The built environment, which includes our homes, workplaces, schools, hospitals, libraries, and other public buildings, is – as we know – the single largest energy consumer in the EU. It is responsible for an estimated 40 per cent of the EU’s total energy consumption and 36 per cent of greenhouse gas emissions. 75 per cent of the total number of the buildings in the European Union are energy inefficient, which means that a large part of the energy used goes to waste.
The energy performance of both new and old buildings have been addressed in a series of EU directives over the years, the most far-reaching one calling for nearly zero energy buildings(NZEB). But the results so far have been modest. In a comprehensive study recently undertaken by the EU Commission the conclusion is drawn that progress has been far too slow. “The speed at which the building stock improves its energy performance can be expressed as annual reduction of the total building stock’s primary energy consumption. This weighted energy renovation rate is calculated to be about 1%. If this rate persists, the building sector will clearly and significantly fail to deliver its share of the overall need for primary energy reduction and consequently a reduction in greenhouse gas emissions. Significant acceleration is needed.”
The barriers to change are many. The most frequently mentioned one is split incentives between building owners and tenants that, in practice, hinder the uptake of energy efficiency investments. Another barrier that is often referred to are the perceived administrative and financial barriers.
In a recent report the International Energy Agency set out the first global blueprint for a green recovery after Covid-19. The top priority is on energy generation and consumption. Wind and solar power should be a top focus, the report advised, alongside energy efficiency improvements to buildings and industries. A comment at the release of the report by Sam Fankhauser, executive director of the Grantham Research Institute on climate change at the London School of Economics, summarizes the situation: “Building efficiency ticks all the recovery boxes – shovel-ready, employment intensive, a high economic multiplier, and is absolutely key for zero carbon [as it is] a hard-to-treat sector, and has big social benefits, in the form of lower fuel bills.”
When analyzing the energy efficiency initiatives so far within EU member-states a variety of measures are being undertaken. Based on incentives provided by governments, many individual homeowners have started isolating their roofs and floors, and adding double glazing to their windows. While such initiatives show high awareness for the benefit of living in a highly energy efficient home, these kinds of actions alone will neither suffice to meet the Paris climate goals, nor be bold enough to play a lead role in the green recovery.
There are about 250 million homes in Europe. If the aim is to have them all renovated by 2050 – the date by which the EU wants to be carbon neutral – we would need to renovate 50,000 homes per day, every day, for the next 25 years. Individual action has its merits but given the scale of the problem collective community action is urgently needed.
A holistic approach to home retrofitting
EIT Climate-KIC – the largest public-private partnership on climate innovation in the EU – has embarked on an ambitious plan in the area of building efficiency. The goal is to retrofit one million EU homes to near-zero energy within the next five years. Working hitherto together with cities in the Netherlands, Italy, Belgium, Denmark, Bulgaria and Croatia the goal is to achieve the target in time and, in the meantime, reach out to other regions and hope to replicate the program in a great number of cities.
A strong argument for collective action is to make sure the most underprivileged populations who can’t bear the cost of renovation – even with government incentives – are included. Energy poverty is already a widespread problem in the EU, where between 50 and 125 million people cannot afford proper indoor thermal comfort.
The opportunity for social transformation is a key element of our mission. Residents across Europe daily face the dilemma of ‘heat or eat’, whilst others wish to retrofit, but cannot afford it. Retrofit has huge potential to offer a wide range of social benefits, from improved health and wellbeing, to affordable living cost, cleaner air and job creation. By engaging residents and citizens in a participatory process, they are more stimulated to actively contribute in improvements in their neighbourhood.
In practice, Climate-KIC brings in a consortium of partners that have technical insight, connects them with local partners, industry and citizens, and oversees the strategic connection between each of them. It means a four-fold approach. Firstly, the aim is a social engagement process among tenants that is central to creating large-scale acceptance and demand. A second component is “a suppliers engagement process” that is aiming at helping develop a circularity focused, high-productive building- and construction industry. Thirdly, also crucial for success, is the setting-up of dedicated funds providing innovative finance mechanisms for affordable retrofitting. And fourthly, the close collaboration with local governments to ensure the right policy measures are put in place to facilitate the societal development process that renewing the built environment is a key lever to.
Let me share a few examples of EIT Climate-KIC work in progress:
First large-scale integrated renovation project (100 homes) including complete energy efficiency measures, disconnection from natural gas, fix maintenance backlog including a 30 years finance structuring linked to the respective buildings. The latter means that the energy savings over time pay for the refurbishment costs. Moreover – and crucially important – the renovation time per home was five working days on average, skipping the need for temporary relocation.
More than 10,000 homes have been identified in Amsterdam, and the first 288 are already being engineered. District social engagement has been started. The structuring of a scalable financing proposition is underway.
The ambition is to renovate 100,000 homes by 2026, starting with 250 homes in 2021. In the coming months a scalable fund will be established as well as the validation of the social engagement process being developed and the engagement of local industry to start building a scalable supply chain.
The programme will simultaneously be deployed in Zagreb, with the fist 250 renovation starting in 2021, as well as in Leuven, Copenhagen and Sofia. From a cost perspective the projects have shown that is possible to design for the principle of ‘equal cost of living’ compared to current cost levels. A major benefit though is the fact that that cost level is to be maintained for the next 30 years, while current costs are projected to increase significantly. A major factor is the integration of self-generation of (most of) the required electricity.
In conclusion. The impact of renovating houses goes far beyond the economic effect of energy efficiency, it also has a direct positive impact on people’s health and well-being, on social cohesion and quality of life. The European Commission sees the built environment as a strategic domain in view of the goal of full decarbonisation by 2050, but the challenge is colossal as already indicated. The EU needs a massive renovation wave for its buildings and infrastructure. These efforts also need to be part of a whole systems transition towards building more circular, regenerative economies that will be more resilient to potential future crises. EIT Climate-KIC is happy to be in a position to help kick-start the massive refurbishment process that has to happen within the EU. We do it with a program that includes all the necessary elements for success, not least a renovation time that means tenants do not have to relocate and a financial package that guarantees “equal cost of living” over decades.
About the author: Anders Wijkman, chairman EIT-Climate-KIC, former MEP
 Comprehensive study of building energy renovation activities and the uptake of nearly zero-energy buildings in the EU – Final Report 2019