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

Scenario 3 - Deep
The Deep scenario combines the deep renovation path with the medium rate of renovation growth.
By virtue of the rapid shift towards deep renovations, and the growing share of nearly Zero Energy
Buildings towards the middle of the century, this scenario achieves energy savings as high as 68%, with
corresponding CO 2
emissions reductions of 90% (under the fast decarbonisation option) - the target for
buildings set out in the EU 2050 Roadmap.
While the investment required for the deep scenario is considerably greater than for the earlier scenarios,
so are the savings, as demonstrated in the table below.
By 2020, societal savings will amount to €1,656 billion including externalities. This figure represents
almost a doubling compared to scenario 2. On the other hand, investment costs until 2020 are also
highest of all scenarios, amounting to €477 billion which is due to the fact that deep renovation measures
are introduced quickly and on a large scale, leading to large energy savings but also requiring larger
investments. Compared to all other scenarios, this is equivalent to an almost doubling of the investment
costs in the period to 2020, or nearly a five-fold increase compared to the baseline. As a result, the internal
rate of return of 9% is slightly lower than in the previous scenario. However, the savings at present value
are still higher than the investment costs, delivering a net saving for consumers of €10 billion.
Looking ahead to 2050, the internal rate of return increases to 11.8%, however, it is only the fourth highest
of all scenarios. This can be explained by the fact that the total amount of initial costs for deep renovation
measures are relatively higher due to their fast introduction in the first half of the scenario period. This
prevents the learning effects to have a full impact on cost reduction of deep measures.
As in the case to 2020, the investment costs of this scenario are the highest also in the years to 2050,
amounting to €937 billion. However, savings are also the highest at €1,318 billion, resulting in a net
saving for consumers of €381 billion.
The impact on employment creation is the highest of all scenarios. Triggered by the relatively fast increase
in the renovation rate and by applying deep renovation measures, this scenario leads to the creation of
1.1 million direct jobs per year on average for 40 years. This is more or less equivalent to employing 1.1
million people for their full working life time.
Table 3C4 – Key results of scenario 3
Source: BPIE model
Scenario
Results
in year...
% energy
saved
% CO 2
saved
Investment
(€bn)
Energy
cost
saving
(€bn)
Net
saving to
consumers
(€bn)
Net saving
to society
(€bn)
3 – Deep 2020 13% 16-35% 477 487 10 1656
3 - Deep 2050 68% 71-90% 937 1,318 381 9,767
To summarize, this scenario delivers high energy and CO 2
savings, while also delivering the highest
employment effects. However, it also requires a steep increase in investments in this decade which would
represent a step change compared to the current reality of renovation practices in Europe.
116 | Europe’s buildings under the microscope