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The New Energy Letter: November 2020

Andy Bradley's picture
Director Delta-EE

Andy is a Director of Delta-EE, a specialist research and consultancy company in the 'new energy' sector. Since joining Delta-EE in 2010, Andy has helped define and develop Delta-EE’s portfolio...

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  • Nov 11, 2020
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Since our last new energy letter, the European Commission has published its long-awaited Renovation Wave Strategy, revealing of the extent of Europe’s decarbonisation ambitions in existing buildings – arguably the most challenging sector to decarbonise. The renovation wave strategy is making ripples, which could become a tidal wave of transformation for our existing building stock, with energy efficiency and the uptake of low carbon heating standing to make vast gains.

But this scale of change will only be unlocked if the market is swept along too – if member states follow through on the strategy recommendations, and if private investment is unlocked at the scale envisaged. So which parts of the renovation wave strategy give me something to be optimistic about?

First, the phasing in of minimum energy performance standards for existing buildings – with a focus on more accurate energy performance data. Until now, there have been carrots but very few sticks to encourage building renovation so it’s a big step. And the proposed “smart readiness indicator” could start to attach real value to how future-proof and flexible the building is.

Second, the focus on a local approach, giving some autonomy and support to regions in planning their renovation strategies. This way of thinking means decarbonisation plans are determined by the local geography, and not only by a distant national target. This enables easier integration of locally available energy sources (for example waste heat) and encourages a cross-vector approach which can benefit from the integration of heating, cooling, transport and the wider energy system. Amsterdam is a good example of a city already taking this approach, which can be seen as a model for other regions to follow.

Third, that green finance should become easier to access. The Commission estimates €275bn/year in additional investment is needed to achieve a doubling of renovation rates. This money will come partly from various EU funds, but crucially through mobilising private investment. To quantify the impact of finance on the heating transition, you can look at the wider potential for innovative retrofit models like The FCTR E (NL) and Ecoworks (DE) – both of whom recently secured new investments.

We see encouraging signs that the market is engaging in decarbonising existing buildings. Engie (UK) has just launched its ‘Net Zero’ retrofit offer; O.K (DK) has been replacing oil boilers with heat pumps under heat as a service contracts for several years; and Dutch housing corporations like Bo-Ex are renovating to not just net zero but energy positive.

The coming decade will be pivotal for whether (or not) net zero targets can be met – let’s hope the industry is up to the challenge.

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Matt Chester's picture
Matt Chester on Nov 11, 2020

We see encouraging signs that the market is engaging in decarbonising existing buildings. Engie (UK) has just launched its ‘Net Zero’ retrofit offer; O.K (DK) has been replacing oil boilers with heat pumps under heat as a service contracts for several years; and Dutch housing corporations like Bo-Ex are renovating to not just net zero but energy positive.

Assuming the friction of upfront costs for facilities that couldn't otherwise afford those retrofits are minimized, what's the biggest hurdle that would remain? Education and outreach? Resistance to undertaking the heache of such retrofit projects (even if they'll pay for themselves in the long run)?

Andy Bradley's picture
Andy Bradley on Nov 12, 2020

Very briefly, I would say the 3 biggest challenges to realise renovation projects (once you have the money available) are:

  • Available labour force – installers – we still hear constantly on the market that it is challenging to find labour force, and this is with renovation rates at 1%/yr. they need to be significantly higher to reach goals, so we need a step change in labour force available
  • Availability of building materials (e.g. prefab building elements) and easy to install, low cost HVAC systems – for achieving mass renovations, you really need investment in mass production of these elements, which can be installed at relatively low cost with minimal interference. HVAC solutions are particularly challenging in multi family buildings.
  • Lack of customer (end user) engagement and awareness – and unwillingness to undergo a disruptive renovation. 

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