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Energy and Housing in 2030: Looking behind the targets

How will the affordable housing sector contribute to a more energy efficient Europe?

Brussels, 25 July 2014 | Published in Energy

While the tension on the Ukrainian soil keeps escalating and the EU-Russian relations push the energy security issue further up in the European agenda, the European Commission proposes reducing the bloc's energy use by 30% by 2030. The affordable housing sector, as a key player influenced by the political decisions made, is encouraged by the rather ambitious target, but the accompanying elements of this target will be the ones that will make the difference at the end of the day.

CECODHAS Housing Europe works to ensure a sustainable future for the affordable housing sector. This can only be secured through very concrete and evidence-based initiatives. The newly elected president of the organization, Marc Calon stresses that:

“Apart from the targets, we need a strategy that is in tune with developments on the ground. We are encouraged by the objective of the European Commission of reaching a 2% renovation rate, but we are in need of more favorable financial conditions, particularly in cooperation with the EIB, as well as business models that work. Furthermore, it is crucial not only to have a stable legislative framework, but to make sure that this framework is implemented in the best possible (i.e cost optimal) way, especially with regard to the labelling requirements and the nZEB roadmaps of the EPBD and the renovation roadmaps of the EED.”

Given the “affordability” gap in the housing market and the need for energy consumption reduction of which 30% is due to residential sector, we need to refurbish affordable housing units at a massive scale. In fact, refurbishing 800.000 dwellings to the highest standards each year thereby creating 200.000 jobs on a yearly basis, at least 16 billion Euros are needed… As stated in the European Commission Communication: “To reap the benefits of energy efficiency in buildings, the biggest challenge is to accelerate and finance upfront investments and speed up the renovation rate of the existing stock from 1.4% - today’s average - to above 2% annually. Part of the challenge is to implement this acceleration in a socially acceptable way.” We couldn’t agree more and we welcome the ongoing work of the European Investment Bank to set up a new facility to provide affordable finance for energy efficiency investments in the housing sector.

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The Energy Efficiency Directive has been mobilizing member states to put in place renovation roadmaps (art.4) and there is indeed a range of innovative financial models already in place. The most recent publication on financing Nearly Zero Energy Housing Projects with “Exemplary Financing Models across the European Union” that was compiled by the National Housing Federation (NHF) and CECODHAS Housing Europe presents some success stories, including enhanced loans, Pay As You Save (PAYS) schemes, guarantee programmes and Energy Service Companies (ESCO’s).

Alongside with these financing models, numerous encouraging best practices have been developing over the last years, including the CECODHAS Housing Europe flagship European project “POWER House nearly Zero Energy Challenge” and the Dutch renovation scheme suggested by Energiesprong which now aims at being scaled up in other EU member states..