The European countries have long agreed to a common energy vision for 2050 by which date EU’s economy-wide emissions of greenhouse gases will have to be 80-95% lower than 1990 levels. The Commission’s Energy Roadmap 2050 specifies that EU’s building stock will need to reduce its emissions by 88-91%.
In view of such an ambitious target, the requirement under EU’s Energy Performance of Buildings Directive for all new buildings to be “nearly Zero-Energy Buildings” (nZEB) from 2021 onwards (and from 2019 onwards for public buildings), seems quite obvious. However, focusing only on what will be built in the next 30-35 years misses the wider picture. Of all the buildings that will be still standing in Europe by 2050, almost 70% have already been built. It is therefore essential that the necessary policy and funding environments and instruments that will facilitate the gradual renovation of the existing building stock in a cost-effective manner, are created.
It is important to have an understanding of the scale of the effort and costs required towards the energy renovation of the EU’s building stock: Implementing deep renovation of the approximately 24 billion m2 of the useful floor area in the EU and will require between 600 and 900 billion euro investment at present value. Assuming that 3% of this space should be renovated annually, total annual investment needs amount to around 20-30bn euros. Experience with current and recent relevant funding schemes such as those by the European Investment Bank, the European Bank for Reconstruction and Development and Germany’s KfW shows that a leverage factor of 4 to 5 can be expected realistically, therefore the necessary annual funding support amounts roughly to 4-7 billion.
The Energy Efficiency Directive introduced in 2012 an important new dimension by requiring Member States to set out national strategies which incentivize investments into the deep renovation of the building stock. However, the existing national strategies so far don’t seem to deliver expected results, while 6 out of 28 Member States have yet to publish their strategies, more than 6 months after the Commission’s deadline. More effective guidance from the Commission to member states on that matter would be welcome, maybe even with a request for corrective actions to be taken.
To achieve the required long term transformation of the existing building stock, more detail and coherence in policy packages and support measures is needed to provide effective incentives to invest in deep renovation:
– Clear targets until 2050 for the energy performance of the building stock are required for developing target-oriented policy packages.
– Definitions (eg of what nZEBs or deep renovation are) and targets should be clarified and consistent across all member states.
– A bundle of instruments (rather than a single one) is needed to properly address the heterogeneous target groups and technology specific barriers.
– Data availability and monitoring as well as effective compliance mechanisms need to be enhanced.
Looking into the future, we may need to expand the scope of view regarding nZEBs from individual buildings to neighbourhoods or even cities. Crucially, synergies between the building and power sectors need to be actively sought as buildings not only consume energy but should also produce or store it in order to match electricity demand and supply not (only) at the annual level but essentially in real-time.