The energy transition: Progress over perfection

When it comes to the energy transition, the Netherlands seems to focus on a 100% green electricity ideal. Ramon van den Dungen, Managing Director Energy at ING, argues for more realistic ambitions. Take the North Sea, for example. “There’s tremendous opportunity for the creation of offshore wind.” But the government’s ambitions turned out to be unrealistic, so they’re now being scaled back. Having high hopes is one thing—but hitting those targets is a different story.

“In order to come to an integrated energy system, we should have a long-term, holistic, consistent outlook”, van den Dungen continues. “Then we can start building a practical plan, rather than a perfect plan.”

That begs the question: what does such a plan look like?

Hieminga’s proposal: think hybrid. “Corporate decision makers and policy makers should focus more on hybrid solutions, rather than fully electric ones. Like hybrid heat pumps, for example. These run on electricity most of the time, but when it’s extremely cold, they switch to green molecules.” While not a perfect solution, Hieminga admits, going hybrid is “an important step that can be scaled up more easily.” And steps, it turns out, are key. “Step by step, a net-zero economy will come into perspective.”

What about green molecules, then, like biogas, sustainable heat, and low-carbon hydrogen? Will they ever play a significant part? Ultimately, yes, both experts say. Hydrogen’s benefits are clear. Hieminga: “It has the potential to really transform carbon-intensive processes like steel- and plastic-making.” Van den Dungen adds: “Transitioning to hydrogen isn’t just realistic, it’s absolutely necessary. Green hydrogen is needed to decarbonise a number of sectors. And it has potential as an alternative means of transporting energy.”

But there are two caveats: scalability and cost competitiveness. According to Hieminga, hydrogen is still in its pilot phase. And it’s taking a lot longer to scale than hoped. What’s more, van den Dungen says, “green hydrogen is much more expensive to produce than other types of energy carriers.” Plus, with prices expected to fall, long-term contracts aren’t exactly attractive to companies. 

Here, Van den Dungen thinks, the government and the public sector can really step up. He adds that we should look to our German neighbours for inspiration. Their public sector is acting as a market maker—an aggregator of supply and demand—lowering the risk for corporate players. “I think it's very important that we get to a similar system,” van den Dungen says.

According to van den Dungen, implementing green hydrogen will take a little more time, but it’ll happen. And again, the way to get there is a slightly less ambitious but achievable plan, he argues. “We need to be realistic.” In practical terms, that means “looking at blue hydrogen, potentially blending green hydrogen, and labelling it in a more pragmatic way, rather than according to the very detailed regulations the EU has put in place that hardly work in practice.”

So pragmatism, realism, and taking it step by step. Sounds doable, right?

If you’d like to know more, explore our deep dives into this topic at Opens in a new tabING Research.