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80 percent of the unnecessary energy consumption in buildings could be saved – above all – by using digital technologies: from workshops to factories, from data centers to residential buildings to family homes – in other words, in all kinds of buildings. The Renovation Wave within the European Green Deal focuses on the building stock.
It goes without saying: CO2 emissions have to be reduced in all sectors – heat/energy generation, industry, and transportation — if we in Europe – and the rest of the world – want to become climate-neutral. The greatest savings potential, however, lies in buildings, and above all in the existing building stock! Let’s take a look at the bare facts:
About 25 percent of the building stock is already energy-efficient. That leaves 75 percent that is inefficient and will still be in use several decades from now (1).
As three-quarters of their energy consumption comes from fossil fuels (gas, oil, coal), they contribute significantly to global CO2 emissions: The building and construction sectors together account for more than one third of end energy consumption and nearly 40 % of all direct and indirect CO2 emissions worldwide (2).
So, one thing quickly becomes clear: A 55-percent reduction of CO2 emissions by 2030 will only be feasible if end-use sectors such as buildings reduce their dependence on fossil fuels, integrate renewable energy through direct electrification, and thus radically increase their energy efficiency.
The basis for this is digitalization, and it plays a key role regarding the building stock.
How do we make the building stock energy-efficient? The only way is digital!
Digitalization of the building stock is a strategic concern: For small businesses, SMEs, industry, data centers, corporations of all shapes and sizes, and, of course, for building operators – of commercial buildings – and home-owners.
In the next few years, key regulatory policy decisions will be made that will add to the cost of the already highly unprofitable energy consumption of (existing) buildings. Conditions in the future – such as CO2 pricing, for example – will create further costs and at the same time result in a rapid fall in the value of energy-inefficient buildings. The sooner the building stock is made future-ready, the better. That’s why the EU’s Renovation Wave has come at the right time: Now!
In addition to energy efficiency, comfort will be a deciding factor in the value and attractiveness – and therefore also the rentability – of real estate. Smart Buildings and Smart Homes are becoming the benchmark. We will no longer want to do without digital building control systems that enhance comfort and convenience in our living and working spaces, as well as controlling energy consumption by means of smart prosumer solutions, for example.
Alongside the short-term CAPEX investment, focus is turning toward the total building lifecycle – which includes OPEX components such as repair and maintenance and running costs. Smart alert management systems in connection with predictive maintenance, for example, stand for efficiency and effectivity. The basis: Digitalization.
The Renovation Wave is far more than “ideology”: It stands for calculable cost reduction, investment protection, and value retention.
The question of energy efficiency in the building stock is finally attracting attention. In addition to sustainability, it’s about calculably profitable benefits for private households, SMEs, and international corporations alike.
That’s because digitization is one of the most effective instruments for protecting investments, influencing return on investment, achieving energy efficiency, and reducing operating costs. These are all key factors for improving competitiveness.
Already today, there is an unmistakable expectation among investors, customers, and partners, but also on the part of society in general, that companies will formulate their own ambitious sustainability (ESG) targets, including climate neutrality, and achieve them. The anticipated introduction of CO2 pricing will make everyone change the way they think – because it will simply be too expensive not to.
The European Renovation Wave is a turning point. Several key proposals from the European Commission could stimulate systemic efficiency in end-use sectors.
At their heart: Funding for integrated digital renovation of buildings, combining on-site energy generation from renewable sources, electric heat pumps, networked systems and EV charging stations.
For systemic efficiency – which describes the interaction of all parts of a solution by means of efficient buildings and smart energy infrastructure – will make a decarbonized, highly electrified, and resilient urban ecosystem possible.
At the same time, the European Recovery Plan will bring directives into effect aimed at stimulating the market for energy services and enabling access to attractive private financing. This includes setting minimum standards for overall energy efficiency and requirements for using a minimum proportion of renewable energy in buildings, as well as support for Building Information Modeling (BIM) for the construction sector and digital industry platforms for collecting and optimizing the use of building data.
The good news: The technology is there! Now it’s time for integration and migration.
Specifically, this means connected products combined with smart home, energy management and prosumer systems, Building Information Modeling (BIM) and Building Management Systems (BMS) that can control all the individual components, such as heating, cooling, air conditioning and lighting, and electricity and energy distribution, in such a way that consumption is ultimately minimized.
The thinking behind the Renovation Wave defined in the European Green Deal is big – the implementation measures themselves are small. The goal here is to achieve aggregate effects. From the single-family house to the buildings owned by global corporations. The European Green Deal provides the necessary acceleration of the renewal process. And it does so in a multi-faceted manner.
(1) Renovation wave | Energy (europa.eu)
(2) Tracking Buildings 2020 – Analysis – IEA
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If you want to know more about this topic, we invite you to read the following blogs:
- The EU Renovation wave – how to make buildings at the heart of the green transition in Europe (se.com)
- Here’s how to decarbonize the EU’s building stock | World Economic Forum (weforum.org)
- Net Zero Carbon Cities: An integrated approach | World Economic Forum (weforum.org)
