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OVERVIEW - Building Renovation Strategies: Burden or Opportunity?

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OVERVIEW - Building Renovation Strategies: Burden or Opportunity?

Estimates suggest that it could take up to a year for Member States to develop a renovation strategy, under the Energy Efficiency Directive. With the reporting deadline less than a year away, April 2014, it is high time Member States take action and start this process. Find out more about the steps to developing a renovation roadmap.

Here you can download the PDF version of this Overview article (see below under 'Additional documents').

Enjoy reading, and feel free to send a comment of your own!


Energy Efficiency Directive (EED) and what it means for existing buildings

With the ink on the Energy Efficiency Directive well and truly dry since November 2012, now comes the important part: delivery. As a result of the 30 Articles and 14 Annexes in EED, Member States now have a raft of measures to implement, targets to achieve and reports to produce. Some of these, such as the requirement to submit National Energy Efficiency Action Plans, are a continuation from the previous Energy Services Directive which, together with the Cogeneration Directive, has been replaced by EED. Others, such as the requirement for Member States to set national energy efficiency targets, introduce energy efficiency obligations and produce national building stock renovation strategies, are entirely new.

As a rule, we don't like being told what to do. This applies to governments and businesses as much as to individuals. In the case of EU Directives, we've seen a lot of dragging of feet when it comes to implementation of, say, the Energy Performance Certification requirements in the Energy Performance of Buildings Directive, or the submission of national definitions of nearly zero-energy buildings. It remains to be seen whether Member States collectively pick up the suite of initiatives in the latest directive with enthusiasm and a commitment to deliver.

It begs the question as to why Member States, having all agreed to the final text, presumably on the basis that Directives deliver goals of strategic importance to the EU and its constituent members, seem so reluctant to deliver the goods. Can it be that, for example, developing a national strategy to renovate existing buildings, as required by EED Article 4, is perceived as just another Brussels-imposed burden? Or is it a timely wake-up call to governments to realise the multiple benefits that renovation can bring, including stimulating jobs, generating economic growth, improving living & working conditions, improving energy security and cutting the energy bills for households, business and the public sector alike in a sector that has been largely overlooked to date?


Front Runners

Some Member States and regions have been quicker to react than others. At the World Green Building Council’s event in Brussels (April 2013), several presentations covered the state of play across Europe. For example, Ireland and the Basque Regional Government in Spain published their Housing Renovation Roadmaps before EED came into force. These and other examples are described in Renovation Roadmaps for Buildings, a report by The Policy Partners for EURIMA. The Basque roadmap discusses various options for financing the required investment, including pooling resources from public and private sources. The Irish roadmap identifies a number of capacity building measures that need to take place prior to delivering the strategy’s ambition of improving the average Building Energy Rating of dwellings from D to A:

  • Use existing skills and increase the capacity to enable widespread deployment of energy efficiency upgrades;
  • Develop training schemes and installation standards for installers, and assessors of energy efficiency and low/zero carbon measures;
  • Educate residents on this long term vision including adequate marketing by suppliers;
  • Promote further education and jobs in the energy sector.

Denmark started the consultation process on its renovation strategy in September 2012, while France's ongoing Plan Bâtiment Grenelle (rebranded as ‘Plan Bâtiment Durable’) builds on efforts over recent years to realise savings in the existing building sector. Germany made a commitment, in its National Energy Efficiency Action Plan, to achieve an 80 % reduction in primary energy use in the building sector by 2050, with the aim of achieving an almost climate-neutral building stock.

Industry is also active. In Spain, the industry-led Grupo de Trabajo sobre Rehabilitación (Rehabilitation Working Group) has now published the second version of its action plan for a new housing sector. The group estimates that renovating 10 million residences between now and 2050 would generate around 150 000 jobs, while delivering an 82 % reduction in CO2 emissions.


Guidance for Member States

For those Member States yet to take the plunge, the Buildings Performance Institute Europe (BPIE) published its "Guide To Developing Strategies For Building Energy Renovation" earlier this year. This sets out the process for developing a renovation strategy in an easy step-by-step format, as summarised in the diagram below. BPIE estimates that it could take up to a year for Member States to develop a renovation strategy. Given that the reporting deadline is less than a year away, April 2014, it is high time that the process is commenced.

The Guide identifies a number of ways in which the energy saving investments can be financed:

  • Secure sources of finance, including those identified in EED Article 20 and EU/international funding sources, and develop mechanisms that effectively leverage private capital;
  • Take into account the monetary value of co-benefits (e.g. health, employment) in public funding decisions;
  • Develop funding vehicles, tailored to specific market segments, that provide a simple (“one-stop-shop”) and commercially attractive source of finance for deep renovation;
  • Develop mechanisms to encourage deep renovation via third party financing, e.g. ESCOs, EPCs;
  • Strengthen energy/carbon pricing mechanisms to provide the right economic signals;
  • Remove fossil fuel subsidies to eliminate perverse incentives that discourage investment;
  • Consider bonus-malus mechanisms, e.g. property taxation systems (which reward high energy performing buildings while penalising poorly performing ones) and energy pricing;
  • Design Energy Efficiency Obligations that encourage the delivery of deep renovation.


What’s the Potential?

If Member States collectively seize the opportunity to put strategies in place that lead to the renovation of the existing EU building stock, the potential benefits are enormous. A BPIE report “Europe’s Buildings Under The Microscope”, published in 2011, modelled several renovation scenarios. Under the most ambitious scenarios, the net present value benefits to the EU as a whole are in excess of €10 000 billion, around 1 million jobs on average are created throughout the period to 2050, resulting in CO2 reductions in excess of 90 %. Surely, these are compelling figures that should mobilise government, industry and other stakeholder effort in preparing and delivering effective national building renovation strategies.