In our latest episode of the Energy Transition Talks series, CGI Vice-President, Consulting Services Tom van der Leest interviews Nienke Homan, who holds several board positions in energy- and industry-related organizations. Nienke and Tom have an in-depth discussion on how hydrogen enables the energy transition, how organizations need to balance the new energy system and how optimized IT systems are a critical piece of this transformation.
As the energy transition progresses, hydrogen is becoming increasingly important in reducing emissions and meeting climate neutrality targets. The production, transport and offtake of renewable electricity and green hydrogen are adding complexity to the energy system, which requires organizations to transform their internal and external operations.
Drawing on her rich expertise within the energy sector, Nienke Homan shares her thoughts on the opportunities and challenges of transitioning to green hydrogen, the need to balance the overarching energy system and the growing importance of data and IT systems in achieving a climate neutral energy system.
Through her role in Energie Data Services Nederland (EDSN), the shared IT service provider for the Dutch energy system, Nienke sees several shifts developing in energy IT and infrastructure. Specifically, she points to flexibility means, the optimization of IT systems and using real-time data.
‘’If accelerating the energy transition is the goal, then real-time data and flexible, efficient IT systems are critical’’, says Nienke, suggesting the creation of “an agile system that can find the optimal balance between molecules and electrons, so we can use our energy and its infrastructure in the most efficient way.”
- 1. Introduction
Tom: Hi everybody. Thank you so much for joining. My name is Tom van der Leest. I work at CGI as Vice-President and I'm responsible for the energy business we run in the northern part of the country. With me here today is Nienke Homan. Nienke, thank you so much for joining.
Nienke: Thank you. Happy to be here.
Tom: Very happy to have you. At CGI, we have been talking a lot to different stakeholders in the market about hydrogen and you are one of the persons who is very explicit about making stuff in the energy transition, reducing emissions, and sees hydrogen as a key element in that. You also work in very different roles both on industry as within IT, as within consulting. So, we're very happy to get some of the perspectives that you have from your different roles.
Nienke: Well, thank you. Yeah, that's the new world. Production, transport and offtake of renewable electricity and green hydrogen–you have to balance that system. So that's new. That's why I have these different roles and actually, it's my favorite subject to talk about.
Tom: Well, I'm happy that I can ask you questions about something that's on the favorite list.
- 2. Key challenges in transitioning to hydrogen
Tom: Looking at your different roles and the role of hydrogen, we often see a lot of people talking about part of those roles, either producing it, consuming it, or storing it, but it's quite a complex topic and it also asks a lot of things to organizations to change.
Given your conversations and different views that you have, what do you see as key challenges in that domain, and are there certain areas on which you see hydrogen moving faster than in others?
Nienke: Yes, well, we have two levels of transition. We have the social transition: different companies, different sectors have to work together in another way. And then you have the technical transition: we have to balance a completely new system with not a stable production of energy like natural gas or oil, but a flexible energy production that wants a flexible net infrastructure but also wants flexible offtake. That's not always possible. So we have to combine new ways of working together with a new infrastructure system.
Tom: And if you look a bit closer at the different ways of working, what's different in that sense? How do parties act and how should they react?
Nienke: Well, they act too slow. Because we are in a hurry.
Tom: Yeah, we are.
- 3. Hard to abate sectors are the first step in moving to green hydrogen
Nienke: It's almost 2030, and we have a lot of goals in 2030, but we have even more to do in the next couple of years. But changing the system, we have to start, for example, with using green hydrogen in different ways in hard to abate sectors. I'm active, for example, in the chemical industry, but also in the ceramic industry and in the IT system that is under it, as a supervisory board president of the Energie Data Services Nederland (EDNS).
And then I see that it's going to change from a stable offtake to a flexible offtake. We have flexible offtake right now, for example, in mobility. You're not going to fill your car all day long; these are moments. So we have to have a solution for this part. It can be a flexible system with electrons, for example, but also with molecules.
This is going to change the way we use our renewable energy, because this is actually a part of this, if you look at the trucks, hard to abate, so we need green hydrogen for this. And how do you get the green hydrogen in the place where you refill your truck, for example?
Tom: Industry and mobility, are those the key industries you see it moving first?
Nienke: Yes. Especially the hard to abate sectors. So long haul trucking for example, or chemical industry that needs not only an energy carrier for heat processes, but also as feedstock. So we're going to change that system because nowadays you can have that. We have an organized infrastructure for getting, for example, the natural gas to the filling stations, the LNG, but not yet the green hydrogen.
