Innovation

Group Machiels has seen sustainability as an opportunity and a part of the company's DNA since its foundation in 1941. In 2004, the owner and chairman of the board, Louis Machiels jr., decisively chose a strategy aimed at sustainability, innovation, and continued internationalization. The addition of "Closing the Circle" as a guiding principle in 2008 furthers the anchoring of sustainability in the corporate philosophy.

The business innovation – energy sharing – is undoubtedly embedded in the strategy and philosophy of Group Machiels. Energy sharing is essentially based on producing green energy, primarily through solar farms and wind turbines, and the cross-site sharing of this energy with other entities. "In short, it involves various parties' production and consumption of green energy," stated Dries Van Hooydonk, Business Unit Manager of Energy & Sustainability at Group Machiels. Energy sharing can take place both between companies and between companies and individuals.

First, Group Machiels wants to use the innovation of energy sharing to provide all their sites in Belgium with their own produced green energy. This process will make the company independent of energy suppliers and thus utterly self-sufficient in terms of power. Second, the company will share its excess green energy with other companies. And third, energy sharing allows sharing of the green energy produced by Group Machiels with households.

In June, distribution system operators approved the concept of energy sharing in Flanders. Without this approval, it was impossible to establish the business innovation. Why was this approval so important? The energy produced by Group Machiels must be put on the distribution network for other parties to use. Without permission from the distribution system operators, it is simply not possible to consume the energy.

Inspiration

Group Machiels' inspiration for business innovation came from three different perspectives. First, the company wants to grow in renewable energy and improve environmental sustainability by systematically closing circles by committing to renewable energy sources. They want to contribute to the transition to a CO2-neutral society through a commitment to improve the energy efficiency of buildings and realize and manage renewable energy sources. The concept of energy sharing contributes to this mission.

Another incentive for Group Machiels' business innovation is to create a safer environment in the energy market. Investment in renewable energy is strongly encouraged by the government. By the end of 2030, solar panels will produce substantial renewable energy. This process carries the risk of energy overproduction when the sun shines brightly versus underproduction when the sun does not, which could lead to an imbalance in the market. The lack of consumption will create energy prices in negative, and energy producers will have to pay to inject their energy into the distribution network. Energy sharing offers the opportunity to close long-term energy contracts with various parties having fixed energy prices. This contract will ensure that the price paid for energy is stable over time. Moreover, power availability assurance will be there for energy-sharing participants when energy is under-produced because of the contract. Thus, participants in energy sharing face less risk, both Group Machiels, and their customers.

Last but not least, Group Machiels saw the opportunity to install solar panels on their roofs. As Dries Van Hooydonk said in the interview: "A building's roof is lost space, and so it is better to use it meaningfully." Currently, Group Machiels utilizes only 13% of its roof capacity. Energy sharing allows Group Machiels to use their total roof capacity to install solar panels to produce much more energy. Through energy sharing, they can share that energy with other parties.

Overall impact

Since 1941, Group Machiels has applied its values, mission, and vision, positively impacting society, the environment, and people. The business innovation of energy sharing contributes to this positive economic, ecological and social impact.

Right now, the business in renewable energy is booming. Demand for solar panels and additional wind farms is rising rapidly due to the need for more green energy in Europe and the current energy crisis. By investing in renewable energy, Europe hopes to become less dependent on foreign gas in the near future.

In the short term, energy sharing could lead to more investment in green energy, creating even more renewable energy parks. However, an adverse effect could be the bottleneck in producing these panels and turbines, built in China and shipped to Europe, because of an over-demand.

In the long run, Group Machiels may be able to share energy across Europe. Currently, the innovation focuses on Flanders, but it could spread with more research and data. The concept of energy sharing can be applied on a larger scale – and is thus potentially scalable.

Another positive long-term effect could be the drop in energy prices. Dries Van Hooydonk stated in the interview that "green energy is cheap to produce due to free inputs such as wind and solar, which can reduce energy prices." Moreover, energy sharing will lead to more investment in renewable energy, and the greater the supply, the lower the prices.

Ultimately, the goal is to eliminate European energy poverty by providing affordable energy to all households. "In a perfect world, we would build a wind farm and distribute the energy for free," said Dries Van Hooydonk. While this may be an ideal we will never achieve, energy will become more affordable thanks to energy sharing and the fixed prices it provides due to long-term energy contracts. In this way, energy sharing can be seen as a radical innovation because it helps eliminate energy poverty in Europe, a significant global problem.

Business benefit

Group Machiels focuses on projects where ecology and economy go hand in hand. The innovation of energy sharing provides the company with several ecological and economic benefits. In this section, we will focus on the financial business benefits.

First, long-term energy-sharing contracts offer the advantage of long-term fixed income, which provides Group Machiels with security. Although energy prices can fluctuate, high prices can generate more revenue, and securing a steady income stream is more advantageous because it reduces risk. Therefore, energy sharing offers a sustainable revenue stream.

Second, investment in more extensive energy-producing facilities requires engaging in energy sharing. If you provide more production, you need more consumption. Since energy-sharing benefits both the company and the customer, people will be interested in closing long-term energy-sharing contracts with Group Machiels.

Third, the energy sector is rapidly growing, which offers many new opportunities. By building know-how and being among the first to enter the market with the concept of energy sharing, Group Machiels can capture a significant market share. Thus, introducing the idea of energy sharing earlier than competitors will create a valuable advantage.

There will be a high need for renewable energy in the future. Green energy has enormous potential and a much greater commitment to sustainability. “Energy sharing is an excellent opportunity for Group Machiels to capitalize on,” said Hilde Thevis, Executive Assistant of Operations and Communication. With the demand for renewable energy growing exponentially, this innovation is the ultimate chance for the company to strengthen its leadership position in sustainable solutions.

Social and environmental benefit

As said before, the business innovation of energy sharing positively impacts society, the environment, and people. First, energy sharing contributes to the transition to a CO2-neutral society. Decarbonizing the EU’s energy system is crucial to reach the 2030 climate objectives and for Europe to become carbon neutral by 2050. The concept of energy sharing stimulates the production and consumption of renewable energy because it benefits both the producer and the consumer. And so, energy sharing discourages the use of carbon. In this way, business innovation can be seen as a radical innovation contributing to solving a global problem. Moreover, energy sharing has a net positive effect because it relieves pressure on gas power plants, resulting in less air pollution. This effect contributes to a healthy environment.

Second, energy sharing can play an essential role in the fight against energy poverty. Many households and companies are in trouble due to high energy prices. Entering into long-term contracts within the concept of energy sharing can prevent such problems because these contracts provide the security of a stable price for energy over the negotiated period. Moreover, the business innovation of energy sharing encourages both the production and consumption of green energy. Energy sharing creates the opportunity to invest more in solar panels and wind turbines to generate renewable energy, as basic economics teaches: the more significant the supply, the lower the prices. So the more investment in green energy, the lower the expenses. In this way, energy sharing has a net positive effect. It not only provides green energy but even delivers it at a lower price than current energy prices. This process will boost economic prosperity.

Interviews

Dries Van Hooydonk, Business Unit Manager Energy & Sustainability

Hilde Thevis, Executive Assistant Operations and Communication