healthier, happier and richer

Rotterdam is now Europe’s largest port. It has a concentration of heavy industry, including oil refineries and power stations.  So its contribution to climate emissions is substantial. However, the Netherlands – as the name suggests – is extremely vulnerable to sea level rise. Therefore, Dutch politicians and businesses have been more engaged in reducing climate change than those in most other countries, and the City of Rotterdam has taken a lead. It is an active member of the C40 Cities climate leadership group, and is working with other delta cities from around the world.

The City of Rotterdam set up the Rotterdam Climate Initiative (RCI) in 2006, in partnership with the port of Rotterdam. RCI is 80% owned by the City and 20% by the national government, and was set up in partnership with a not-for-profit business society called Deltalinks and the part of the Dutch environmental protection agency dealing with Rotterdam and surrounding areas.  RCI works with the Clinton Climate Initiative, and its Board is chaired by former Dutch prime minister, Ruud Lubbers.

Rotterdam has set itself  targets for 2025:

• To ensure that all buildings use only sustainable energy.
• To reduce the city’s carbon emissions by 50%.
• To make the city 100% adapted to climate impacts.

It believes that doing so will  strengthen the Rotterdam economy, and also improve Rotterdam’s image. Unlike some bodies that simply set targets and then do little to achieve them, it  works extensively on energy efficiency (retrofitting of existing stock), green rooves, renewables (predominantly biomass and wind energy), district heating and carbon capture and storage (CCS). It argues that Rotterdam should be a hub for CCS, taking CO2 from the Netherlands and Germany to storage in old oil and gas fields and saline acquifers in the North Sea.

I went to Rotterdam in mid-July to meet with some of the leading figures in the Rotterdam Climate Initiative. I met with Alexandra Van Huffelen, who had recently been appointed alderwoman in the City government responsible for sustainability.  Alexandra previously worked for the Dutch energy company Essent, promoting renewables and electric vehicles. I first met her on last year’s trip to Antarctica (see Antartica blog – 12 March 2009). She is extremely knowledgeable and extremely determined. I also met with Wiert-Jan de Raaf and Swati Sen Gupta from RCI.

Why was RCI set up?

RCI was the initiative of Ivo Opstelten, Mayor of Rotterdam from 1999 to 2009. (In the Netherlands, mayors are appointed, not elected.) The motivation was partly to win greater public support for the expansion of the port, which at the time was being extended by 1,000 more hectares westward (and another expansion is now happening). In part, the motivation was also to help ‘re-brand’ Rotterdam, to focus on a shared goal and to attract investment.  Opstelten was also influenced by the activity of the then mayor of London, Ken Livingstone, who had set up the London Climate Change Agency in 2005, and by Bill Clinton, who visited Holland in 2006. Al Gore’s film, An Inconvenient Truth, was also influential.

Opstelten was replaced in January 2009 by Ahmed Aboutaleb, who is firmly committed to RCI.

The motivation of business was  mixed: partly re-branding, partly the fact that permits under the EU’s Emissions Trading Scheme were limiting greenhouse emissions (so that the largest energy company in the area, Eneco, was unable to get permits for a new gas power station), and partly because of concerns about air pollution from nitrogen dioxide and particulates, also caused by the burning of fossil fuels. Deltalinks recognised that climate change was something that Rotterdam’s businesses had to deal with.

How is RCI funded?

RCI initially received €50 million from the city council, which had been raised by selling waste incinerators. This was not enough to make RCI a major financial institution, so the focus has always been on partnerships.  The money was divided: €30 million for mitigation (reducing emissions), which will be spent by the end of this year, and €20 million for adaptation (dealing with the unavoidable consequences such as increased risk of flooding).

A new budget of €30 million has been agreed for the next four years, but this is for the whole sustainability agenda, not just RCI.

