Effect and power in the energy transition
Delivery efficiency and investment power is a challenging balancing act.
Sweden and the world are facing a historic energy challenge. Even before Russia's invasion of Ukraine, it was a challenge to manage a doubling of electricity demand and the transmission capacity that this requires until 2045. An electricity production that must also be fossil-free. During 2022, it has become clear that Sweden's transition must take place even faster than previously anticipated. This is because, together with the rest of Europe, we want to free ourselves from dependence on Russian gas and oil, which means that a deficit occurs on the European energy market.
Ekan Management is part of this transformation and we deliver competence to the energy sector, among other things by assisting the industry in obtaining maximum output for the investments that need to be made. Andreas Hagberg is a senior management consultant at Ekan and business area manager for the energy sector. We asked him how he sees the current situation.
- The big trend is of course the accelerating electrification and the challenges it brings at all levels - from supply and production via distribution to use and consumption. This in turn has major consequences for all energy players, not least for the local and often municipal energy companies. The consequences affect both the "inner life" of the companies with their strategies, governance and competence. It also affects the financial part of being able to finance the required investments. I find it hard to see how any company would solve it without making an effort. Incidentally, this also applies to their owners.
- The municipal energy companies have historically been able to deliver large surpluses to their owners. It is likely that in the future the surpluses will have to be used for necessary investments in the energy companies' own operations. Some municipalities may even have to push for additional resources. There is a potential conflict of interest here that will require close and long-term cooperation and dialogue.
What do you see as the most important thing to get right in the industry?
There are, of course, many elements that are required to be successful in managing the transition, but I think the single most important thing initially is to have "a grasp of the situation" - to be able to answer the question of what exactly we need to do. Then to have a well-thought-out and anchored plan for what is to be done and how it is to be done, which you then carry out. For many energy companies, it will be a challenge to go from a "management mode" with the governance and organization that this entails, to building up an efficient investment operation in parallel with an efficient delivery.
Do you have any exciting examples of what Ekan is working on in this area?
An exciting assignment in the near term has been to assist the Energy Agency in their work with how Sweden can use energy more resource efficiently and reduce energy intensity. This concretely means that the ratio between added energy and GDP will be lower. Put simply, we should simply get more GDP for the energy supplied. This is particularly challenging when energy consumption is expected to double as a result of the ongoing electrification.