Europe's trump card: mandatory energy renovation
In these dark and uncertain economic times, we Europeans hang on to the tiniest sliver of hope. So when a silver lining appears on the energy efficiency front, let’s rejoice:
“The current rate and quality of building renovation needs to be substantially scaled up in order to allow the EU to significantly reduce the energy consumption of the existing buildings stock by 80 %, relative to 2010 levels, by 2050”
This is right out of a resolution on the Energy Roadmap 2050 passed on March 14th, 2013, by the European Parliament. The 80% reduction target may make some MEPs uneasy. ‘Unrealistic!’ some will warn. Others will shriek.
The truth is this is just about the most pragmatic energy policy the EU could adopt right now. Energy-wise, Europe is in quite an unenviable position: it is highly dependent on oil and gas imports, and its energy dependence is only growing with each passing year.
Worse: most of this gas is imported from outside the EU. Central and Eastern Europe are especially dependent on Russian gas, with Austria getting 67% of its gas from Europe’s Eastern neighbour, Hungary 70%, the Czech Republic 88%, Poland 90%, and Estonia, Finland and Slovak Republic a full 100%! The situation isn’t much better in Southern Europe, with the majority of imports coming from Northern Africa and the Middle East, notably in Italy (65% of gas imports from these two regions), Spain (90%) and Portugal (100%).
With 38% of total European gas imports directly consumed by buildings in 2010, this is where the buildings sector can take centre stage.
Beyond gas, buildings energy expenditures gobble up a significant portion of GDP. Energy bills in the residential sector alone can add up to 4% of GDP in some IEA member countries (see chart)!
There is now a general consensus in the EU on the need to retrofit the 25 billion sq.m. of useful floor space, most of which was built before the first building energy codes were adopted. It’s also clear that with an energy renovation rate way below 1% – mostly shallow energy renovation at that – the EU will never achieve its 2020 target no matter how much tax payers money is poured into energy renovation.
The good news is that the necessary commitments are already in place, such as in Article 4 of the EED, with this requirement to:
“establish a long-term strategy for mobilizing investment in the renovation of the national stock of residential and commercial buildings, both public and private”
These few words have turned Brussels and other EU capitals into bubbling breeding grounds to imagine and discuss renovation strategies. Not a day goes by without a request from one of our member countries asking me about renovation best practices. I have but one answer: we only know of some individual good practices at reduced scales, with very small impacts. Scaling up deep renovation for national prime time is still something we need to invent all together.
Renovating the existing buildings stock needs to be considered in the broader economic context. In many European countries, the construction sector was smashed to smithereens when the real estate bubble burst – indeed, it got a beating even in countries where real estate extravaganza had remained limited. Yet the construction sector still represents almost 10% of EU GDP and accounts for around 31% of industrial employment. In this period of economic turmoil, resuscitating this vital sector could be a key to a sustained recovery. This is exactly what an ambitious EU-wide energy renovation programme has to offer.
The latest World Energy Outlook 2012 has explained what we need to do in Europe:
“Require deep renovations of existing buildings, incorporate stringent energy requirements and provide resources necessary for effective implementation”
The way forward is clear. First, work on a regulation that will make energy renovation mandatory in the upcoming years. Second, prepare market actors, from construction companies to commercial banks, so that the stage is set when energy renovation finally becomes mandatory.
In the meantime, the least we could do is to make energy renovation mandatory each time a renovation is conducted, regardless of size or building type. Finland is already leading the way on this front with its latest regulation.
Winston Churchill, who knew a thing or two about overcoming crises, once said:
“Once in a while you will stumble upon the truth but most of us manage to pick ourselves up and hurry along as if nothing had happened.”
If by chance representatives from the Irish presidency and other EU institutions happened to stumble on this blog, let’s hope they won’t hurry along. Let’s hope they choose to play Europe’s trump card. Let’s hope they make energy renovation mandatory!
This post was published for the first time on April 25, 2013 on the IEA sustainable building centre web site, www.iea.org