[Report] Are Businesses Ready to Go Deep in Energy Efficiency?

2013/04/25 | Europe欧洲

A question investigated by The Economist Intelligence Unit (EIU) in a new survey among building sector and real estate executives in Europe. The GBPN in collaboration with its EU Hub, the Buildings Performance Institute Europe (BPIE) and in partnership with the World Business Council for Sustainable Development (WBCSD), commissioned the EIU to put European industry stakeholders under the spotlight.

In the new survey “Investing in Energy Efficiency in Europe’s Buildings”, EIU explores how companies in the European building sector approach energy efficiency investments, how they perceive the latest EU regulations, and how innovative financing could help them ramp up retrofits to achieve emission reduction targets. 

The survey is a follow-up to the global report “Energy efficiency and energy savings – a view from the building sector” from October 2012. This report of over 400 building sector executives had found that over 84% of businesses leaders are ready to cutting CO2 emissions associated with their business. Executives underestimate the returns but are already implementing efficiency measures in their buildings. They urge more commitment and policy direction from governments.
 
The key findings of the report include:
 
  • The financial crisis, which has caused downward pressure on real estate valuations across much of the EU, has highlighted the need for renovation of existing building stock. This will be needed to maintain and even increase the value of portfolios; deep retrofits will be crucial to achieving lasting value.   
  • EU companies are relatively active in retrofitting buildings compared with their counterparts in other regions, but efforts need to double to meet EU energy efficiency goals by 2020. Our 2012 survey revealed that 43% of EU respondents in the building sector focus on retrofits—more than in the US (37%) and in China (23%), for example. The majority (57%), however, still focus on new builds, with energy-efficient retrofits still accounting for only a meager 1% of existing stock. 
  • The EU has taken some positive steps to improve regulation, but ambiguity regarding definitions of what constitutes a “deep retrofit” and a “nearly zero-energy building” affects implementation at national levels. Indeed, 29% of the EU survey respondents identified regulatory uncertainty as a barrier to pursuing energy efficiency investments. Furthermore, implementation of energy efficiency-related directives varies by country, which limits the ability of property owners to achieve economies of scale across the region.
  • Regulatory uncertainty should not be an excuse as waiting on the sidelines in anticipation of better laws exposes companies to the risk of asset depreciation. Large property owners are starting to audit their portfolios to identify where they can achieve the most cost-effective energy efficiency measures. The deeper the retrofit, the lower the asset depreciation risk.
  • Attracting large institutional investors in retrofit finance will require energy efficiency project aggregators. Aggregators can be public or private and can appear either as a result of regulation or client demand. To be effective, however, they require clear energy performance objectives, standardized contract structures that allocate responsibility for performance, and data collection and transparency about results.
Analysis from experts of the GBPN network - Watch the video: 

 
This report is based on:
  • A survey of 96 EU executives in the building sector (69% real estate segment and 31% of the building construction sector)
  • Four in-depth interviews with experts and C-level executives in the EU building sector
  • Desk research based on the newest data and reports on the topic
"Investing in Energy Efficiency in Europe’s Buildings", Case Study, GBPN and BPIE, April 2013
 
Other formats of this report: 
Multimedia (video interviews with experts from the GBPN)
 
Also consult the October report: 
"Energy Efficiency and Energy Savings: A View from the Building Sector", Case Study, GBPN, October 2012
Other formats of this report: 
 
This report is part of a series of regional EIU reports commissioned by the GBPN on China, India, Europe and the US (Our Network). 

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Glossary

Deep Refurbishment or Deep Energy Refurbishment means to bring something back from a state of reduced efficiency to a better state with ‘deep’ indicating a very substantial improvement of the energy use. [Source: GBPN, 2012]

Deep Renovation or Deep Energy Renovation is a term for a building renovation that captures the full economic energy efficiency potential of improvements. This typically includes a focus on the building shell of existing buildings in order to achieve very high-energy performance. The renovated building consumes 75% less primary energy compared to the status of the existing building before the renovation. The energy consumption after renovation for heating, cooling, ventilation, hot water and lighting, is less than 60 kWh/m2/yr. (Definition often used in Europe) [Source: GBPN, 2012]

The 2002 Energy Performance in Buildings Directive required Member States to apply minimum requirements as regards the energy performance of new and existing buildings, ensure the certification of their energy performance and require the regular inspection of boilers and air conditioning systems in buildings. This was updated in 2010 by the EPBD recast. [Source: European Commission]

Under this 2010 Directive, Member States must establish and apply minimum energy performance requirements for new and existing buildings, ensure the certification of building energy performance and require the regular inspection of boilers and air conditioning systems in buildings. Moreover, the Directive requires Member States to ensure that by 2021 all new buildings are so-called 'nearly zero-energy buildings'. [Source: European Commission]