‘We have to act as a single authority.’

A series of events in 2021, including flooding in Limburg, rising gas prices and the latest climate conference in Glasgow, made the energy transition front and centre all of a sudden, says Jan-Willem. In spite of the negative impact of some of these events, they have generated widespread understanding of the need to accelerate the energy transition. We need to act now.

In Lansingerland, that action is taking very concrete shape in the form of the planned branch of the WarmtelinQ network to the municipality, which will transport residual heat from the Rotterdam port area to The Hague and surrounding region. ‘That branch represents an important success,’ says Jan-Willem. ‘Our municipality is home to a large greenhouse horticulture cluster, which at the moment uses natural gas, geothermal energy and residual heat from a conventional power plant. The branch provides an important impetus to retaining the sector’s competitiveness, since it enables even more combined heat and power systems to be disconnected, provided that the heat is affordable and reliable and the CO₂ network is simultaneously expanded.’ For Danny too, the very concrete actions taken are the highlights of 2021. ‘The €200 million investment by our shareholders, several improvements in the Method Decision after concerted lobbying and the fact that we managed to engage central government to consider whether and, if so, in what way they can contribute financially to ensure the success of the energy transition are all necessary steps towards facilitating the concrete projects Jan-Willem refers to.’

Who provides the financing?

The conversation with a CFO and an alderman responsible for finance very quickly turns to financing the energy transition – an important, complex issue. Would Jan-Willem be open to the possibility of non-public organisations also contributing financially? At present, the legal possibilities are limited. ‘Let me state clearly that I am pleased that times have changed after the years of privatisation activity and that we are now seeing a reappraisal of public goods. I am not against other parties in principle, but I prefer for us to act as a single authority and take steps jointly to ensure a robustly financed grid manager. After all, the grid concerns us all. We now have the opportunity to set out a clear path for the coming decades. So I would prefer first talking with municipalities in Stedin’s area that are not yet shareholders and also entering into dialogue with the provinces and central government.’

Danny, too, has no objections in principle to non-public organisations, provided that they are identified with social responsibility. Nevertheless, his preference is for public parties: ‘The added value lies not just in the financial domain. Municipalities and provinces are also partners in the RESs. Combined action in relation to spatial planning issues can lead to significantly shorter lead times. ‘That is entirely in line with my idea of acting as a single authority,’ says Jan-Willem. ‘Stedin's service area should ideally map perfectly to the shareholders so that, together, we can tackle the challenge as a single authority.’

Unpredictable developments

In the past year, we have been surprised on several occasions by unpredictable developments in the energy market, such as the sharp rise in gas prices and congestion. How do we get more grip on this? Jan-Willem smiles. ‘The question is whether it is actually so unpredictable. I have my doubts. We’re all in the process of phasing out fossil fuels; we’ve known that for some time. These are the inevitable severe hiccups that accompany any major change of this type. As public authorities, we need to get better in terms of strategic competence and long-term thinking. We have the capability – just look at the Delta Works. But it needs to become far more embedded in our thinking.’

Danny: ‘Traditionally, we are an organisation with a long-term strategy, and that long term was always very stable. In terms of investments as well as the one-dimensional nature of the energy system. Nowadays, however, we are facing a system transition with multiple uncertainties, including customer demands that are developing faster than expected, rising energy prices and prices for other commodities, and shortages of materials and staff. Political decision-making in relation to the energy system and the desired speed of the energy transition are also making it challenging to make clear and accurate judgements for the long term. We have significantly improved our ability in recent years to think in scenarios and translate that to strategic decisions and calculations. Last year, we asked McKinsey to review our investment plans, which concluded that we have a robust and mature process. That confirms that we are on the right path.’

Stedin’s role

How does Jan-Willem see Stedin’s role in the energy transition? ‘I believe that Stedin, and the same also applies to the municipality, by the way, plays a driving role in the change. An important element in this regard is providing clarity to customers. When someone in our municipality wants to install charging points on their land, for example, and it then takes 20 weeks to connect the charging points, they can become quite irritated. If something like that is made clear in advance and you are open about the dilemmas you face, then it is far more likely that you will forge a true partnership with customers in the energy transition. We need to embrace the concept of ‘system-based thinking’, where everyone, customers included, moves in the same direction.’ ‘There is much still to be gained,’ says Danny, ‘but we’re moving in the right direction. As a grid manager, we are bound by legislation and regulations and are simply not able to do certain things. But let’s focus above all on what is possible. After all, ensuring the success of the energy transition is a shared responsibility.’