Energy Efficiency

Surging energy poverty in Europe – it is time to act on renovation!

Oliver Rapf
Oliver Rapf
May 6, 2022

Oliver Rapf, Executive Director of the BPIE, reflects on the growing issue of energy poverty throughout Europe and examines how deep renovation can alleviate the associated problems.

​Between 50 and 125 million people in Europe are unable to afford proper indoor thermal comfort, and the situation is worsening every day.  The Ukraine crisis and the recent decisions by Russia to cut off gas supplies to Poland and Bulgaria are a stark reminder of how vulnerable European citizens are when it comes to securing a warm home and how fragile social and political stability is. But energy prices were rising even before Putin’s aggression. Unfortunately, it took the most serious shock in energy prices since the oil crisis in the 1970s to elevate the issue of energy poverty to gain much-deserved attention. Today, governments all over Europe are implementing various measures to reduce the economic burden of high energy bills, ranging from fiscal measures to direct financial support for citizens.

These are short term fixes which are justified though costly. But what about structural changes to our energy and buildings policies, our support programmes in countries and regions which would have long-lasting positive effects?

Need for long-lasting reduction in energy demand

In its recent RePowerEU strategy, a response to the energy supply crisis, the European Commission announced the development of an Energy Savings Plan. This can only be welcomed, but such a plan must go beyond appealing to citizens to turn down their heating at home or to use public transport instead of private cars. The plan must include measures which deliver a long-lasting reduction of our energy demand, and these measures must be supported by the set of Directives which are currently in the political discussion process, such as the Energy Efficiency Directive and the Energy Performance of Buildings Directive. BPIE developed a number of ideas how the EU should respond with short-term and long term measures.

At the same time, we need to make sure that energy and building policies are designed to support a socially just energy transition, as we argue in a recent BPIE publication. Focus must be put on ensuring that renovation measures and financial support for renovations are accessible, in particular to vulnerable groups, and that information is effectively reaching those who need to be made aware of the solutions.

How to finance deep renovations – the fair way

Citizens in all EU countries are suffering from increasing energy costs. But the problem is aggravated in the countries of Central and Eastern Europe (CEE), which have the highest concentration of energy poor households in Europe. The ComAct Horizon2020 project, which aims to alleviate energy poverty by triggering deep renovation, has found that effective policies tackling energy poverty in multi-family buildings are missing in CEE countries. Although there are some financial instruments targeting deep renovation, these are mostly subsidies that don’t support increasing the energy efficiency of the building envelope nor target energy poor households, who are often more difficult to reach.

New ideas and programmes are needed to improve residents’ financial and living situation: high home ownership rates in multi-family buildings in this region are not suited for traditional renovation schemes shaped by Western European experiences where people typically rent their homes.

Renovations could be directly financed from the Recovery and Resilience funds available to every Member State. Funding support should be proportionally linked to the depth of renovation, meaning that higher support should be given to renovations achieving higher savings, either through a one-time deep renovation or in a step-by-step process to avoid lock in effects. Member States should therefore re-evaluate their plans to ensure that renovation is core and central to their efforts to increase energy independence and to reduce energy poverty.

Additionally, Member States’ national building renovation plans should include stronger requirements to set up schemes to alleviate energy poverty in collaboration with local authorities. A large portion of these plans (to alleviate energy poverty) will need to be included in "Social Climate Plans" (SCP), which every Member State will need to present to the Commission by June 2024. Homeowners and tenants need to be reached during in this process to ensure that deep renovation can achieve this aim. At the same time, homeowners should be empowered to better understand their needs and possible benefits regarding the renovation of their homes.

Eradicating energy poverty through deep renovation

Building renovation, and specifically deep renovation, can help alleviate many of these issues since it improves the building structure, air quality, and overall climate impact of the building, and significantly reduces energy bills.

Herein lies the caveat. Deep renovation in the best of circumstances is challenging. It often involves costly interventions, requiring highly complex technical and organisational support. Add to that an even more serious challenge of owner-occupied multi-family buildings with inhabitants from a mixed social background, and we have a real obstacle standing in the way of building renovation. The renovation of such buildings requires various kinds of support measures, which is where effective policies at the Member State and EU level need to come in.

But the solution also needs to come from those that supply renovation services. The construction sector should develop and provide comprehensive renovation solutions which make it easy for owners to take a positive investment decision. The renovation reality today still requires owners and investors to act as renovation coordinators having to deal with many different companies who deliver parts of a renovation rather than a complete package.

So a lot needs to change:

  • The European Commission must release a comprehensive Energy Saving Plan which introduces long-term structural change to how we use energy.
  • Policymakers on all levels should put a particular focus on vulnerable groups in society and design policies and programmes which contribute to the alleviation of energy poverty and the achievement of a just and fair transition towards carbon neutrality.
  • National governments should use the available EU funds including the EU-ETS revenues to provide well-targeted support for deep renovation.
  • Tenants, owners and investors should receive well-designed advice detailing how, when and where to invest in renovation measures.
  • The construction sector must innovate to deliver a comprehensive and convincing renovation offer and ensure it has a skilled and motivated workforce to deliver high quality renovations.

If all these efforts come together, a socially fair transition to a climate-neutral building sector will be within reach.

BPIE – Buildings Performance Institute Europe

As Europe's leading independent think tank on energy performance of buildings, BPIE’s vision is a climate-neutral built environment, aligned with the ambition of the Paris Agreement, and in support of a fair and sustainable society.

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