what drives and what hinders energetic building refurbishments in germany? dr. ralph henger 20th...
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What drives and what hinders energetic building refurbishments in Germany?
Dr. Ralph Henger
20th Annual ERES Conference, Vienna | Austria, 3-6 July 2013
Green Buildings & Environmental Policies, Parallel Session C-24July 4, 2013, 13:30–15:00, Room 5
Dr. Ralph Henger, ERES Conference Vienna, 4th July 2012, Session C-2, Room 5
Content
Background
Drivers and constrains
Profitability of energetic building refurbishments
Conclusion
Germany’s climate policy
CO2 reduction of 40 % by 2020 and 80% by 2050 (compared to 1990)
By 2020: achieve 35 % share of renewables (electricity)
The building sector accounts for about 40% of Germany’s final energy consumption and about one third of CO2 emissions.
Energy Concept 2050: Sectorial (ambitious) targets for the building sector
By 2020: minus 20 % of Final Energy Consumption
By 2050: minus 80 % of Primary Energy Consumption (“near-zero-carbon building stock”)
Current refurbishment rate of 1 % p.a. is too low to reach the targets, doubling to 2 % is necessary
Background
Dr. Ralph Henger, ERES Conference Vienna, 4th July 2012, Session C-2, Room 5
Source: IWU Gebäudetypologie 2011
Germany’s building stockTwo third was built before 1978 (1st Thermal Insulation Ordinance)
21%
44%
30%
4%
vor 1948 1949 –1978 1979–20012002–2009
26%
40%
27%
6%
vor 1948 1949 –1978 1979–2001
2002–2009
Homes Buildings
Dr. Ralph Henger, ERES Conference Vienna, 4th July 2012, Session C-2, Room 5
Residential energy consumption for heating per household, depending on age and condition of the buildings
Source: ARGE (Arbeitsgemeinschaft für zeitgemäßes Bauen e.V.) 2011
Average consumption: Single-unit house: 172
kWh/m²a
Multi-unit house (< 12 units): 145 kWh/m²a
Much higher consumption in building stock built before 1978 indicates high energy saving potential (better insulation and heating efficiency)
Dr. Ralph Henger, ERES Conference Vienna, 4th July 2012, Session C-2, Room 5
fully renovated partially renovated not renovated
Huge potential for saving energy and CO2Residential building stock (built until 2001): 34,4 Mio.
Source: IW Cologne 2012 based on ARGE (Arbeitsgemeinschaft für zeitgemäßes Bauen e.V.) 2011
Dr. Ralph Henger, ERES Conference Vienna, 4th July 2012, Session C-2, Room 5
before 1948 1949 - 1978 1979 - 20010%
10%
20%
30%
40%
50%
60%
70%
80%
2%6%
62%65%
71%
34%33%
23%
5%
building stock share
not renovated
minor renovated
partially / fully renovated
Final Energy ConsumptionTarget 2020: minus 20%
Source: IW Cologne 2012
Dr. Ralph Henger, ERES Conference Vienna, 4th July 2012, Session C-2, Room 5
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
2045
2046
2047
2048
2049
2050
0
100
200
300
400
500
600
1%-Scenario: Final Energy Consumption in TWh/a
2%-Scenario: Final Energy Consumption in TWh/a
Minus-20%-Target (2020)
2020: -10%
2020: -21%
Primary Energy ConsumptionTarget 2050: minus 80%
Source: IW Cologne 2012
Dr. Ralph Henger, ERES Conference Vienna, 4th July 2012, Session C-2, Room 5
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
2045
2046
2047
2048
2049
2050
0
100
200
300
400
500
600
1%-Scenario: Primary Energy Consumption in TWh/a
2%-Scenario: Primary Energy Consumption in TWh/a
Minus-80%-Target (2050)
2050: -63%
2050: -83%
Refurbishment measuresEnergetic building refurbishment rate (in % of building stock to 2004)
Source: IW Cologne 2012 based on Datenbasis Gebäudebestand (IWU / BEI 2010)
Dr. Ralph Henger, ERES Conference Vienna, 4th July 2012, Session C-2, Room 5
Insulation
Renew windows
Exchange heating
Use su
bsidy
Use kf
w-subsid
y
Insulation &
Windows
Insulation &
Heating
Windows &
Heating
2.22.3 2.3
1.2
0.81.0
0.50.6
1.8 1.9
1.5
1.0
0.7 0.7
0.3 0.3
Home owners Landlords
Investments shifting from construction to renovation
Investments 2011: € 307 Billion into the building sector, thereof €183 Billion into the stock (60%) (German Building Ministry, 2012)
Green renovations are becoming more and more popular
Investments 2011: €53 Billion (29% of all building stock investments) are energetic refurbishments, thereof €38 Billion into residential buildings (German Building Ministry, 2012)
High investments for reaching a “nearly-climate-neutral building stock”
Overall: €838 Billion by 2050
New buildings: €331 Billion by 2050
Maintenance of the building stock: €270 Billion by 2050
Energy efficiency: €237 Billion by 2050 (for comparison: Energy Savings: €361 Billion!)
