EU-ASE featured in Energy Efficiency Magazine 2020 – EE and Economic Recovery

Energy Efficiency in Recovery Plans gives Europe an ace up its sleeves for both today’s and tomorrow’s challenges

by Monica Frassoni, President of the European Alliance to Save Energy (EU-ASE)

 

Crucial for climate mitigation, energy efficiency should be a key focus area in Member States’ stimulus programmes. This would greatly benefit the bloc’s economy, while setting the EU on the path to becoming a leading player in global markets.

European Union governments are in the process of designing massive stimulus packages to sustain socio-economic recovery following the devastating impact of COVID-19. The plan is to develop spending programmes large enough to bring the economy back on track, while at the same time ensuring that investments are aligned with Europe’s sustainable economic growth strategy as outlined by the European Green Deal.

Against this backdrop, it is useful to look back at the last time when major public stimulus plans were implemented: the global financial crisis of late 2008. As IEA’s Fatih Birol has rightly recalled, the extra spending on clean energy following the 2008 crisis contributed positively to economic recovery. Recovery was also made possible through energy efficiency programs which supported a construction sector hard-hit by the crisis. However, that recovery was energy and carbon intensive: global CO2 emissions declined by 400 million tonnes in 2009, but they rebounded by 1.7 billion tonnes in 2010 in the sharpest upswing in history. This cannot be repeated in a decade which is crucial to mitigating the effects of climate change and preventing the irreversible effect of dramatic temperature rise. This is even more true for Europe, since the bloc has pledged to achieve climate neutrality by 2050. The EU needs to learn from what happened with the last crisis and show the world how to pursue recovery while cutting energy consumption and related emissions.

Here are a few reasons why energy efficiency policies should be among the key areas of national and European stimulus programmes.

First, energy efficiency is paramount for climate mitigation: through existing technologies, it is possible to reduce energy consumption, increase the efficiency of the entire energy system and accelerate the integration of renewables. According to the IEA, 76% of the European greenhouse gas emission reductions required to keep temperature increases below 1.5°C must come from energy efficiency.

Secondly, from an industrial point of view, energy efficiency has great added value as its value chain is deeply European. In fact, Europe hosts some of the most innovative and successful energy efficiency companies in the world. The members of the European Alliance to Save Energy are global “champions” that export technologies and drive innovation. Hundreds of other players, especially small and medium-size enterprises (SMEs), also operate in this field locally across the continent.

Investing in energy efficiency also means investing in European innovation, especially when it comes to the construction sector. According to data from the European Patent Office, green construction-related patent filings have tripled in a little over a decade. These include technologies for energy-efficient insulation, “green” lighting, and incorporating renewable energies in buildings.

If Europe develops a technological leadership in energy efficiency, it will have a strong competitive advantage helping with access to global markets. Indeed, innovations developed in Europe and investments in more efficient and ecologically friendly buildings will pay back quickly with dividends and millions of well-paying, local jobs.

This explains why energy efficiency is a ‘must have’ in government stimulus programmes. EU Heads of State and Government have agreed to provide the Union with the necessary means to address the challenges posed by the COVID-19 pandemic and decided to mobilize 750 billion EUR to be committed by end of 2023. Member States should seize this opportunity and invest without hesitation in efficiency projects at national and local levels.

While the 30% climate target for the expenditure of these resources is a step in the right direction, EU governments should agree on clearer rules and stringent green conditionalities for qualitative use of recovery funds. Additionally, resources should be earmarked for investments in sectors with high potential, like construction.

It is time for Member States to fully implement the energy efficiency first principle to avoid new costly energy infrastructure that would jeopardise EU efforts to reach climate neutrality by 2050. Finally, Members should modernize their economies to increase resilience and tackle climate change impacts without delay

This would bring great economic and social benefits in the short term and contribute to protecting the environment in the long term.

 

About the magazine

The EE Magazine promotes energy efficiency by compiling short articles from renowned international energy experts, showcasing the latest innovations and achievements in this sector.

