San Lie: This undercurrent will help the Netherlands become energy independent
This column was originally written in Dutch. This is an English translation.
By San Lie, Director of ASN Impact Investors
A geopolitical landslide is forcing Europe to invest at breakneck speed in its security and independence. These are big words, but for the Netherlands the latter is about a series of very concrete and local investments. Investments in the 'undercurrent' that will lead to a stronger and more energy-secure country.
Like you, I follow the news from Brussels, Washington and The Hague closely. According to European politicians, it is clear that we must invest a huge amount in peace and security, both literally and figuratively. This is not an uncontroversial message, but one element of it directly appeals to sustainable investors and deserves a response. After all, a safe Europe is a Europe that is less dependent on other countries for its energy and raw materials.
This makes the strategic urgency of the energy transition abundantly clear: we must move away from fossil fuels as quickly as possible and move towards renewable energy that we generate within our own borders. This also applies to the raw materials on which our economy runs. Reusing makes us less dependent on the rest of the world.
What is striking about these kinds of truths is that they are loaded with big words, loud warnings and ambitious visions. These are more likely to discourage ordinary citizens than to encourage them to take action. Yet this action is much closer, more tangible and more manageable than you might think.
The energy transition that will make the Netherlands stronger and more independent has now reached a phase in which supply and demand must be better aligned. This mainly revolves around local projects that remedy grid congestion and local shortages of power connections with energy storage, smart charging infrastructure or better power management.
Getting a project like this off the ground is the tangible, manageable action that stands in contrast to the geopolitical squabbling. It is in line with what Rotterdam transition professor Jan Rotmans calls the 'undercurrent'. While the 'overcurrent' of institutions and dominant systems makes a lot of noise, the undercurrent is a growing movement of change that operates under the radar.
Rotmans estimates that 1.5 million citizens are working on social renewal through countless citizens' initiatives and social enterprises. If these initiatives contribute to a more sustainable society that makes better use of energy and raw materials, that is the undercurrent that will make the Netherlands stronger and more independent.
The largest onshore wind farm was set up by 200 farmers in Flevoland who invested together with private citizens. There are hundreds of energy cooperatives that generate sustainable energy locally. This undercurrent is part of the solution: it produces a part of the countless local projects that together will accelerate the energy transition.
As investors, we can also join in from the sidelines. This local undercurrent needs support from the financial sector to reach maturity. It is estimated that some 30 billion euros will be needed by 2030 to bridge the mismatch with existing forms of financing. Think of it as the local funding gap in the energy transition. An enormous challenge, but also a great investment opportunity for investors, including pension funds and other professionals, who want to contribute directly to Dutch energy security.
So don't stand on the sidelines of this global landslide. Become part of the solution that is literally close at hand. Focus on the local opportunities that contribute to an energy-independent Netherlands.