It’s four months since European Leaders agreed to reduce their countries’ gas demand by 15% [1], and two months since they agreed on a similar target for electricity demand (10% total reduction, with 5% during peak hours [2]). And it’s now the time to ensure the delivery of these targets.

As the pressure on European citizens and industries from high energy prices persists, the delivery of those targets becomes more than ever a matter of political leadership. Gas supplies from Russia are likely to fall next year while competition for liquified natural gas (LNG) supplies increases. Filling in gas storage ahead of next year’s winter might prove far more challenging [3]. We need a long-term solution.

The only option left is to act on the energy demand side. Reducing energy consumption would come with three substantial benefits. First, a permanent improvement to energy security. Second, lower carbon emissions. And finally, a shift in the state budgets, from short-term relief funds to capital investment on assets like better building stock and modern industrial processes.

Now is the time for leaders to use all the tools at their disposal to enable a substantial and sustained reduction of energy consumption. This includes setting up an industrial strategy and designing ambitious regulations. But it also requires galvanising efforts around skills and technical support in sectors where it is most chronically needed, like buildings retrofit and electrification. Next year is the European Year of Skills and offers a great opportunity to do so [4].

For the buildings sector, there are ample examples of good practices of investment in skills and advisory services like one stop shops [5]. Member States, industry and social partners can share and scale them to reduce energy consumption in buildings across the EU. But the industry needs more than incentives for innovation and public investments. Above all it needs a clear signal about the direction of travel. It is up for political leaders to do this through ambitious regulations, like minimum energy performance standards [6], while encouraging the sector to embrace modernisation and digitalisation.

This is the time for European leaders, social partners, and private sector stakeholders to think strategically about the practical delivery of energy saving targets as they pave the way towards green and digital transitions. 

Vilislava Ivanova
Senior Researcher
E3G

Sources:
1. European Council (2022). Member states commit to reducing gas demand by 15% next winter
2. European Council (2022). Council agrees on emergency measures to reduce energy prices
3. IEA (2022). Europe needs to take immediate action to avoid risk of natural gas shortage next year 4. EC (2022). Commission kick-starts work on the European Year of Skills
5. Renovate Europe (2022). Speeding up the delivery of renovation – skills
6. E3G (2022). High Minimum Energy Performance Standards for buildings

As we are drifting towards winter, I am struck by the gap between the urgency to protect European citizens from the consequences of poorly performing homes, and the reluctance of our leaders to decisively act on it. We are witnessing intense debates on the energy efficiency files under the Fit for 55 Package, and this is not nearly the end of it.

Asking citizens to adapt their behavior to mitigate the risk of gas shortages and subsidizing their bills seem to be the only political answer. Yet, we all know that solutions addressing only the symptoms will not help in the long run.

The solution to the cause is the EU Renovation Wave, however we cannot overlook the challenges to this. We need an additional 275 billion euros to finance it (1), and the acceleration of the rate and depth of renovation calls for coordination and new business models.

We have been sleepwalking on the issue for too long, hypnotized by cheap fossil energy hiding the leaks and waste of our buildings. It is not too late to change that.

It is our responsibility to help politicians join the dots between short- and long-term concerns. The equivalent of 1,7% of EU GDP was spent to mitigate the impact of the energy crisis so far (2). By contrast, financing the Renovation Wave would represent 1,5% of the GDP. Add to that jobs, health and productivity benefits, and a boost to our climate agenda.

It is also our responsibility to explain what renovation market actors need to be able to invest, train, and innovate. Building owners, manufacturers, banks, real estate and building professionals need visibility. This visibility is at the heart of the MEPS (Minimum Energy Performance Standards) proposal, a true renovation accelerator.

The best energy will always be the energy we do not need, thanks to the efficiency of our buildings.

We can help make this a reality.

by Céline Carré
Head of Public Affairs
Saint-Gobain

Sources:
1. Question 5 in FAQ on the Renovation Wave: https://ec.europa.eu/commission/presscorner/detail/en/qanda_20_1836
2.  Bruegel, 21/09/2022 and Europe’s Deepening Energy Crisis Pushes Bill to $500 Billion