So we have to organize this in a new way. You can, for example, produce your own electricity for your electric car, but you can also produce your own green hydrogen for fuel in your truck. And that's also the same for industrial applications. Can you buy it on the market and what time for what price? Can you produce it by yourself? This is really changing the system. To do this in the best way possible, I think you really need to use data. And we have a lot of data. We have a lot of opportunities to collect this data and use the infrastructure in the best way possible, but we have to organize this much better.
- 4. Finding energy balance to accelerate the transition
Tom: It's challenging because the energy system is a very complex system on its own, both technically and also on the data side because we already have a decentralized system with suppliers, grid operators, and everybody has their own role to play. But we're adding quite a lot for a lot of variables to this discussion. How do you see those working together? Do you see that as they are replacing each other, or is there more a mix between renewables, hydrogen, natural gas and electricity?
Nienke: This is the transition. So we know where to go. We need a carbon-neutral system as soon as possible, I would say. But while the transition is... It's very vague, so if you're in the middle of a transition, it's hard to see what to do. That takes leadership and that's the first one of course. But it also takes... Well, you're obliged, I would say, to use the best ways you have to make this transition as soon as possible.
Tom: It also takes a bit of courage, doesn't it, to do something that is somewhat insecure and you don't know which way it's exactly going to go.
Nienke: Yeah, well that's the transition, that's the hard part. For example, in a household, you have electricity, you could share it with your neighbor, and that's something that is tested and is possible, but we're not doing it yet. Of course, we're using the system, the current infrastructure for it, but we're now having 16% of renewable electricity and we have to have 100.
Tom: That's just talking about electricity, right?
Tom: If you look at how we use energy, it's just a part that's electric and there's a much larger volume of energy that comes from different, more function-based sources.
Nienke: Yes, and that's what I wanted to say. Yeah, that's the problem. So if the sun is shining and the wind is blowing, then it's perhaps quite easy. But what do you do if both of them not there? So we need the green hydrogen there, for example, for the households to balance the system to be sure that there's electricity, but also for the hard to abate sectors like industry, like mobility, to have it as a feed stock, but also you have to use it for mobility, for example, for long haul trucking, for the long distance shipping.
So actually, this will definitely change the way the technical part of course. You have to change the trucks and the boats, and of course the processes in the industry, but you also have to change the system together there.
- 5. The role of EDSN in unifying and optimizing the Dutch energy market’s transition
Tom: Maybe from a moralistic view, maintaining an energy system evolves around having something that's affordable, reliable, and sustainable, future-proof, and that we now use very unpredictable source of energy like wind, like sun, threatens that. I think that also imposes requirements to what you need to know about what's happening at a certain moment in time. And there it might be interesting to talk a bit about EDSN and the work you're doing there.
So as I understood it, EDSN is the shared IT service provider for the Dutch Energy System owned by seven grid operators that jointly unify processes and created IT backbone. What kind of shifts do you see coming along in IT land and the infrastructure we need there?
Nienke: Yeah, it is really a shifter. So we have energy going both sides, both ways. So I have from a centralized grid to a decentralized grid, a small house level, but also industrial level. And then we also have the international level so that's also an important part.
Tom: That's right.
Nienke: Yeah, so the import/export situation. And just like it is now, it's a global energy system. So you're going to exchange the energy by cables and pipelines, but also by shipping. And it's all evolving. So using the natural gas, this will still be there the next couple of years of course. Also oil. And meanwhile, we also have to change the system to renewable electrons and molecules like green hydrogen. So you really need to see how you can do this in the best way possible, in the level from the households and industrial applications.
So yeah, that is a heavy duty for our current infrastructure. And that is in the Netherlands, it is well-designed, but it's not yet completely prepared for a flexible system. So in the meanwhile, while we have this mostly fossil fuel system, and we have to change this to renewable flexible system, we have to use the infrastructure in the best way possible. Otherwise, it's going to be too expensive. So that's a part, but there's a more important part. We have the possibility to bring down a carbon emission even better if we use the system better. And that's I think the most important part.
- 6. A carbon-neutral energy system requires timely, effective data and IT systems
Tom: And we kind of came a long way, if you look where the energy system started to how it worked to now. Because during the 90s and 2000s, we liberalized this energy market. We created all kinds of systems that allow you to change supplier, choose your own supplier, have consumers accessing new services. And a lot of that work has been made possible by EDSN or by grid operators.
Are there things that we learned there or did there, you think like this is something to keep in mind if we're going to do this new kind of source of energy?
Nienke: Yes, definitely. We learned a lot in the last couple of years, the last 15 years I have to say. But we have to learn even more because we started with the flexibility of the system, of course, using the data, much more real time also. And we have to do this even more. Because we're only at the beginning of the transition and we still have a long way to go over the 80%. So much more flexibility will be needed.
I don't see a way without changing the IT system or using it much better, I have to say, and perhaps also change it. Yeah, I don't see a possibility getting the carbon-neutral energy system without using the IT much better.
