From their facility in Almelo S4 Energy uses innovative technology to supply primary reserve power for TenneT TSO. This is realised in part by means of a collaboration with the Energy Fund Overijssel (EFO). We asked EFO director Bas-Jan Blom how this collaboration fits in with the aims of the fund as well as those of the province of Overijssel.

Bas-Jan Blom (EFO, centre): “S4 Energy’s solution is a vital link in the transition to a truly sustainable energy infrastructure.”

EFO was set up towards the end of 2012, after the province of Overijssel had sold its shares in energy company Essent and then aimed to re-invest the proceeds in the community. This included making 200 million euros available to the EFO which was given the explicit task of helping the province reach its ambitious goal of realising 20% renewable energy by 2023.

Blom: “There are two ways of achieving this goal: by producing more renewable energy and by limiting total energy consumption. The fund is one of the tools being used to achieve this. The initial agreement was to finance projects during a five-year period, but due to the success of the project this period has been extended.”

Financial and social ROI

The EFO does not give subsidies, but expects returns on its investments: as a revolving investment fund the aim is, at the very least, to preserve the fund capital. “We provide equity, loans and guarantees. Compared to banks, we have a greater willingness to invest in projects which although promising, may also have more risk attached to them.”

Furthermore, EFO’s definition of returns encompasses more than financial profits. The fund also expects considerable social returns: up to 14,000 terajoules of sustainably produced energy/reduced energy use per year, boosting the energy efficiency of 6,500 council houses and creating employment opportunities: the overall impact is expected to generate 150-300 permanent jobs in the region.

Joint venture with S4

The list of successful projects is impressive. From an 80% reduction of gas consumption in an ice-skating and swimming complex in Deventer to the construction of the world’ s first large-scale installation using pyrolysis to convert biomass into sustainable oil. Last year this list was further augmented by the addition of S4 Ancillary Services, a joint venture between EFO and S4 Energy.

On the face of it this project seemed to be outside the scope of the fund. “It doesn’t produce sustainable energy, or directly reduce energy use, so in that sense it’s definitely the odd one out. However, there are some obstacles to reaching the province’s goals, and S4 provides the perfect solution for one of them.”

A vital link in the energy transition

The problem in question is the grid’s ability to handle a large-scale transition to sustainable energy. “Natural energy sources are a lot less predictable than traditional gas-powered power stations.” Brief fluctuations in the amount of energy they supply cause frequency variations, which TenneT, as grid operator, needs to compensate for.

“S4 Energy has developed smart technology which stores excess energy and can release it again at high speed, exactly when it is needed. This keeps the frequency level stable. It is a vital link in the transition to a truly sustainable energy infrastructure. When S4 Energy approached us, we straight away recognised the idea’s potential.”

Market potential

Moreover, it is an idea with significant market potential according to Blom. “The installation has already proved its worth on the ground, which is why we recently decided to triple its storage capacity. And the same storage technique can be used in many other places, since the issue of frequency variations is a nationwide problem. We can supply TenneT with added primary reserve power in other locations, with the beneficial side-effect of creating more industry and employment here in Overijssel.”

All in all, Blom is pleased with the collaboration between S4 Energy and EFO. “We’re proud of the fact that we have given S4 Energy a platform to put this concept into practice. We want to build on this cooperation, because together we can make it easier for society to make the transition to sustainable energy."