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BPIE: Europe's buildings under the microscope - PU Europe

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B. Overview of <strong>the</strong> Renovation Model<br />

A renovation model has been developed which allows scenarios to be examined that illustrate <strong>the</strong> impact<br />

on energy use and CO 2<br />

emissions of different rates (percentage of <strong>buildings</strong> renovated each year) and<br />

depths of renovation (extent of measures applied and size of resulting energy and emissions reduction)<br />

in <strong>the</strong> residential and non-residential building sectors up to 2050.<br />

A number of scenarios have been modelled to illustrate <strong>the</strong> financial, economic, environmental,<br />

employment and energy use impacts of different rates of uptake and depth of building renovation. In<br />

particular, <strong>the</strong> scenarios assess <strong>the</strong> following outcomes, both annually and in total:<br />

• Energy saved – <strong>the</strong> total energy savings over <strong>the</strong> lifetime of <strong>the</strong> measures installed<br />

• CO 2<br />

saved – <strong>the</strong> total CO 2<br />

savings over <strong>the</strong> lifetime of <strong>the</strong> measures installed. The CO 2<br />

savings in a given<br />

year are calculated by multiplying <strong>the</strong> energy saved by <strong>the</strong> weighted average CO 2<br />

emission factor for<br />

that year<br />

• Total investment required - <strong>the</strong> total cost of <strong>the</strong> installed renovation measures, including materials,<br />

labour and professional costs<br />

• Energy cost savings – <strong>the</strong> cumulative value of <strong>the</strong> lifetime energy saving. Savings in a given year are<br />

calculated by multiplying that year’s energy saving by <strong>the</strong> weighted average energy price<br />

• Employment impact – <strong>the</strong> number of full time equivalent jobs created over <strong>the</strong> 40-year period (2011-<br />

2050), based on employment factor (no. of jobs per €1 million investment) times <strong>the</strong> average annual<br />

investment<br />

• Cost-effectiveness indicators:<br />

> The internal rate of return (IRR) - based on <strong>the</strong> net saving each year (i.e. cost saving less investment<br />

required in a given year)<br />

> Net saving to consumers - <strong>the</strong> difference between <strong>the</strong> lifetime energy cost savings and <strong>the</strong> lifetime<br />

investment. Both figures are discounted by <strong>the</strong> weighted average consumer discount rate.<br />

A negative figure indicates a net COST to consumers<br />

> Net saving to society, including <strong>the</strong> value of externalities - <strong>the</strong> sum of <strong>the</strong> lifetime energy cost<br />

savings and value of externalities, less <strong>the</strong> lifetime investment. Both figures are discounted by <strong>the</strong><br />

societal discount rate.<br />

A negative figure indicates a net COST to society<br />

> Carbon abatement cost – net lifetime societal savings divided by <strong>the</strong> lifetime carbon savings.<br />

A negative figure indicates a net benefit per tonne of CO 2<br />

saved<br />

The development of <strong>the</strong> model is <strong>the</strong>refore split into two parts:<br />

(I) Assessing <strong>the</strong> practical limit (of floor area to be renovated and <strong>the</strong> energy use associated with this<br />

building floor area); and<br />

(II) Examining scenarios.<br />

106 | <strong>Europe</strong>’s <strong>buildings</strong> <strong>under</strong> <strong>the</strong> <strong>microscope</strong>

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