Energy transition gets stuck in its own good intentions

Due to a number of recent events, it is starting to look like the energy transition is starting to get stuck in its own good intentions. For example, the Dutch highest advisory body, the Council of State, says that the step from 'paper to practice' has not yet been sufficiently taken for the energy transition. In a recent opinion, the Council of State ruled that it is 'unrealistic' that all energy transition measures have been 'completely implemented on time and have maximum effect'. For example, there are major shortages of people, resources and materials.

According to the Council, measures are in danger of being postponed, partly due to the fall of the cabinet. The objectives may also disappear further from view due to other political choices, such as postponing road pricing or possibly investing less in sustainability packages. This already applies to the agricultural sector, partly due to the collapse of the agricultural agreement and the slow progress of the 'national rural area programme'.

Far-reaching package of measures in the power grid
Earlier I talked about our overcrowded power grid. As a result, more than 6.000 companies and wind and solar parks are now on a waiting list to be connected and companies can no longer even establish themselves in certain areas for the time being. That is why the outgoing cabinet is coming up with a drastic package of measures. For example, companies should be able to be obliged to use less electricity at peak times for a fee. These 'unorthodox' interventions are necessary to prevent us from being left in the dark at peak times in a few years' time," Rob Jetten, Minister of Climate and Energy, told the House of Representatives. The fact that the government is willing to go this far illustrates the scale of the problem.

This does not only apply to large companies. Small consumers, such as households and SMEs, in the Flevopolder and the provinces of Gelderland and Utrecht could also run into problems from 2026. For example, they cannot install solar panels on their roof or charge their electric car.

Transition to cleaner alternatives difficult
Another interesting recent development is that a number of major oil and gas companies such as Shell and Total Energies have signed long-term contracts with Qatari liquefied gas supplier QatarEnergy. They did this just a few days after the European Union declared its aim for a global phase-out of most fossil fuels well before 2050. The signed contracts with Quator continue until after 2050. Apparently these major energy companies assume that we will continue to will still need gas in 2050 to keep our economy running.

In their scenarios, sustainable energy, batteries and green hydrogen alone will not get us there. It appears to be very difficult - despite the need to transition away from gas more quickly - to make the transition to cleaner alternatives. High financing costs and uncertainty about the commercial feasibility of offshore wind, for example, have held back investments and raised questions about the feasibility of Europe's climate goals. The overcrowded power grid and gas deals until after 2050 clearly demonstrate the gap between the harsh reality and the politicians' predictions with regard to climate goals. Not only in Europe, but certainly also in the Netherlands.

Kasper Walter

Kasper Walet is a former board member of the agricultural futures market. He has now been working under the name Maycroft for years as an independent adviser on energy and climate to governments and companies from all over the world.

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