Tennet – Driving the Energy Transition

TenneT, one of Europe’s major investors in national and cross-border grid connections on land and at sea, is set to play a pivotal role in the energy transition.

TenneT is a leading European electricity transmission system operator (TSO) with over 5,000 employees and a turnover of EUR 4.1 billion. The company came into existence 1998, being formally appointed by the Dutch government to operate the country’s national high-voltage transmission grid. In 2010, the company acquired the German high-voltage grid from E.ON, making TenneT Europe’s first cross-border transmission system operator.

After a period of strong growth, TenneT is getting ready for its pivotal role in the rapidly changing energy market, says CEO Manon van Beek. “As a company we want to drive the energy transition through a huge investment over the next ten years, which will make us the biggest investor in energy in those countries where we operate.”

The energy transition is one of the most high-impact challenges facing society and energy supply. The most fundamental change is the transition to renewable energy. By 2030, the EU wants 30% of its electricity to come from renewable sources.

Setting an example

Today, TenneT has 14 offshore grid connections in operation, 12 in the German and 2 in the Dutch North Sea. This brings the total connection capacity in the German part of the North Sea to over 7 GW, exceeding the German government’s sustainability target of 6.5 GW by the end of 2020. Doubling the executing capacity is one of the biggest challenges TenneT is facing, says Ms van Beek. “In the next decade, TenneT will invest EUR 4 to 5 billion a year in the energy transition. With the adjusted climate targets down to 55% less C02, a number of 11 GW offshore capacity is expected to be added on top of the existing offshore targets in the Netherlands and Germany. This will probably lead to an even bigger investment agenda by 2030,” she explains.

Are these goals of a 55% reduction in CO2 emission at all feasible? “The task is huge but I believe it is achievable under three conditions. First of all, it requires system thinking: to integrate large-scale production e.g. of offshore wind energy, into the energy system, you need to think of both offshore and onshore, and also cross-country, both electrons and molecules will be needed to meet demand. Power to Gas technology must quickly become affordable.”

“The second pivotal condition is European cooperation. Only in a European context can we make optimal use of every electron generated at sea. Intensive cooperation between TSOs, governments and the other bodies involved – across borders – must be the rule rather than the exception in order to ultimately achieve a European sustainable energy system.”

In this respect the Dutch and German governments are already taking emphatic joint steps and Ms van Beek believes that TenneT can set an example for the energy transition in north-western Europe. Its North Sea Wind Power Hub is a good example of the initiatives that are possible.

The third condition is green industry politics. Large industry is responsible for half of the energy consumption in the Netherlands and that proportion is probably the same or higher in other countries. “Some choices need to be made regarding the energy mix, including hydrogen. We at TenneT can do a lot but we are not magicians, we need to know now what we need to do say in ten years’ time. General policy does not help us much.”

Equigy – the new platform

She points out that it is not just sustainability that is the prime objective. The electricity supply must also be secure and affordable. “Last year, TenneT’s security of supply was 99.9998%, meaning that we keep the lights almost always on. This is not going to be taken for granted in a system that is weather-dependant. At the same time, we want to grow renewables, and – last but not least – do it in an affordable way. The task of changing the entire energy system from a certain to a sustainable and weather-dependent system is bigger than the Delta Works.”

To accommodate the new energy sources and match them with society’s growing need for electricity requires thinking out of the box and a high degree of flexibility to ensure that the grid remains in balance.

To this end, TenneT (Germany and the Netherlands) together with Swissgrid (Switzerland) and Terna (Italy), four of the largest European transmission system operators, are now jointly developing a cross-border blockchain platform – Equigy. This will enable millions of European households and owners of, for example, electric vehicles to actively offer the flexible capacity of their cars and house batteries on the energy markets for the stabilization of the electricity system and thus gain financial benefits from the energy transition.

“The company will be officially established in the coming weeks and offer European citizens the opportunity to participate by offering their capacity flexibility. If millions of cars get involved, the impact will be significant,” says Ms van Beek.

“This is a perfect example of a platform that we are putting in place not to make money but to enable the market to trade. Equigy starts with four countries but the idea is to make this a pan-European platform. It seems a highly ambitious task, but I believe it is achievable. Technology-wise, it is already happening and the only thing that needs addressing is the regulatory framework.”

Green recovery

Looking ahead, Ms van Beek highlights the key tasks. “First, we need to expand the grid, and second, to utilise it better. The third challenge is then to unlock the necessary decentralised flexibility in the market and Equigy is a good example of that. And the fourth task is to promote system thinking, in other words, to focus not only on how to optimise the grid but on looking at the energy system of the future.”

“We need a strategy to introduce the right technologies at the right time, with a flexible cross-border regulatory framework to achieve CO2 reductions at the lowest possible cost and the greatest possible social acceptance. “

To support its growing role in the energy market, TenneT is looking to hire over 1,100 people in the next three years from a wide spectrum of professions both in the Netherlands and Germany. These will be not only technicians and IT experts but communications specialists to participate in driving the energy transition.

While Covid-19 has impacted the Netherlands just like any other country, it has also helped to shift the focus to new ways forwards, Ms van Beek points out. “We can invest ourselves out of this crisis. In a way, Covid-19 is an opportunity to get the talent we need in the next few years. Now, maybe even more that before, people are looking for a purpose at work, and TenneT can offer that. We are connecting people to a brighter energy future, to lighten the way ahead together.”

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