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Developing robust and future-proof revenue models for a Dutch grid operator

October 9, 2018

Mission

The identification and assessment of relevant revenue models and propositions in predefined energy scenarios. Important questions are (1) testing the robustness or the risk level of the various propositions, (2) identifying the scope of the non-regulated activities, the associated investments and their financing and (3) the revenue potential and profitability of the propositions.

Background

Our client is a Dutch grid manager and transports gas and electricity. Besides this regulated activity, the company also offers commercial propositions such as metering services and installation of infrastructure. As grid manager, the company has a key role in successfully shaping the energy transition.

Problem statement

The Netherlands is on the eve of a major energy transition. The minister has decided that the Netherlands will phase out gas production in the coming period. This is expected to lead to a decrease in the use of gas. A large part of our customer's income currently comes from the transport of gas. A reduction in the use, and therefore the transport, of gas can have far-reaching consequences for the company's earnings model. In order to shape the energy transition successfully, it is important to develop a vision on the future portfolio, level of investments and financing. The company also wants to have a clear picture of the 'no regret' investments in order to minimise the risk of 'stranded assets'.

Our contribution

JBR made an analysis of the possible future propositions and earning models and tested them against the defined energy scenarios using relevant criteria such as revenue potential, strategic fit, legal framework and risks. For the propositions, which are considered opportune, an estimate of the revenue potential, investments and profitability was made. In order to have sufficient grip during the energy transition, a strategic framework has been drawn up within which the various business units must operate.

The result

The report was presented to the organisation's Supervisory Board and agreement was reached on the strategy to be followed with regard to the energy transition and the strategic framework. In addition, the report is an important part and basis of the organisation's long-term plan.