The neighbourhood energy system as the catalyst of the integrated approach
In most neighbourhoods the energy transition is the catalyst of the integrated approach: there is a legal task, there is budget, and the street is opened up anyway. Four linked tasks shape a neighbourhood’s energy system — grid capacity, energy reduction, generation on homes and collective generation — together worth over €53 million in societal value per model neighbourhood.
First reduce demand, then generate — within what the grid can handle
Together the four tasks form the route to gas-free, in that order: grid capacity as the silent precondition, energy reduction through insulation (the largest value item at around €33 million per model neighbourhood), generation on existing homes and collective generation for the neighbourhood. The smart link: insulation brings ventilation for health and roof greenery for cooling along with it.
To the four tasksGrid capacity as the silent precondition
Rising electricity demand puts the current grid under pressure. Large-scale generation — from solar parks, for example — has to be transported, but the grid is often not built for it. New energy infrastructure that regulates this volume and the peaks is essential for a stable and sustainable system.
A medium- and intermediate-voltage substation costs a model neighbourhood around €1 million per year, including space and maintenance. No separate societal value stands against that: it pays off in the other energy tasks, which do not get off the ground without sufficient grid capacity.
Energy reduction in existing buildings
A building loses most heat through the roof, walls, windows and floor. Insulation makes the home more energy-efficient, so less CO₂ is released when heating and energy costs fall. A smart thermostat matches regulation to the resident’s needs and limits unnecessary use.
Insulation is the largest value item of the energy system: around €33 million in societal value per model neighbourhood against around €7 million in costs — over €4.50 per euro invested. The task is applied to 80% of homes built before 2000 and 20% built after; 30% of the insulation cost can be borne by central government. Biobased insulation material stores additional CO₂.
Generation on existing homes
With solar panels, solar boilers, thermal storage and (hybrid) heat pumps, existing homes can move off natural gas. That reduces the CO₂ emissions of buildings and lowers energy costs. The installation can be carried out by local parties, which supports neighbourhood employment.
Generation on and in existing homes delivers a model neighbourhood around €8.2 million in societal value against around €4.9 million in costs. In the implementation plan this step belongs directly after insulation: first reduce demand, only then does generation pay off fully.
Collective generation for the neighbourhood
Making a neighbourhood fully gas-free requires collective generation alongside rooftop panels. Energy for the neighbourhood comes sustainably from a solar park, wind park, geothermal source or district heat, using residual heat from industry.
Collective generation delivers a model neighbourhood around €12 million in societal value against around €8.7 million in costs. Because most neighbourhoods have limited space, an average of a solar park and a wind turbine is assumed, not both at once.
Value and cost per task
The four linked tasks of the energy system for a model neighbourhood of around 2,500 households, with the societal value and costs from the Societal Impact Analysis.
| Linked task | Societal value | Cost |
|---|---|---|
| Grid capacity (precondition) | pays off in the tasks below | ±€1 mln per year |
| Energy reduction existing buildings | ±€33 mln | ±€7 mln |
| Generation on existing homes | ±€8.2 mln | ±€4.9 mln |
| Collective generation for the neighbourhood | ±€12 mln | ±€8.7 mln |
Amounts per model neighbourhood; grid capacity is an annual precondition without its own benefit item. Source: Societal Impact Analysis, Transform Zuid-Holland.
Linking opportunities with other transitions
The energy system does not stand apart from the rest of the neighbourhood. Opening the street for insulation or a heat network links logically to ventilation for a healthy indoor climate, roof greenery for cooling in hot summers, and alignment with climate adaptation so that rainwater and greenery reinforce the same intervention. That way every euro returns multiple value.
Method and source
The figures come from the Societal Impact Analysis of the Transform approach: a value and cost picture per linked task for a model neighbourhood, built up from cost-benefit analyses and comparable projects. Gas price rises, inflation and interest are not included. The full method is available at buurttransform.nl (in Dutch).
Frequently asked questions
Where does a neighbourhood energy implementation plan start?
With grid capacity and energy reduction: first test what the electricity grid can handle, then lower heat demand through insulation — only then does generation pay off fully.
What does taking a neighbourhood off gas cost and deliver?
The three value tasks together represent over €53 million in societal value per model neighbourhood against around €20.6 million in costs, alongside around €1 million per year for grid infrastructure.
Why does grid capacity set the pace?
Solar panels, heat pumps and charging points require a grid that can absorb peaks; without reinforcement every next step stalls.
Why does insulation come before generation?
Insulation lowers heat demand first; on a lower demand solar panels and heat pumps then pay off fully, at a lower cost per tonne of CO₂ avoided.
Which linking opportunities does the energy system offer?
Insulation pairs with ventilation for health and roof greenery for cooling; alignment with climate adaptation lets rainwater and greenery reinforce the same street intervention.
Frequently asked questions about the energy system
According to this approach around €8.2 million per model neighbourhood against around €4.9 million in costs; this step comes directly after insulation in the implementation plan.
Collective generation delivers around €12 million in societal value against around €8.7 million in costs per model neighbourhood.
The figures apply to a model neighbourhood of around 2,500 households, built up from the Societal Impact Analysis.
To 80% of homes built before 2000 and 20% built after 2000; 30% of the insulation cost can be borne by central government.
A medium- and intermediate-voltage substation costs a model neighbourhood around €1 million per year; it has no benefit item of its own because it pays off in the other tasks.
Insulation is the largest value item at around €33 million against around €7 million in costs, which is over €4.50 per euro invested.
Because most neighbourhoods have limited space, an average of a solar park and a wind turbine is assumed, not both at once.
Biobased insulation material stores additional CO₂, on top of the energy savings from the insulation task.
Exploring an integrated neighbourhood approach for a municipality or province? contact@neweconomy.eco — or visit the platform at buurttransform.nl (in Dutch).