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

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C. Setting <strong>the</strong> scene<br />

This section explores six scenarios <strong>under</strong> which <strong>the</strong> renovation of <strong>the</strong> <strong>Europe</strong>an building stock might<br />

evolve over <strong>the</strong> next 40 years. These scenarios are derived from combinations of <strong>the</strong> renovation rate and<br />

renovation depth pathways as well as <strong>the</strong> two decarbonisation rates described earlier.<br />

One difference between <strong>the</strong> baseline and <strong>the</strong> o<strong>the</strong>r five scenarios is <strong>the</strong> age profile of <strong>the</strong> residential<br />

stock being renovated. Except for <strong>the</strong> baseline scenario, <strong>the</strong> profile of homes renovated is weighted<br />

more heavily towards <strong>the</strong> older stock in <strong>the</strong> period 2011-2030, giving a higher energy saving per €<br />

of investment during this period. The reason for applying this weighting is on <strong>the</strong> basis that policies<br />

to increase renovation rates would favour older properties where greater energy (and hence carbon)<br />

savings can be achieved.<br />

Scenario 0 – Baseline (Business As Usual)<br />

For <strong>the</strong> baseline scenario, it is assumed that <strong>the</strong> prevailing renovation rates (which are predominantly<br />

minor) continue until 2050. Unlike <strong>the</strong> o<strong>the</strong>r scenarios, this does not result in a full renovation of <strong>the</strong><br />

building stock. In fact, at <strong>the</strong> prevailing renovation rate of just 1% p.a., only 40% of <strong>the</strong> stock is renovated<br />

by 2050.<br />

In terms of costs and savings 58 , <strong>the</strong> baseline scenario requires a total investment of €164 billion to 2050,<br />

generating lifetime energy savings to consumers worth €187 billion – i.e. a net saving of €23 billion.<br />

Overall benefits to society, including <strong>the</strong> value of externalities, amount to €1,226 billion.<br />

Compared to today’s regulated energy use (heating, ventilation, hot water, cooling and lighting), energy<br />

savings of 2% are achieved by 2020, rising to just over 9% by 2050. The corresponding CO 2<br />

savings in<br />

2050 are 18% to 72% (<strong>the</strong> lower figure is calculated at <strong>the</strong> low decarbonisation rate; <strong>the</strong> higher at <strong>the</strong><br />

fast decarbonisation rate). It can be seen that <strong>the</strong> baseline scenario falls far short of <strong>the</strong> level of ambition<br />

required to deliver <strong>the</strong> carbon savings envisaged in <strong>the</strong> EU 2050 Roadmap.<br />

The results in saved energy are minor compared to today, which means that <strong>the</strong> high CO 2<br />

reductions by<br />

2050 (72%) occur mainly due to a decarbonisation of <strong>the</strong> energy supply when a 5% annual decarbonisation<br />

rate is applied.<br />

The table below summarises <strong>the</strong> key results for 2020 and 2050.<br />

Table 3C1 – Key results of scenario 0<br />

Source: <strong>BPIE</strong> model<br />

Scenario<br />

Results in<br />

year...<br />

% energy<br />

saved<br />

% CO 2<br />

saved 59<br />

Investment<br />

(€bn)<br />

Energy<br />

cost<br />

saving<br />

(€bn)<br />

Net<br />

saving to<br />

consumers<br />

(€bn)<br />

Net<br />

saving to<br />

society<br />

(€bn)<br />

0 - Baseline 2020 2% 5-28% 107 94 -13 277<br />

0 - Baseline 2050 9% 18-72% 164 187 23 1226<br />

58<br />

All costs and savings are at present value. Consumer savings (i.e. those arising to end-users – households, businesses and public sector bodies) are<br />

discounted by <strong>the</strong> weighted average consumer discount rate, but do not include externalities. Societal savings are discounted at 3% and include<br />

externalities.<br />

59<br />

For <strong>the</strong> percentage of CO 2<br />

saved, <strong>the</strong> lower figure reflects <strong>the</strong> slow decarbonisation rate, while <strong>the</strong> higher figure reflects <strong>the</strong> higher decarbonisation<br />

rate.<br />

<strong>Europe</strong>’s <strong>buildings</strong> <strong>under</strong> <strong>the</strong> <strong>microscope</strong> | 113

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