Holland turns the tide
Holland turns the tide
Dutch utilities together with their residential and commercial customers are planning to invest almost 900 million dollars in energy-efficient lighting in the next ten years. But the ambitious goal of 3,5 CFLs per household probably won't be reached by 1995 as planned.
In 1990 the Netherlands decided that it would cut its annual CO_2 emissions by 20% by the year 2000. When the decision was made, all the utilities in the Dutch energy distribution sector were already looking for strategies to do their part. Each gas, electricity, and district heating distribution utility (organized in the branch organization VEEN) made a survey of all possible means to reduce energy demand and, in the case of electricity, generate a larger share by renewables and by combined heat and power facilities. The work was coordinated in a general Environmental Action Plan, MAP (of the Dutch Milieu-ActiePlan).
MAP estimates that total investments of NLG 13 billion (appr. US$ 6,9 billion) are needed by the year 2000, of which financial incentives to customers amount to between NLG 3,6 and 4,5 billion (appr. US$ 1,9-2,4 billion). These figures include investments in demand-side management measures as well as electric generating facilities.
Energy-efficient lighting is, for the near term, considered one of the most promising means, in terms of giving fast results (whereas changing the stock of appliances, for instance, is regarded as a more long-term measure within the ten-year period), according to MAP. It is estimated that energy-efficient lighting in the residential and commercial sectors could reduce total Dutch electricity demand by appr. 2,5% by the year 2000. In numbers, this means a 1600 GWh reduction of the total 68 300 GWh use in 1991.
Total investments in energy-efficient lighting of NLG 1 620 million (appr. US$ 860 million) are needed by the year 2000. Of this, about NLG 500 million is for residential programmes and 1 120 million is for commercial programmes. Instead of supporting the lighting programmes from public funds, VEEN and the ministry of economic affairs have agreed on an environmental surcharge of 0,5-2,0% levied on the electricity price to raise funds.
15 MILLION CFLs FOR HOUSEHOLDS
In 1990, the average penetration rate of compact fluorescent lamps (CFLs) was an average 0,8 units per Dutch household, according to VEEN. The original MAP-target was set very high: 3,5 CFLs per households in 1995. In practice this means that Holland's 5,8 million residential customers would have to buy some 15 million CFLs in five years (lamps bought outside the programme not included). Indeed a huge task, and even more so if one considers that 12 million lamps were intended to be sold by nationwide utility-sponsored programmes before 1993.
A nationwide standard contract was negotiated between VEEN and the utilities, which allows the customers to buy any combination of four integral, electronic Osram or Philips CFLs. The price of the four-lamp package is NLG 138 (appr US$ 73), and the utilities pay a NLG 20 subsidy (US$ 10,6). Of the remaining NLG 118, the customers have to pay at least NLG 30 at the shop. The remaining NLG 88 can be paid over the electricity bill with NLG 8 paid each month. So far, about 50% of the responding customers have chosen to pay over the bill.
Considering that lamp packages contain four lamps, more than half of Holland's 5,8 million residential customers would have to respond to reach the target of 15 million lamps. In pilot programmes, run by some utilities in 1990 and early 1991, the response rate was very good, 15-16%, according to Ruud Kroon at the firm Aspeslagh PR, who designed the programmes.
NO COMPLETE SUCCESS
It is planned that all utilities would run one 3-month programme in either Winter 1991-92 or 1992-93, with about half of all Dutch households involved in each winter. Considering the extremely ambitious goals, results from programmes run last winter were positive despite the relatively low response rate, says Annemarie van der Gaag at the MAP Projectbureau: "Considering the number of households that we have to reach, the response rate of 7-10% was a good result".
Ruud Kroon also takes this positive stand: "The average response rate within the programme so far is 8%, but if we include the increased total lamp sales, we have reached at least 12%", he says, and concludes that lamp sales more than quadrupled from the normal 300 000 to 1,3 million units within the areas where programmes were run. About half of the utilities will run their programmes next season, and still only half of them have signed the standard contract. Many utilities feel that they can reach better results with other contracts, as did, for instance, the Amsterdam and Rotterdam utilities who offered both two-lamp and four-lamp packages to their customers.
The Dutch programmes now absorb the lion's share of European CFL-production. Even though the manufacturers have committed themselves to ensure full supply to the programmes, the Dutch programmes might mean supply shortages in other markets, according to Ruud Kroon.
COMMERCIAL SECTOR
Commercial sector programmes include a wide range of technologies. Of the total investments in the commercial sector, customers are supposed to contribute about 50% of the annual NLG 112 million total (US$ 60 million). Typically, incentives amount to only 30%, which is the maximum subsidy level recommended by VEEN, so there is a gap between recommended subsidy levels (30%) and the planned utility contributions (50%).
According to Ruud Kroon, subsidies are indeed larger in some cases. The typical payback-time of investments (customer perspective) is 5-7 years, says Ruud Kroon who explains the gap as a wish of some utilities to raise extra funds for helping "poor" customers to overcome this long payback-time. "In fact, some utilities are already handing out more money than the planned subsidies", he says.
The utilities have great freedom in designing their programmes, but in general there are two methods in use: Direct subsidies and "performance-subsidies".
In the performance-subsidy method, utilities typically pay their customers NLG 20 per kW load reduction times a factor based on the percent load reduction achieved. For example, if demand is cut from 40 to 20 kW, this means 20x20x50, i.e., a NLG 20 000 (US$ 10 600) subsidy. Accordingly, 40% load reduction from 50 to 30kW yield a lower subsidy of NLG 16 000.
Direct financial incentives typically amount to NLG 35 (appr US$ 18,5) for a full-size fluorescent fixture with an electronic ballast (but four-times larger subsidies have been paid for very advanced fixtures, according to Ruud Kroon).
Subsidies generally amount to 18-25% of total investments. To help utilities decide on incentives, VEEN is compiling a list of products with recommended subsidy levels.
(See also: Massive Programs get the Dutch Market Moving, IAEEL 1/93, and Promotional program for Dutch retailers, IAEEL 2/94.)
For further information contact:
Projectbureau MAP
Tel. +31 55 494 644
Fax. +31 55 421 026