3. Overview of the Starting Point of the Proposed Action
Clear analysis of the starting point: clear red line from the current situation in the targeted countries/regions with its specific market barriers and needs to your proposed action and expected results.
Common important user needs and market barriers[edit]
- What is your overall motivation to start the action?
- What are the important user needs and market barriers to be tackled by this action? (Give a short overview.)
The first kernel of the RINNOVATE consortium gathered in 2009 following the preparatory works about the recast of the EPDD.
Studying the potential for smart integration of energy saving technologies and RES (Renewable Energy Source) during building renovations and maintenance, partners conducted an independent analysis of user needs and market barriers that would be important to tackle from the perspective of energy saving specialists and integrators (both technical and financial integrators) who were trying to put together building owners and suppliers (of works, materials and equipments, services) on operations driven by energy performance indicators. Since then partners kept working on the idea that, in addition to large Community and national initiatives, there is also place for a knowledge based, market centered approach based on readily available products, technologies and services to tackle enough cases to justify further efforts (in general cases falling at the boundaries of incentive classes).
At the end of 2010 FUNITG and TRECON decided to work on the RINNOVATE concept calling on the other partners to join forces. The background have been thoroughly rendered in the preparatory works of the European Commission, of member states committees and in stakeholders' position papers: very shortly, the greatest energy saving potential lies in buildings, where a large part of it remains untapped. Solutions exist but renovation rate is too low. The public sector can be normatively pushed to lead by example, but on the private sector mainly promotion systems are devised. Moreover renovations are currently poor: average energy performance improvement is in the range of 15%-20% per renovation. Often these limited renovations carry missed chances: in fact sub-optimal renovations “lock in” large savings potential.
On this background the partners of RINNOVATE elaborated their proposal to define a path towards nearly zero energy target for each building and reconsider budgeting and performances in this frame, including all current renovation and maintenance costs. In fact a large amount of small and incremental renovations and maintenance works remain: a viable solution is to help setting a frame in which all renovation and maintenance expenditure regarding a building or dwelling converge in a plan towards nearly zero energy goals. Setting nearly Zero Energy Building in Renovation as a standard Approach (ZEBRA) is the core of RINNOVATE.
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Current situation in the target countries/regions[edit]
- Why is this action needed in each target country/region? What exactly is the gap, barrier, problem, challenge that you would like to solve and overcome in the specific target countries/regions?
- Which market(s) will you address? (Describe the specific market e.g. size, actors, jobs, energy consumption, saving / renewable energy sources potential etc.)
- Which previous or ongoing national/regional/local initiatives and measures in the target countries/regions are important to your action? Are there any available tools which you can build on?
Note: Typically, your proposal will address barriers in different geographical markets in Europe. Be specific and describe, where appropriate, the different starting points/advancements/problem environment. Explanations should be provided for all barriers addressed, preferably supported by making reference to relevant studies. Avoid general statements.
TThe RINNOVATE proposal is twofold: on one side it addresses the regions of its partners (Spain, Italy, Portugal, United kingdom); on the other it is largely independent from geography and is of European breath. Hence both data at national and at European scale help.
Eurostat Housing Indicators (2009) show that about 70% of the European building stock is privately owned. A large majority of these private owners, especially in the residential sector, are individual households (at least 65% of European households own their home) or private property owners with small and medium sized building portfolios.
In 2009 a total of nearly three quarters (73.6 %) of the of the EU-27 population lived in owner-occupied dwellings, while 13.0 % lived in dwellings with a market price rent, and 13.5 % in reduced-rent or free accommodation.
The figures of owners (both with and without mortgage) in the RINNOVATE countries ranged from 83,2% in Spain, 74,6% in Portugal, 72 % in Italy, 69,9% in United Kingdom. About half of these buildings were constructed before 1973.
50% of Spanish buildings are aged before 1970 (15% before 1945); 20% of Italian dwellings are antecedent 1919 (about 70% built before 1970).
In Portugal 35% of building are aged before 1970 and the UK 20% of the building stock was built before 1919, about 40% before 1945 and 60% before 1970. [Nemry, Françoise; Andreas Uihlein (2008). “Environmental Improvement Potentials of Residential Buildings” (IMPRO-Building)].
The Italian legislative framework has a market mechanism to support energy efficiency and energy savings (the tradable white certificates system), but poor reliability of policy measures, bureaucracy and complex permit procedures jeopardize policy initiatives.
