Smart Cities

Stakeholder Platform

Zero-energy Buildings with Low-exergy Storage

Key to Innovation Integrated Solution Zero-energy buildings with low-energy storage

Document information Prepared by: Edited by: Date: Version:

Renee Wansdronk / EPORIUM ECN November 2013 2.0

TABLE OF CONTENTS Abstract

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Introduction

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Description of a Key Innovation

1. Presentation of the Key Innovation 1.1 1.2 1.3 1.4 1.5

Description of the innovation and rationale for selection Level of deployment Impacts of the innovation: achieved and foreseen Technical feasibility and viability Financial analysis

2. EXPECTED IMPACTS 2.1 2.2 2.3 2.4 2.5 2.6 2.7

Energy supplied or savings expected Financial cost/benefit analysis and return on investment (period) Expected impact on GHG emissions Interfaces with other technologies/ transport modes Wider potential benefits for cities Additional requirements on deployment Other expected impacts

3. Additional requirements on deployment 3.1 3.2 3.3 3.4 3.5

Governance and regulation Suitable local conditions Stakeholders to involve Supporting infrastructure required Interfaces with other technologies

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4. Financial models and potential funding sources

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4.1 Financing models suitable for the innovation 4.2 Specific sources of funding for the KI

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ANNEX: Back ground information

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ABSTRACT Building concept The Emporium building concept involves zero-energy solar energy dwellings or buildings that use energy and materials economically. This type of construction can provide occupants with a living environment that meets current standards. It involves a low-exergy system where the temperature of the energy produced, distributed, stored and delivered for heating purposes is as close as possible to that of the requested heating and cooling media. A warm water storage container and collectors provide heating and hot water supply for the space and a cold water storage container and collectors provide cooling and a source for the refrigeration. The water circulates without pumps; instead it uses a thermo-siphon, and therefore requires no high-grade energy such as electricity or fuel. A lightweight construction supports the water storage containers. This mass of water also replaces the hot and cold accumulating capacity of the building mass. The building concept is suitable for free-standing, connected, or high-rise homes or utility buildings in all climate zones. The storage systems can also facilitate the storage needs of nearby district heating systems and load management of the electricity system.

Energy system The building construction includes an energy producing climate system, that is composed of both low-exergy and zero-emission solar heat and infrared cool energy sources, and heat and cool thermo-siphon circulations, and a prefabricated, collapsible, and above ground seasonal hot and cold storage. The technical feasibility has been proven and confirmed. A low-exergy system is an energy system that aims at the lowest exergy loss between the requested energy on the one hand, and the energy produced, distributed, stored and delivered on the other hand. For a thermal energy system this means that all temperatures within the system are as close as possible to that of the requested heating and cooling media. Energy production (quantity) with a high exergy value (quality) requires a high effort of sustainable energy sources, so that low exergy systems using sustainable energy sources will be cheaper. Exergy regards the quality of energy carriers/media, while energy regards the quantity or energy content. The energy content of natural gas is 35 MJ/m3 and has the same potential exergy value, given a temperature of 2500˚C when burned and converted into other energy forms, like electricity. From this 2500˚C source, the residual 1000˚C heat can be used to bake stones, 500˚C to bake bread, 100˚C to boil water, and with the remaining residual 50˚C heat a whole building can be heated. This means that with the direct consumption of natural gas for building heating 97 % of the quality (50˚C against 2500˚C ) is lost through the chimney.

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INTRODUCTION The Key Innovations (KIs) are a key output of the Smart Cities Stakeholder Platform. The Platform promotes innovation and is part of the Smart Cities and Communities European Innovation Partnership of the European Union. It aims to accelerate the development and market deployment of energy efficiency and low-carbon technology applications in the urban environment. The emphasis will be on their integration, which is a key challenge particularly for Smart Cities’ technologies. The Platform aims to bring together technology providers, financiers and specialists in implementing smart city strategies at local level. The expert Working Groups of the Platform on Energy Efficiency and Buildings, Energy Supply and Networks, ICT, as well as Mobility and Transport select from the spectrum of Solution Proposals (SPs) submitted by stakeholders 1 the most promising and fundamental solutions to accelerate the development of smart cities. The focus is on specific promising innovations, considered pillars or technical leapfrogs for integrated solutions in smart cities, thus promising, but standalone solutions, will not be developed into key innovation files and toolkits. Regardless, if an SP will be part or not of a key innovation document, all solution proposals will be published in the Platform and linked to city profiles. The Platform is not an evaluation body and is open to all relevant smart solutions, large or small scale for cities and their inhabitants. The aim is to promote through the preparation of a detailed document, a guide for cities on the performance of the innovation, including in some cases wider impacts on city life (such as change of behaviour, environment, social inclusion etc.). For each innovation, this key innovation document will describe the methodology to deploy it, including the technical requirements and the necessary framework conditions, such as existing infrastructures, technical expertise, regulatory requirements as well as the financial costs involved. The document aims to promote the adoption of the key technology and to identify barriers to deployment to assist relevant authorities in developing solutions to remove them. The document will list the technology providers as well as information of a number of potential financial sources by the EU and other bodies which have supplied information to the platform. The information in the Key Innovation documents will become an integral part of the recommendations of the Smart City 10 Year Rolling Agenda document the Platform will draft for the European Commission. This document will highlight identified actions at European level required to promote the adoption of key innovations, such as the removal of regulatory barriers or recommendations on the focus of the Horizon 2020. It is important to stress that this document is not a set of technical proposal or a full evaluation of the innovation, but aims to assist for cities to identify potential solutions and understand their context and implementation needs. It does not exempt or substitute a detailed cost/benefit analysis and implementation plans for cities that wish to introduce the innovation. The Stakeholder Platform cannot take any responsibility for inaccuracies or missing information or specific problems in the implementation of the proposed Key Innovations or other Solution Proposals.

