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.

 

EUSEW 2020 blog | Renovation Wave: the immediate and powerful recovery button at the fingertips of EU policymakers

by Bertrand Deprez, Vice President EU Government Affairs at Schneider Electric & Céline Carré, Head of European Public Affairs at Saint Gobain, members of the European Alliance to Save Energy (EU-ASE)

This article was published in the blog of the EU Sustainable Energy Week 2020


There is one clear reboot button at the fingertips of European policy-makers, the label underneath carries the tag ‘Renovation Wave’. Rather than causing a re-start, bringing back an older configuration, pressing this button would put Europe on a new path to sustainable growth, with its citizens at the heart.

The European Union should therefore set aside any hesitation and reply with a straight ‘Yes’ to the question ‘Are you sure?’ that we usually get when rebooting our devices. ‘Yes’, because with 36% of CO2 emissions and 40% of energy consumption, buildings represent a major potential for Europe’s climate neutrality pathway. ‘Yes’, as fuelling renovation activities across Europe will translate into an immediate economic stimulus for the whole construction value chain, the biggest industrial employer in Europe. ‘Yes’, because the Renovation Wave will deliver comfortable and smart buildings that our citizens desire. Finally, ‘Yes’, as it will significantly contribute to the EU’s climate and energy targets and help to restore social cohesion in societies affected by the crisis.

Alongside the first push, political willingness will still be needed to give this wave the right shape and reap its promised benefits:

  • Firstly, the overarching goal: a clear strategy built on the long term goal of reaching a net zero-carbon building stock by 2050, should act as a catalyst to coordinate the efforts of the value chain and reach sufficient depth of renovation. Decarbonizing the existing stock will only happen with the right combination of making our buildings ultra-efficient (based on energy efficiency first) and relying on local renewable generation.
  • Secondly, the rate of renovation: political impetus such as the use of trigger points, minimum energy performance standards and the phase out of the worst performing buildings should be deployed to bring the renovation rate across Europe to 3% per year.
  • Thirdly, the scalability, which will come from simple and stable renovation programmes and related financing, e.g. via the setting of a dedicated Renovation Fund for All Europeans, stable tax incentives for renovation and leveraging of private finance. At the same time, there is a need to make full use of the potential of digitalization to improve buildings’ design and optimize their performance. It is time to tailor such initiatives in a segment-specific approach, encompassing both building renovation and retrofit of the technical building systems. With the current COVID-19 outbreak, Europe should seize the opportunity to renovate the less occupied public and non-residential buildings as well as homes. Citizens who spend more time indoors want to enjoy comfortable and healthy spaces.

A high impact renovation wave will be the key to creating hundreds of thousands of jobs across the continent. Research, innovation, industries: Europe already has all the ingredients to power this motor for the recovery. It just needs to press that button.

 

EUSEW 2020 blog | Smart and the city: energy efficiency and sector integration for a #carbonneutralEU

by Julie Kjestrup, Interim Head of Group Public Affairs and Sustainability at Danfoss and Board Member of the European Alliance to Save Energy.

This article was published in the blog of the EU Sustainable Energy Week 2020


In the next few years, policy makers will have to rethink urban planning and market designs. For the cities of tomorrow to be sustainable, sector integration and energy efficiency must be at the heart of the policy framework.

The COVID-19 pandemic has increased the urgency of a Green Deal framework that delivers, to ensure that we do not go back to where we were but forward to where we want to be: to a sustainable society, protecting our climate and creating future-proof jobs and growth.

Leveraging urban efficiency is essential to getting there. Cities provide unique opportunities for energy and resource efficiency, using synergies between the elements of the urban energy system. This makes them ideal frontrunners to showcase new technologies and create attractive, future-proof places to live and work.

The key is to be smart in the way we use our (future) energy: this means smart about how much energy we consume in the first place. In other words: energy efficiency first. Capturing the full potential of energy efficiency will allow a faster roll-out of renewables and lead us on the most cost-efficient path to carbon neutrality. In fact, recent research from Denmark shows that the extra costs for reaching Denmark’s new and ambitious 70% CO2 reduction by 2030-target can be significantly reduced by investing in existing energy efficiency technology in buildings and industries.

It also means smart about how we use, re-use and store our energy: through interconnections, integration and managing demand and supply in an efficient way we can stabilise our grid. We can use the excess heat from a nearby factory, data centre or supermarket to warm or cool houses, or to charge an electric vehicle. By creating synergies between sectors like buildings, industry, power generators and transport, sector integration is integral to reach decarbonisation.

According to a forthcoming research from Navigant, implementation of existing technology solutions for sector integration, energy efficient heating and cooling of buildings and electrified transport can bridge about half of the gap needed to reach the 1.5°C target in urban areas. At the same time, these reductions will contribute with more than one-third of total needed national emissions reductions in Europe. It can also save money. The Heat Roadmap Europe studies show that utilising energy system synergies and exploiting energy efficiency can save Europe 13% of primary energy use and reduce total energy-system costs by approximately 70 billion euros per year compared to other decarbonisation scenarios.

The future is here already: EnergyLab Nordhavn is an important part of Copenhagen’s overall goal of being climate neutral by 2025. A ‘living lab’ on efficient and smart sector integration, it will house 40,000 residents and 40,000 workplaces when done. Going forward, projects like this must become norm, and that means integrating our own thinking in terms of levers of the future energy policy framework.

The Green Deal framework enables that by putting a holistic vision forward that can create a more resilient, efficient and consumer-based system, and add jobs and growth along the way. To make this happen, policy makers will have to rethink urban planning and market designs. For the cities of tomorrow to be sustainable, sector integration must sit at the heart of the policy framework.

Additional information:

https://www.danfoss.com/en/about-danfoss/insights-for-tomorrow/energy-efficiency/

https://www.danfoss.com/en/about-danfoss/insights-for-tomorrow/district-energy/