Boost Needed in Energy Efficiency in Buildings and District Heating Systems
Date: December 10th 2020
Author: Alenka Lena Klopčič
“Renovation happens in any case, but the basics lie in trust,” said Karlis Goldstein of the European Commission in his opening remarks of a presentation about the renovation wave for climate neutrality and recovery during Wednesday’s virtual Celsius Summit 2020 - Mission Possible, subtitled ‘Facilitating the Heat Transition in South East Europe & Beyond’, adding that “Rome wasn’t built in a day.” Upcoming financing opportunities were presented during the summit, and the speakers further touched upon the potential of district heating in light of its contribution to the climate goals.
Let’s start with the energy efficiency of the existing buildings stock
Buildings that are being constructed today only use around half of the energy used in existing buildings. On top of what is already being done, an intensive investment wave needs to begin. Among the reasons for this is that last year, for instance, the energy efficient measures in buildings only resulted in a 1% decrease in energy consumption, said Goldstein.
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Buildings in numbers:
- 40% of total energy is consumed in buildings
- 36% of greenhouse gas emissions (GHG) come from the buildings sector
- 85% of existing buildings (some 220 billion) were built before 2001
- EUR 275 billion is the estimated annual investment gap in the sector in order to reduce GHG emissions by 55% by 2030
- 85-95% of buildings will still be standing by 2050
Financing opportunities on the horizon
Goldstein continued his presentation by presenting proposed financing in relation to the climate coefficient in the legal basis and total climate contribution. Among others, he mentioned Horizon Europe as the research support mechanism with a 35% climate coefficient in the legal basis and with a total climate contribution of EUR 28.315 billion. ITER, the international nuclear fusion research and engineering megaproject, was also mentioned with a 100% climate coefficient in the legal basis and with a total climate contribution of EUR 5 billion. The InvestEU Fund has a climate coefficient in the legal basis of 30% and a total climate contribution of EUR 2.520 billion. The Connecting Europe Facility has a climate coefficient in the legal basis of 60% and a total climate contribution of EUR 11.038 billion.
Furthermore, the European Regional Development Fund has a climate coefficient in the legal basis of 30% and a total climate contribution of EUR 60.108 billion. The Cohesion Fund has a climate coefficient in the legal basis of 37% and a total climate contribution of EUR 15.746 billion.
REACT-EU (Recovery Assistance for Cohesion and the Territories) follows with a climate coefficient in the legal basis of 25% and a total climate contribution of EUR 11.875 billion. The Recovery and Resilience Facility has a climate coefficient in the legal basis of 37% and a total climate contribution of EUR 248.825 billion.
With a climate coefficient in the legal basis of 100% and a total climate contribution of EUR 19 billion the Just Transition Fund was mentioned, whereas the figures for other financial proposed mechanisms (CAP, EMFF, NDICI, OCT and Pre-Assistance) are lower.
The EU Green Deal is bringing support to the major investments in hydrogen and carbon capture and storage (CCS) infrastructure. It is securing a long-term high (enough) carbon price, and is also helping to reduce waste generation, especially plastic, noted the speakers of the Celsius Summit 2020.
In the pitching session on financing opportunities, some new financial opportunities were presented, such as the Clean Energy Transition Partnership (CETP), the ERA-NET/GEOTHERMICA joint programming initiative on Heating & Cooling, the European City Facility, as well as the European Innovation Fund, while Bojan Bogdanović, who is in charge of Renewable District Energy at the European Bank of Reconstruction and Development (EBRD), presented the EBRD’s latest financing opportunities in this area.
According to Bogdanović, there are quite a few requirements and significant room for improvement in the Balkan region when it comes to decarbonisation of the existing energy systems, particularly in terms of electrical and district heating systems. While to date electrical power systems have been investment priorities, now is the time for district heating systems. Those, in combination with renewable energy, also need appropriate governmental support, especially bearing in mind that the share of renewable energy in power systems stands at some 40%, while in district heating systems it amounts to just 0.04%.
On the other hand, there is no one single solution that can be applicable to all cities and regions, therefore, the EBRD is also aiming to come up with specific solutions appropriate for each and every case, explained Bogdanović, adding that there is no need for renewable energy to be more expensive than conventional energy.
Croatian capital aiming for carbon neutrality
The speakers also talked about the potential of the district heating systems and their contribution to climate goals, while it was also mentioned that the Croatian state-owned energy utility Hrvatska Elektroprivreda (HEP) is already doing a lot when it comes to investing in existing infrastructure.
Since this year’s Celsius Summit 2020 was organised by the North-West Croatia Regional Energy Agency (REGEA), the example of Zagreb, as a ‘soon-to-be carbon neutral city’, was also presented by Ivan Ivanković, the Head of Energy and Climate for the City of Zagreb. Read also: Croatia to Spend EUR 1.34bn on Energy Renovations of Family Houses
With bold goals for a reduction in GHG emissions of at least 40% (and a maximum of 55%) by 2030, “a unprecedented challenge that will require a never-before seen coordination of massive investments and overall changes in thinking” lies ahead of the Croatian capital, highlighted Ivanković.
Collaboration and sharing appropriate best practices are crucial, concluded Goldstein, who also sees big potential in the geothermal energy in the district heating systems. It is notable that the enterprise Tehnostan has recently built the first solar district heating system in Croatia – in the city of Vukovar.