Energy gap widening: Households outside Randstad spend much more on energy bills
Households in the northern provinces and Limburg spend significantly more on their energy bills on average than those living in the Randstad area. For example, a family in Groningen province on average spends €105 more per month on energy than a comparable family in Utrecht province, according to a study commissioned by Essent. The power company expects the gap to increase, partly due to the energy transition.
According to Essent, energy bills are higher outside the Randstad because people there generally live in larger homes that are less well-insulated. They also generally earn less, so have less to spend on making their homes more sustainable.
The study, done by consultancy Berenschot, shows a clear North-South pattern in energy prices. Residents of Groningen (8.0%), Drenthe (7.8%), Friesland (7.5%), and Limburg (7.5%) spend the most of their income on energy, while those in Utrecht (5.0%) and Noord-Holland (5.8%) spend the least.
“Energy must be affordable for everyone, regardless of where they live,” said Essent CEO Resi Becker. “National averages mask significant differences.”
Within cities, the contrast is even more extreme. In Amsterdam, residents of the De Omval neighborhood spend 1.5% of their income on energy, while those living around the Slotervaart Medical Center spend 13.5%, for example. And it is almost always the less well-off neighborhoods that spend more on energy bills.
“The lowest incomes often have the highest energy expenditures, yet they are the least able to invest in sustainability. This growing group will soon be unable to keep up with the energy transition,” Becker said.
According to Essent, over 40 percent of Dutch households won’t be able to afford investing in sustainability by 2035. And households that don’t make their homes more sustainable will end up with even higher energy bills, partly due to rising gas prices and taxes, widening the energy gap even further.
Essent made several suggestions for tackling this inequality. First, make it easier for people to find subsidies to make their homes more sustainable by distributing all of them through a single point of contact. According to Essent, many low-income households currently don’t know how to find these subsidies or avoid them because they often have to advance money themselves. The company therefore also suggested a 90 percent subsidy for people with the lowest incomes, with no advance payment.
The government also needs to step up for tenants who are caught between high energy costs and landlords refusing to invest. “Private tenants currently have the right to propose sustainability improvements, but landlords can almost always reject them. This should become an enforceable right,” Essent said.
Finally, Essent suggested turning the current temporary emergency fund for energy bills into a permanent energy fund. The current fund provides a safety net for acute payment problems, but does not solve them permanently. “A permanent national energy fund should link emergency aid to structural home sustainability improvements.”
