Policies to mitigate high energy prices should fast-track building renovation

DISCLAIMER: All opinions in this column reflect the views of the author(s), not of EURACTIV Media network.

The most reliable long-term answer to rising energy prices is to minimise consumption and boost the energy performance of the European building stock, writes Oliver Rapf. [Ivan Liakhovenko / Shutterstock]

It is troubling to see that buildings have been given a relatively small space in the overall strategy to combat rising energy prices, writes Oliver Rapf.

Oliver Rapf is the executive director of the Buildings Performance Institute Europe (BPIE).

Finding solutions to address the challenge of rising energy prices will be on the agenda of Energy Ministers next week and will again be discussed by Heads of States & Governments just before Christmas. Progress on the topic has been slow so far. National leaders are under pressure from their constituencies to solve the energy price crisis which is putting a strain on their electorate.

A few weeks ago, the European Commission published a communication, Tackling rising energy prices: a toolbox for action and support. The Commission’s toolbox provides a welcome list of measures, including targeted support to consumers, direct payments to those most at risk of energy poverty, and cutting energy taxes. Revenue from the ETS should help cover some of these costs.

Businesses, in particular SMEs, will be given relief through state aid or power-purchase agreements on a longer-term basis. The Commission also stressed that tackling the energy price challenge requires accelerating progression towards our target goal of 65% renewable electricity by 2030.

While the Commission has provided welcome and much-needed measures, the toolbox of solutions to this crisis conspicuously concentrates on securing energy supply in the short-term and seems to ignore the most reliable long-term answer to the problem: minimising energy needs and boosting the energy performance of the European building stock.

It is troubling to see that buildings have been given a relatively small space in the overall strategy to combat rising energy prices. There is no mention of buildings before page 18 of the Commission’s document, and only here we find a rather vague nod to energy efficiency as a tool to fight energy poverty in the long-term and contribute to a more resilient energy system.

It is also worrying that the Commission’s communication defines energy efficiency only a ‘medium-term’ priority. While building renovation indeed is not an overnight undertaking, treating renovation as anything less than a top priority shows short sightedness and a lack of urgency.

The conclusions from the meeting of European Heads of State at the end of October did equally little to focus on long term solutions to reduce the exposure to energy price spikes. In its conclusion, the Council concentrated on short term measures while just giving a mandate to the European Investment Bank to “look into how to speed up investment in the energy transition”.

Energy Ministers and heads of state now have the opportunity to change this priority setting and deliver on the promise of Efficiency First to which Europe committed itself, notably when discussing the Energy Efficiency Directive, which includes relevant provisions on the renovation of public buildings.

Our political leaders should deliver long term solutions to ensure that future energy price hikes will no longer be a serious concern. The EU ETS revenue should be used to kick-start renovation efforts by allocating them to immediate comprehensive energy audits of buildings.

These audits, also known as Building Renovation Passports, will prepare deep renovation plans with a focus on the worst performing buildings. This will result in a transparent definition of investment opportunities for the coming years.

The Recovery and Resilience Facility funds (RRF) should be used to provide a mix of financial support consisting of grants, preferential zero-interest loans, and bank guarantees to trigger investments by different owner groups.

Most national recovery plans make significant funding available for renovation. Investing a share of the RRF in an initiative to boost skills and innovation in the construction sector so that renovation service supply can meet the growing demand is also essential and should happen now.

Short-term solutions such as increased financial support for vulnerable groups are an appropriate and necessary political response in a time of crisis but should not dilute attention and commitment to pushing long-term sustainable solutions.

Improving the energy performance of European buildings is the most reliable and safest strategy to reduce the EU’s exposure to future energy cost spikes, and policymaking should move from serious words to serious action and serious political support.

We know that the share of natural gas used in European buildings grew in the past decades. Europe’s dash for gas helped move away from more carbon intensive fuels like heating oil and coal but did little to achieve higher efficiency levels. In fact, absolute gas consumption grew significantly in many European countries.

After COP26 and its call to governments for higher efforts on mitigation, the essential role buildings play in combating climate change, representing 40% of Europe’s CO2 emissions, should not need any reminding. And at the same time buildings have a central role in supporting a more resilient, decentralised and decarbonised energy system.

Overall, the toolbox communication and the recent Council conclusions raise concerns as to the real political priority which building renovation and the Renovation Wave is given.

Winter is here: what has started as an energy crisis will quickly become a social crisis if the adequate immediate measures are not taken.

Ad hoc short-term measures to protect vulnerable citizens against severe consequences of energy price spikes must go hand in hand with measures to deliver sustainable, long-term solutions with deep renovation of the building stock and these measures should be an immediate priority.

Energy efficiency gains through deep renovation of European buildings must be a key pillar of Europe’s move to a higher level of affordable and renewable energy, and it is essential for the European journey to climate neutrality.

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