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‘We need a step change in energy efficiency to drive down consumption’
By Anna Dukhno on May 28, 2019

Knauf Insulation speaks to Samuel Thomas, a senior advisor for global energy policy advisors, the Regulatory Assistance Project (RAP).

Climate change and energy have shaped Samuel’s career for over a decade. He has worked with the International Energy Agency, the UK’s Department of Energy and Climate Change and been a rapporteur to the European Commission on Member State energy consumption.

Here he discusses how buildings have a critical role in decarbonisation, how a building excise tax could make a major difference and why the youth movement makes him optimistic.

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What does RAP do?

We are an independent, non-partisan, non-governmental organisation dedicated to accelerating the transition to a clean, reliable and efficient energy future. RAP helps energy and air quality decision-makers and stakeholders navigate the complexities of power sector policy, regulation, and markets. Energy efficiency is a large part of our work.

In Europe 36% of emissions come from buildings which also use 40% of energy. Are we seeing any emission reductions in buildings?

We have seen big reductions in building energy use over the last 20 years, although some of that is due to warmer winters meaning that buildings need less heating. Still, heating accounts for between 60% and 70% of energy consumption in residential homes.

But have there been improvement as result of energy efficiencies in buildings?

In the 2000s, yes, but in the 2010s there has been a marked slowdown. The 2000s saw the rise of efficient gas condensing boilers, as well as a decline in the use of oil boilers. We now need a new wave of efficient technology uptake focussed on building fabric improvements and heat pump installation.

Do you know the status now?

The data are patchy but it appears that renovation rates are impacting about 1% of the building stock every year. We are going to need to see this rate double or triple if we are going to renovate the entire European building stock in a timeline that meets the Paris Climate Agreement.

What do we need to do to improve this?

We need a step change in energy efficiency action to drive down consumption, with space heating the most important end-use to focus on in Europe. That is going to involve two things: more insulation and a switch to non-carbon heating. There has been a lull in progress in the energy efficiency of buildings and this has to change.

How is RAP helping policy makers make this step change?

We are looking for changes in regulatory and incentive structures and are helping policy-makers think about difficult decisions around buildings. For example, it is an anathema to put constraints on what homeowners can do in their own homes. But we need a conversation about how to change homes to make them more energy efficient and to ensure that policies to drive this change are fair and equitable.

So how do you incentivise change in such a situation?

One way would be to use a model similar to differentiated vehicle excise duty.

How would this work?

As for vehicles the more efficient the building the lower the excise you would pay. This would incentivise owners or the person buying the home to make adjustments and renovate at the point they are most likely to do so — around the time of a change of ownership.

And in the private rental sector?

This sector is more challenging, given the fact that landlords do not directly benefit from energy efficiency improvements unless they are able to recoup their investment costs through higher rental income and sales value. Right now, housing markets do not fully price in the lower operating costs and greater comfort associated with more efficient buildings. On the other hand, the private rental sector is more regulated, providing opportunities for policy-makers. Regulating for the achievement of minimum energy efficient standards in buildings — just as for building health and safety — is an option being pursued in some jurisdictions.

You have also spoken of incentivising utilities?

There is a long history of obligating energy utilities to deliver energy efficiency actions in many US States, EU Member States and other countries. These policies can help to subsidise energy efficiency improvements in buildings and are perhaps best suited to incentivising the take up of the most efficient and smart-ready products and appliances. Given that the costs to utilities are passed on to bill-payers, focussing on measures that all consumers can benefit from makes sense.

To what extent will smarter homes have an impact on energy efficiency?

Around the world we are advocating that policies, such as utility obligations, provide incentives for the take-up of products that are both efficient and smart, so that buildings can be players in a future energy grid where flexibility will be a desired commodity. The electrification of heating, along with the roll-out of smart meters and prices that reflect the changing costs of providing electricity, would allow households to provide flexibility services to the grid.

Where will we get the money to pay for energy efficient building initiatives?

The first thing to say is that this issue needs to be seen as more of a priority for the use of scarce investment resources. To tackle climate change, investment is needed now to cycle through the entire building stock before 2050 in the most cost effective way. If we wait, more will need to be done in a shorter timeframe at the same time as we end up paying for climate change damage, something that we really should be looking to avoid. Secondly, we have a growing source of revenue that should be directed towards building energy efficiency: EU Emissions Trading System Allowance auction receipts. EU ETS prices are rising as the economy recovers and the structural surplus in the market is removed. A high priority for spending this revenue should be on buildings efficiency. We also need to recognise that there are also many other benefits beyond tackling climate change.

Such as?

Better building energy efficiency means more health benefits from reducing cold in homes. There is evidence from New Zealand showing benefits in terms of reduced health sector costs and the UK and Ireland are engaged in energy efficiency pilots in their countries. In some countries, renovation will help improve employment and provide more jobs. Renovation requires people to make it happen and if you double the rate of renovation you’re going to need construction workers in all regions, including the most deprived.

What about the two-thirds of countries globally that don’t have any established energy efficiency codes or standards?

In emerging economies, the issue is much more around new buildings. We expect a massive amount of urbanisation and most of the building stock in 2050 has not been built yet. Cooling is often a much more important energy service than heating in emerging economies. So land-use planning and building codes for new build, to reduce the need for cooling, and product standards to reduce the energy needed to provide energy services and the most important policies to get right.

Are you optimistic about the future?

I feel optimistic when I see the passion of so many young people around the world, determined to bring about a change in the pace of climate action. I am optimistic when I see what is possible in countries such as Norway, where electric vehicle ownership is now the norm. But I am frustrated by the gap between what was agreed to at the Paris Climate Conference in 2015 and the short-term policy response we have seen so far.  We need to take action now to avoid the situation later where we are paying both more to mitigate climate change and more to adapt to its damaging effects.