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Solution proposals are published on the web site: www.eu-smartcities.eu/ solutionproposals

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Description of a Key Innovation A key objective of the Smart Cities Stakeholder Platform is to identify Key Innovations (KIs) for the development of Smart Cities. The selection of an SP as KI is based on the following criteria: applicability, simplicity, affordability, usability the extent to which it addresses technology integration and if the potential impact is significant. Selected SPs will then be enhanced by the Platform’s technical Working Groups (WGs) to develop KIs, adding the following aspects: 

   

Premises for the technology development and up-take (e.g. problems, what the technology is intended to achieve, other unforeseen benefits for the smart cities); Potential integration with other technologies and sectors, including use of ICT; If necessary, enhancing the information from the SP on the urban environment in which the technology can be applied; Key pre-requisites for the applicability of the key innovation, such as the required enabling environment; Instruments and market conditions needed to reach commercial viability.2

KIs will be completed by the technical WGs in collaboration with the Finance WG. This group will analyse the financial needs of the KI as well as their financial viability and bankability. The members of the WG will provide information on funding sources. The result will be published as a Key Innovation Toolkit. The Toolkits thus provide practical solutions that can create an enabling environment for the application and replication of key innovations in a smart city.

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This includes a description of the main EU support instruments, such as the Risk Sharing Financing Facility

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1. PRESENTATION OF THE KEY INNOVATION This key innovation is based on the following solution proposal(s): Emporium building concept Submitted to the platform at date: 8 September 2012 Body(ies) submitting the proposal(s): Emporium Business Interests Type of innovation: New building concept based on exergy and seasonal storage IP right holders: Yes (Emporium Business Interests) Maturity of innovation: Pilot project

1.1 Description of the innovation and rationale for selection The Emporium building concept regards zero-energy solar energy dwellings or buildings that use energy and materials economically. This construction can provide the same living standards as conventional heating and cooling for the occupants. It regards a low-exergy system where temperatures of produced, distributed, stored and delivered energy for thermal purposes are as close as possible to that of the requested heating and cooling needs. A warm water storage container and collectors provide the space heating and hot water supply, and a cold water storage container and collectors deliver the space cooling and cooling source for the refrigerator. The water circulates without pumps; instead it uses thermo-siphon, and therefore requires no high-grade energy such as electricity or fuel. A lightweight construction supports the water storage containers. This mass of water also replaces the hot and cold accumulating capacity of the building mass. The building concept is suitable for free-standing, connected, or high-rise homes or utility buildings in all climate zones. The storage systems can also facilitate the storage needs of nearby district heating systems and load management of the electricity system.

1.2 Level of deployment This project has already been tested in the city of Fuzhou [2]. In co-operation with construction industries and knowledge institutes Emporium test buildings will be realized at science park in the Netherlands.

1.3 Impacts of the innovation: achieved and foreseen Under testing, to be expanded.

1.4 Technical feasibility and viability The building construction regards an energy producing climate system, that is composed of both low-exergy and zero-emission solar heat and infra-red cool energy sources, and heat and cool thermo-siphon circulations, and a prefabricated, collapsible, and above ground heat and cool seasonal storage. The technical feasibility has been proved and confirmed.

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A low-exergy system is an energy system that aims at the lowest exergy loss between on the one hand the requested energy, and on the other hand the produced, distributed, stored and delivered energy. For a thermal energy system this means that all temperatures within the system are as close as possible to that of the requested heating and cooling media. Energy production (quantity) with a high exergy value (quality) requires a high effort of sustainable energy sources, so that low exergy systems using sustainable energy sources will be cheaper. Exergy regards the quality of energy carriers/media, while energy regards the quantity or energy content. The energy content of natural gas is 35 MJ/m3 and has the same potential exergy value, given a 2,500 oC as temperature when burned and converted into other energy forms, like electricity. From this 2,500 oC source, the residual 1,000 oC heat can be used to bake stones, 500 oC to bake bread, 100 oC to boil water, and with the remaining residual 50 oC heat a whole building can be heated. This means that in case of direct consumption of natural gas for building heating 97% of the quality (50 oC against 2500 oC) is lost through the chimney.

1.5 Financial analysis See Annex, sections 1.1-6.4

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2. EXPECTED IMPACTS 2.1 Energy supplied or savings expected Savings expected The dwelling concept will have zero-energy consumption over the year. The savings can be set equal to the energy consumption of presently constructed new dwellings, consisting of gas for space heating and hot water and electricity for space cooling. Energy supplied The building concept uses evacuated tubes (semi-transparent) facade elements, and 50 oC to 90 oC indoor and above ground heat storages, to produce the indoor climate heating and hot potable water energy. Only using the facades for heat and cool production keeps the roofs available for solar electricity production.

2.2 Financial cost/benefit analysis and return on investment (period) Cost/benefit analysis All construction parts will be prefabricated, to reduce the construction period at the building site to one day only. This industrial approach will improve the production process, and reduce the construction costs, step by step. The today production capacity is 500 dwellings per year. Return on investment For cost/benefit analysis the costs of capital, i.e. the required return on investments, is of importance, especially for capital-intensive options like zero-energy buildings. Investors are willing to proactively encourage companies through engagement and dialogue to invest in sustainability. Investors are also more and more willing to invest in companies that still have large improvement opportunities related to sustainability (see Annex, section 2.1). Moreover, reinsurers have interest in reduction of the risk of climate change which they have to cover (see Annex, section 2.2). Therefore, it is assumed that required return on investment will be relatively low. Increasing future value Another factor in the cost/benefit analysis is the valuation of zero-energy dwellings and building in the longer term. For the dwelling there are balance costs (contractor), a price (buyer) and a (future) value. At increasing energy prices the value of energy producing houses rise, and the value of natural gas houses will decline. At lower energy prices the price-value difference of energy producing houses is smaller compared to that for gas heated houses. But this balance can quickly invert at increasing energy prices, and if that is expected be a motive to purchase the energy producing house with a smaller price-value difference. It is also expected that clients within ten years will claim energy neutral products and services. Buildings will consist of demountable, reusable, construction elements, that can be adjusted to changing end-users wishes, and in many cases buildings will be trans functional (see Annex, section 5.1). The (higher) future value and the priorities of the occupants will enable larger investments than possible with conventional cost/benefit analysis.

