How Gasunie harnesses its purpose to accelerate the energy transition
August 28, 2019
August 28, 2019
A purpose-driven business offers products and services that align with its deepest values, such as social or environmental values. They create opportunities for sustainable growth and change, which leads to more motivated employees, loyal customers, and better business outcomes.
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A purpose-driven business offers products and services that align with its deepest values, such as social or environmental values. They create opportunities for sustainable growth and change, which leads to more motivated employees, loyal customers and better business outcomes.
How can Gasunie, which manages and maintains the infrastructure for transport and storage of gas in the Netherlands and Northern Germany, become a more purpose-driven and sustainable business? What are Gasunie’s challenges and how can they overcome them? We spoke with René Oudejans, CFO of Gasunie, to explore this further.
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Purpose-driven business is a radical realignment, a new outlook on the way we create value. The opportunities for sustainable growth and change are huge – and nowhere more so than in the resources industry. Our choices about which opportunities we pursue today will shape our future.
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Gasunie was founded in 1963–only four years after the discovery of the Groningen gas field, Europe’s largest natural gas reserve. Over the years, the Gasunie assets evolved into a world-class energy transport infrastructure, existing of thousands of kilometers of pipelines and thousands of stations. Over 100 billion cubic meters of gas passed through its pipeline system in the first decade of its existence, while Gasunie produces a steady 24 billion cubic meters of gas on a yearly basis. Its network facilitates transport, storage and transit of gas, and connects energy suppliers and consumers.
Currently, the energy transition is one of the major challenges for society. Governments around the world and our society as a whole agree that moving towards a greener and more sustainable energy system is essential. Besides, the Dutch government has committed to the Paris Agreement on climate change and has sharpened its ambitions. In 2030, the Netherlands must have reduced its CO2 emissions by 49 percent compared to 1990. In 2050, this reduction must be 95 percent.
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Hydrogen can play a significant role in the solution but has to meet its expectations in the coming ten years.
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It is possible to establish a fully CO2-neutral and reliable energy system. We then must bring carbon emissions to a halt by significantly reducing our country’s overall energy consumption and adapting to alternative sources of energy. René Oudejans states that “Hydrogen can play a significant role in the solution but has to meet its expectations in the coming ten years.”
"The far-reaching, short-term challenges in the playing field of natural gas directly translate into changes in Gasunie’s core activities. However, it is expected that the gas infrastructure will remain the backbone of a reliable and affordable European energy supply. For this reason, the company’s infrastructure and expertise will play an essential role in our society’s transition to renewable sources of energy.”
Gasunie is planning to use its current infrastructure in combination with other forms of energy carriers, such as green gas and hydrogen, to play a substantial role in the energy transition.
The UN has formulated 17 sustainable development goals (SDGs) for 2030 that address global challenges, including clean energy and climate action. Gasunie has explored in which aspects they contribute to the SDG objectives, and which topics will present challenges for the future.
To become a more purpose-driven organization, Gasunie has now linked the company’s strategy to the Sustainable Development Goals. Gasunie’s three strategic pillars are the following:
Gasunie’s first strategic pillar is optimum infrastructure and relates to SDG seven: Affordable and Clean Energy for Everyone. René Oudejans stresses that the overall consumption of traditional Dutch (Groningen) gas will decrease drastically from 2020. However, gas will still play a crucial role in Europe’s energy demand. Gasunie is, therefore, investing in a new nitrogen facility to make high calorific (import/H-) gas suitable for Dutch households by blending this H-gas with nitrogen.
In addition, the company wants to become an enabler for green gas transport with the introduction of green gas boosters, adding new green gas connections to the grid for third parties, and by making the network operational for green gas transport.
The transition to more sustainable gas transport and storage is an important point of attention. According to Oudejans, “Underground storage facilities will still play an extremely important role because it offers an energy storage capacity where large-scale battery solutions are not capable of.’’ A great example of this was launched in 2018 in the north of the Netherlands, where the hydrogen project HyStock, a power-to-gas pilot by Gasunie and EnergyStock, converts sustainable electricity into hydrogen for transport and industry. In the future, the existing caverns now used for natural gas will be used for storage of this hydrogen supply, supporting the flexibility needed for short-term demand and supply differences.
Gasunie’s second strategic pillar is their aim to be a linking pin in Europe, which is connected to SDG nine: Industry, Innovation and Infrastructure. The company will continue to optimize its network through efficient business operations, sufficient gas storage, and their Liquid Natural Gas (LNG) import capacity.
By focusing on above-mentioned optimizations, Gasunie can become more sustainable and remain an important player, even in a shrinking market as Oudejans foresees the German and Dutch market to integrate more in the coming years. Additionally, the South-Eastern European region is important for the transportation of gas towards Western Europe. The region offers an alternative to Russian gas, while gas is also used as an alternative to energy sources with higher levels of pollution, such as coal.
Gasunie’s third and last strategic pillar is ‘Energy in transition’ and corresponds to SDG 13: Climate Action. The company wants to utilize its knowledge, competence and infrastructure to enable and accelerate the energy transition, moving towards a CO2-neutral energy supply. René Oudejans mainly sees potential for Gasunie in the areas of green gas, hydrogen and heat transport, as well as Carbon Capture, Transport, Utilization and Storage (CCTUS).
