WHY IS A THRIVING ENERGY RENOVATION MARKET ESSENTIAL TO DRIVE THE EU ECO

PERCHÉ UN MERCATO DINAMICO DELLE RISTRUTTURAZIONI ENERGETICHE È ESSENZIALE PER RILANCIARE L’ECONOMIA DELL’UE? - Download Italian Translation

POURQUOI UN MARCHÉ DYNAMIQUE DE LA RÉNOVATION ÉNERGÉTIQUE EST ESSENTIEL POUR GUIDER L’ÉCONOMIE EUROPÉENNE ? - Download French Translation

POURQUOI UN MARCHÉ DYNAMIQUE DE LA RÉNOVATION ÉNERGÉTIQUE EST ESSENTIEL POUR GUIDER L’ÉCONOMIE EUROPÉENNE ? - Download Spanish Translation


Europe must roll up its sleeves and put climate action first in the next MFF

By Adrian Joyce, Renovate Europe Campaign Director

30th July 2018

shutterstock_116294821

In the midst of a catastrophic heatwave, it might seem odd to make the case for building insulation in the next Multiannual Financial Framework (MFF).  But there’s no choice: it is unanswerable.  Why? Because this torrid summer is not just a trigger for extraordinary drought management measures, it is a harbinger of the new normal that awaits us, unless we act now.

Don’t just take my word for it.  As the World Meteorological Organisations’ Deputy Secretary-General Elena Manaenkova said on July 26: "The heatwaves and extreme heat we are experiencing are consistent with what we expect as a result of Climate Change caused by greenhouse gas emissions.  This is not a future scenario.  It is happening now.”  More than a third of the emissions Manaenkova was talking about come from our buildings, and we will not meet the Paris climate goals without dramatically paring those emissions back.

It is vital that we shift into a mindset for systematically resolving the climate crisis, while there is still time to do so.  Studies show that energy efficiency – particularly in buildings – offers the most cost-effective way of cutting planet-warming gas emissions.  It slashes air pollution and energy poverty, while at the same time delivering a myriad of additional benefits.

That’s why the International Energy Agency said that 75% of Europe’s additional spending to meet the Paris targets should come through energy efficiency.  For that reason, the EU’s new budget is to be commended for increasing the ringfence on climate spending to a quarter of its total, even if this is less than the 40% earmark that President Macron said we could achieve.

In its own initiative report, the European Parliament had demanded a 30% ringfence by 2027, and it is to be hoped that MEPs will still have something to say about that when they debate the issue in September.

With the European Commission on track to miss its 20% set-aside for climate spending in the current budget, we must remember that implementation depends on political will.  The signals sent out by national governments and the Commission play a large part in that domain.  It is also still unclear precisely which 25% of budget funds will be allocated to climate measures – and which climate measures they will be allocated to.  In the last budget, ‘greening the CAP’ captured the lion’s share of revenues, even though the European Court of Auditors declared it ineffective.

Taking all that on board, here are three suggestions for how to use the available resources to best effect in the 2020-27 period to bring down Europe’s greenhouse gas emissions:

  • 1) Give the money directly to cities. At the moment, EU funding goes through national authorities, which give monies to regions, which share them out accordingly. But as well as housing most of Europe’s citizens – and buildings – cities have proven themselves to be among the most dynamic and ambitious actors in fighting climate change.

Where building renovations are concerned, they lead the way in training, awareness raising, funding schemes and district-level interventions.  From first-hand experience, they know how and where to make the best climate investments in an efficient way.  They are locally accountable and have a welcome knowledge of (and focus on) the renovation of privately-owned dwellings.

Empowering city authorities in this area could improve the take-up and roll-out of Europe’s energy renovation policies and strategies.  And it could fine tune their implementation and local governance, especially if the duration of project funding calls were to be extended.

  • 2) Guarantee funding for energy renovations. Cohesion funds have been the largest contributor to Europe’s energy renovations programmes in recent times, but the Commission wants to cut their account by a headline 7% figure in the next MFF.  Depending on how you do the math, some experts say that could translate into a reduction of up to 14% in real terms.

Ministers in Central and Eastern European governments report that it is already difficult to persuade their treasuries of the benefits of energy efficiency spending.  A shrinking of the overall pie in the 2020-27 period will not make this any easier.  On the other hand, sending out a clear political signal that links Cohesion Funds to national climate plans – and renovation spending to them – might help to turn the tide.

  • 3) Put climate change on a par with defence, security and migration. These latter three areas are certainly ‘hot button’ topics and it is right that the EU’s coming budget addresses them.  But climate change is literally a matter of life or death for Europe, and the world.  There are no armies, nations or migrants on a dead planet.