2.3 Expected impact on GHG emissions The dwelling concept with solar energy production and storage supply is a CO2-neutral system. Thus, the CO2-reduction is equal to the CO2 emissions of regular new dwellings.

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The construction method can also contribute to the avoided CO2. However, this is normally not accounted for in the analysis of energy saving options.

2.4 Interfaces with other technologies/ transport modes Balancing electricity system Electric resistance heating elements are very cheap and the same is valid for electricity during an unbalance between supply and demand. The idea is to use the low priced electricity surplus for heating of water buffers in the zero-energy dwellings. The energy storage can facilitate a national electricity unbalance market (see Annex, section 4.2). It can also facilitate a regional renewable electricity production park (see Annex, section 4.3). Finally it can work together with a local building-related electricity generator (see Annex, section 4.4).

2.5 Wider potential benefits for cities Flexible energy storage Prefabricated constructions with small scale (building connected) energy storage can be added to, or fitted in, an urban district without any nuisance, due to a very short construction period and compact construction transport (see Annex, section 3.1). Urban integration A sustainable renovation of a residential area, or district heating network, often requires an energy storage integration which is an expensive operation within the existing situation. By a limited addition of new buildings with payable energy storage this can, besides the new buildings itself, also facilitate the existing or renovated surroundings (see Annex, section 3.2). The (one day) construction process is suitable for small-scale implementation between existing buildings, of two (minimum) to four dwellings for example. Multiple value The classical value chain changes to a value network whereby, by the way the output from one party is taken up by the other party, larger value additions arise. Within a civic economy, where sustainability stands central, civic entrepreneurs generate besides economic also social and ecological values. This 'multiple value' could never have been produced separately by the state or the market (see Annex, section 6.4).

2.6 Additional requirements on deployment No information provided

2.7 Other expected impacts Waste prevention From 2010 to 2020 the raw material consumption shall increase from 65 to 82 billion ton. Suppliers see that this linear system enlarges the risk on price increase and availability. Within a circular economy, instead of a linear economy, products and materials are designed for reuse. The supplier often remains the owner and the buyer becomes the user, and the product is hired, leased or shared. Excluding the car industry, currently 25% is collected, while the construction sector is the largest raw material consumer and waste producer. The supplier can share the product ownership partly with a component supplier, which then partly can share this with a material supplier or a raw material bank (see Annex, section 6.3)

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The Emporium prefabrication production is a zero waste process, and the re-use and recycling of all construction parts can be organized in advance. Flexible urban planning Above ground and collapsible energy storage gives more flexibility to the urban planning. In case that, for a better planning of the permanent development, the land allocation is limited to five or ten years for example, the energy storage can, as a temporary solution, be assembled and disassembled, and moved to a following location (see Annex, section 3.3). Soil protection Above ground energy storage avoids perforations in water sealing (clay) soil layers. In case of underground energy storage these soil layers will be perforated, with the risk that soil or sea water mixes with the soil environment above (see Annex, section 3.4). Limiting import dependence The production and storage contributes to limiting the increased dependency of Europe on fossil fuels imports (see Annex, section 1.2). Monetary effects mortgages At increasing energy prices the value of energy producing houses will rise and that of gas heated dwellings will decline. Property covers in almost all cases 95% of all the money that is created by banks on the basis of debt with pledge. Within this money creation system the value decline of the pledge (natural gas houses) is not taken into account. The value increase of energy producing houses, as an expansion or a replacement of the stock, can compensate for this and avoid money inflation (see Annex, section 1.4).

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3. ADDITIONAL REQUIREMENTS ON DEPLOYMENT

3.1 Governance and regulation No information provided

3.2 Suitable local conditions A sustainable renovation of a residential area, supplied by a district heating network, often requires an energy storage integration which is an expensive operation within the existing situation. By a limited addition of new buildings with payable energy storage this can also facilitate the existing or renovated surroundings (see Annex, section 3.2). The (one day) construction process is suitable for small-scale implementation between existing buildings, of two (minimum) to four dwellings for example.

3.3 Stakeholders to involve The implementation is linked with the local government, the construction industries and knowledge institutes, and of course the buyers or landlords/renters of the buildings.

3.4 Supporting infrastructure required No information provided

3.5 Interfaces with other technologies No information provided

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4. FINANCIAL MODELS AND POTENTIAL FUNDING SOURCES The Finance Group of the Stakeholder Platform has prepared documents on funding models and the use of EU Funding instruments, either from the EU budget or from the European Investment Bank. The documents are freely downloadable from the Stakeholder Platform’s website. •

For funding models please refer to the “Financing models for Smart Cities” guidance document.

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For EU supported funding instruments please refer to the guidance document on “Using EU Funding mechanisms for Smart Cities”.

This section presents specific recommendations for financing models and potential sources suitable for this KI.

