Notes #19/2023

It's governance, stupid. Smart Energy Systems, SMEs, and the role of the Public Sector

Notes are just that: Short, informal messages, or brief records of points or ideas written down. The views and opinions expressed in my notes do not necessarily reflect the views or positions of my employer or clients.

Smart Energy Systems, SMEs, and the role of the Public Sector

In the last two years, I have attended a few meetings with small and medium enterprises (SMEs), business parks, and local governments to discuss smart energy systems (SES) and local grids. Two such meetings in the last two weeks have prompted me to reflect on these interactions and inspired me to share some observations:

Many SMEs have made tremendous progress in recent years to reduce their energy consumption, and in many cases, energy production through solar PV. A determining factor seems to be the attitude and ambition of the director (often the owner in my examples). Many of these directors excel in incremental technical solutions for their own companies but are remarkably uninformed about the broader context and dynamics of the energy transition.

This lack of awareness might explain why it takes an individual problem today to initiate thinking about collective solutions for tomorrow. Even with grid congestion and steep increases in energy prices affecting the availability and affordability of energy for well over two years, many municipal public sector economic departments and SME owners are still caught off guard when a new business development area or a production increase cannot be provided with the electricity it needs.

Once SMEs and the economic departments of municipalities realize that there is a problem and that there might be a (smart) solution, the discussion about a local SES solution often starts with the desired technologies instead of aims and objectives. A battery is not always the solution, nor is more solar PV, or a complex digital virtual energy-sharing and trading platform.

A solution for what, anyway? What are the specific problems, obstacles, and what is the local context? What are the ambitions and goals? Is it just to have sufficient energy available for now, or for increases in production, or for new companies to settle in the area, or to be able to charge electric trucks? Is it to become climate neutral? Is it to become independent of the national grid, or to reduce the price of energy? Is it to make money in the energy markets? Or any combination or all of the above?

Ironically, when the goals are determined, and the discussion returns to the assets and technology, it often focuses on the perceived risks of (proven) technologies, whereas the main factor for success is governance. Who invests in and owns the assets, and how is decision-making organized? In my experience, the determining factor for advancing SES solutions among SMEs is their degree of (prior) organization. Sharing energy requires trust, stability, and transparency.

An interesting project developing a rather advanced solution based on trust and preexisting long-term cooperation is Project DOEN by Saenz, a local energy cooperative for companies, in collaboration with Aug-e and the municipality of Zaanstad (I have been involved through my previous role with the municipality).

The role of local government in these projects is limited but crucial. To initiate progress, it is helpful when local governments support a higher degree of organization and intensity of cooperation (even on issues other than energy or sustainability) among businesses. And it seems necessary for local governments to facilitate the start of discussions, providing the means for the first steps, such as feasibility studies and energy profile analysis, including through grants or subsidies.

Personally, I sometimes question why taxpayer money should be invested in a project that primarily benefits businesses. However, in practice, I see that these funds are a necessary catalyst for collaboration, a symbol for the societal relevance of the energy transition, and a token of trust.

Reading recommendation

• Pedersen, D.B. (2023) An evaluation framework for institutional capacity of science-for-policy ecosystems in EU Member States. Publications Office of the European Union, JRC136095.

• European Commission, Directorate-General for Research and Innovation, Arranz, D., Bianchini, S., Di Girolamo, V. et al., Trends in the use of AI in science – A bibliometric analysis, Publications Office of the European Union, 2023,

In other news: Back to 100 miles

I have started a second newsletter on Substack called 'Back to 100 Miles.' The one you are currently reading—'RZ Notes'—covers my professional interests as a choreographer of sustainability and a science-policy mercenary. In the new newsletter, I share my experiences as a struggling ultrarunner, documenting my training (or lack thereof) for my next ultrarunning race. This newsletter includes actual training reports as well as musings about running, endurance, nature, art, and other topics remotely, vaguely, or not at all related to ultrarunning. While the Venn diagram depicting the audiences for both newsletters might consist of two disconnected circles, you can sign up to receive Back to 100 miles here!

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