Ir. Drs. Ruben Dijkstra (19970009) Professor of Sustainable

"SEASONAL STORAGE OF GREEN POWER IS THE HOLY GRAIL"

INTERVIEW WITH: IR. DRS. RUBEN DIJKSTRA,

DIRECTOR OFFSHORE WIND ENECO

The Netherlands has major problems with air pollution caused by heavy industry along its coastline. About twenty kilometers from the beach, Eneco is rapidly building wind farms that can supply the green power to make Tata Steel, Shell Pernis and other companies 'clean.' American Hi Tech giants are also eager to use our wind power and, as customers, are at the same time laying a foundation for financing a healthy green energy sector in the Netherlands. Alumnus Ir. Drs. Ruben Dijkstra (19970009) discusses the developments in this market and the challenge of seasonal storage of green energy.

BY OELE STEENKS - PHOTOS ENECO

Ruben Dijkstra is one of the driving forces behind offshore wind energy in the Netherlands, called Offshore Wind Energy in technical jargon. He got a masters in mechanical engineering from TU Delft and started an IDPFM course at Nyenrode in 1997, after which he started working for Stork in 1999. In 2003 he joined the offshore oil and gas sector, becoming a supplier to Shell, among others. The green economy began to fascinate him at an early stage. In 2008 he became project director at Evelop International bv, which invested in wind and solar energy worldwide. A year later he was asked to become Director Offshore Wind at Eneco.

RD: "I had been used to working with the challenge of offshore exploitation for quite some time. I joined Eneco to apply that knowledge to wind energy. Eneco is one of the champions of renewable energy in the Netherlands and currently the market leader. We are the greenest of the big and the biggest of the green to put it simply. Eneco is active in onshore solar energy, in onshore and offshore wind energy and in biomass."

By today's standards, that's already a long management period; is the work still challenging?

RD: "There is an incredible amount happening in this sector. It has been front page news almost continuously. When I made the switch to Offshore Wind, the first warnings came from the American former vice president, Al Gore, that CO2 emissions in the world were rising too high. At the same time, energy independence became a major issue in Western Europe as Putin began to regularly turn on the gas tap. It was also the time of high oil prices, so the Dutch government looked at Dutch wind as a cheaper alternative for fossil fuel. Along with solar energy, that was a big promise at the time, assuming that a huge cost reduction would be possible. We have succeeded to achieve that cost reduction at sea. We can now build wind farms in the North Sea without subsidies. Dutch wind energy is currently the cheapest source of green energy. It has been a wonderful 'journey' over 13 years and we are far from finished. There is now 2.5 gigawatts of offshore wind production running and, according to the new coalition agreement, this has to go to a capacity of 11 gigawatts by 2030. So that's times five in less than ten years. And to make the challenge even greater, the government is committed to further capacity expansion of another ten gigawatts."

Can you indicate how the production of Offshore Wind is controlled by the Dutch government?

RD: "There are currently 4.5 gigawatts worth of tenders due-known by the Ministry of Economic Affairs and Climate Change. At the moment we are working very hard to fill in our part. Together with Shell, we are building a project of over 700 megawatts in the tender area Hollandse Kust Noord. Our colleague Vattenfall is building 1.5 gigawatts in the Hollandse Kust Zuid project. All in all, we're talking about a production of 2.2 gigawatts that will contribute to the target of 4.5 gigawatts set by the previous Rutte cabinets for the year 2023. This is guaranteed to succeed, because the tenders issued will be realized on time. We are on our way and construction is currently underway."

With Drs. Rob Jetten, the Netherlands has a minister for Climate and Energy. He has to tackle the big polluters in our country. Will Eneco's wind power play a role in the greening of Tata Steel, for example?

RD: "We are blessed in the Netherlands with a beautiful North Sea that lends itself ideally to the generation of offshore wind energy. The wind conditions are favorable, while the bottom is not too deep and has a stable structure. We do not need to build floating or other complicated structures for the foundations of the wind turbines. In addition, we have a good starting point for the Dutch industry to build on. And let heavy industry, our biggest future customers, be in very convenient locations. From Eemshaven/Delfzijl, Amsterdam/IJmuiden, Maasvlakte/Pernis to Terneuzen on the Western Scheldt. You don't have to travel all over the country with cables to reach the major customers, as is

the case in Germany. If wind energy is produced there on the North Sea or Baltic coast, it has to be fed into the grid across the country to reach the chemical industry in southern Germany. However, we can link green electricity in the Netherlands directly to companies like Tata Steel and Shell Refinery. And in the future, it will also be possible to link the pipelines of oil and gas extraction in the North Sea to wind turbines, to produce offshore hydrogen in the process! We are thus in the unique position to achieve 1 plus 1 is 3 on the North Sea.The North Sea, as a production region for future energy, can excellently strengthen the earning capacity of the Netherlands, with which we can largely compensate for the reduction of our natural gas production from the Slochteren field."

