Innovation Is on Full Power, Regulations Must Keep Up

July 27, 2015 | 00:00
Innovation Is on Full Power, Regulations Must Keep Up
Innovation Is on Full Power, Regulations Must Keep Up
Regulations must keep up with the increasing speed of innovation in the transition to decentralised renewable energy, agreed experts from business, politics and academia at a fully-powered Erasmus Energy Forum in June. Speakers at the event organised by Rotterdam School of Management, Erasmus University highlighted the need for governments and industries to make way for innovation – and for a multi-faceted approach from all stakeholders.

Consumers have a role to play, but are resistant to change their behaviour, and that’s a challenge for industries developing the new energy landscape. The call to ‘do something now’ was also a message from several of the event’s speakers.

The annual Erasmus Energy Forum takes an international and multi-stakeholder perspective; this year it focused on the transition to decentralised sustainable energy in ports and cities and was introduced by Volker Beckers, former Group CEO of RWE Npower and chairman of the Erasmus Centre for the Future of Energy Business (ECFEB) to an audience of over 200 people.

Advanced steps are underway in Rotterdam city and in the Port of Rotterdam to switch energy supplies to renewable sources for houses and industries. Both welcome innovations for generating and re-using energy said Mayor of Rotterdam, Ahmed Aboutaleb and CEO of the Port of Rotterdam, Allard Castelein. The city and port support each other in any way they can, with a versatile and unprecedented infrastructure.

Professor Wolf Ketter, academic director of the ECFEB, described new developments in smart sustainable markets which use avatars or intelligent software agents to allocate resources to give most value or act on behalf of individuals and companies. But he warned that only developed nations would benefit from the growth of smart markets and intelligent software agents.

All sectors of industry are becoming digitalised said Colette Maloney, Head of Unit Smart Cities and Sustainability at the European Commission (EC) and it should be regarded as an opportunity, not a threat. New services must increase consumer choices and give better supply and demand. Digitalisation is needed to enable smart grids and to reach the EC’s 2020 and 2030 targets. It can be achieved through standardisation and further developing what already exists. “If we don’t get that right, there are others who will,” she said. Maloney said the key to success is constructive co-operation between energy and ICT sectors.

Dutch government representative Mark Dierikx said the energy transition is often talked about as if it is science fiction. The Director General for Energy, Telecomm and Competition in the Dutch Ministry of Economic Affairs showed evidence from his appointments diary from the first half of 2015. He listed local and international achievements that rarely make headlines, such as agreements and developments in security of supply, market systems and energy efficiency. They all show the transition to sustainable energy is underway, and is producing results, he said.

Professor Stephan Reimelt, CEO of GE Europe, says fragmentation is preventing Europe from making an impact in the transition to decentralised sustainable energy. GE is one of the largest investors in Europe, he said, but it was hard to perform in ‘a much regulated place that’s different in every member state’. More investment is needed for industries in the data sector to make progress, he said, and called for an aspirational leadership in the European Union.

The speed of innovation will be faster than regulation or standardisation, he warned, and said regulations are too slow. “We must innovate, or we’ll miss something,” he said.

Speaking of a port-specific transition, Ewald Breunesse, Manager Energy Transitions for Shell Netherlands, explained the Netherlands is one big energy delta for Shell, which has invested in a liquefied natural gas (LNG) break-bulk facility in the new Maasvlakte area of the Port. The LNG supply would be extended to other port terminals. He said he thought road transport would be done by quieter and less polluting trucks fuelled by LNG. The next stage is to supply LNG vessel-to-vessel.

Pieter Trienekens, CEO of distribution system operator Stedin addressed the role of natural gas – responsible for building wealth in all of Western Europe – in the future energy landscape. Reducing the household demand for natural gas is a real challenge, he commented. Solar power, heat pumps and electrical storage are customers’ favourite new energy technologies, he said, and the company currently has 20 pilot projects underway; one investigates the use of excess power in the grid to manufacture syngas, or synthesis gas, another study explores ‘demand-side management’ and the use of heat pumps for 300 householders in The Hague.

Stedin uses models of customer behaviour as well as optimising additional capacities and investing in its grid. “If we don't do anything, there will be a massive requirement for more grid investments; that’s not optimal from an economic point of view,” he said. His conclusion was that the grid will be used as a storage or exchange facility in future.

Michiel Langezaal, founder and CEO of Fastned, which operates the infrastructure for fast charging electric cars along the Dutch motorway network spoke of a race between manufacturers of reasonably priced electric cars because battery prices are dropping by about 20-25 per cent annually. The trend for faster charging will continue. Despite being seen as an inconvenient 20-minute stop on a long journey, fast charging will exist alongside slow charging, but three-quarters of EV drivers in the Netherlands still cannot depend on public charging. Fastned continues to build a charging station every week.

Yukihiro Sonoda is the Vice President of Energy Research, Advanced Technology & Technical Affairs Planning for Toyota Motor Europe. He explained Toyota’s vision of mobility zones such as those in Toyota City in Japan where analysis and incentives show people how to change their daily habits to reduce energy consumption. The company is developing second generation batteries such with lithium-air and all-solid-state technologies, as well as its ‘HiGrid’ concept for combining hybrid electricity and a hydrogen grid. Toyota is also working on the Ha:mo RIDE ultra-compact EVs, a self-service car sharing system with 35 stations in Toyota City.

Marc Borrett, co-founder and CEO of Reactive Technologies said customers and ‘prosumers’ are a valuable resource because of their flexibility and should be made a more visible part of the energy industry. The company develops new technologies for making efficient decisions in the power grid, connecting different levels of grids in countries, districts, cities, business, houses and even devices. Pulling supply and demand together gives opportunities from billions of devices, and there’s a drive towards more open standards because grids allow better control, said Borrett.

Prof. Han Gerrits of the VU University Amsterdam described how small start-up companies are shaking up innovations in the sector, influencing bigger companies to adapt. There are no rules for innovation, and learned behaviour inhibits new ideas from being brought to life. Start-ups and small companies search for new business models, he said.

The energy industry is moving to a value network, with several contributors collaborating, explained the professor. Good ideas come from transferring knowledge from one area to another, and by bringing people from different backgrounds together.

The Energy Debate concluded Business Day at the Erasmus Energy Forum, and featured Chris Faulkner, CEO and chairman of Breitling Energy Corporation, an oil and natural gas company based in Dallas, Texas which specialises in fracking. He gave his responses to questions that were also put to the audience.

The majority of the audience, 63.5 per cent, indicated that they thought a transition period to a non-fossil fuel environment was underway while new and viable technologies are being developed. Chris Faulkner said he thinks fracking is also a source of a transition fuel. More than 85 per cent of the Forum’s audience said that the European public won’t accept the US shale gas model and fossil fuels should be kept in the ground. Chris Faulkner admitted that the fracking industry has not done a good job of earning trust. “We’re late at the party with a new message,” he said.

Asked who should pay for a decentralised energy sector, 44.4 per cent of the audience indicated they thought consumers should pay, rather than government or suppliers.
The USA’s energy sector is built by the private investor sector, said Faulkner. Some Americans are prepared to pay more for green energy – for example in California – but such states still have some of the highest rates of oil use in the country.

The final question of the day asked if existing cities can become energy efficient. Almost 70 per cent of the audience indicated they thought it was possible if solid legislative framework was created. Faulkner agreed. Efficiency must be part of the plan because of population growth, despite rising demand for gasoline, he said.

Image: Professor Wolf Ketter at the Erasmus Energy Forum. Courtesy of Rotterdam School of Management, Erasmus University (RSM).
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