This year special edition, which focuses on the role of energy efficiency in COVID-19 economic stimulus programs, as well as the climate benefits of efficiency, was launched by the EE Global Alliance (EEGA) during a Climate Week NYC webinar organised by the Alliance to Save Energy and the Business Council for Sustainable Development.
Access the full EE Magazine Special Edition on EE and Economic Recovery

The great potential of non-residential buildings and how to tap into it

Decarbonising non-residential buildings is crucial to meet Europe’s carbon neutrality goal by 2050. To do so, and in view of the upcoming Renovation Wave, Member States should focus on the ambitious implementation of the EPBD and produce renovation strategies targeted also to this sector.

There are many reasons why making also non-residential buildings energy efficient should be among the priorities for the European Union and its Member States. The share of non-residential buildings in the total EU building stock is just 25%, but they require in average 55% more energy than residential buildings. Take Germany, for example, non-residential buildings (excluding industry and trade) are the smallest group in terms of numbers, at around 2.7 million units. However, due to their larger area per building they represent the second largest group in terms of building energy consumption (36%).

Decarbonising non-residential buildings is advantageous because, due to their nature, ownership structure and the high energy demand schools, hospitals and offices are ideally suited to help shape important paths for a future-oriented energy system based on energy efficiency, digitalisation, and an increasing role of “prosumers”.

Indeed, in 90% of cases, the energy efficiency potential of those buildings can be realized economically within their life cycle. The technologies required for this have been available for a long time and are constantly being enhanced by the industry. These include systems for energy-efficient management of indoor air quality, thermal comfort, integration of renewable energies, electromobility, as well as for workplace management. 

In addition to the energy-efficient renovation of the building envelop, investments in building automation technologies offer savings in energy and cost of around 30%, with payback periods between 6 months and 3 years. 

To achieve these figures, all technical systems in a non-residential building should be coordinated to go beyond their individual functions in order to optimize the energy productivity. This can be done through the harmonization of demand and supply energy flows, and the proactive management of thermal and electrical storage. Doing so would enable the integration of renewables even on a small scale as well as the application of various demand side management strategies.

In this perspective, a coherent modernization and digitalisation of the energy infrastructure of non-residential buildings will support the transformation of the energy system and the active implementation of the EU’s climate protection policy. The advancing digitalisation in the building sector will be the determining pathfinder for more energy efficiency in the future and will pave the way for grid-interactive efficient intelligent buildings. 

Smart buildings integrate technology and equipment to proactively predict faults, monitor performance in real time, and provide predictive insights regarding building systems and facilities, including power management, energy usage, and occupant comfort.

The revised EPBD set out a clear path towards achieving a stock of low and zero-emission buildings in the Union by 2050. This path is based on national roadmaps with intermediate targets and progress indicators, with public and private funding and investment. An ambitious EPBD implementation and financially sound renovation strategies for non-residential buildings are needed to kick-start the Renovation Wave. 

In this context, buildings should no longer be considered as pure energy consumers but as active players and dynamic assets in the future, climate-neutral energy system.

 

This article was written by Bonnie Brook, Vice-chair of the Board of the European Alliance to Save Energy and Senior Manager Industry Affairs at Siemens, and Volker Dragon, Senior Manager Industry Affairs at Siemens.

Recover Europe? Renovate buildings!

by Peter Robl, Public Affairs Manager Eastern Europe at Knauf Insulation & Martin Hojsík, Member of the European Parliament

This op-ed was published on CEEnergyNews


Building renovation needs the EU’s support and will help recover the economy in return. European leaders need to deliver efficient incentives soon.

Building renovation is a key element of achieving Europe’s 2030 and 2050 decarbonisation targets. The COVID-19 related quarantine and the current summer heatwaves across Europe have underlined the importance of quality and energy-efficient buildings to deliver safe and healthy housing and workplaces. Europe needs to increase the generally low renovation rate, yet the economic impacts of the COVID-19 crisis will further push the rate down.

The slowdown in renovation activity will result from a decline in investor confidence. Who would not delay insulation of their home by a year or two, when they had lived without insulation for the last ten? Who would provide a loan for renovation if repayments are not secured?

Construction output tends to suffer from economic hick-ups longer and harder than the rest of the economy. After the crisis in 2008, GDP and industrial production returned to growth as early as 2010 in many countries, while construction output continued to fall year after year until 2014 (as illustrated by the Slovak case – see chart below).