Gasunie has already taken the first steps in this transformation of its core activities, Oudejans explains, from transporting and storing gas, to actively focusing on environmental issues and working on a long-term strategy for a sustainable future. The company sets high ambitions for this pillar and aims to start and be part in many new projects to improve its competences, while boosting climate change measures.
To meet the Dutch Climate Agreement goals for 2030 and 2050, it’s necessary to quickly switch to alternative energy sources. This means that we’ll have to move from the production, transport and consumption of natural gas to alternative energy sources, such as green electricity, green gas, and hydrogen.
Gasunie takes a leading role in the developments of exploring hydrogen consumption in the Netherlands. They especially make great advancements with the production options of ‘green hydrogen’: this type of hydrogen is produced through electrolysis using (surpluses of) green electricity, such as wind power or solar energy. Hydrogen is well-suited as fuel for industry and transport, and currently, pilots have been started to explore the potential of using hydrogen as a reliable power source in homes. Moreover, it’s relatively easy and cheap to transport and store in large quantities, making it a promising reserve fuel in the energy mix of the future.
Obviously, Gasunie knows it can play an important role in this area. An extensive infrastructure is already in place due to the transportation and storage of natural gas. With slight modifications, the existing Gasunie infrastructure can be used to transport other types of gas such as hydrogen.
As early as 2030, Gasunie can have the national infrastructure ready for the use of hydrogen as replacement for fossil fuels. This means that the company can take an enormous leap forward by leveraging its infrastructure to develop the hydrogen market and make hydrogen an affordable and sustainable gas. “I believe we (Gasunie) should be distinctive when it comes to our own emissions and energy use,” says Oudejans.
Looking ahead, gas and electricity infrastructures will need to be aligned to compensate for fluctuating energy sources in the future energy system. Since a seamlessly coordinated, interweaved gas and electricity grid should give the flexibility the energy system needs, Gasunie and TenneT published the Infrastructure Outlook 2050 at the beginning of 2019. This report is the result of a joint study on the development of an integrated energy infrastructure in the Netherlands and Germany. It takes the target of the Paris Agreement (COP21), to achieve a 95 percent CO2-emission reduction by 2050, as its starting point.
Needless to say, there are tremendous challenges for Gasunie. Shifting to other forms of gas and renewable energy means changing the core of its business. This raises the question: how could Gasunie make such a transformation in a relatively short amount of time? How can they adjust their core business and attract talent to address these challenges?
According to Oudejans, Gasunie has seen stable growth with little change in its core processes for many years. The energy transition may seem a threat to employees who are used to the traditional processes within Gasunie. However, the challenges and changes can also be interpreted as opportunities for employees, particularly for younger generations.
These younger generations are well represented in this new and exciting innovation domain. And luckily for Gasunie, the majority of millennials want to do meaningful work, in which they can contribute to society and make a positive impact on the world.
Looking ahead, Gasunie millennials could contribute to shape the future energy system and a more sustainable world. Oudejans believes that “A career at Gasunie is becoming an increasingly exciting one due to the increasing fluctuations in energy supply and demand, the growing importance of setting up new partnerships and project coordination with other parties, and a growing digitization of the business.”
In a workshop with Gasunie’s young professionals, we asked the question: “How do you see yourself contributing to a sustainable future?" Our focus was on the three goals Gasunie already contributes to: Affordable and Clean Energy (SDG #7), Industry, Innovation and Infrastructure (SDG #9) and Climate Action (SDG #13).
One of the ideas harvested from the workshop was the introduction of a ‘5% Challenge’ to find an answer to the following question: “What goals can we reach in thinking and acting sustainably, if we let employees spend 5 percent of their time on sustainable projects?”
Another proposal was the introduction of a ‘Gasunie Innovation Challenge’. As innovation is now introduced to higher levels of the organization, not everyone within the organization is in the loop of the already existing sustainability efforts. By sharing innovation knowledge with employees top-down and asking for their input, Gasunie can grow involvement and provide support to accelerate innovation within the organization. The many ideas that the young professionals came up with show that they are excited to play a key role in the company’s journey towards a CO2-neutral future.
Oudejans emphasizes that Gasunie does not only focus on attracting millennials to accelerate the transformation. They also concentrate on more diversity among employees in general. For instance, Gasunie aims to close the gender gap, because a more equal workplace will make the work culture more dynamic, enriches the discussion, boosts innovation, improves creativity, generates other types of ideas and ultimately leads to better results.
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A workplace culture of equality is a powerful multiplier of innovation and growth, according to our latest research, conducted to celebrate International Women’s Day 2019. Culture is more effective than just diversity, though there’s a serious disconnect between leadership and employees.
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Looking ahead, Gasunie plays a vital role in the Netherlands’ journey towards a CO2-neutral energy supply. The energy transition needs commitment and Gasunie can make a huge contribution by shifting its services to other forms of energy.
Gasunie, with its extensive infrastructure, in combination with its experienced workforce and young, purpose-driven talent, forms an important enabler to overcome today’s energy transition challenges.
René Oudejans perfectly sums up Gasunie’s road ahead, stating that the company must go from facilitating to accelerating the energy transition when it comes to sustainability. “We not just want to play a role in this transition, but we actively want to be part of the solution.”
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We not just want to play a role in this transition, but we actively want to be part of the solution.
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