Is an off-take contract from Tata Steel already on the table for Eneco?

RD: "We can only build offshore wind energy projects if we can conclude contracts with major parties in advance. For Hollandse Kust Noord we have concluded a contract with Amazon for their data centers, among others. Tata's environmental plans are dated for the end of 2021 and include reducing CO2 emissions and moving to the use of hydrogen, produced using green energy. The policy change at Tata Steel comes too late for our current projects, but the government's plans include a decrease of 5 gigawatts by Tata Steel, out of a total of 17 gigawatts of planned new Offshore Wind Energy capacity. So for finding future partners, Tata Steel is potentially an important off-take route."

What makes Offshore Wind Energy pass the break-even point in a reasonably short time?

RD: "The most important development towards subsidy-free offshore wind, is the technological development. Eneco has started with offshore wind energy at the Princess Amaliapark. There we use rotor blades of 80 meters span and 2 megawatt generators.We had to erect sixty of them to reach the total capacity of 120 megawatts. Now we are building 69 wind turbines with a wingspan of 200 meters in the Hollandse Kust Noord project, with a total capacity of 760 megawatts. So we have grown to turbines of 11 megawatts. It still takes just as long to erect a similar number of turbines, but it produces six times as much energy. Maintenance has also become more efficient; the turbines require the same amount of maintenance to lubricate them all, so to speak. So those costs have also been reduced by a factor of six. You can see the same thing in the supply chain, which in the beginning was based on construction platforms from the oil and gas exploitation in the North Sea. That was always building a single platform at a location, whereas now we have 69 times the repetitive construction activity. The offshore industry has developed and specialized vessels have been built to realize this assembly line setup. Parties like Boskalis and Van Oord have invested in the special installation vessels. The steel foundations for our turbines were initially manufactured in Roermond, but production has now been transferred to the Maasvlakte, where large series of foundations can be made. Another thing that has greatly improved is the procedural process. When we started with offshore wind energy, each producer was required to arrange his own permits and ensure connection to Tennet's Dutch electricity grid. And that, too, in competition with each other. Now this model is tilted towards the Dutch government, which designates the best sites, grants them in advance and then calls for tenders. So the government designates a plot and it is equipped with a power outlet. That makes a huge difference in our investment costs."

With the tender system for Offshore Wind Energy, has the Dutch state made its own revenue model out of green power?

RD: "I want to approach it in a positive way. The process of tendering has definitely contributed to the quality of offshore wind energy. The best party wins, as it were. The rules of the Dutch government are very transparent and it's certainly not the case that national parties have an advantage. A Chinese energy producer has just as much chance of winning a tender as a national party."

But the requested investments must have been increased by a significant factor, especially given the driving ambition of the Rutte 4 cabinet?

RD: "The extremely low interest rates have, of course, had a positive effect on the financing of this type of large project. But all in all, we in the Netherlands have the best development model for wind energy in Europe. In other countries, the energy producer has to take care of the connection to the electricity grid, which often leads to longer lead times. Tennet is already building the cable connection for the Hollandse Kust West tender, which is currently being prepared by the government. As a developer, you can assume that the power outlet is already there for the wind turbines you are going to build as the winner of a tender."

Will future Offshore Wind Farms have the same soil conditions as the first projects?

RD: "The bottom of the North Sea is very favorable for us; there are no strange things in it like rock, chalk or bollards. In addition, the bottom between the Netherlands and England doesn't really slope much; in the middle a depth of 40 meters is reached. The Belgian and German North Sea coasts are subject to similar conditions. It is a homogeneous sand package. We build the wind farms at least 10 nautical miles, or 18 kilometers, from the national coast. The water depth we work with is roughly

30 meters. We go into the ground about 50 to 60 meters. The total length of the foundation consists of 60 meters in the ground, 30 meters in the water and 25 meters above water. So we are talking about foundations of 115 meters in length that we are hoisting into the ground. We are looking for alternatives to do this with less noise pollution, because it is true that hoisting has an impact on the welfare of the fish population and marine animals in the North Sea."