Energy efficiency

As has happened elsewhere, policies to increase energy efficiency began with a focus on new buildings. Building regulations are set nationally in Holland, but in Rotterdam developers were asked to make new buildings more efficient than the regulations required. However, not many new buildings are being constructed now.

Therefore, RCI  is increasingly focussed on the existing stock. The city council owns 4,000 homes, together with shops and offices.  Homes in Rotterdam use, on average, 30% less than the national average. This is partly because houses and apartments are smaller than elsewhere in Holland, partly because Rotterdam residents are less wealthy and partly due to the concentration of industrial activity and buildings, which often makes  Rotterdam  nine degrees warmer than the surrounding countryside.

Half of the homes in Rotterdam are housing corporations (and three-quarters of these are apartments). Therefore, it is more difficult for residents to get a decision allowing them to improve the building fabric. RCI has been trying to get housing corporations to sign up to agreements to retrofit existing buildings, and half have now done so. The average efficiency of Rotterdam’s buildings is improving by 2.5% a year (but this is only slightly more than the nationwide average of 2%). The most active housing corporation is Woonbron, which allows people to choose whether to buy or rent their property, and has set up an NGO to encourage its resident to improve energy efficiency, whichever they choose.

Billions of euros have been spent improving specific buildings. However, RCI now feels that too little time and money has been spent on getting the correct organisational structures. An NGO to promote energy efficiency is, they think, the best approach – energy companies do not want to be involved as the pay-back times are too long.

RCI is finding it hard to make significant progress on making office buildings more energy efficient.  The demand is largely for cooling.

District Heating/Cooling

RCI soon identified district heating using biomass as a priority, as it would lead to a 70-80% CO2 reduction compared to gas. New biomass DH plants are being planned. There are helpful national policies on biomass in the Netherlands:

• In 2009 the Dutch government adopted criteria for which biomass is sustainable and which not.
• Biomass plants do not receive any public subsidy unless the heat is used in an efficient way.

Rotterdam has a local law that any building constructed has to be connected to a DH system if one exists. It took five years to get this adopted as a law, as most people assumed that natural gas would remain plentiful and cheap.

DH is not currently widespread in Rotterdam, (or, indeed, in Holland generally). The City is planning to extend it through an infrastructure company, owned by the city, and an operating company, owned by the City and Eon Benelux. Heat will be taken from a waste incinerator. The City council will provide equity capital of €38 million, and provides surety for the mortgage loan up to an amount of €149.5 million.

Studies have been carried out on the potential to use geothermal heat for the Rotterdam DH system. These showed that it would be possible, and could be done in the next ten years, but there is a widespread feeling – including at RCI – that it would be more cost-efffective to capture and use some of the heat created in the port and factories.

RCI is trying to use a DH approach for cooling. However, energy companies do not want to invest in the necessary infrastructure. Therefore, the City council, housing corporations and the provincial government are considering investing themselves.

Heat pumps

Much of the demand for cooling is being met by heat pumps. This is causing difficulties for DH. There is a powerful and extensive lobby promoting heat pumps, as it is very profitable for developers to instal heat pumps in new buildings, increasing their return by up to 20%. (Margins for heat pumps are not regulated, whereas DH tariffs are regulated.)

Renewables

There is currently 150Mw of wind capacity installed in the port area. RCI aims to double this by 2020.

RCI is also aiming to run a pilot project installing PV on rooves, with a local energy company just doing the billing. However, this is being held back by complexities about who will pay the VAT.

National leadership?

RCI does not think that there has been sufficient leadership from the Dutch government. There are limited national regulations and subsidy schemes. For example, there are no national laws on CHP or DH (though there are some tax incentives). This contrasts with the national leadership shown in, for example, Denmark (see Why can’t we all be more like the Danes?)

Questions:

• Which other towns or cities have established effective partnerships with local business and property owners like housing corporations?
• Which other cities or towns are planning significant expansion in district heating?
• Is Rotterdam right that controlling climate change will enhance its economy as well as protecting its citizens from climate risks?