Unraveling the complexities of an energy transition
A close reading of four long reads from a Dutch general affairs magazine
I am a big fan of the Dutch weekly magazine De Groene Amsterdammer (DGA). The first issue appeared in 1877, so soon it will celebrate its 150th anniversary! An impressive achievement as it continues to this day to pursue an independent course, free from political and commercial interests. No adds here for SUVs cheek by jowl with warning cries about climate change! The magazine highlights the complexity of our times through long reads based on serious investigative journalism.
In the past two years, DGA illuminated various aspects of the Dutch energy transition, away from fossil fuels towards a renewables and hydrogen-based system. Obviously a frightfully complicated, costly and controversial operation. In order to get a better feel for the overall scope and orientation of DGA’s argument, I have selected four long reads — typically around 5.000 words long — and summarised each by way of a causal-loop diagram. I then pulled the four diagrams together and developed a single, synthetic diagram from them. In general this is a very good way of practicing close reading and flexing one’s causal doodling muscles.
Kumu is still the application of choice for building complex network diagrams, but for casual (causal) modelling a virtual whiteboard suffices. So a diagram is built up of virtual sticky notes linked by arrows. Each sticky stands for a driver in the energy transition dynamic as described by the author of the piece. I think about them as variables. So even if a journalist argues that, say, investments in renewables are lagging, I will label the sticky as ‘investments in renewables’ (that can be high or low) rather than ‘lagging investments in renewables’ (that are by definition too low compared to what might be hoped or expected). This way of working has advantages and disadvantages. In doing so, I move away from the judgements written into the piece to highlight the conceptual backbone of causal interdependencies that supports the author’s reasoning. As a result, the diagram becomes more general and timeless, less tied to the specific circumstances addressed by the article. There are two types of arrows: solid lines and dotted lines. The former represent a causal relationship that maintains the direction of change from the tail to the head variable (say, more investment leads to more capacity of alternative energy sources), while the reverse is true for the latter (more capacity leads to a fall in prices). Of course, the sign of the arrow depends on how one has conceptualised the variables. These are the usual intricacies of causal loop diagramming.
Let’s see what we can learn from this exercise. I’ll add the links to the online articles, but the material is obviously in Dutch and behind a paywall, so most readers will have to take my word for it. There’s a virtual whiteboard here that offers flexible access to each individual CLD.
Pepijn Vloemans’ January 2022 piece takes a wide angle view on the energy transition. His bottom line is: investment in a rapid short-term transition will save us a lot of money down the line. The longer we wait, the more expensive the climate change bill will get. In his piece he describes the dynamics of the switch to renewables.
I extracted ‘installed capacity of renewables’ as the nodal variable (in blue), which anchors the whole argument. Ramping up the installed base of renewable energy sources is indeed the key challenge. Then there is a small number of drivers where a lot of lines seem to converge. Let’s call them leverage points: investments in renewables, cost of renewables and the twin variables linked to the expansion and upgrading of the electricity grid. So a cursory glance at the CLD already gives a pretty good idea of the main drivers at play in the energy transition.
From there, it is simply a matter of taking the leverage points one by one and tracing back the tangle of causal relationships. The bottom of the diagram visualises the market dynamics unfolding around renewable energy capacity expansion. There are many factors at play. Transaction costs (uncertainties and delays related to permits), competitive dynamics between major market blocks, price of carbon and investment strategy are important drivers here. Regarding the latter, Vloemans points out the limited rationality of investors. It is very difficult to move people away from linear extrapolations from the past to the future. It’s a cognitive bias: we are not used to dealing with phenomena that show non-linear, exponential growth. Today this leads to underestimation of the potential of renewable energy and hence underinvestment in capacity expansion.
Another important driver that shapes the speed of deployment of renewable energy sources is their typically intermittent character. At the mercy of variable availability of wind and sun, a renewables-based energy system will always need an either fossil or hydrogen-based back-up infrastructure to cover for periods of dunkelflaute.
The transition to renewable energy goes hand in hand with massive electrification. This requires (again) serious investments in grid improvement and expansion. An important facilitating factor here is the potential for long-distance (intercontinental) electricity distribution. The author points out two risks of electrification: a burden on economically disadvantaged groups in society due to rising costs, and environmental damage due to the massive demand for materials and the associated increase in (land-based or deep-sea) mining activities.
Finally, the top end of the diagram shows various desirable downstream implications of an energy transition: less costly adaptation to climate change, healthier people, more local jobs, more geopolitical clout vis-à-vis autocratic oil producing countries.
Obviously, there is quite a lot of meat in DGA long read!
A second piece, written by Sanne Bloemink (May 2022), zooms in the hydrogen component of the energy transition. Hydrogen is a key enabler of a comprehensive sustainable energy supply, with large-scale storage of renewable energy in the form of hydrogen as an important link.
The CLD shows that this piece is essentially an exploration of supply-demand dynamics. A renewables-based energy system requires an energy storage back-up infrastructure and hydrogen is one option for this. An important theme foregrounded by the author is the competition for green electrons by two types of demand: the more concentrated energy-intensive industrial applications and the more dispersed demand from households and transport. It seems to be difficult to cater for these two needs at the same time. Or is it recommended to put all the cards on industrial demand and supply electric cars and heat pumps straight from green energy sources? The opinions are still divided.