From the English Condition Survey 2005 a considerable part of the older building stock is con sidered to have poor thermal comfort (25% of pre-1945 dwellings, 15% in the build ing period 1919-1944, 8% in the period 1945-1964, 6% in the period 1965-1990 and 1% in buildings built after 2000). When considering the total thermal quality (com fort and energy efficiency), these percentages are higher: 41, 30, 26, 28 and 11% respectively. Fitness, repair or modernisation activities are considered to be needed in 15% of the pre-1945 stock, in 22% of the stock built between 1965 and 1990 and in 10% of the stock built after 2000. There is no data on yearly renovation activities. From the English House Condition Survey, it is known, however, that a typical household in vests £683 in repairs and replacement. 28% of the households have no costs, 28% have costs between £0 and £1000, and a small number of households have very high maintenance costs. The average investment in repair and replacement is £2115.
In the United Kingdom, almost all parties play an important role (apart from the contractor and project developer) in the renovation process The respondents from the United Kingdom classify the policies into four types of tools: regulations (systems of building regulation and planning permission, EPBD, EPCs), taxes (on a very small scale), grants (many possibilities) and training (a lot of information is available). Building refurbishment is promoted by extremely tight con trol of new construction under planning legislation. Building renovation is often seen by building owners as a quicker and more predictable path to stock improvement. [Laure Itard, Frits Meijer, Evert Vrins & Harry Hoiting, Building Renovation and Modernisation in Europe: State of the art review - Final Report ERABUILD, 2006 OTB Research Institute for Housing, Urban and Mobility Studies, Urban and Mobility Studies, Delft University of Technology, Delft, The Netherlands].
At European scale many innovative solutions are directed towards new buildings but only a few are optimised for the existing stock. Moreover, buildings, especially residential buildings, are never considered as a whole. Therefore, there are a lot of components (windows, insulation ma terials, boilers, lighting, etc.) which are installed, serviced and maintained by different companies without a holistic approach to the overall building operation. The result is a lack of energy efficiency and in some cases functionality once the buildings are refurbished. t is assumed that the developments of many innovative solutions (systems composed of insulation and thermal storage materials, renewables, etc.) are relevant for the countries all over Europe. [European Commission, Directorate-General for Research, Industrial Technologies Unit G2 'New generation of products', Energy-efficient buildings PPP Multi-annual roadmap and longer term strategy, Luxembourg, Publication Office of European Union, 2010].
The need to put existing buildings in the central focus of political action is recognized as they represent by far the largest share of the energy savings potential, remarking also that only the comprehensive refurbishment of buildings through an Energy Performance Contract or Integrated Energy Contracting appear to be effective and very cost efficient. [Directorate general for Internal policies Policy department A: Economic and scientific policy industry, research and energy, EU Energy Efficiency Policy – Achievements and Outlook, Brussels, European Parliament, 2010].
Unfortunately data about national and regional rates are of little use for the purpose of RINNOVATE, because corrective maintenance and small renovation often are self made or slip out of statistics. For this reason owners must enabled to do their own computations. Again some tools exist (see for instance http://www.inega.es/simuladores/aparellos.htm), but it is difficult to gather the real total expenditure.
Another approach used by RINNOVATE partner have been to compare the market for ESCO/EPC (main source Energy Service Companies Market in Europe - Status Report 2010 - European Commission Joint Research Centre Institute for Energy).
Starting from Spain, the estimation (JRC) is that around 15 companies are now operating in this field. The real number of ESCOs is probably higher. The market appears to be mainly composed of large companies due to the fact that they are the only ones with sufficient financial capacity to assume the investment and returns in the long term. Yet, small companies are also playing an important role in this market though not as “real” ESCOs but rather as energy providers without the assumption of financial risks (ANESE, Asociación de empresas de servicios energéticos) has been established only recently and comprises more than 200 smaller associates. Commercial banks have been the most common source of finance to ESCOs. Since the beginning of to the economic crisis, lending conditions have tightened. Currently, several ESCOs are using their own equity to finance projects, which cannot be sustained on the long term. Specific measures such as the approval of the Código Técnico de la Edificación (National Building Code), which obliges new and refurbished buildings to cover a certain part of their energy needs with RES, have sped up the growth of renewable energies in the building sector. The new regulation on renewable energies use and energy efficiency in new and refurbished buildings was approved in 2007, and stated to have a clear impact in 2008. The main drivers that are now developing the market include positive regulation and political will, the need to reduce costs and the willingness to outsource facility management in public buildings. The Italian ESCO market is a well developed one, with a relatively large number of companies, even though the exact number of the currently operating real ESCOs is unknown because there is no national registry of companies offering ESCO services. Estimate from ESCO Associations put the number around around 100-150 ESCOs. AGESI estimates the Italian ESCO market value for energy efficiency projects of around €10-12 billion for existing residential and tertiary building (including hospitals).