Sweden's Vatenfall is Eneco's biggest competitor when it comes to Offshore Wind Energy in the Netherlands. How is the competition going?

RD: "We both have about the same number of customers in the Dutch market. Under the Nuon brand, Vattenfall has built up a very strong bond with the Dutch market, but now the company is shifting color to its Swedish parent company (state-owned, etc.)."

To what extent do the German and Belgian electricity markets give Eneco a chance of stabilization on the offtake side?

RD: "The electricity grids of Germany, the Netherlands and Belgium are interconnected and the electricity prices are also correlated to one another. So in principle we can supply customers in our neighbouring countries with our offshore and onshore wind farms, but as a rule we serve large local customers. For example, we link the Blauwwind project (Borssele 3&4) to Dutch Railways, Schiphol, Microsoft Netherlands and DSM. There are agreements to balance electricity production and offtake, but it is not the case that we are now structurally serving industry in southern Germany with Eneco Offshore Wind energy."

Can you provide a cost-benefit analysis of Offshore Wind Energy for the average Dutch person?

RD: "You can say that the construction of a wind farm in the North Sea costs two and a half million euros per megawatt. The average trade electricity price in the Netherlands was about 50 euros per megawatt hour or 5 cents per kilowatt hour. At home, you pay about 22 cents per kilowatt hour. The 17-cent difference that consumers pay consists of transmission costs and taxes. The taxes can be used to encourage consumers to behave in an energy-efficient manner."

Is the Dutch consumer being sandbagged with the importance of small energy savings, while a dozen or so industrial plants are responsible for half of the air pollution in the Netherlands?

RD: "Let me put it this way, it was necessary for the government, in order to correct this imbalance, to take more control. I welcome the fact that we now have a separate Minister for Climate and Energy. At least there is one person in our country whom we can call to account on this issue and who can set the rules of the game. Together with the European Fit For 55 program, now is the time to move on. On the one hand with support packages that ensure that Dutch industry does not lag behind internationally,

on the other hand, we must oblige our industry to become more sustainable."

What does this EU program entail?

RD: "The FIT For 55 program is a great concept because it outlines across the EU how we are going to get to 55% less CO2 emissions by 2040. It outlines a framework how we will achieve this for industry, but also how we can finance the production of green hydrogen. Furthermore, some major adjustments are arranged. For example, CO2 pricing is an effective way to push industry in the right direction. But this has to be regulated at the European level, otherwise competition will be distorted. Fit for 55 provides a steppingstone for framing national plans for climate and energy. It is also good that the EU has come up with a Carbon Border Adjustment price mechanism at the external borders, to protect European industry as a whole against producers from continents where the international climate agreement is less strictly complied with."

Will this make the European green energy market a transparent, unified market?

RD: "The rollout of offshore wind energy is still a national affair within the EU until now. This also applies to onshore green energy. In the Netherlands we are accelerating the phasing out of gas-fired power plants and the Rutte 4 cabinet has now included the option of nuclear energy in its coalition agreement. At the same time, Germany is phasing out its nuclear power plants. We are phasing out gas, while in Germany they are actually moving from lignite to natural gas. The same applies to Poland. That country has the task of only now saying goodbye to outdated nuclear power plants and highly polluting lignite. Locally, these may be logical choices, but more holistically you might ask: what the hell are we doing here now?"

Will offshore wind energy eventually become an export product?

RD: "There is a huge demand for energy in the Netherlands from heavy industry on the coast. The big challenge for the Netherlands is how to make this sector sustainable. We very much need the potential of offshore wind energy to enable the transition to a clean heavy industry. So for now I don't see the Netherlands as a country becoming a net exporter of wind power."

But does Eneco have the economic basis to participate as a company in offshore wind energy projects in other member states?

RD: "At Eneco we strongly believe in partnerships, until now logically with local partners, who on the one hand can generate joint working capital, and on the other hand a partner such as Shell offers purchase security with the refinery in Pernis and with Shell Chemie in Moerdijk, where the switch is made to green power. Furthermore, both parties in the Netherlands complement each other across the board in the consumer market, we on the production side and Shell in the downstream activities, i.e. selling gasoline, diesel and charging power to the consumer. In Poland the Baltic Sea offers good opportunities for offshore wind energy. The first concessions have been granted. In 2025 or 2026 we will also see the first offshore wind turbines there. We are looking at that, but more strategically for now. In the future, we will always look per market and per tender, at what we lack to be successful abroad."