 

 

European leaders have the power to help economic recovery, decarbonisation and housing quality of EU citizens at the same time. Delivering efficient incentive mechanisms aimed at building renovation and delivering them soon is required.

They have plenty of opportunities. Many countries struggle to manage spending from the current cohesion programs (2014 – 2020) in a number of areas. Re-allocating the funds to building renovation programs where demand is high is a sensible solution and an alternative to leaving the money on the ground. Swift finalisation of the MFF discussions will enable Member States to seal Partnership Agreements and launch new Cohesion funding (2021 – 2027) without much delay. The Next Generation EU fund intends to help Europe with green and digital transitions and should, therefore, include programs aimed at building renovation.

Lessons learned from previous periods need to be taken on board to ensure good results. Visegrad experts have pulled their 15 recommendations on more efficient use of the 2021-27 Cohesion Funds that apply to any other EU or national funding, too. Experts call, among other things, for a better reflection between allocation and investment need. They also say that “more developed regions” need access to the funding, too – building owners, both public and private, need to be motivated to perform a renovation and to perform it with higher ambition and quality, regardless of how developed their region is. Moreover, they suggest excluding renovation from state aid rules and streamlining public procurement to a lean and effective process as this would increase the renovation uptake.

But are the Central and Eastern European Member States actually ready to deliver building renovation? In fact, and contrary to their climate policy attitudes, they are. Just a few examples. Romania is just about to launch subsidy programs for both single-family homes and public buildings. Bulgaria has a successful track record with a program for a multi-apartment building renovation that is now on hold due to budget issues. In Slovakia, renovation projects of municipal buildings worth more than 100 million euros are ready as they have applied but not received subsidies from an EU Fund program. Poland is starting a Clean Air Program aimed to combat air pollution. The Czech Republic has a positive experience with their New Green Savings, a program delivering quality renovation of 8,000 single-family homes a year. Croatia seeking funding for multi-apartment and public building renovation programs, as well as for buildings in Zagreb damaged by the March 2020 earthquake.

Supporting the quality renovation of buildings delivers several benefits. It goes directly to builders, the citizens. Not only does it control the damage to the decline of construction output, but also helps recover the economy. It turns private savings into investments and economic activity. It triggers domestic demand that is catered to by small local construction companies across all regions of Europe evenly. Therefore, renovating buildings is a key tool to support the EU’s socio-economic recovery after this crisis, and leaders and governments should act to make this happen.

 

Energy efficiency: green recovery ‘made in Europe’

by Monica Frassoni, President of the European Alliance to Save Energy (EU-ASE)

This article featured in the summer 2020 edition of European Energy Innovation magazine


The Covid-19 pandemic is highly impacting our societies and is a major shock for the European and global economy. In this difficult context, the European Union has the opportunity to relaunch its economy guided by its long-term climate commitments, namely becoming climate neutral by 2050, while at the same time providing support to its many citizens who suddenly lost their work and income.

The recovery packages being prepared should not only aim at countering the economic damage caused by the COVID-19 pandemic. They should prepare the ground for a more prosperous, resilient, and sustainable future for our continent and the world.

Energy efficiency can help policymakers address the multiple challenges we are all faced with.

Energy efficiency is paramount for climate mitigation. Through existing technologies, it is possible to reduce energy consumption, increase the efficiency of the entire energy system and accelerate the integration of renewables. According to the International Energy Agency (IEA), 76% of the European greenhouse gas emission reductions required to keep temperature increases below 1.5°C must come from energy efficiency.

In the European Union, energy efficiency is one of the pillars of the European Green Deal. In the recent proposal of a European Climate Law, energy efficiency is part of the defining elements of the EU’s trajectory towards climate neutrality by 2050. Along the same lines, the current political focus on buildings renovations indicates that the EU institutions recognize the economic, social and environmental impact of a transition towards a highly efficient building stock. Last but not least, the European Commission recently highlighted in its EU Industrial Strategy that reducing emissions across industry, namely the most energy-intensive ones, will greatly depend on the wide implementation of efficiency measures and on the Energy Efficiency First principle.