In Portugal the financial crisis has had a negative impact on the access to financing for ESCOs, and several potential clients have frozen some ESCO projects planned. Among the main barriers to market development, the most important is the lack of information and training and low number of projects implemented or best practices.
The United Kingdom (UK) is one of the most developed ESCO markets with a well established TPF market and intermediaries active in offering improved energy performance in the commercial sector. The energy service contracting market dates back to 1984, when subsidiaries of large energy companies and engineering companies started to include value added services such as project financing to their traditional offers (Sorrel 2005.). UK’s Energy Services and Technology Association is focused on demand side energy efficiency of buildings, building services and process services with 110 members (2009) including suppliers of products and services covering energy efficient monitoring, control, operation and management of buildings, building services and process services (ESTA 2010). From this broad context and thanks to in depth direct contact with several key actors, the partners of RINNOVATE portrayed a situation in which either the owner has many buildings, or the building is big (a hospital e.g.) and there is a lender or a promoter who subventions (state or regional).
Examining the causes of this situation further, RINNOVATE partners found that:
- solutions, products, tools and expertise are available, but not connected, not integrated, not easy to understand and difficult to search and have priced;
- insufficient diffusion/use of appropriate investment calculation that influence economic reasons, namely economic benefits, that play a main role in investment decisions of private owners;
- short-term orientation (not looking any further ahead than five years at most); short-sighted behaviour affects both demand and supply side, owners and suppliers and commercial operators;
- perception that the elaboration of integrated renovation specifications/terms of reference is difficult because it needs initiate cooperation processes;
- difficulty to identify, quantify and compare the impact of the range of materials, technologies and solutions that can be used to improve energy efficiency because of the great diversity of building form, size, use, location.
RINNOVATE will you address three sides:
- demand side (owners, public and private)
- supply side (material, component and service suppliers)
- renovation consultants, designers, practitioners (in private and public sectors)
organizing its action in three phases:
- Enabling Phase
- Attraction for community development (inbound)
- Propagation memes, aiming at triggering a snowball effect (outbound)
Note: Typically, your proposal will address barriers in different geographical markets in Europe. Be specific and describe, where appropriate, the different starting points/advancements/problem environment. Explanations should be provided for all barriers addressed, preferably supported by making reference to relevant studies. Avoid general statements.
Note: Typically, your proposal will address barriers in different geographical markets in Europe. Be specific and describe, where appropriate, the different starting points/advancements/problem environment. Explanations should be provided for all barriers addressed, preferably supported by making reference to relevant studies. Avoid general statements.
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Link to relevant actions beyond the target countries/regions[edit]
- What previous or ongoing initiatives, e.g. at EU level or other countries or regions not covered by your action, are important for this proposed action? What are their limitations?
- More specifically, what existing campaigns, tools, guidebooks etc. do you intend to use?
Note: Do not only list the initiatives - explain how your proposal builds on them and illustrate how you will use and take forward the results.
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There are a lot of interesting previous and ongoing initiatives at European level that are relevant for RINNOVATE proposal. However, an in-depht search of IEE database projects and documents, revealed that the renovation issue is mainly referring to promote and facilitate the use of new models of cooperation, inspired by integrated design, for the energy renovation of social housing (RESHAPE, EISAV/EIE/05/045/2005, SHELTER, IEE/09/707/SI2.558240), to promote renovation through quality supply chains and energy performance certification standards (REQUEST, IEE/09/870/SI2.558308) or related to Energy Saving Contracting project (EUROCONTRACT, EIE/04/211/S07.38673) and Performance contracting (FRESH, IEE/08/668/SI2.528421). Some projects are mainly oriented to training on renewable energy solutions and energy efficiency in retrofitting (REE_TROFIT, IEE/09/886/SI2.558310) or to provide information about good examples of energy efficient buildings in use, in order to reduce prejudices and lack of knowledge of many key actors of the building market (EULEB,EIE-2003-172 EULEB). Other interesting initiatives are in general more concerned to provide both the knowledge and the necessary tools for the efficient management of buildings (ENERBUILDING, EISAS/EIE/06/196/2006 ) or for energy saving (POWER HOUSE EUROPE, IEE/07/779/SI2.500397) both in new and renovated buildings or focused on applying the EPBD to improve the energy performance requirements to existining buildings (ENPER EXIST, EISAV/EIE/04/096/2004).