Robin Lancaster finds out what the UK could learn from retrofit schemes on mainland Europe
Buildings accounted for 18.4% of global greenhouse-gas emissions in 2010, according to the UN's Intergovernmental Panel on Climate Change (IPCC). With the human population forecast to rise to almost 10 billion by 2050, which will result in more homes and offices being built, the panel noted in its assessment that emissions from buildings had the potential to triple in that time. However, it also said these could fall if cost-effective best practices and new technologies are used.
One solution the IPCC proposed was housing stock renovation, which, it said, could deliver energy savings of 50% to 90%. But in the UK policies to incentivise housing retrofits have been cancelled and a replacement regime has yet to be agreed. The UK's green deal scheme became a victim of the government's spending constraints when, in July, Decc announced no further funding for energy-saving improvements, such as insulation or double-glazing.
By the end of June, about 10,000 properties had been renovated using green deal finance, with a further 5,600 finance plans currently in progress. Despite the numbers, Decc claimed that low take-up and concerns over industry standards were the reasons for the scheme's demise. It has commissioned an independent review to look at standards, consumer protection and the enforcement of energy-efficiency schemes for buildings. But, for the time being, the only government-led scheme to retrofit buildings is the Energy Company Obligation, which targets properties occupied by low-income families.
Looking across the channel
While the UK considers the options, it could do worse than seek inspiration from projects elsewhere in Europe.
One, the two-year multilateral Build Upon initiative, was launched in March by various European green building councils with €2.35 million funding from the EU's Horizon 2020 project. Build Upon aims to stimulate the creation of energy-efficient renovation strategies in Bulgaria, Croatia, Czech Republic, Finland, Ireland, Italy, Latvia, Romania, Slovakia, Slovenia, Spain, Sweden and Turkey.
Build Upon has taken its lead from initiatives in other sectors that, despite a lack of resources, have brought together stakeholders to solve long-term problems, says James Drinkwater, senior policy adviser for the European regional network of the World Green Building Council. The buildings sector is a massive, fragmented market, he says, and the initiative involves key stakeholders collaborating on the design of retrofit strategies.
Build Upon is still in its early stages and is focusing on organising events and workshops to stimulate a dialogue between stakeholders. It is also mapping out the current renovation landscape and Drinkwater himself has been working on Renowiki, a database of about 500 renovation schemes in Europe. Build Upon plans to expand and strengthen retrofit strategies before putting forward ideas for country plans and generating buy-in to deliver them.
Drinkwater stresses the importance of collaboration and developing a multi-stakeholder process to achieve successful retrofit strategies. The significance of such collaborative approaches is already bringing benefits to some European countries, including France and Denmark.
France has set a target to reduce energy consumption from buildings by 38% by 2020. To this end, the ministry of ecology, sustainable development and energy has held meetings with more than 1,000 stakeholders nationally and 5,000 regionally. The country plans to renovate about 500,000 homes a year by 2017.
38% reduction in buildings' energy use is the target in France
The Danish example
Denmark also used a multi-stakeholder process to devise action plans to renovate buildings. In 2012, it brought together manufacturers, architects, engineers, housing associations, investors, local municipalities, the financial sector, NGOs and industry associations in a project called the Network for Energy Retrofit. They divided into groups to look at six areas: single-family houses and small buildings; multi-storey family buildings; offices and industrial buildings; integration of renewable energy; financing structures; and research and development.
After six months the groups had drawn up more than 300 recommendations, which were eventually whittled down to about 180. These were reduced further by a steering committee of experts before the government chose 21 of them.
"The focus was on the quality of the renovation and additional values," says Kurt Emil Eriksen, senior political adviser for corporate social responsibility and public affairs at one of the stakeholders, specialist window company Velux. "We talk about energy savings but that often does not cover the value of the investment and so we identified other qualities from the renovation," he says. These other qualities included the indoor climate, which focuses on improving the comfort levels of a home, such as daylight and more efficient air quality, on which we tend not put a value," says Eriksen.
Another recommendation was to create long-term targets for industry to work towards. "Now we know what the situation has to be in 2020 - the outlook is clear," says Eriksen. "We all start working on this and have a long period to train ourselves and learn before buildings have to meet the new demands."
The government also approved taking a holistic approach to renovations rather than base it on individual aspects. In the past, says Eriksen, energy saving values were applied to individual components, such as a wall or a window. "Now we have an overall classification for buildings, which means we can meet all the requirements rather than focus on individual components [during the renovation]."
The Danish initiatives are in the early stages of implementation so the overall impact is not yet discernible.
Velux, meanwhile, is participating with three other companies - Rockwool, Danfoss and Grundfos - in a private sector scheme called Better Homes. Under this, a website provides a homeowner with a rough overview of the types of renovations that could be implemented. The owner can then contact Better Homes to receive a more detailed analysis of what is feasible both in energy-efficiency and cost terms.
21 the number of measures in Denmark being used to retrofit buildings
Going Dutch
In the Netherlands, tenants, housing associations and construction companies have come together on an ambitious project called De Stroomversnelling. The aim is to turn typical Dutch terraced houses built between 1945 and 1970 and owned by housing associations into modern, net-zero energy buildings in just 10 days.