4.1 Financing models suitable for the innovation Financing energy efficiency in buildings is still a challenge, due to the relatively high upfront costs. The ‘Financing models for Smart Cities guidance document’ discusses some financial solutions. The EU Horizon 2020 funding can contribute for a large-scale demonstration in a city, that can also be supported by the Risk Sharing Finance Facility (RSFF) managed by the EIB (please refer to the EU Funds Guidance Document). However, a large-scale deployment of the solution cannot be financed by those funds, this will require specific financing models. For this KI, the financing model for public buildings is the most relevant, although some of the examples may also be adapted for the private sector. Energy efficiency projects can be financed directly by public grants (in particular in the public sector), but such an approach is expensive and thus will limit the number of projects that can be realised and ignores the self financing potential through energy savings. A more successful model would be based on a system using the savings (revenue) generated from lower consumption to pay for the energy efficiency investment, by some form of energy performance contract, where the company renovating the building guarantees a performance, which is then rewarded over the years. The risks and upfront costs are shifted to the specialised energy company, which also creates efficiency incentives. For this model of financing, the EIB has published a detailed overview of financing models that are relevant in their 2012 report by the European PPP Expertise Centre (EPEC): EIB (2012), “Guidance on Energy Efficiency in public buildings”, EPEC, Luxembourg, which can be retrieved at: http://www.eib.org/epec/resources/epec_guidance_ee_public_buildings_en.pdf accessed 3/11/1013)

(last

This report is accompanied by detailed guidance documents on specific aspects in the planning, procuring, financing, monitoring, etc. Project preparation support is offered by the EU through technical assistance funding: from the structural funds and the ELENA facility, the European Energy Efficiency Fund (EEF) and the MLEI (Mobilising Local Energy Investment).

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4.2 Specific sources of funding for the KI Netherlands From 1 August 2011 an extra mortgage financing may be provided by the Mortgage Financiers Contact Organisation (in Dutch: Contactorgaan Hypothecair Financiers) in case of energy saving measures within the house, and for a house with a so called Alabel (see Annex, section 5.2). For 2011 these amounts are 3,500 euro for a house with an energy label A, 5,000 euro for a house with an energy label A+ and 8,500 euro for a house with energy label A++. Due to the lower energy costs of energy neutral houses, at incomes above 27,000 euro, extra mortgage financing may be provided of 18,000, 20,500, 24,000 en 29,000 euro compared to the less energy economical labels D, E, F and G [NIBUD]. A Green Investment Bank (GIB), a revolving governmental fund for co-financing of energy saving in buildings, is under investigation (see Annex, section 2.3). Sustainable energy and energy storage offers fiscal advantages for the fiscal profit and the energy tax (see Annex, section 5.4). The Dutch tax offers a 41,5% (EIA) and 36% (MIA) deduction and a write-off possibility up to 75% during the year of investment (VAMIL). Germany KfW introduced an energy efficiency programme to support loans to private owners for energy efficiency refurbishments. Since 2006 KfW has provided low interest loans and grants for investments in residential buildings supported by a €4 billion grant and guarantee of the Federal Government. KfW also provides advice on energy efficiency measures through in-house experts. The magnitude of the support depends on the savings achieved. KfW delivers energy efficiency certificates, which have become a national standard and directly affect the value of properties. The results between 2006 and 2012 have been the following3:   

Over 3 m homes (including appartment buildings) were either renovated or newly built according to KfW energy efficiency standards. The programme has led over this period to a reduction of approximately 6 m tones per year. The programme is credited for having secured or created on average 240.000 jobs per year.

In France the Caisse de Depots (CDC) also provides credits for housing. The ‘èco-prêt logement’ for example offers very favourable terms, targeting primarily social housing.

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Figures provided by KfW

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ANNEX: BACK GROUND INFORMATION Emporium Business Interests .................................................................... A building construction with an energy producing climate system, that is composed of both low-exergy and zero-emission solar heat and infra-red cool energy sources, and heat and cool thermosiphon circulations, and a prefabricated, collapsible, and above ground heat and cool seasonal storage, is characterized by the following financial and non-financial interests and values: 1. Government 1.1 Government, carbon dioxide emission reduction 1.2 Government, fossil energy independence 1.3 Government, state-owned natural sources 1.4 Government, property pledge monetary system 2. Investor 2.1 Investor, stock market shares value 2.2 Investor, climate change reinsurance risk 2.3 Investor, revolving governmental fund 2.4 Investor, responsible investment principles 3. Municipality 3.1 Municipality, small scale urban integration 3.2 Municipality, storage facility existing district 3.3 Municipality, temporary urban planning 3.4 Municipality, soil environment protection 4. (R)ESCO 4.1 (R)ESCO, (renewable) energy service company 4.2 (R)ESCO, national power supply unbalance 4.3 (R)ESCO, regional power supply unbalance 4.4 (R)ESCO, building power supply unbalance 5. Resident 5.1 Resident, property investment value 5.2 Resident, mortgage borrowing capacity 5.3 Resident, shared building construction ownership 5.4 Resident, sustainable investment tax reduction 6. Supplier 6.1 Supplier, carbon credits exchange 6.2 Supplier, low-exergy temperature control system 6.3 Supplier, product ownership 6.4 Supplier, civic entrepreneurs economy .................................................................... 1. Government .................................................................... 1.1 Government, carbon dioxide emission reduction Production and storage of sustainable zero-emission energy matches with the European Union (EU) domestic greenhouse gas (GHG) emissions reduction aim of 80% by 2050 compared to 1990 levels, and 88% - 91% for the building stock. From 1990 to 2006 the EU-27 (Netherlands) GHG emissions decreased from 11.8 (14.2) to 10.4 (12.7) tonnes of CO2 equivalent per capita. Carbon credits instruments are the Assigned Amount Units (AAU's), Clean Development Mechanism (CDM), Joint Implementation (JI) Domestic Offsets, and the voluntary Gold Standard and Verified Carbon Standard. Greenhouse gas reduction costs (euro per ton CO2 equivalent) are the lowest (negative) in the building sector, -160 to -120 for building insulation, -80 for lighting systems, -75 for air-conditioning, and -50 for water heating. 14