The supply side is again a story of investment priorities. Who will pay for this? There is an obvious tension between vested interests, who want to make profits from their existing infrastructure and slow down the speed of the transition, and the decisiveness required by the impacts of climate change. The Netherlands have, however, a major asset: the existing gas network infrastructure that is to be transformed into a ‘hydrogen backbone’ in the coming years. This is an important incentive for government and private sector to assertively invest in green hydrogen.
In their piece (May 2022), Adrian Estrada and Felix Voogt investigate the impact of the energy transition on the long-term viability of Dutch ports (with Rotterdam taking first place as Europe’s largest seaport).
The question is this: public authorities are pouring an awful lot of money in the expansion of ports but the question is whether this is well spent given that investment decisions are still very much skewed towards a fossil fuel-powered future. However, a rapid transition to a renewables-based system will lead to a more decentralised energy infrastructure with less need for massive portuary distribution hubs. Much of the piece is given to a critique of governmental foresight practice. The authors contend that it suffers from at least four major gaps: unclear starting assumptions, unquestioned growth bias, the lack of up to date data, and the incapacity to factor in all the complexity that is folded into these transition pathways. In other words, governmental foresight is not rational enough.
The fourth and last piece deals with the problems related to the expansion of the Dutch electricity grid (authors: Bijou van der Borst, Adrián Estrada and Belia Heilbron; July 2022). Ramping up the capacity of the electricity grid to meet rising demand is crucial to respond to the challenge of climate change. Also the speed with which the housing crisis in The Netherlands can be tackled is dependent on the pace of upgrading of the grid. But the process is mired by bottlenecks to the effect that municipalities and industry operators are not able to connect their green projects to the grid. “The Netherlands is on the brink of a nationwide power grid chain collision with far-reaching consequences.” At the time of writing four of the five main Dutch industrial clusters were located — sometimes partly — in areas where no new connections are possible.
The friction is rooted in governmental energy policy. The bottom end of the CLD spells this out quite clearly. The key problem is a lack of coherence: public authorities play the card of decentralisation by giving energy regions and private citizens the discretion to invest in renewable infrastructure. It’s up to the grid managers to respond to this geographically and temporally dispersed and non-linear demand. (For instance, until 2017, the Netherlands had only 22 solar farms, now there are 272.)
The grid operator and distribution companies feel slighted by the government. In the outlining of the electrification strategy they are kept at arms length. In addition in the past 10 years the Dutch Ministry of Finance has extracted more than 1 billion euro of dividend from TenneT, the designated grid operator of the national high-voltage grid in the Netherlands. These funds could have been profitably allocated to investments in the grid. Also here the quality of government foresight is a key driver. In a response to the DGA authors, the Minister of Energy acknowledged: “We thought we were in a gradual transition, but it is very disruptive and that also requires some adjustments.”
Surveying these four long reads, one gets senses that in some way they complement each other. There’s a lead in piece that provides a bird’s eye view of the transition challenge, and then three articles that zoom in on key sub-challenges namely the futureproofing of the hydrogen, electricity and port infrastructure. In each CLD there are variables that also appear in other diagrams, so in principle we might simply wire them up by connecting these interface variables. I did that and then it looks roughly like this.
But for an unprepared reader it becomes a tall order to flesh this out. That is why I took a fresh sheet of paper and started to doodle a synthetic diagram at a somewhat higher level of generality. The result is this:
The key driver behind the success of the energy transition that emerges from these four pieces is the quality of government foresight. Effective foresight forms the basis of a successful investment strategy in grid expansion and in sustainable energy generation and storage (left hand side of the CLD). But the quality of foresight is undermined by a number of factors: the force of cognitive biases (optimism bias), the weight of vested interests, technical and social-political complexity, and a lack of transparency (right hand of the CLD). I would personally add that in many countries there is serious cognitive and financial underinvestment in governmental foresight capacity.
It was great fun to trawl with a bit more focus through these articles from De Groene Amsterdammer. The DGA editors are doing a great job in bringing a lot of complex information together in a compelling story. Their work deserves sustained attention. And we, readers, feel like we have genuinely learned something new.
These contributions reflect a vision that can be labelled eco-modernist. Central to this is the belief that advances in science and technology are the key to a ‘good Anthropocene’ that links ecological sustainability with human prosperity. Undoubtedly, this is not the full story behind the climate challenge, and the team behind DGA knows it. In other articles, they zoom in on the need for equitable burden-sharing and a transition away from our self-image of controlling, self-centred, utility-maximising agents. Climate change leads to intertwined infrastructural, economic, geopolitical and socio-cultural transitions.
Epilogue: here is another DGA piece, by Tamar De Waal, on the reading crisis (January 2023). Deep reading has indeed taken a back seat in our society. De Waal writes: “Also crucial is what Maryanne Wolf, professor and researcher on ‘the reading brain’, refers to as ‘cognitive patience’: the ability to pay attention to something in a concentrated, sustained and in-depth way. Cognitive patience is needed for understanding complexity, reflecting on ideas and values, combining information, creativity and imagination, self-knowledge, synthesis — and thus progress, including democratic progress.”
Acknowledgment: I gratefully acknowledge the support of Ms. Loukia Batsi in writing this piece.