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Joint Statement – November 28, 2022
Preamble: Squaring security of supply and decarbonizing buildings will not be simple. Buildings are the largest single source of energy consumption in the EU and represent 40% of final energy consumption and 36% of CO2 emissions1. Heating occupies the largest part of the building’s total energy consumption, about 60%, and the demand is concentrated for a few months. In short, this sector is difficult to mitigate and requires a more comprehensive and pragmatic approach to ensure full decarbonisation by 2050.
We learned hard lessons about over-reliance on too few solutions. Risks include energy waste (shortage), expensive and/or slow network expansions, stranded assets and technology monopolies. There is also the problem of lack of spare capacity and consumer choice. Electrification will certainly play an important role, but without considering other energy vectors, systems will face serious challenges in matching supply and demand (as recently acknowledged by European electricity transmission system operators; ENTSO-E2).
For the revision of the Energy Performance of Buildings Directive (EPBD), we must recognize the complementarity between renewable electrons and renewable molecules. A wide range of efficient solutions use green energy carriers, installed on site or delivered through energy networks. These technologies include heat pumps, hybrid solutions, cogeneration, micro-CHP, residential fuel cells and renewable energy ready boilers.
Recommendations: The signatories of this statement call on policy makers to ensure an ambitious and cost-effective decarbonisation of the European construction stock. We must strive for smart, integrated energy systems that are increasingly based on renewable energy sources where local circumstances and consumer needs are fully taken into account. All renewable and efficient energy solutions, whether deployed on-site via energy grids or off-grid, should play a role. We encourage policymakers to consider the following recommendations:
1. A bottom-up approach is key to ensuring cost-effective decarbonisation that takes into account local specificities and empowers local actors.
- When the realities of local and national circumstances are taken into account, unexpected opportunities for cost-effective decarbonisation emerge. In this way, the full potential of renewable energy, energy efficiency measures and synergies through the existing infrastructure can be used.3.
- We want to empower local authorities, consumers and energy communities, together with suppliers and producers in their areas.
- Such an approach can place an equal focus on energy system efficiency, demand reduction, demand-side flexibility and energy diversification, as highlighted in the European Commission report. First instructions for energy efficiency4.
2. Affordability of sustainable heating solutions should be the cornerstone of a just transition in the building sector.
- Consumers’ ability to pay must be taken into account in direct costs (energy bills, building systems, renovations) and indirect costs (infrastructure, storage, peak capacities). The specific needs of groups such as tenants, building owners, industrial customers and small and medium-sized enterprises should be duly taken into account.
- Reducing peak demand through demand-side solutions, including on-site heat and/or power, will greatly reduce system costs. Such gains will directly benefit consumers by keeping the supply and infrastructure components of energy bills under control. This will provide citizens with the opportunity to flexibly rely on the most cost-effective and increasingly sustainable solutions available locally.
- The EPBD should therefore actively promote the “total cost approach”, taking into account direct and indirect investment and operating costs. Savings from daily and seasonal demand management must be shared with customers, through adjusted tariffs and incentives.
3. Solutions that balance peaks and reward demand management should be integrated into any strategy for decarbonizing residential heating.
- New solutions, such as hybrid heating technologies that use an increasing share of renewable energy sources, can be implemented today and offer ways to balance peak flows at limited costs for end users. EPBD should promote such solutions. This is in line with the recent political elections held in several EU member states.5
- Heat pumps are key. When supplemented with hybrid heating solutions, the decarbonisation of heating becomes easier, cheaper, more flexible and more socially acceptable. Some areas have a lot of variable renewable energy that needs to be stored. Incorporating hybrid solutions to overcome these challenges could save over €520 billion between now and 2050.6
- Geothermal heat, solar heat, thermally driven heat pumps, bioenergy, cogeneration including micro-CHP, residential fuel cells and boilers are ready to run on renewable energy sources. They should also be supported by the EPBD when they are sustainable and cost-effective. The definition of Zero Emission Buildings (ZEBs) should support the use of all cost-effective renewable energy solutions including: on-site sources, nearby sources, grid and off-grid renewable sources. In this way, peak demand can be managed economically and reliably. The ZEB definition should take into account the reduction or phase-out of building-related greenhouse gas emissions, rather than excluding certain technologies. This is the most effective way to encourage demand response measures. Otherwise, buildings will continue to contribute to emissions at the point of electricity generation.
- The increase in efficiency generated by the seasonal flexibility of demand should also be taken into account in the energy performance assessment of buildings and the energy performance certificate.
4. All renewable-ready heating technologies should be allowed to contribute to cost-effective decarbonisation of the European building stock.
- REPoverEU has set a target for 2030 of 35 billion m3 of biomethane (380 TWh) and 66 billion m3 of renewable hydrogen (780 TWh). This is more than current household gas consumption, which will gradually decrease through the Renewal Wave. According to Guidehouse7REPoverEU volumes will be sufficient to meet the demand for renewable gas in buildings as the demand will be reduced to 400 TWh through energy efficiency measures.
- The replacement of old and inefficient heating systems with heating devices that use a range of renewable energy sources should be supported in the EPBD when cost-effective. This would ensure the most optimal use of each technology according to the specifics of the building and local circumstances.
- This approach will also reduce peak electricity demand at times of insufficient solar and wind output and high heating demand (“Dunkelflute“), saving billions of euros in expensive infrastructure investments for both consumers and businesses.8
Download the PDF here.
1 European Commission, 2020. A wave of renewal for Europe, p. 23.
2 ENTSO-e, 20 October 2022 Early Insights 2022-2023 Winter Forecast Report.
3 Fraunhofer IEE & Fraunhofer ISE, 24 June 2022 Interim report on the bottom-up study project on pathway options for efficient and socially responsible decarbonisation of the heating sector (in German).
4 European Commission, 2021. Recommendation and guidelines of the European Commission on the first principle of energy efficiency.5 Bloomberg, 2022 Dutch homes will have to install hybrid heat pumps from 2026.6 Guidehouse2022. Decarbonisation pathways for the European construction sector.
7 Guidehouse2022. Decarbonisation pathways for the European construction sector.
8 Guidehouse2022. Decarbonisation pathways for the European construction sector.
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