Tom: And from CGI, we recognize this point. We see many systems that have been designed as a one-size-fit-all, this is what it does. We need more modular solutions that are far more near real times. So we are closer, on the ball, if you will, on what's happening and what choices do we have to make. And of course also to address part of this human capital challenge and saying, well, if you use artificial intelligence, if you use smart solutions, and maybe we can hurry up a bit because you mentioned before, time is sticking out and it's quite a big transition to make.
EDSN now works in line with the grid operators who first jointly decide what they want to do and then execute it by EDSN. If we're talking about speed and doing this quickly, would there be any good ad chases around just let EDSN or a similar organization take the steering wheel on that, or do you find it important that it's on that grid level? Do you have any ideas on that?
Nienke: No, I think that I had heard the TSO said this is what they do, this is their role, and IT is supporting this way of working. And I think this is also the future, supporting a stable, efficient, fair and just grid infrastructure. So I think IT is actually in all processes I know is a supportive part that can optimize systems. And that's actually what I like in it. It also can support, for example, the household, how these people that are now consuming the energy can get a new role and then-
Tom: The prosumer.
Nienke: Yeah, like the prosumer/consumer discussion. I really love it. And so we have in the household level, but you can also have it, and we saw it the last couple of years in a situation with the gas crisis, that the shift of which way energy goes can change very quick. So if you can use data to make this effective and also have it influence prices, this is the next couple of years, very important.
So by using data, you can give information and create a stable grid. Because I think in Netherlands, Europe, the world, it's very important to have the opportunity to have payable and reliable electricity or energy, for example, in the form of green hydrogen, for example. Because energy is welfare, and that's important that we keep organizing this and use IT to realize that.
- 7. Key areas to focus on to accelerate the energy transition
Tom: Well, we recognize a lot of the thoughts you're sharing. At CGI, we quite ambitious to take a role in helping companies become digital and using IT to leverage some of the good ideas. Do you think it's moving fast enough?
Nienke: No. I'm always in hurry.
Tom: What can we do? Because you refer to the energy crisis, which was funny because it was a crisis, but it helped us too. Because all of a sudden, if you look at my own house, I put solar panels up and I isolated my walls because all of a sudden it was economically a good idea to do that. What are things we should pay more attention to? Where should we move quicker?
Nienke: Wow, that's quite simple. We need much more renewable energy. And if we need much more renewable energy, we also need more green hydrogen to balance the system. So we need renewable energy of course as electricity, but also as a way to produce the green hydrogen for the hard to abate sectors. So there's this combination-
Tom: Storage on saying, okay, I can access that when needed to make a more optimum balance.
Nienke: So actually green hydrogen is the missing link in this system, and this is quite new. And because natural gas and oil were already there and natural gas is also a gas, so green hydrogen also that it's not that hard I would say. But the way it is produced and can be decentralized production, that's really changing the system.
So if the question is how can we do it even quicker, much more electricity, create a quick system that can find the optimal balance between molecules and electrons so we can use our infrastructure in the best way for households, but especially also for industrial applications and for the best optimized situation of using our infrastructure. So in that way, I think IT is supporting this transition in an elementary way.
Tom: And maybe then the last question about speed versus quality, because we were talking about hydrogen. I mentioned hydrogen, you mentioned green hydrogen. Green hydrogen is obviously hydrogen made fully by renewables. Apart from green, we have six other different colors of hydrogen.
Nienke: It's a complete rainbow.
Tom: It's a very big rainbow. Is green the only way for us to be considered for the center speed on saying, well, maybe pink or to cross or different kind of types of hydrogen should be in that mix as well?
Nienke: Yeah, I think that the leading, the most important reason for having the discussion must be bring down carbon emissions.
Tom: Therefore, green.
Nienke: Yeah, no, that's not true. Perhaps also in the current situation, also blue. It's up to the companies themselves to choose one of these colors as long as it's without carbon emission. That's for me now in this current state, what we're in with the climate crisis, this is the most important. It doesn't really make it easier because then we have non-flexible, flexible. The IT part will be even more important.
The transition is vague. It is a transition that makes it so hard and use it in the best way. Yeah, we need the data and I think it cannot be real time enough.
Tom: Thank you so much for sharing your thoughts. I'm very happy to have you here. At CGI, we are inviting the listeners to reach out and have conversation with us on how we can help make some speed in digitalizing some of the more new process that we're introducing to the mix. You can reach us in the details that are in link, or you can reach us at one of the events we're visiting in the coming period. Obviously we hope to see there again, but for now I would very much like to thank you for your time and the effort.
Nienke: Thank you. Have a good day.
Tom: As to you.