The transition of energy intensive industries and the role of Public-Private Partnerships

Public-Private Partnerships (PPP) are key in reaching the decarbonizing goals of the energy-intensive industry. In the Netherlands, the government takes on a coordinating and facilitating role towards PPP’s.

What can we learn from the Netherlands and what makes this PPP strategy so unique?

The Dutch government has a long history in creating PPP’s and aims to overcome the “Chicken or the Egg” dilemma in the transition of the energy-intensive industry. Examples of PPP’s are infrastructural projects such as Aramis (a CO2 transport infrastructure project to enable offshore CO2 storage, where Total Energies, Shell and two state owned companies collaborate) and collaboration efforts to set goals for CO2 emission reduction.

Goal-setting

An important example in setting goals was the Dutch Climate Agreement 2019 between the energy intensive sector and the government on decarbonization of industry in which parties agreed to reduce 14,3 Mt CO2 in the industrial sector and 20 Mt CO2 in the electricity generation sector by 2030.

Overcoming the Chicken or the Egg dilemma with PPP’s

To accomplish this and make the transition from fossil fuels to renewables, the appropriate energy infrastructure has to be planned, executed and integrated to the current Dutch energy system. However, there is a mismatch between the realization of new infrastructure and renovation of existing infrastructure and decarbonisation of the industry:

  • The industry will invest only when there is certainty about the infrastructure
  • The TSO’s and DSO’s will not build and invest in infrastructure if the demand is not clear

Programme Infrastructure Sustainable Industry (PIDI)
To overcome this “Chicken or the Egg” Dilemma, the Dutch national government decided to take the lead in planning and coordinating the realisation of new, future-proof energy infrastructure. How are they doing this?

  • The Government works in close cooperation with TSO’s and DSO’s, industry and local governments in PIDI (Program Infrastructure Sustainable Industry).
  • The Government asked every industrial cluster to draft their energy strategy, including the necessary investments and infrastructure needed to decarbonize their business.
  • All the data received was stored in a secured data room and was discussed with TSO’s and DSO’s; how fast can we speed up the realization of new energy-infrastructure? And discussed with energy producers their plans of upscaling renewable energy into the energy-matrix.
  • Based on the collected information and in collaboration with TSO’s and DSO’s, a multi-annual investment plan for the energy-infrastructure (MIEK) was developed, in which investments were categorized and prioritised. In this way projects of national importance were identified to accelerate. These include the construction of the electricity infrastructure, hydrogen pipelines and the carbon capture and storage pipeline infrastructure in the North Sea.

Finally, tailor-made arrangements are to be made between government and industry, overcoming hurdles and accelerating the transition.

TwynstraGudde, our Cordence member firm in the Netherlands, is an expert in creating and managing public-private partnerships. They are currently supporting the Dutch government in the PIDI programme to accelerate the projects of national importance and coordinate and collaborate with the involved stakeholders. TwynstraGudde is also working on several large PPP’s projects in relation to decarbonisation of the industry such as #Porthos, #Aramis #Tata Steel.

Do you want to hear more about creating public-private partnerships and how you can implement it in your country? Please contact us at: info@cordence.com

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