Green Investments are taking place
Dr. Ralph Henger, ERES Conference Vienna, 4th July 2012, Session C-2, Room 5
Dr. Ralph Henger, ERES Conference Vienna, 4th July 2012, Session C-2, Room 5
Content
Background
Drivers and constraints
Profitability of energetic building refurbishments
Conclusion
TechnicalAge and condition of the buildingBuilding Type (one vs. multi-unit
buildings)Potential operational energy
saving
Influencing Factors
Dr. Ralph Henger, ERES Conference Vienna, 4th July 2012, Session C-2, Room 5
(Socio-)Economic Energy PricesPay-back time / Interest Rates Property value or rentLocation
Individual Owner/ Occupant characteristics
(income, age, household size, health)
Owner/ Occupant motives, awareness and preferences
RegulatoryBuilding codes and standards Financial incentives (subsidies,
tax reductions)Landlord-Tenant Law Information / Transparency (e.g.
Energy certificates)
Landlord / Tenant DilemmaComparison of rent increases and returns
Dr. Ralph Henger, ERES Conference Vienna, 4th July 2012, Session C-2, Room 5
<00-
10
20-3
0
40-6
0
80-1
0005
10152025303540
Distribution of rent increase after refur-
bishment in %
<0 0 0-5 5-11 11-20
>2005
101520253035404550
Distribution of returns after refurbishment in %
Source: 1,301 objects in the kfw “Energy-efficient refurbishment” program (Henger and Voigtländer 2011)
Rent increase Initial returns
Rational decisions need transparency
2008: Energy certificates Required whenever buildings (residential,
non-residential) are sold or rented
Information on energy consumption / demand expressed in terms (kWh/m2/yr)
Very low acceptance by homeowners and realtors
EnEV 2014: improvements Stricter controls (randomly)
Obligation to display energy certificates at public buildings
More transparency: Energy certificates
Dr. Ralph Henger, ERES Conference Vienna, 4th July 2012, Session C-2, Room 5
Content
Background
Drivers and constrains
Profitability of energetic building refurbishments
Conclusion
Dr. Ralph Henger, ERES Conference Vienna, 4th July 2012, Session C-2, Room 5
How much energy savings can be realized?Results from some selected case-study calculations
Source: IW Cologne 2012
kWh/m²a
Dr. Ralph Henger, ERES Conference Vienna, 4th July 2012, Session C-2, Room 5
IWU
200
8 (1
969-
1978
)
IWU
for B
SI 2
008
(19.
..
ARG
E 20
11 (K
fW 1
00)
ARG
E 20
11 (K
fW 7
0)
Den
a 20
10 (K
fW10
0)
Den
a 20
10 (K
fW55
)
empr
icia
/ LU
WO
GE
2...
empr
icia
/ LU
WO
GE
2...
