Context
Due to rising energy prices, the Dutch Government has placed emphasis on meeting national energy performance objectives through the reduction of fossil fuel consumption.
The Dutch Government is seeking innovative solutions to deliver more energy and cost-efficient buildings, as well as achieving Net Zero Energy buildings by 2020.
The retrofits include installation of rooftop solar panels and other insulation technologies.
Problem
- Buildings in the Netherlands account for approximately 35% of the country’s total energy consumption.
- Most Dutch residential and non-residential buildings use natural gas and electricity, almost entirely sourced from fossil fuels, to fulfil their energy needs.
- An innovative approach was required to overcome the cost, scale and speed of rapidly retrofitting buildings across the Netherlands.
- Energy refurbishment was also considered too complex and costly for individual homeowners.
Innovation
- Tenants of the housing association will pay an upfront energy service plan which is equivalent to their previous energy supplier bill. These payments are then used to partly fund the retrofits.
- The upfront costs of the retrofits are also partly funded from the planned maintenance and repairs budget for next 30 years, along with expected energy cost savings.
- The remaining amount is funded by financial arrangements organised by Energiesprong mainly from national funds and philanthropic funders.
- The risk of performance is transferred to Energiesprong.
Stakeholders involved
- Commissioner: Dutch Ministry of the Interior and Kingdom Relations (BZK)
- Implementer: Platform31
- Private sector lead: Energiesprong (private sector led from 2017)
- Partially funder: WSW Social Bank funding for Stroomversnelling (Rapids) deal
Timeline
Results and impact
- Successful pilot: Energiesprong has successfully delivered Net Zero Emissions retrofits to over 113,000 Dutch homes.
- Expanding globally: A further 21,706 houses planned across the Netherlands, UK, France, Germany, Italy and the US. Achieving scale is a key barrier to green infrastructure. The larger the market, the greater the opportunity drive down costs of components, improve quality and ultimately drive the Net Zero Emissions in the built environment. Energiesprong has generated significant interest internationally, due to its success in the Netherlands, and its work to make Net Zero Emissions retrofits a market reality in other countries. Energiesprong has managed to export its business model to international markets which is an important step to achieving green urban development at scale.
- Energy savings - successfully achieved an average total reduction in energy use of 150 kWh/m² and a 70% reduction in total household energy consumption, from almost 20,000 kWh to just over 6,000 kWh.
- Reduced the cost of housing: Achieving economies of scale through 3D technologies and pre-fabricated materials have enabled Energiesprong partnerships to lower the unit cost from EUR€130k (USD158k) to about EUR65k (USD79k).
Key lessons learnt
- Providing financial security for the private owner: Energiesprong uses an energy performance contract to guarantee the long-term energy saving performance of retrofits for a minimum of 30 years. This provides certainty for the private owner that the property will perform at the expected level.
- Public housing programs provide demand certainty for the solution provider: For the solution provider(s), there is a confirmed order pipeline with a minimum volume that justifies investment in innovation and solution development
- Program required to achieve scale and drive industrialisation: Market development teams work with regulators to achieve scale for the program, often involving thousands of retrofit deals simultaneously, and enabling suppliers to invest in quality components and reduce their costs.
- Legislation needs to be amended to allow a conversion of the monthly energy bill into a monthly energy service fee for the housing association.