Press article

Energy is the dominant theme for all board members and managing directors!

Atreus Director and Partner Martin Schulz in conversation with DVGW energie | wasser-praxis, October 2022

The current study “Mood Barometer in the Energy Industry” by Atreus reaches the conclusion that risk management with regard to security of supply and investment in an accelerated energy transition is a top priority in the energy sector and also in many other companies. Atreus Director and Partner Martin Schulz provides information on the background.

The main findings of the study

1. The energy transition is the dominant theme for board members and managing directors

First of all, all executives and entrepreneurs should prioritize the issue of energy. So far, we have discussed the topic of energy primarily from the point of view of the energy industry. However, we need to have a much broader discussion about industrial companies, and that goes far beyond the industries that consume a lot of energy.

2. Energy procurement

Energy procurement is of crucial importance in the context of risk management and security of supply in the current market distortions. Also relevant is the topic of consumption management and the efficient use of energy.

3. Investment decisions

There is an urgent need to make decisions about the investments that will go towards a faster green transformation in order to become more independent and to better control costs and risks.

What role does hydrogen play in the energy mix?

Hydrogen contributes significantly to accelerating the transformation process. We are aware that the process of the heat transition is indispensable for achieving the climate targets and that hydrogen will play an important role in this. It is necessary to replace gas with hydrogen at a suitable location in the long term, because electricity cannot completely substitute gas in the heating sector. This involves, for example, the conversion of combined heat and power plants that are to be operated exclusively with hydrogen. However, we absolutely need a mix of measures. The either/or discussion is rather harmful.

Factors for accelerating the energy transition

We urgently need more renewable energy capacity and increased local production. There is still a lot of room for improvement in the field of photovoltaics in Germany. It is also necessary to optimize the interaction of renewable energies. This means that even if the sun is not shining, the wind can still blow. This is where biomass and storage technologies come into play to ensure a steady flow of energy. In this context, there are already companies that are developing decentralised complete systems for the supply of electricity and heat as well as green water storage systems.

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Corporate risk management accelerates the energy transition

Today, energy is not only a risk factor for many companies, but also a cost driver. In the chemical industry, for example, a large amount of gas is needed as a raw material and if less than 50% of the quantity is available, there is a risk that production facilities will have to be shut down. For this reason, BASF is developing one of the world’s largest heat pumps. The example shows that companies are not waiting any longer. The development will continue to accelerate because fossil fuels will become more expensive in the future. The overall situation is therefore generating a boost for the topic of investing in the green transformation.

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The role of demographic change

Demographic change is having a major impact: the labour market is under great strain. The implementation of projects increasingly depends on capacities, resources and competencies, rather than on the willingness to invest. As a result, the topic of human resources is included in the category of risk management of companies. What solutions are available? In the short term, the topics of skilled workers and skilled trades must be given much higher priority in the public consciousness and the entire repertoire of HR instruments must be used.

The author

Will be happy to answer questions and provide answers.