Energy poverty structurally addressed

Many low-income households struggled financially last year. These households often live in older homes with lower insulation standards, causing them to experience high energy costs. To reduce their burden, these households would benefit from investments in insulation measures and natural gas-free heat technologies. However, such investments are often out of reach for households with limited financial space.

To maintain the momentum of the climate plans and “free” low-income households from their high energy costs, the Dutch Sustainable Energy Association (NVDE) and the Top Consortium for Knowledge and Innovation – Urban Energy (TKI UE) propose large-scale sustainability of the built environment. In doing so, they also recommend that sustainability efforts begin in neighborhoods with the most low-income households. The advantage of this approach is that i) the resources deployed not only contribute to countering energy poverty, but also contribute to the goals of the energy transition, and ii) as a result of a sustainability investment, a long-term effect is achieved (of about 30 years) rather than a one-time energy bill offset.

Ecorys was asked to study the costs and benefits of this plan. The cabinet estimated that that ceiling will cost over 11 billion euros. If the cabinet allocates the same amount for making neighborhoods more sustainable, more than 1.1 million homes can be made natural gas-free. This would entail an average reduction in energy bills for households of 1100 euros per year. This plan assumes that if a household is living in energy poverty, the government will pay for the entire cost of sustainability. If a household does not live in energy poverty, half of the investment would be paid for through a contribution of the household’s own.

For more information, read the full research report in Dutch (pdf).