Housing Ministers, meeting in Spain today, heard from one of the EU’s top climate mitigation experts about how large-scale, deep retrofitting programmes across Europe could lead not only to substantial energy savings and greenhouse gas reductions, but also to a decline in dependency on fossil fuel from overseas, a substantial increase in jobs, and the alleviation of fuel poverty.
Minister are meeting in Toledo for an informal housing meeting where one of the main topic of discussion was the energy efficiency of homes and the retrofitting of Europe’s housing stock. They listened to a presentation from Diana Urge-Vorsatz, Director of the Centre for Climate Change and Sustainable Energy Policy (3CSEP) at the Central European University (CEU) in Budapest, who outlined how much Member States have to gain economically, socially and environmentally from the large scale energy-efficient building renovations.
The particular study, which Dr Urge-Vorsatz and her team conducted, was into the Hungarian housing stock, but the findings have important ramifications for other countries in the EU. The study examined several renovation scenarios with different levels of energy efficiency improvement and different amounts of buildings renovated per year. The results clearly demonstrate that the employment impacts of such a programme are very positive, especially for deep renovation scenarios. These assume energy efficiency improvements of 75-90% per building which can realistically and cost effectively be achieved in virtually all Hungarian buildings through currently available know-how.
Ministers were shown how by 2020, a large-scale, deep renovation program in Hungary could create up to 130,000 net new jobs (including the workforce losses in the energy supply sector), as opposed to approximately 43,000 in the suboptimal scenario. The peak figures for the creation of employment could happen in fact in 2015, when 184,000 new jobs are created in the most ambitious deep renovation scenario. Up to 38% of the estimated employment gains are due to the indirect effects on other sectors that supply the construction industry and the induced effects from the increased spending power of higher employment levels.
Speaking at the conference, Dr Urge-Vorsatz said: “Our research in Hungary demonstrates that there is a way to create additional jobs while greatly reducing the energy costs of households and public buildings, reducing natural gas dependency and making further contributions to mitigating climate change. These lessons apply not just to Hungary, but to the whole of Europe. I was pleased to be able to discuss with housing ministers how the tangible benefits of the changes offer a long-term and sustainable way out of current economic difficulties.”
The study highlighted that building refurbishment activities are typically much more labor-intensive than other types of climate change mitigation and economic recovery activities. For instance, the forecasted direct employment impacts of deep renovations would be five times higher than those generated in Hungary by the same investment in transport infrastructural developments such as road construction.
While a wide-spread deep retrofit program would be costly (up to €2 bn initially and €1 bn in the later program phases, for a scenario roughly doubling the present renovation rate), the research has also found that redirecting the current energy subsidies and making wise use of available EU funds could potentially make available up to €1 billion per year, an amount that by itself practically covers during the first years of the program the full annual costs of renovating Hungarian buildings at a rate of 100,000 units per year. A portion of the investments could also be financed through a scheme where homeowners pay back a loan over time from the money saved due to their reduced energy consumption after the retrofit.
From a total cost perspective, a more gradual implementation (2.3% of the floor area, equivalent to 100,000 dwellings per year) of a deep renovation program is thought to be much more attractive as its overall costs are lower and it produces less economic and labor market “shocks”. Such a program can create approximately 52,000 jobs by 2020, with a peak employment creation of 74,000 jobs in 2015. The length of the program ensures that the employment created is long-term; and new jobs are likely to be distributed throughout the country, as renovations are usually carried out by local small and medium enterprises.
Additionally up to 85% of Hungarian heating energy use, and the corresponding CO2 emissions, can be avoided by a consistent and wide-spread deep retrofit program that applies the principles of the passive house to Hungary’s public and residential buildings. A less efficient retrofit scenario applying suboptimal renovation levels achieving only around 40% efficiency improvement would lock in approximately 45% of 2010 building heating-related emissions–around 22% of 2010 total national emissions–by the middle of the century, jeopardizing ambitious national emission reduction targets.
A deep retrofit program would also allow Hungary to significantly reduce its natural gas imports and therefore improve its energy security. By 2030, a deep renovation scenario could save up to 39% of annual natural gas imports, and up to 59% of natural gas import needs in January - the most critical month from the perspective of energy security. The suboptimal scenario, on the other hand, would save just over 10% of national natural gas imports, and the peak loads (January import needs) would be reduced merely by 18%.
The report concludes that high efficiency renovations create more jobs, save more energy, reduce more emissions and decrease to a larger extent energy dependency.