Because of their age these homes have a large scope for saving energy and their sheer numbers provide huge market potential. "The industrial way these houses were built makes the development of a systematic approach and technological solution replicable and therefore a valuable investment," says Linda van Leeuwen, a technical developer in the housing renovation department at the Royal BAM Group, one of the construction companies involved in De Stroomversnelling.
The scheme is still in the prototype phase, she says, but has a goal of making 1,000 retrofits a year just for BAM. The work includes installing a prefabricated roof with integrated solar panels and prefabricated insulated facades. In backyards a prefabricated energy module is positioned to provide heat, hot water, power and ventilation. Bathrooms, kitchens and toilets are also replaced and the houses are converted from gas to electric.
The money the tenant would have spent on energy is paid to the housing association as an "energy performance fee". The association reinvests this in more retrofits. The result is a more modern, comfortable home for the tenant, good quality housing stock for the associations and more business for construction companies, says van Leeuwen. She adds: "There is only a business case when all the partners involved benefit either financially or socially. Collaboration is needed to create a viable business case between the partners involved."
The scheme has been recognised by the EU and, through the Horizon 2020 project, a €5m grant has been provided to expand De Stroomversnelling. The new initiative, REnnovates, focuses on the wider energy use in the retrofit. It aims to use technology to make the operation of the energy modules more flexible and offer services to the grid. Stedin, the network operator, is a partner in the project.
The key to REnnovates is that the households that go through the De Stroomversnelling process end up using electricity only. Therefore, in winter there is high demand for power but residents can give back the summer surplus to the grid. The use of heat pumps and batteries ensures that Stedin can minimise or avoid costly investments in extra capacity on the electricity network. The REnnovates project, so far, includes 200 homes in De Stroomversnelling, but the partners are looking beyond the Netherlands.
"We are currently looking for opportunities to replicate the deep renovation approach in the REnnovates project across Europe," says van Leeuwen. Poland and Spain are likely to benefit next given that other partners in the project include Warsaw-based construction company Mostostal and Basque-based corporation Mondragon. But other markets will also be considered, she says.
10 days is all it will take to improve the efficiency of Dutch houses
The Baltic experience
Elsewhere in Europe, some countries have instigated loan and grant programmes to stimulate retrofit building schemes. Estonia has a "revolving" loan scheme set up through its credit and export guarantee fund (KredEx). The fund, which ran from 2009 to 2013, has been used to renovate apartment buildings - which house 75% of the Baltic state's 1.3 million people.
Working with the country's two largest banks - SEB and Swedbank - KredEx dispersed €72 million in loans to associations that owned at least three apartments. Financial backing, which came from the European Regional Development Fund, the Council of Europe Development Bank, KredEx and the Estonian government, covered to up to 85% of the renovation value of each apartment.
The scheme resulted in average energy savings of 48% in more than 20,000 apartments, says Madis Laaniste, strategic planning manager in the energy department at Estonia's ministry of economic affairs and communications. The average loan was about €110,000, with the efficiency improvements targeted at different features of a building, including heating, ventilation, windows, roofs, doors, ceilings and facades.
Estonia also created its green investment scheme (GIS), which used funds from the sale of assigned amount units (AAUs) - and are tradable under the Kyoto protocol - to renovate the buildings. Each AAU is equivalent to one tonne of CO2. The protocol's goals are set mainly against 1990 baselines, so most countries in central and eastern Europe, including Estonia, could easily meet Kyoto targets because of economic contraction since the collapse of the Soviet Union. GISs were established in some countries to provide an environmental benefit from the proceeds of surplus AAUs, which countries with Kyoto caps can sell to each other.
KredEx also distributed funding through a grant scheme that provided money towards 15%, 25% or 35% of the renovation costs, says Lauri Suu, grant manager at the organisation. The required energy efficiency improvements and complexity of the retrofit depended on the size of the grant. To receive a 15% grant, energy savings had to amount to between 20% and 30%; a 25% grant was linked to efficiency improvements of 40%; and the 35% grant to energy savings of at least 50%.
In terms of the complexity of the renovation, a 35% grant required work on a building's roof, façade, windows, heating system, heat-recovery ventilation system, and targeted energy consumption of less than 150kWh per m2. A 25% grant does not include the heat-recovery ventilation system, while the energy consumption target is less than 200kWh per m2.
Fully 661 buildings and about 24,000 apartments have so far benefited from the scheme, achieving average energy savings of about 40%, says Suu. The grant scheme is still operating in Estonia but the revolving loan has been discontinued mainly because banks are now providing their own funding for retrofits.
Germany has a similar scheme through its state-owned development bank KfW, says Eriksen at Velux. The bank provides loans for renovation activities that go beyond what the law requires, he says. For example, if a window is to be replaced it will need to meet a particular standard level of efficiency, but the replacement could qualify for support from KfW if the savings are 20% greater than the legislation requires.
Multiple benefits
For a renovation scheme to be successful it needs to provide multiple benefits that go beyond thinking in terms of a payback from the energy saving. Eriksen says: "No-one buys a new kitchen or bathroom for a payback. In all other areas [of the building sector] no one talks of a payback. They do it because they would like a modern house and a nice place to live. But when it comes to renovation strategies we talk of providing a payback. We need to consider the other qualities, such as a more healthy building to live in as well."
24k apartments in Estonia have been made more energy efficient