Governments and EU officials must not be blown off course by media frenzies.  Let’s not forget that climate change is already one of the most powerful drivers of migration and military conflict and will only become more so as it advances.

If you think our summer heatwave and droughts have been bad, imagine how Africa, Asia and Latin America will fare after 2030, when planetary warming will cause an extra 250,000 early deaths each year, and an additional 100 million people to live in ‘extreme poverty’. Consider what consequences that will have for us in Europe, in an increasingly inter-connected world.  And then tell me that climate spending today is a luxury we cannot afford.

There are other steps that we could and should be taking.  Lifting the revenues available for energy renovations from the EU’s LIFE programme to 1% is one.  Another would be a concerted focus on upskilling our work force so that it can respond to the needs of the new green economy.  Really, this is a non-negotiable, if we are serious about the shift to a no-carbon economy.

As E3G has argued, InvestEU – the successor to Jean-Claude Juncker’s European Fund for Strategic Investment – should also be operationalised for the task ahead, with clearer sustainability requirements.  Mainstreaming climate action into innovation spending and setting out clear criteria for the spending of the 50% of ETS revenues that Member States will receive, would also help to join the dots that currently are at risk of rearrangement into some very different pictures.

Money is a resource and resources make opportunities. Europe has not yet left the crossroads it arrived at ten years ago, when it approved its first landmark climate package. It is time to roll up our sleeves and grasp our opportunities, while we still can.


Croatia’s renovation projects can teach us as much as their football

Croatia_football_celebration-800x450 (1)

What do Croatia’s football team and its energy efficiency programmes have in common? Experience, skill, tenacity and an inspiring amount of success.

Croatia may not have lifted the World Cup this year – and the country may not be the first place that decision takers would think to turn to for policy advice. But if they do, they will find a source of inspiration at least as surprising as the national team’s exploits on the football pitch.

Between 2014 and 2016, a €220m energy renovations programme benefitted more than 15,600 family homes, 2,300 multi-unit buildings, 80 commercial buildings and 262 public buildings!

A good example of the sort of public building works in play about can be found in Karlovac hospital, near Zagreb, which has a catchment area of 140,000 people, and sees 1500 patients daily.  That hospital has been transformed after a €7.2m investment and four months of remedial work – with minimal disruption to patients and staff. Its yearly CO2 emissions have been more than halved – the climate mitigation equivalent of planting 113,000 more trees. Annual heating savings are also expected to be above 50%, as are annual financial savings.

And the cost of the deep refurbishment should be paid off within 14 years, from the savings on energy bills brought by the renovation works. These include the installation of new heat pumps, cooling systems, solar thermal collectors and a 25% renewable energy supply.

The public-private partnership behind the makeover worked with an ESCO mobilising 60% of the finances from private investors and 40% from the Croatian energy efficiency fund.

Altogether, around 250 workers were employed on the build, with 32 mostly nearby companies giving a boost to the local economy.

Karlovac was no outlier. An ESCO-led energy renovation of the Clinical Hospital in Split produced almost identical results for reduced energy consumption. Another swimming pool, also in Split, achieved a 71% energy savings rate after renovation, while Lepoglava prison now receives more than half of its power from renewables.

Compared to traditional public procurement practice, renovation contracts in Croatia are simpler, standardised and more transparentThey have been completed up to seven times faster and with significantly lower administrative and total costs.

One very hopeful sign is that Croatia’s energy efficiency champions began acting early on an interpretation of accounting rules that Eurostat recently confirmed was correct – and can now be applied across Europe. This states that ESCO’s must carry the risk on these projects – for cost over-runs, delays, failures to meet energy saving commitments etc – and, in return, they may reap the rewards.

Eurostat last week revised its accounting rules, allowing local authorities to stop counting as public debt the building refurbishment work they undertake as part of energy performance contracts, writes Quentin Genard.

Energy refurbishment programmes have been applied to Croatia’s high-rise buildings, to private homes and commercial buildings. A guarantee scheme for ESCO’s similar to the one set up in Bulgaria may be the next step. As with the national teams occasionally erratic defending, there is room for improvement in Croatia’s energy renovation picture too.

The EU’s next long-term budget for 2021-2027 offers a unique opportunity to demonstrate the tangible benefits that EU policies and funding can deliver to citizens on the ground.

hrvatska-7

The next MFF, with its increased ringfence of funds for climate mitigation, holds out the prospect of a sustained and effective focus on renovation in the decade ahead that could see Europe itself taking the next step to success on the international clean energy stage.

Croatia’s achievement in advancing the energy efficiency revolution is a beacon that should be celebrated, just as we have been thrilled by their triumphs on the football pitch.

Read Full Opinon on Euractiv: https://www.euractiv.com/section/energy/opinion/croatias-renovation-projects-can-teach-us-as-much-as-their-football/