When it comes to industrial strategy, economic growth and job creation, indeed, the full application of the Energy Efficiency First principle to all energy policymaking, planning and investments, can be a real change maker for the energy efficiency value chain and, as a consequence of this, for the European economy.

Our continent hosts some of the most innovative and successful energy efficiency companies in the world. The members of the European Alliance to Save Energy are global “champions” that export technologies and drive innovation. Hundreds of other players, especially SMEs, operate in this field across Europe.

Read the full article in European Energy Innovation

Ending energy poverty starts with efficient homes

by Monica Frassoni, President of the European Alliance to Save Energy (EU-ASE)

This op-ed was published on CEEnergyNews


The upcoming Renovation Wave initiative will be crucial to address how energy poverty can be eradicated through accelerated renovation rate across the EU.

Today around 11 per cent of the EU population – 54 million Europeans, is affected by energy poverty. With real energy prices up by 70 per cent since 2004, energy is becoming a luxury item across the European Union, where 75 per cent of the current building stock has no or very weak energy performance requirements.

In 2016 alone, roughly 50 million Europeans were unable to keep their home warm. This means 1 European out of 10. In some countries, the situation is much worse, for example in Bulgaria where 46.5 per cent of people are unable to keep their homes adequately warm in winter. Similar numbers were reported regarding the late payment of utility bills or the presence of poor housing conditions. Recent data show that more than a third of the Greek population (35 per cent) struggles to keep up with their payments, the same is true for many Bulgarians (34 per cent), Croatians (30 per cent), and Romanians (29 per cent).

This already bad situation has worsened because of the impact of the COVID-19 crisis, as the confinement measures adopted by national governments have made the energy needs of residential consumers grow. Moreover, many energy-poor people are the ‘essential workers’, facing low pay and risk as they have to keep working to keep essential services running. Lower-income households also pay proportionally more for energy. Due to the economic downturn caused by the crisis, many people also lost their job and families saw their income swiftly decline, with a new or increased difficulty in paying their energy bills.

A key step to tackle energy poverty is renovating buildings to make them more energy-efficient and would lower residents’ energy bills. In the case of low-income households, who are forced to spend a large share of their income on energy bills, energy efficiency measures allow them to live in a more comfortable and healthy environment while saving money they may need for other basic purposes, like food or healthcare.

There are few policy actions that the EU and national authorities should do immediately to boost buildings renovation and eradicate energy poverty.

First, Member States must speed up the implementation of existing legislation, starting with the Energy Performance of Buildings Directive (EPBD), which requires them to submit long-term renovation strategies. The deadline to transpose the directive was 10 March, but only seven Member States have done so to this date.

Governments should also introduce renovation grants and fiscal incentives. This would allow low-income households to renovate their homes for free or very cheaply. To this aim, it is key that a consistent part of the COVID-19 recovery plans is allocated to boosting building renovation at a national level. A quota of EU funds should also be directed towards renovation efforts, through the EU budget, the Just Transition mechanism and the recently announced recovery package (Next Generation EU).

At the EU level, the Commission has done very little so far to tackle energy poverty. In its Green Deal communication of December 2019, it only proposed to review existing laws which are not delivering, set up a platform for stakeholders, and provide “guidance” on energy poverty to Member States.

The upcoming Renovation Wave initiative will, therefore, be crucial to address how energy poverty can be eradicated through accelerated renovation rate across the EU. Boosting renovation to 3 per cent annually (from one per cent at present) would slash energy demand in buildings by 80 per cent, lifting millions of residents from energy poverty, while at the same time drastically cut related emissions.

Minimum standards legislation for existing buildings, as proposed by the energy committee of the European Parliament in its initiative report, would also boost renovation efforts.

Finally, the current energy efficiency targets must be increased and made binding at EU and Member State level.

If rightly implemented, these policies would have a tremendous social impact delivering to households across Europe increased comfort, cleaner indoor and outdoor air quality, reduced energy bills and better and more qualified local jobs.

It is the time for Europe to prove that the Green Deal pledge to “leave no one behind” is not just a slogan but a concrete political plan and that a just transition to a climate-neutral society is possible and desirable.