ARG
E 20
11 (K
fW 1
00)
ARG
E 20
11 (K
fW 7
0)
0
100
200
300
400
End energy demand before End energy demand after
Total costs vs. Energy efficiency costsResults from some selected case-study calculations
Source: IW Cologne 2012
Dr. Ralph Henger, ERES Conference Vienna, 4th July 2012, Session C-2, Room 5
IWU
200
8 (1
969-
1978
)
IWU
for B
SI 2
008
(19.
..
ARG
E 20
11 (K
fW 1
00)
ARG
E 20
11 (K
fW 7
0)
Den
a 20
10 (K
fW10
0)
Den
a 20
10 (K
fW55
)
empr
icia
/ LU
WO
GE
2...
empr
icia
/ LU
WO
GE
2...
ARG
E 20
11 (K
fW 1
00)
ARG
E 20
11 (K
fW 7
0)
0
200
400
600
800Full costs Energy efficiency costs
kWh/m²a
Does an energetic refurbishment pays off?Results from some selected case-study calculations
Source: IW Cologne 2012
Dr. Ralph Henger, ERES Conference Vienna, 4th July 2012, Session C-2, Room 5
IWU
200
8 (1
969-
1978
)
IWU
for B
SI 2
008
(195
8-19
68)
ARG
E 20
11 (K
fW 1
00)
ARG
E 20
11 (K
fW 7
0)
Den
a 20
10 (K
fW10
0)
Den
a 20
10 (K
fW55
)
empr
icia
/ LU
WO
GE
2010
(19.
..
empr
icia
/ LU
WO
GE
2010
(19.
..
ARG
E 20
11 (K
fW 1
00)
ARG
E 20
11 (K
fW 8
5)
0102030405060
Full costs Energy efficiency costs Energy savingsEUR/m²a
How important are subsidies (of the kfw)?Results from some selected case-study calculations
Source: IW Cologne 2012
Dr. Ralph Henger, ERES Conference Vienna, 4th July 2012, Session C-2, Room 5
EUR/m²a
IWU
200
8 (1
969-
1978
)
IWU
for B
SI 2
008
(195
8-19
68)
ARG
E 20
11 (K
fW 1
00)
ARG
E 20
11 (K
fW 7
0)
Den
a 20
10 (K
fW10
0)
Den
a 20
10 (K
fW55
)
empr
icia
/ LU
WO
GE
2010
(19.
..
empr
icia
/ LU
WO
GE
2010
(19.
..
ARG
E 20
11 (K
fW 1
00)
ARG
E 20
11 (K
fW 8
5)
0102030405060
Full costs - subsidy (kfw) Energy efficiency costs - subsidy (kfw) Energy savings
Total costs differ significantly across buildings and measures
However: Total costs can never be paid off with energy savings
Energetic refurbishments should not be done outside the “renovation cycle” of a building
“Energy efficiency” costs lie around 33–50% below total costs
Energy efficiency costs can be paid off in one-third of the case-study calculations
… with kfw subsidies in two-third of the case-study calculations
Energetic refurbishments are financially rewarded within the “renovation cycle” if…
Homes are in a bad condition, i.e. energy consumption is high
Government / kfw subsidies can be claimed
Investment costs can be shifted to tenants (by increasing rents)
Stylized factsBased on 22 case-study calculations (Henger and Voigtländer 2012)
Dr. Ralph Henger, ERES Conference Vienna, 4th July 2012, Session C-2, Room 5
Content
Background
Drivers and constrains
Profitability of energetic building refurbishments
Conclusion
Dr. Ralph Henger, ERES Conference Vienna, 4th July 2012, Session C-2, Room 5
Main drivers: old building stock, kfw subsidies, homeowners’ motivation
Main barriers: long pay-back periods, landlord / tenant dilemma, transparency
Targets for a zero-carbon building stock by 2050 seems to be too ambitious
Government has to develop a long-ranging and socially balanced strategy with an effective subsidy and monitoring scheme
Conclusion
Dr. Ralph Henger, ERES Conference Vienna, 4th July 2012, Session C-2, Room 5
Thank you for your attention!
Dr. Ralph Henger
Cologne Institute for Economic Research, Real Estate Economics
+49 221 4981-744 [email protected]
www.immobilienoekonomik.de