Rising gas prices are ringing social and political alarm bells. It is officially estimated that over 96m people in the EU are at risk of social exclusion, and this damning figure predates the worst impacts of COVID. It seems likely that many people will struggle to properly heat their homes this winter.
Meanwhile, EU leaders discussed options at last week’s European Council, and energy ministers are holding an ‘extraordinary’ Council on the gas price issue tomorrow.
But in the general hunt for solutions, the importance of making our homes and buildings more energy efficient is not getting sufficient attention. To help remedy that, we commissioned research from Cambridge Econometrics, a consultancy that regularly carries out modelling work for the EU Commission. The analysis has just been published and the results are striking.
Cambridge Econ estimates that meeting the EU ‘Renovation Wave’ objective of retrofitting 35 million buildings could cut household energy bills by around €400 per year, in renovated homes that are heated by gas. This is a reduction in gas heating costs of around 50 percent.
Other key findings:
- Meeting the Renovation Wave objectives could reduce gas consumption from homes by about 43,000 GWh per year across the EU. That is the equivalent of 25 of the world’s largest LNG carriers.
- This could reduce imports of gas by up to €3.3bn per year by 2030, and achieve a reduction in imports of up to €12.8bn cumulatively over the period to 2030. Cumulative savings would be higher if renovation programmes are scaled up faster.
As our CEO Jens Birgersson puts it, the analysis shows that building renovation can literally insulate people from high energy prices.
A crucial point in this debate is that renovation is a lasting solution. There is talk of financial compensation this winter for high energy prices. But longer-term, that type of compensation basically subsidises fossil fuel use. Deep energy renovations deliver multiple benefits, from saving money to reducing pollution to creating healthier and more comfortable homes.
It may be a cliché, but it is also true – the cheapest, cleanest and safest energy is the stuff you don’t use. EU leaders have to remember that ideas are cheap, but energy is expensive. If we prioritise renovation we send a clear message that we are investing in people’s futures.