Investment opportunities in deep renovation in Europe
NEWS FROM EUROPE
Written by Energiaklub
BPIE – Buildings Performance Institute Europe - has carried out an analysis of the investment opportunity for Europe’s building sector, which could help mitigate the damage of the COVID-19 pandemic. The analysis outlines the economic opportunity for Europe’s building sector, which could help mitigate economic damage of the COVID-19 pandemic.
The findings show that the total amount to trigger a significant scaling up of the renovation rate and depth would add up to €90 billion per year, allocated to support mostly deep renovation, advisory services for owners/investors and technical assistance in member states, as well as innovation in serial renovation solutions. This funding would support an annual investment in mostly deep renovation of € 243 billion in EU-27.
€73 billion/a should be allocated in support of building renovation, while an additional €13.8 billion/a should be provided in an innovation fund to scale up serial renovation of buildings on an industrial scale.
A significant push for serial renovation is necessary to increase speed and depth of renovation while keeping the required work force at a realistic level. Industrial/serial renovation delivers cost-effective net-zero renovation at high quality by making use of prefabricated building modules, innovative financing and business models, and digitalisation across the value chain.
179 billion is needed for residential buildings and 64 billion is for other building types. Subsidies and incentives should help both those who want to renovate their buildings and businesses who want to make the renovations. This program should have two important pillars: first it should target and help owners and investors and second it should provide technical background for mass renovations.
Another area of support is to prepare and encourage the construction industry to serve mass renovations as efficiently as possible. To this end, various research and pilot projects have been underway across Europe over the last 7 years to develop industrialized, prefabricated solutions. However, support for the construction industry would not only facilitate this, but could also remedy and alleviate a number of other pre-epidemic problems, such as:
- the decarbonisation of the built environment can be accelerated by developments resulting in standard solutions;
- the time required by the construction sites and the construction site can be reduced;
- higher quality renovations can be achieved with long-term quality guarantees and monitoring; but also these solutions can alleviate the shortage of skilled workers;
- encourage the development of new, innovative business models, thus opening up new market areas;
- help the renewal of the construction industry: promotes the testing and market maturity of new technologies;
- make renovations more attractive than new construction works.
The industrialized mass solutions in the construction industry usually have high start-up costs and therefore they can not come true because of it. According to BPIE’s calculations 30% of the subsidy, a 69 billion EUR innovation fund would be enough to launch a market for industrialized technologies, which would also create a huge impact on green economic recovery. The organization proposes that, the fund should be available for 5 years with an annual budget of 13.8 billion EUR.
In addition, advisory services for appropriate renovation measures should be increased significantly, so that investment decisions avoid lock-in effects and contribute to a full decarbonisation of the building stock. This includes the establishment of one-stop shops, the roll out of the Building Renovation Passport and respective awareness campaigns.
Further, technical assistance for member states should be increased so that national authorities are enabled to establish measures and support programmes to deliver the renovation programmes. It would be appropriate to spend at least €1/m2 of floor space to be renovated for technical assistance in member states, requiring a total of €26 billion to cover the full European building stock. BPIE recommend spending 50% of this funding in the first decade to kick-start the process. This means that an additional €1.3 billion/a in this decade is needed.
Encouraging deep renovations in Europe offers a unique opportunity to give a new dynamism to the economy, while bringing many benefits to European citizens and the climate as well.