Investing in energy efficiency in buildings is the cheapest, fastest and most effective way to decrease our energy dependency by reducing our energy demand, writes Adrian Joyce.
Adrian Joyce is secretary general of the European Alliance of Companies for Energy Efficiency in Buildings (EuroACE), and Renovate Europe campaign director.
Today 18 June, the EU becomes 100% dependent on energy imports for this year. This energy dependency occurs at high cost, as the EU is spending more than €1 billion every day to import the energy it needs. But there is a solution! By renovating the EU building stock, we could push the EU Energy Dependence Day back to 26 October. Nonetheless, mobilising the necessary funding and channelling the investment to energy efficiency projects remains a challenge.
Today is the right moment to tackle energy efficiency investments in buildings
The EU Energy Dependence Day is the day on which the EU becomes entirely dependent on energy imports, and consequently, relies totally on external suppliers. Can we afford this? Of course not!
On this exact date, 18 June, the European Commission, together with EuroACE and EEIP (Energy Efficiency in Industrial Processes), is specifically dedicating a session of its high-level EU Sustainable Energy Week (EUSEW) to the issue of investing more and better in energy efficiency projects. Following up on the initiative to create the Energy Efficiency Financial Institutions Group (EEFIG), an expert group looking at the drivers of demand for and supply of energy efficiency investments, the European Commission has decided to fully acknowledge the crucial role that investments in energy efficiency have in helping the EU to reach its Europe 2020 goals.
Several interesting opportunities have been created. €38 billion of the European Structural and Investment Funds (ESIF), better known as Cohesion Policy, are dedicated to investments in energy efficiency and renewables for the period 2014-2020. The European Commission has also put in place the “Smart Financing for Smart Buildings” initiative, in order to facilitate the access to existing financing schemes. As to the European Fund for Strategic Investment (EFSI), EuroACE deeply regrets that no ring-fencing for energy efficiency projects has been included in the Regulation, and calls for a focus on investments in building renovation while using the fund in practice. Are we doing enough? Of course not!
The EU should and could do more when investing in energy efficiency in buildings
It seems that there is a lack of motivation within the EU Member States to prepare ambitious investment plans targeting energy efficiency in buildings, although this is a requirement deriving from EU legislation. In fact, Article 4 of the Energy Efficiency Directive (2012) requires member states to submit long-term strategies for mobilising investment in the renovation of the national building stock.
However, according to a study done by BPIE (Buildings Performance Institute Europe), it appears that these strategies do not fully comply with the requirements, and that Member States fail to adopt a forward-looking perspective on the topic. A second version of the national Renovation Roadmaps is due in April 2017. The EU cannot miss this opportunity if it wants to realise the full benefits that more energy efficiency in buildings can bring. Therefore, we need stronger political will, both at EU and member state level, together with more robust governance and more guidance from the European Commission.
The lack of political willingness and action towards targeting more investments to energy efficiency in buildings is even more shocking in current times of utmost urgency. As a matter of fact, the EU is currently highly dependent on foreign suppliers when it comes to energy, at a cost of €400 billion every year. And starting from 18 June, the EU totally relies on energy imports.
Energy security has been recognised as one of the five dimensions of the Energy Union, last February. But in the midst of the Ukrainian-Russian crisis, all the attention has been directed towards topics such as diversification of supply, short-term resilience and transparency in gas contracts. On the contrary, the contribution of energy efficiency to increasing energy security in the EU has hardly been mentioned. Today, is the contribution of energy efficiency in buildings to more energy security properly recognised? Of course not!
Investing in deep renovation of buildings would significantly ease the issue of energy dependence
The buildings sector should be seen as a key priority sector for the EU, when talking about energy security. As a matter of fact, if buildings consume 40% of the energy used, they can waste up to 80% of that precious resource if not performing adequately. To solve this issue, there is already a solution. By choosing to promote and support deep renovation of the building stock in the EU, we could decrease gas consumption in our buildings of 95% by 2050, according to a study by Ecofys.
On one hand, building renovation projects can be deployed very quickly (in less than two or three years), with immediate benefits for both society and individuals. On the other hand, alternative options to reduce our import dependency, focusing on the supply side, do not show the same cost-effectiveness as deep renovation of buildings do. Energy efficiency investments in buildings also induce a multitude of mutually reinforcing benefits, such as job creation, increased competitiveness and productivity, better health and comfort, lower energy bills, and improved public finances. Investing in energy efficiency in buildings also makes sense for the financial sector, with a great return on investment (between 11% and 14%) and induced increased value of properties (up to +4%).
In short, investing in energy efficiency in buildings is the cheapest, fastest and most effective way to decrease our energy dependency by reducing our energy demand. By deep renovation of the EU building stock, using modern technologies which are currently available, we can cut our energy demand by 80% until 2050. Are we on the right track? Of course not!
Time to act – time to Renovate Europe!
There is, as you can see, a lot of room for improvement. According to the EEFIG, between €60 and €100 billion of annual investments in energy efficiency are needed up to 2020 in order to achieve the agreed target of keeping global warming below 2°C. But investments in energy efficiency in buildings are not yet occurring at the required rate. This is why EuroACE is calling for energy efficiency investments to be considered as the first choice for future investments, calling for them to be given the right to compete on an equal footing with other energy-related investments. With ambitious political and stakeholder engagement, putting into practice the “Energy Efficiency First” principle, we can push our Energy Dependence Day back to 26 October.
Not investing in deep renovation of our building stock means putting the EU at risk. So shall we act and Renovate Europe? Of course we will!