References Buildings account for about 40% of total energy consumption and 36% of CO2 emissions in Europe. The European Union (EU) aims at drastic reductions in domestic greenhouse gas (GHG) emissions of 80% by 2050 compared to 1990 levels, and the building stock should achieve even higher reductions of at least 88% - 91%. Nearly Zero Energy Building (nZEB) CO2 emissions related tot the energy demand is recommended to be below 3 kg CO2/m2year [BPIE Atanasiu]. The European EU-27 (and Dutch) Greenhouse Gas Emissions per Capita (Global Warming Potential) decreased, between 1990 and 2006, from 11.8 (14.2) to 10.4 (12.7) tonnes of CO2 equivalent per capita [EC ESTAT Roman Enescu]. The Assigned Amount Units (AAU's) are the emission rights within the Kyoto protocol which are assigned to countries, and where companies stand outside [Carbon Metrics Harmsen]. The carbon credits instrumentation knows three variants [CNG Genee]: - Clean Development Mechanism (CDM) - Joint Implementation (JI): Domestic Offsets - voluntary Gold Standard 14 euro/tonCO2/Verified Carbon Standard 10 euro/tonCO2 Greenhouse gas reduction costs (euro/ton CO2 equivalent) are the lowest (negative) in the building sector, -160 to -120 for building insulation, -80 for lighting systems, -75 for air-conditioning, and -50 for water heating, compared to 27, 39 and 50 for new coal, coal retrofit and industrial Carbon Capture Storage (CCS) [McKinsey Enkvist]. 1.2 Government, fossil energy independence Production and storage of sustainable zero-emission energy makes Europe less dependent from fossil fuels. Within 'business as usual' European energy import dependence in 2030 increases from 50% to 65%, natural gas import from 57% to 84%, and oil import from 82% to 93%. References Europe is becoming increasingly dependent on imported hydrocarbons. With 'business as usual' the EU's energy import dependence will jump from 50% of total EU energy consumption today to 65% in 2030. Reliance on imports of gas is expected to increase from 57% to 84% by 2030, of oil from 82% to 93% [EC ENER]. 1.3 Government, state-owned natural sources A building climate system, using sustainable energy sources and seasonal energy storage, saves natural gas for example that can be sold with more profit on a later moment. Notwithstanding that within the period 1966-2009 (in the Netherlands) the price index raised faster than the natural gas price, 523.5-2,522.7% and 0.12-0.34 euro/m3, within the period 2010-2030/2035 the natural gas price will probably almost double. An energy producing house to let share in the profit of this natural gas price doubling is reasonable because a natural gas house lets go up this profit in smoke and therewith even fully claims. References The natural gas price for households, according to the PRIMEX model by the NTUA Athens, rises between 2010 and 2030, and nearly doubles within the coming 20 years, from 0.396 to 0.780 euro/m3 [EC ENER Decker]. The natural gas import price, according to the GAS Scenario, or to the WEO-2010 New Policies Scenario, will increase between 2009 en 2035 (USD 2009), from 4.1 to 8.0 or 10.4 USD/MBtu (United States), from 7.4 to 10.9 or 13.3 USD/MBtu (Europe), and from 9.4 to 12.9 or 15.3 USD/MBtu (Japan) [IEA Corben].

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Natural gas of 0.25 NLG/m3 in 1966 and 0.34 EUR/m3 in 2009 (NUON) compared to the price index (CBS) of 100% in 1900, 523.5% in 1966, and 2,522.7% in 2009, has become cheaper [TU/e Lintsen]. Natural gas of 0.25 NLG/m3 in 1966 for households (0-300 m3/year) decreased in price for larger purchases, and for house block heating even to 0.05 NLG/m3 [TU/e Van Overbeeke]. 1.4 Government, property pledge monetary system At increasing energy prices the value of energy producing houses will rise and that of natural gas houses will decline. Property covers in almost all cases 95% of all the money that is created by banks on the basis of debt with pledge. The money volume within the Eurozone has more than doubled within the period from 1999 to 2009 from 4,500,000 to 9,500,000 billion euro. This increase is not based on houses which have become more and more valuable, and has been higher than the growth of incomes or the real economy as a whole. Within this money creation system the value decline of the pledge (natural gas houses) is not taken into account. The value increase of energy producing houses, as an expansion or a replacement of the stock, can compensate this and avoid money inflation. References Property plays a very important role within the financial markets. 95% of all the money which is created by banks, is created on the basis of debt with pledge. In almost all cases that pledge is property. So by these connections the value of money is secured by the value of property [AcadeMi Gielingh]. As long as it is easy to get borrowed money to buy a house for example, the house prices continue rising and the banks continue making profit on more and more higher mortgages. Nevertheless this means that the underlying value of the loan, and the house itself, depends on the money volume that has been put as debt in the money system. So the increase of house prices is not based on houses that become more and more valuable, but on a more and more availability of credits and the need of banks to earn money with this. This increase has been higher than the growth of incomes or the real economy as a whole. Nevertheless the underlying value has not grown with it. Banks have to endless continue with the production of new money to guarantee the (believed) stability and (believed) growth. Within this money creation system the value decline of the pledge is not taken into account [Economy Transformers Toxopeus]. It is fairly in general assumed that a connection exists between the money volume on the one hand and the growth of the economy and the inflation on the other hand. In the course of time the money volume has shown a clear increase: within the Eurozone the money volume according to the M3 definition has more than doubled within the period from 1999 to 2009 from 4,500,000 to 9,500,000 billion euro [Wikipedia]. .................................................................... 2. Investor .................................................................... 2.1 Investor, stock market shares value Investors are willing to proactively encourage companies through engagement and dialogue to invest in sustainability. Investors are also more and more willing to invest in companies that still have large improvement opportunities related to sustainability. 'High' sustainability companies significantly outperform their peers with 4.8% higher stock prices over the long-term. References 16

