Power to the people!

Alliander: from traditional DSO to platform provider

With consumers becoming prosumers and numerous local energy communities springing up, the least one can say is that the energy market is being shaken to its core. How do you cope with that change as a “traditional” DSO? What are the strategic options? “Looking at what was happening in the energy sector, Alliander chose to innovate from its core, but driven by a market perspective,” says Marion Debruyne. “This decision resulted in an exhilarating journey that we recently chronicled in a case study and, through the presentation by Alliander’s strategic director, Pallas Agterberg, gladly share with our DSO community.”

In September 2015 Alliander and Eandis signed the DSO Chair partnership with our School. As part of the Vlerick Energy Centre, the Chair supports and stimulates the ongoing policy and regulatory debate on the future of distribution system operators. True to our credo of “turning action into knowledge”, we invited Pallas to present the strategic change project that she conducted at Alliander during the Future Grid Managers Programme. This programme brings together senior grid managers from all over Europe to think about the future of the energy sector.

Professor Debruyne, what makes the Alliander case study so fascinating?

Marion Debruyne - Vlerick Business SchoolProf. Marion Debruyne: “When Alliander defined its strategy, they asked themselves: what is our mission and what value can we offer to our consumers? And their answer was: ‘We are a platform’. Or, as Pallas formulated it this morning: ‘It’s not about the cables’. Alliander chose to become a matchmaker between supply and demand. Consequently, all the business models that fit within that platform model deserve to be looked into. This approach is fundamentally different from a traditional inside-out approach that limits the role of a DSO to ‘managing the distribution grid assets’.”

“Alliander chose to become a matchmaker between supply and demand” Marion Debruyne, Vlerick Dean

Ms Agterberg, how did you know what Alliander’s strategy was going to be?

Pallas Agterberg - AllianderPallas Agterberg: “I didn’t. The world is changing so drastically that it’s simply impossible for one person to maintain an overview. You therefore have to take your own limited knowledge as a starting point, and admit that you don’t know what your decision will be – but isn’t that the essence of change? Relying on my background as a transformation manager, we created a small innovation hub within Alliander back in 2013. All sorts of ideas came out: some were good and were further developed, others didn’t meet our platform ambitions and were discarded, no problem.”

“Ideas that didn’t meet our platform ambitions were discarded, no problem” Pallas Agterberg

How did you manage to root those good ideas within Alliander’s large organisation?

Pallas Agterberg: “After two years of idea generation, we landed on seven projects that fit our strategy: from electric car charging infrastructures to sustainable housing. Only then did our innovation hub come on the radar of the entire organisation. Since then, Alliander has assumed the role of frontrunner in the energy debate in the Netherlands. And we’re happy to see that other Dutch grid operators, such as Enexis, TenneT and Gasunie, are also setting up innovation hubs with start-ups.”

Did your Chair partnership with Vlerick facilitate the transformation?

Pallas Agterberg: “Certainly. We had already started our innovation track when we entered into the partnership with Vlerick. But very soon it transpired that our ‘organic’ transformation was backed by Vlerick’s take on innovation. Their academic support offered the leverage that our projects needed, internally as well as externally, on a European level, that is.”

“Vlerick’s academic support offered the leverage that our projects needed, internally as well as externally” Pallas Agterberg

Why is that European dimension so important to Alliander?

Pallas Agterberg: “Digital transformation results in openness on the one hand, but also in the need for standards on the other. And those standards will be European, because it’s simply too expensive to tackle them on your own.”

Pallas Agterberg - Marion Debruyne

Marion Debruyne: “That’s also why, from the very beginning, our ambition with the Energy Centre was to act as a European platform in the energy debate. Besides exchanging expertise and initiatives on entrepreneurship & innovation in the energy sector, we also foster digital transformation as an important driver of the change that all European DSOs are or will be undergoing in the near future.”

Pallas Agterberg: “What we’ve really appreciated over the past two years of this partnership is the way Vlerick operates on an exchange basis. We share our knowledge and expertise, Vlerick puts it into a larger perspective and defines the challenges we’re facing. Which, in turn, triggers new action points in our organisation.”

“Focus on regulatory”
Professor Leonardo Meeus is the driving force behind the Energy Centre and the Chair Partnership with Alliander. “The first year of the partnership revolved around Alliander’s business model, while the second year focused on the regulatory framework, e.g. how that will be impacted by the Clean Energy Package, a package of measures that should enable the EU to lead the clean energy transition.”  

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