As part of Denmark’s long-term goal of reaching carbon neutrality by 2050, the Danish energy sector is undergoing a large-scale transformation where renewable energy resources must make up 55% of the total primary energy supply by 2030. Energinet is an independent public enterprise that owns, operates and develops the transmission systems for electricity and natural gas in Denmark. Thus, Energinet is a key prerequisite for the green transition and is faced with the task to adopt renewable energy sources into the transmission system and ensure overall capacity.
The transition to renewable energy sources combined with vast technological development requires a major expansion and development of the transmission network in due time. This means that Energinet’s operating model must deliver 2.5 times more transmission development projects within the next 4-5 years. Market feedback indicates a potential to scale capacity by changing sourcing strategy towards full turnkey sourcing. In doing so, Energinet must create a paradigm shift in the mindset, culture and operating model of the organisation and scale the capacity and risk management.
Energinet asked Valcon to design a target operating model to reach the requirements for successful turnkey sourcing due to our experience with large-scale transformations. In close cooperation with senior management and key market players, we clarified the current situation, including the maturity of key processes, supplier management and performance. This entailed identifying barriers to change and criteria for a successful transformation into the new paradigm. We then proceeded to develop a project production optimisation strategy and design the future end-to-end operating model (figure 1). The new operating model included turnkey suppliers to enhance quality, delivery and cost-efficiency. By designing the future sourcing strategy together with senior management, we secured a scalable production capacity and risk management with turnkey sourcing.
Figure 1: End-to-end operating model designed by Valcon
Today, Energinet has a strategy and a roadmap that enables the future capacity required to ensure the green transition and on-time full delivery of future projects in close collaboration with strategic suppliers. Energinet’s employees gained new and more commercial mindsets and culture.
Key lessons learned:
- The strategy formulation and operational design are to be closely interlinked to mitigate change barriers
- Technical paradigms are best changed by close cooperation by engineering departments and key suppliers
- Mindset and culture are underestimated enablers in highly technical environments