Multiple benefits of renovation in buildings - PU Europe

Multiple benefits of investing in energy
efficient renovation of buildings
energy efficient renovation of buildings, both types of subsidy can be reduced. This will
have a positive effect on public finances.
A more indirect benefit occurs through health benefits. Most energy efficiency measures
will improve the indoor temperature, and by choosing renovation measures that also improve
the indoor climate, health benefits can be obtained through fewer diseases, reduced
mortality, improved worker productivity, and improved overall quality of life. While most
of these benefits accrue to society in general, public budgets may also be improved
through fewer hospital expenses and fewer sick days.
Health benefits also occur as power and heat production from power plants, district heating
plants and local heating is reduced. Power and heat generated in these facilities give
rise to air pollution such as NO x, SO 2, small particle matters (PM2.5) and CO 2, and by
reducing energy consumption this air pollution can be reduced.
Given the current economic downturn, energy efficiency investments can increase economic
activity, and improve public budgets by reducing unemployment benefits and increasing
tax revenue from the increased economic activity. Positive effects from this include,
increased tax revenue (including VAT, labour income tax, corporate income tax
etc.) from increased activity and employment, reduced unemployment expenses. This
effect is relevant during periods of economic crises, when there is spare capacity in the
economy.
In addition to these benefits, which we attempt to quantify there are additional benefits
which are more difficult to assess and are beyond the scope of this study. Three such benefits
are the improved life quality of living in a more comfortable living environment e.g.
through a high average living room temperature (benefits which goes beyond the health
benefits, which we have tried to quantify), the value of reducing EU’s energy supply dependence
on third-countries, and the reduced dependence on volatile fossil fuel prices.
1.2 Scenarios
We have considered two scenarios for investments in energy efficient renovation of buildings.
These scenarios have been defined in an extensive study for DG Energy and
Transport in 2009. 10 This work established the potential penetration in the market of best
available technologies under different conditions, such as the level of political ambition
for breaking down barriers to energy efficiency investments. Based on this extensive work
we focus on two scenarios: 1) Low Energy Efficiency scenario, and 2) High Energy Efficiency
scenario. These scenarios take into account a baseline increase in energy efficient
renovation of buildings based on a business-as-usual scenario. The potential defined in
the two scenarios should therefore be considered in addition to business-as-usual.
The low EE scenario assumes a relatively high level of policy initiative, in order to break
down barriers to otherwise cost effective investment potential. However, the entire investment
potential is so called “cost-effective” meaning that under normal assumptions
10 Fraunhofer ISI et al (2009)
12