Investors are willing to proactively encourage companies through engagement and dialogue to invest in sustainability. Investors are also more and more willing to invest in companies that still have large improvement opportunities related to sustainability. Instead of excluding those companies, they invest in these companies and actively engage with them. As observed in a longitudinal study from Harvard and the London School of Economics, 'high' sustainability companies significantly outperform their peers with 4.8% higher stock prices over the long-term [Shareholder Support Mertens]. 2.2 Investor, climate change reinsurance risk Reinsurers have interest by the reduction of the risk of climate change which they have to cover. The second reinsurer worldwide, Munich Re, invests for this reason in Renewable Energies and Technologies (RENT) projects. Nearly 30 insurers, with a jointly value of 4,000 billion euro and 10 percent of the insurance branche worldwide, have endorsed UNEP's 'Principles for Sustainable Insurance'. References Reinsurers have interest in sustainable energy because this reduces the risk of climate change which they have to cover [FhG Schossig]. Munich Re is the second reinsurer worldwide, and invests in sustainable (energy) projects such as the Desertec Industrial Initiative (Dii). The Renewable Energies and Technologies (RENT) project will stimulate the following technological developments [Munich Re]: . boosting efficiency (e.g. insulation, carbon tax) . networks (e.g. extension deregulation) . storage media . energy conversion sites (e.g. solar parks) . resources (e.g. wood, biowaste, silicon) During the Rio+20 Top the 'Principles for Sustainable Insurance' (PSI) have been launched by the UNEP, that is endorsed by nearly 30 insurers, with a jointly value of 4,000 billion euro and 10 percent of the insurance branche worldwide. In the Netherlands this are Achmea, AEGON, Delta Lloyd, ING and Zwitserleven [HFC]. 2.3 Investor, revolving governmental fund A Green Investment Bank (GIB), a revolving governmental fund for co-financing of energy saving in buildings, is required, and knows successful predecessors such as the German Kredietanstalt für Wiederaufbau (KfW) with 5 billion euro and the British Green Investment Bank (GIB-VK) with 3 billion euro. References In the Netherlands a coalition of VNO-NCW, MKB-Nederland, Bouwend Nederland, FME, Uneto VNI, Natuur & Milieu, and HFC, emphasize the synergy between a revolving governmental fund for co-financing of energy saving in buildings (70 million euro in 2013 en 58 million euro afterwards), and the Spring Agreement (in Dutch: Lente akkoord) for green investments (10 million euro), with the Green Investment Bank (GIB) (in Dutch: Groene Investerings Maatschappij (GIM)) – an HFC initiative with promises of banks such as ABN AMRO and ING [HFC Fransman]. Comparable initiatives and funds are: DEU Germany . Kredietanstalt für Wiederaufbau (KfW) with 5 billion euro GBR United Kingdom . Green Investment Bank (GIB-VK) with 3 billion euro NLD Netherlands . Green Investment Bank (GIB) 17

. Green Fund Energy Saving Buildings . Innovation Capital Initiative (ICI) . National Fund Energy Saving (NFEB) 2.4 Investor, responsible investment principles 17,000 billion dollar, or 20 to 30% of the assets under management worldwide, is invested according to the 'United Nations Principles for Responsible Investment' (UNPRI). The European Union (EU) develops for annual reports non-financial Key Performance Indicators (KPIs) for Environment, Social and Government (ESG) information. Dutch institutional investors are increasingly using ESG information at their investment decisions and voting behaviour at shareholders meetings. References 17,000 billion dollar, . . . (UNPRI) [Double Dividend Lambrechtsen]. The European Union (EU) is developing a set of non-financial Key Performance Indicators (KPIs) on Environment, Social and Government (ESG) information that should at least be incorporated in the annual reports [Shareholder Support Mertens]. Dutch institutional investors are increasingly using environment, social and government performances at their investment decisions and voting behavior at shareholders meetings. The most commonly used KPI's for ESG performances are: voluntary contribution to social goals and charities (philanthropy), lost workdays by accidents, Efforts to reduce greenhouse gases, and information about the stakeholder dialogue [DHV Duurzaam Ondernemen]. .................................................................... 3. Municipality .................................................................... 3.1 Municipality, small scale urban integration Prefabricated constructions with small scale (building connected) energy storage can be added to, or fitted in, an urban district without any nuisance, due to a very short construction period and compact construction transport. 3.2 Municipality, storage facility existing district A sustainable renovation of a residential area, or district heating network, often requires an energy storage integration which is an expensive operation within the existing situation. By a limited addition of new buildings with payable energy storage this can, besides the new buildings itself, also facilitate the existing or renovated situation. Denmark for example will prohibit oil and natural gas boilers for new buildings, and completely switch to district heating networks, which are fed with heat from biogas and biomass for example. References Denmark has voted for 35 percent sustainable in 2020, including the prohibition from 2013 of oil and natural gas boilers installment in new buildings. District heating networks will be expanded and preserved for the heat supply. Combined Heat and Power installations (CHP) (in Dutch: warmtekrachtinstallaties (WKK)) for the district heating networks will switch from natural gas to biogas. The larger power stations will switch to biomass [Essent De Jong]. 3.3 Municipality, temporary urban planning Above ground and collapsible energy storage gives more flexibility to the urban planning. In case that, for a better planning of the permanent development, the land allocation is limited to five or ten years for example, the energy storage can, as a 18