INTERVIEW WITH: IR. DRS. RUBEN DIJKSTRA

Will there be a shift from onshore to offshore wind power in the home market?

RD: "Positively put, offshore wind is going to pull most of the patriotic energy transition. I expect that we cannot exclude onshore solar and onshore wind. We desperately need that capacity. The government's policy of bringing green energy with a regional approach seems to be succeeding. The task of achieving 35Terrawatt hours to develop onshore green power, including projects in progress and licensed upcoming sites, is within reach. So there is still a growing supply of green energy on land. But the big steps forward, as I said, are coming from offshore wind energy. With the cabinet plans to get to 11 gigawatts of offshore wind capacity, we are already at a filling of 49 terra watt-hours on the Dutch electricity grid with offshore wind. And on top of that comes the permit for 10 gigawatts of additional capacity in the North Sea! Then the supply to the Dutch electricity grid will increase to over 80 terra watt hours. That is a huge step forward. And for offshore wind energy there is simply more space and less resistance, because you do notice that on land there is increasing resistance to wind farms."

Do Dutch consumers sufficiently understand that the importance of the Netherlands as a hub of international digital connections, is sometimes more important than environmental concerns?

RD: "This is a false contradiction. We are indeed in the Netherlands at a hub of the HiTech world with cable connections for Google, Microsoft and Facebook etc. As Eneco, we are not really in the game strategically in this regard, but obviously more opportunistically. The American HiTech giants need local parties with whom they can claim not to burden the international environment. That's a match made in heaven, from our perspective. It requires green power and they are capital-rich buyers. Our livelihood security is enhanced because we can enter into long-term contracts with financially robust parties."

The socially underlying question though is do we want to use the limited supply of wind and solar energy to bring new sustainable economic activities to the Netherlands, or do we want to use that capacity to make the existing economy more sustainable?

RD: "The new demand from foreign internet companies, in principle, does not directly help to stop the pollution of Tata Steel."

The Dutch state is going to issue two more tenders for offshore wind energy over the Wadden Islands. What is the likelihood of legal proceedings brought by environmental groups?

RD: "When the tender is issued for the locations above the Wadden Islands, the environmental permit is in place, although it is not yet irrevocable. But when the tender is issued, the chance that a party can successfully lodge a legal objection is very small. There is already a spatial framework, within which a parcel decision has been approved."

Are there any limitations to harnessing offshore wind energy?

RD: "The limitation of green energy is that it is supply driven instead of demand driven. We are not really used to that in our society yet. On the one hand, the energy company is going to determine more when you can run the washing machine or charge your car. We call that "peak shaving.” On the other hand, we have to look for the holy grail in energy transition, and that is seasonal storage. This involves moving wind energy from the winter to the summer. At the moment, we are still feeding excess capacity into the grid. There are already enough households with solar panels that are net producers of green electricity. These are, in themselves, bad customers for an energy company, because these households are busy dragging power from the day to the evening, and from summer to the winter. So far, this has cost these people nothing; in fact, they get it netted on their bank account, but they do purchase a service from Eneco or a comparable competitor. We will definitely move to a different model of pricing energy, as we have already seen in telephony. You used to pay per tap, until KPN found out that they were no longer seeing taps due to What's App and Skype. Then our telephony company had to switch to pay per bundle at lightning speed. I expect we're going to see something similar in the energy market, such that you're charged for personal storage and shifting rather than rewarded."

Can you explain how we get green hydrogen on a large scale in the Netherlands?

RD: "At the moment we produce hydrogen in the Netherlands using our natural gas. The advantage is that this is a very efficient process, but the disadvantage is that it releases CO2. This nullifies the intended greening. In contrast, the Renewable Energy Directive, an EU directive, states that renewable fuel must be blended in. This places an initial demand for green hydrogen in the European market. This involves the use of electrolysis. You put water under voltage and with that you pull it apart into oxygen and hydrogen. It is a technique that has been around for a long time, but has not yet been applied on an industrial scale. Eneco is involved in several pilots in the Netherlands. So far, those pilots have a scale of 1 to 2 megawatts. Within a few years, the scale must be increased to 100 to 200 megawatts. There is still a great deal of work to be done. The technology is still in its infancy. In the somewhat longer term, it is possible that we will see energy islands at sea, on which we can do hydrogen production." ♦