Practices

Deep renovation of buildings: the long road for a win-win strategy

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The Energy Efficiency Directive (EED) 2012/27/EU defines deep renovation as a “refurbishment that reduces both the delivered and the final energy consumption of a building by a significant percentage compared with the pre-renovation levels, leading to a very high energy performance”. The EU Commission set up - for financing research projects proposing innovative solutions in the field of deep renovation - the target of 60% of primary energy savings.

 

The EED 2012/27/EU established that the EU members have to develop National Energy Efficiency Action Plans, aiming at defining a framework for the development of national energy efficiency strategies. The main contents of these national plans deal with strategies and measures for fostering energy savings, and the Member States set the targets and the energy efficiency measures to reach them. 

Furthermore, for the 2018’s Amended Energy Performance of Buildings Directive (EPBD 2018/844/EU), the requirement for Member States to prepares long-term renovation strategies (LTRS) has been moved from the EED directive to the amended EPBD (Article 2a). Along this modification, provision on LTRS matters have been pertinently strengthened and expanded (e.g. with measurable progress indicators and 2030, 2040 milestones).

 

What has been done so far?

A report by The European Commission Joint Research Centre (JRC) has evaluated, for 31 Member States, the compliance of the five requirements according to Article 4 of EED:

  • overview of the national building stock;
  • identification of cost-effective approaches to renovations relevant to the building type and climatic zone;
  • policies and measures to stimulate cost-effective deep renovations of buildings including staged deep renovations;
  • a forward-looking perspective to guide investment decisions of individuals, the construction industry and financial institutions;
  • an evidence-based estimate of expected energy savings and wider benefits.

The assessment of the national building renovation strategies has highlighted that, since 2016, twenty-three out of the thirty-one submitted strategies (74.2%) satisfactorily addressed the main elements of EED Article 4, with the remarkable aspect that almost no Member States reported plans following the "staged deep renovation" concept. The lack of a clear long-term vision, extended to the non-residential building stock, and of comprehensive renovation targets and issues beyond energy efficiency (as indoor comfort/air quality, impact on the construction sector and externalities), slows down investments and, as a negative consequence, the effective engagement of stakeholders.

 

In the same line, a report from the Project EmBuild, on the basis of the JRC report, identifies the main barriers affecting the deep renovation of the building sector. The report states that, while specific barriers can be identified in each country, fiscal and financial barriers were identified as the strongest that hinder deep renovation, with local authorities often lacking the technical skills necessary to apply for available funding (e.g. EU funds like Structural and Cohesion funds, EFSI).

 

The EmBuild report identifies also other key barriers:

  • complex financial schemes favoring large investments and unfavorable accounting rules;
  • complex or unclear legislative and regulatory requirements (e.g. no obligation to renovate existing buildings, no definition of deep renovation) and time-consuming administrative processes to renovate buildings
  • public procurement processes favoring price rather than quality are also a deterrent.

Some of the barriers highlighted in the report are relevant at all levels of government - national, regional and municipal - like limited access to finance or complex public procurement procedures, while others are particularly striking at local level, in particular, limited technical capacity and unfavorable accounting rules that don’t consider energy efficiency investments for renovation as investment but as an expense.

 

To be successful, national renovation strategies should support public authorities at all levels of government by including policies and measures tailored for them: municipalities should be involved in the process from the beginning and be asked to contribute with the knowledge of their market, their territory, and their own implementation capacity to ensure that the appropriate measures to remove the stumbling blocks to deep renovation are included in their national renovation strategies.

 

The renovation rate is indeed still far from the target of 3%, although the multiple benefits are quite clear to most of the stakeholders.

 

H2020 projects: innovative, cutting-edge and efficient solutions for Deep Renovation.

The overmentioned JRC Report illustrates also how Member States seem to neglect or undervalue the importance of R&D in the building sector, as only two national strategies included this dimension. The European Commission’s Executive Agency for SMEs (EASME) is supporting innovation in high energy performance buildings, through the Horizon 2020 program for research and innovation. Accelerating deep renovation has been the focus of 12 projects, that are analysing a wide range of solutions that aim to involve all stakeholders of the renovation process: providing holistic renovation packages through one-stop shops to encourage owners to optimise the energy performance of their buildings (TRANSITION ZERO), developing modular building components on a plug-and-play basis to carry out deep retrofits in six days (MORE-CONNECT), introducing innovative systems as augmented reality and 3D printing on the building site (P2Endure), testing prefabricated facades incorporating insulation, new windows and renewable energy systems (4RinEU), fully adopting BIM in the process (BERTIM, IMPRESS), increasing the knowledge and awareness of landlord and tenant (RentalCal, ENERFUND, iBRoad, ALDREN).

 

During the Sustainable Places Conference 2018, a dedicated workshop on the identification of main values and barriers has been organised by four H2020 projects. Against a higher technical and economic effort, deep renovation projects guarantee the increase of performances during time, in terms of real estate value, building lifetime and indoor environment (comfort, acoustic and safety).

 

Finally, initiatives as Renovate Europe are trying to, through promoting the energy renovation of buildings, reach a yearly 3% of renovation rate, providing analysis of the potential benefits and support for defining policy schemes in line with the needs of the building stock.

 

What does a net-zero pathway mean for the EU?

Adrian Joyce, campaign director at Renovate Europe, has clear ideas: “Demand for the private finance for energy efficiency (PF4EE) programme is significantly higher than expected. Energy renovation could become one of the biggest success stories of the next EU budget. What better way to reach out to EU citizens than by improving their health, comfort and well-being in their homes, their offices, their schools, where we spend up to 90% of our time, while simultaneously creating quality jobs for local SMEs, improving social inclusion through urban regeneration and skills development, and boosting European competitiveness through innovation and digitalisation?”.