temporary solution, be assembled and disassembled, and moved to a following location. 3.4 Municipality, soil environment protection Above ground energy storage avoids perforations in water sealing (clay) soil layers. In case of under ground energy storage these soil layers will be perforated, with the risk that soil or sea water mixes with the soil environment above. .................................................................... 4. (R)ESCO .................................................................... 4.1 (R)ESCO, (renewable) energy service company A building owner can transfer the installation to a (R)ESCO that, depending on the risks, can issue Membership (M), Pioneer (P), Timebound (T) and Open (O) Community Shares. (R)ESCO's also offer a solution for investors which prefer mostly an investment as simple as possible, and have no interest in installations. Energy suppliers make profits of about twelve percent, which now go to the (R)ESCO, or give the end-user or resident a lower energy bill. SME companies invest the most frequently in solar collectors, solar boilers and heat pumps, and the construction sector in solar energy. In Europe the implementation of (R)ESCOs is supported by funds. References The (R)ESCO is installation owner and agrees with the building owner a 15 year supply contract based on the Not More Than Else principle or a system with an almost fixed tariff. In case that the natural gas prices rise, the profit at the Not More Than Else principle is for the (R)ESCO, and the profit at the fixed tariff for the building owner [INNAX Hendriks]. Community shares, for an energy company for example, can be based on Membership (M), Pioneer (P), Time-bound (T) and Open (O) offers, for the following starting points [Co-operatives UK Brown]: Starting points Community share offer types Pre-start M P Start-up start M P T Acquisition and transfers start M T Early stage growth start M T O Later-stage growth and consolidation M T O There are at a rough estimate hundred ESCO's in the Netherlands. This also offers a solution for investors, pension funds for example, which prefer mostly an investment as simple as possible, and have no interest in installations [Sdu EnergieGids Van Baal]. Dutch energy suppliers such as Eneco and NUON make profits of about twelve percent, that in case of a (R)ESCO go to the owner or, in case of an end-user or a resident, give a lower energy bill [Sdu EnergieGids Van Baal]. SME companies invest the most frequently in solar collectors, solar boilers and heat pumps. Heat Cold Storage (HCS) is mainly mentioned by larger SMEs. Especially agrarian companies invest in wind energy, and herewith some companies earn more than with the regular business. Construction and industry are the sectors which mention concrete investments, and which invested the last three years in sustainable energy. Solar energy appears especially in the construction, the industry and the transport sector, the most frequently applied. HSC is popular in the industry, and heat pumps are popular in the industry, the hospitality and the lease/business services [EIM Bertens].

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In Europe the implementation of (R)ESCOs is stimulated with funds from the FP7 and INTERREG programmes. In the Netherlands these possiblities are rarely used [Ministerie BZK Boschloo]. 4.2 (R)ESCO, national power supply unbalance The Dutch electricity production unbalance market amounts 20 million euro per year for downwards adjustment with surplus prices from -100 to -200 euro/MWh, excluding 20 euro/MWh transport costs. The minimum downwards adjustment power is 4 MW per party, during a quarter, and adjustment without gearbox offers market advantage. This 4 MW downwards adjustment power requires approximately 1300 houses with a 3 kW home installation, 160 houses with a 25 kW electric resistance heating in the energy storage (equal to the heat exchanger), and 1 house with a 25 m3 energy storage that is heated with 1 MWh energy from 4 MW during a quarter from 50 to 90 °C water temperature. References The minimum heat exchanger power for potable water heating, and the minimum capacity for seasonal storage of heating and potable water heat, are for a Dutch standard house 25 kW (GASKEUR/CW4 class) and 1,17 MWh (25 m3 water from 50 to 90 °C) [Wansdronk]. The Dutch unbalance market, the electricity surplus and shortage trade, amounts 800 GWh and 35 million euro per year, of which approximately 450 GWh and 20 million euro for downwards adjustment, and 350 GWh and 15 million euro for upwards adjustment. The surplus prices are -100 to -200 euro/MWh as a maximum, and shortness prices can increase to 400 euro/MWh. The downwards adjustment power can rise to 900 MW which only occurs a few times, jointly one hour, per year. The minimum downwards adjustment power is 4 MW per party, and offering adjustment without gearbox provides for TenneT an advantage. In 2012 TenneT started to participate in the International Grid Control Cooperation (IGCC) initiative, whereby the volume of the Dutch unbalance market will decrease from 800 to 600 GWh per year TenneT Nobel]. TenneT has contracts with a fixed number of adjustment parties to process the unbalance. These parties, with large adjustment power, are reimbursed for this. Small players have a minimum power of 1 to 3 MW. Dutch households consume 3,300 kWh per year as an average, with an estimated power of 3 kW. So the minimum power requires 350 to 1,000 households. Large greenhouse horticulturists use electric resistance heating. Exchange from electricity to heat has a 1:1 balance, and is less sustainable than an electric heat pump with a 1:3 (hot water) and 1:4 (heating) balance. Nevertheless heat pumps are unsuitable for energy storage, and to process a surplus that causes unbalance [Energy Matters Schlattmann]. Greenhouse horticulturists, with usually 1 MW power that is full load in use, get entry to a trade platform for real time trade on the energy market with a switch box. Greenhouse horticulturists with Combined Heat Power (CHP) can deliver during a shortness in the unbalance market, whereby the electricity price during the daily peak moments, 8 o'clock in the morning and 6 o'clock in the evening, can increase from 50 to 100 to 200 euro/MWh. Due to the required electricity meter and the transfer of meter positions, this market is only interesting for households with a jointly, starting at 1 MW, connection [Powerhouse Poppenk]. TenneT determines itself, on the arrival time, which provider will be used, and publishes the unbalance price per quarter, within a total band width of -400 to 600 euro/MWh. Next to this transport costs of 20 euro/MWh will always be paid. Electricity is very cheap, 0.25 euro/kWh, that is comparable with cycling a whole day. Measurement per 15 minutes is necessary to settle, and required above 100 kW (3x80 Ampere), and preferable above 50 kW. CHP installations with this kind of power often 20

have left electricity during heat production. Houses can be connected to clusters, by private networks, for which exemption is required. Electric resistance heating elements are very cheap. The idea to use unbalance surplus for heat buffers in dwellings is new [Anode Van Teeffelen]. On the moment also cold stores, aluminium smelters and greenhouse horticulturists position themselves as wholesaler, and in the meanwhile in the United States also supermarket chains with cooling power. Furthermore in Northern Germany and Denmark unbalance with a negative pricing arise by the many wind turbines [TNO Kok]. 4.3 (R)ESCO, regional power supply unbalance Because of the fluctuation in wind and solar resources, regional electricity parks set high demands on the controllability of the regional electricity network, which is not connected to the (international) network. Thermal energy storage can, in case of wind and sun surplus, operate to exchange the surplus to heat by electric resistance heating, and, in case of wind and sun shortness, operate as large heat buffers of flexible Combined Heat and Power (CHP). References In Denmark the electricity production in 2020 has to come by half of wind energy. Denmark already is a cracker in the field of wind, but 50 percent is extreme. This requires extreme demands on the controllability of the electricity network. The wind turbine power strongly fluctuates with the wind velocity. In case of strong wind there already are electricity surpluses. In case that export is impossible, large heating elements of heating networks are already switched on. That is better than switching off wind turbines. In case of wind and sun shortness Germany especially aims on flexible CHP with large heat buffers. They also think about to convert wind and sun surpluses into heat. The government will soon even subsidize the combination of this threesome in the new law for CHP [Essent De Jong]. 4.4 (R)ESCO, building power supply unbalance Building-related electricity production will be controlled by the electricity demand and this will cause at most of the generators a (residual) heat surplus or shortness. With a building-related (thermal) energy storage the (residual) heat surplus can be better utilized. References For local electricity production a hydrogen fuel cell will be developed which also produces heat. The electricity demand will not match with the heat demand. By having a thermal heat storage the (residual) heat surplus can be better utilized [Hanzehogeschool Van Gemert]. .................................................................... 5. Resident .................................................................... 5.1 Resident, property investment value Within the balance costs (contractor), price (buyer), and value (future), at increasing energy prices, the value of energy producing houses rise, and the value of natural gas houses decline. In case that at a house purchase the price-value difference of energy producing houses is smaller compared to that difference of natural gas houses, this balance can quickly invert at increasing energy prices, and being a motif at the purchase moment nevertheless to choose for an energy producing house, with a smaller price-value difference, due to the view on an increasing value. It is expected that clients within ten years will claim energy neutral products and services. Buildings will consist of demountable, reusable, construction elements, that can be adjusted to changing end-users wishes, and in many cases buildings will be trans functional. 21

References Organisations search at their investments for a combination of energy saving and producing measures. The most popular combinations are insulation measures and/or energy management combined with solar energy and/or Heat Cold Storage (HCS). Sustainability also means that should be invested in new product and services development. 42 percent of the respondents expect that their clients within ten years will claim an energy neutral product or service [VNU Strijker]. The Real Capital concept target is the development of cyclic funds that contain real values, such as raw materials, labor and energy. Because these are part of the fund, its destruction is equal to capital destruction. The shareholders and administrators of such a fund have for this reason all interests that the real values are retained as much as possible. In this way sustainability is also rewarded with a financial sense. The first Real Capital application is related to the construction and management of so called 'living property'. This are buildings that consist of demountable, reusable, construction elements, that can be adjusted to changing end-users wishes. In many cases the 'living buildings' will be trans functional: this means that a hospital can transfer to a hotel, or an apartment complex. The Real Capital fund model uses a financial format that makes from the first day energy saving attractive. Therefore most of the buildings that are realized in this way, will be energy neutral. By reusing components, also the energy consumption of the construction material production - that normally is very high and contributes substantial to the global CO2 emission - shall reduce significantly. The specialty of this new fund model is that it offers to investors an attractive, inflation stable and nearly riskless return, especially for the long-term [AcadeMi Gielingh]. 5.2 Resident, mortgage borrowing capacity In case of energy saving measures the residential mortgage may be increased by label with 3,500 (A), 5,000 (A+) and 8,500 (A++) euro. For very energy saving houses even 20,000 (A+++) euro is mentioned. For energy neutral houses the increase amounts, by incomes above 27,000 euro, 18,000, 20,500, 24,000 en 29,000 euro respectively compared to less energy economical labels D, E, F and G. In the Netherlands 6,000 euro (3%) is paid extra for houses with a green label, and these are sold 24 days earlier than those without label. In California 34,800 dolar (9%) is paid extra for houses of 400,000 dollar with a green label than those without label. References The Private Houses Guarantee Fund (in Dutch: Waarborgfonds Eigen Woningen (WEW)) uses at awarding the National Mortgage Guarantee (in Dutch: Nationale Hypotheek Garantie (NHG)) the by NIBUD determined interest cost percentages for mortgage provision, that since 2007 is recorded within the Mortgage Financing Behavior Code (in Dutch: Gedragscode Hypothecaire Financieringen), according to the complyor-explain principle. From 1 August 2011 an extra mortgage financing may be provided by the Mortgage Financiers Contact Organisation (in Dutch: Contactorgaan Hypothecair Financiers (CHF)) in case of energy saving measures within the house, and for a house with a so called A-label. For 2011 these amounts are 3,500 euro for a house with an energy label A, 5,000 euro for a house with an energy label A+ and 8,500 euro for a house with energy label A++. Due to the lower energy costs of energy neutral houses, at incomes above 27,000 euro, extra mortgage financing may be provided of 18,000, 20,500, 24,000 en 29,000 euro compared to the less energy economical labels D, E, F and G [NIBUD].

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Within the Mortgage Financing Behavior Code (in Dutch: Gedragscode Hypothecaire Financieringen) the mortgage loan capacity for energy saving houes with an A-label is in 2011 increased with 6,500 euro. With the Housing Expenses Calculator (in Dutch: Woonlastencalculator) Bouwfonds has calculated the mortgage increase for A++ and A+++ label new built houses on 20.000 euro [BNG Van de Griendt]. Buyers pay 3 percent as an average more for a house with a green label (A, B, C) compared to an equal house with a red label (D, E, F, G). Label improvement investments (year of construction, selling price average in euro) amount 7,880 euro for an in between house from F to B (1946-1964, 217,000), 13,400 euro for a semidetached house from F to B (