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Strengthen your action plan with more ambitious measures

More energy efficient buildings by fine-tuning municipal policy

Local politicians and municipal staff need to make informed decisions. Therefore a detailed or at least overall understanding about what is and is not possible in this context for buildings, municipal budgets and available supportive programmes is necessary and the respective fine-tuning of municipal policies is needed. Enhanced policy solutions target efficient and sustainable energy buildings mainly by:

  • Retrofitting including insulation of the walls, windows, improving ventilation and air tightness and lighting;
  • Passive energy efficiency solutions resulting from design and change in user behaviour;
  • Active energy efficiency solutions by improving energy efficiency (technologies) and generating renewable energy for electricity, space and water heating or space cooling.

Some ambitious policy measures for the building sector that local governments should consider in their action plans in order to eliminate potential barriers and achieve high energy savings within their territory are:

  • Require all new buildings as well as buildings undergoing comprehensive renovation to meet the medium to highest energy codes and energy performance standards by controlling the process for building regulation approval;
  • Support and encourage the construction of buildings with the passive house standard as well as  zero emission and energy plus buildings through financial incentives and facilitating exchanges between energy experts, craftsmanship and residents;
  • Implement policies in coordination with the local energy utility to improve the energy efficiency of existing buildings with emphasis on significant improvements to building envelopes and systems during renovations - remember that the current Energy Efficiency Directive obliges power utilities to continuously improve efficiency by annually 1.5%;
  • Require building energy performance labels or certificates that provide information to owners, buyers and tenants;
  • Establish policies to improve the energy efficiency performance of critical building components in order to improve the overall energy performance of new and existing buildings;
  • Change policy regulations, in particular concerning procurement, to take “grey” energy of building materials and their transport into account.   


In tandem with the policy-making decisions, collaboration between and within municipal departments is recommended to be organised in a way that puts emphasis on energy efficiency in the five common planning stages of any building project: Development, design, tender and selection, realisation, hand-over and utilisation. These planning stages apply for the categories of refurbishment of the existing building stocks, the erection of new buildings e.g. within the strategy of urban density plans as well as any operation and maintenance of local construction. If this matrix is addressed simultaneously by policy makers and municipal staff, more ambition in SECAPs is guaranteed. Thus LGs might also achieve what central governments have been obliged to do since October 2012: The Energy Efficiency Directive in conjunction with the Energy Performance of Buildings Directive requires the public sector to renovate 3% of buildings (with a useful area larger than 500 m2 as of January 2014 and 250 m2 as of July 2015) "owned and occupied" by national governments.

The municipal finance department might raise concerns that the planning or certification of low- or zero-energy buildings is difficult without paying a premium price. First of all the analysis of (renovation) costs of buildings mainly depend on: 

  • Benchmark of comparison (National Energy Efficiency Building Standards);
  • New or existing building;
  • Type of building (public, commercial, industrial, historical or private - single-family, multi-family house, apartment buildings);
  • Floor area used (only identical spaces can be compared);
  • Experience of the planner (the more experience the more the planning is cost-effective);
  • Time of decision (delayed decisions cost more due to rising energy prices).

As far as the certification is concerned, in 2004 a comprehensive cost and budgeting study showed that taking a range of construction factors including climate, location, market conditions and local standards into account for many of the green building projects, certification and advanced planning had little or no budgetary impact (Source: US Green Building Council). Learn more with this German study

Innovative policies

Basel-City achieves energy savings through incentive tax

Basel’s Initiative Energy Canton 2000 set free creative energy and caused a major change in the current law in Switzerland - an incentive tax to save energy. In 1998 the City Council of Basel-City adopted this control and energy efficiency fostering mechanism with a large political majority. Since then residents and the local economy pay for every kilowatt hour of electricity, depending on the tariff, between three and six centimes as a charge into Basel’s Energy Saving Funds. Those who consume less energy, pay a lower contribution into the fund. Once a year every household gets back 72 francs and each business receives about half a percent of its  salaries bill (job-bonus).
Because everyone receives the same amount of money with this bonus system, energy savers have a better balance sheet at the end. In addition to the fact that e.g. newly purchased, energy-efficient lighting or the investment into heat pumps achieves faster financial returns, energy sufficiency is also promoted. Because the bonus is linked to the sum of salaries, those private companies that create jobs are the primary beneficiary from this system. Thus the incentive tax is also a location factor. The evaluation of the control mechanism shows that the energy saving of the system is between 30 GWh and 100 GWh per year. For more information in German click here.


Explore new action options

Retrofit of historical buildings
In the EU27, 14% of buildings were constructed before 1919 and 26% before 1945. Although only a certain amount of these buildings are protected (i.e. listed buildings), they have historical significance and should still be treated with care. For this reason, it is important to consider:

  • Preserving the historic buildings (also in this context consider the impact of climate change on buildings – more intense rainfall, flooding, droughts, heat waves, rising sea level);
  • Reducing the impact on climate change (i.e. reducing greenhouse gas emissions);
  • Keeping maintenance and energy costs reasonable (also considering that energy costs are rising).

It is important to spend tax payers’ money wisely and make the most out of an investment also by considering the economic and social impact when planning the refurbishment of a historic building. In this respect local governments should also consider:

  • Value of building: evidential value, historic value, aesthetic value, communal value;
  • Period of construction: roman, romantic, gothic, liberty, modern, etc.;
  • Construction materials used: concrete, wood, bricks, clay, steel, stone, timber etc.;
  • Public interest - landmark, social meeting point.

Moreover are you involving appropriate people in the process? Joint discussion with the historic building expert (monument protection agency) and experts on sustainable energy solutions for buildings are highly recommended to take place throughout the entire process in order to discuss specific challenges and solutions during the different project phases.

Some of the historic buildings also have cultural heritage with a need to maintain any respective values inherent in the buildings. Cultural heritage buildings are a relatively small number compared to the total percentage of refurbishment of historic and “normal” old buildings and are therefore even more sensitive in terms of change. How you can nevertheless reduce their energy need dramatically, eight interactive case studies show from Bozen and Bologna in Italy, Copenhagen in Denmark, Innsbruck in Austria, Potsdam in Germany, Salamanca in Spain or Appenzell in Switzerland.
Further guidance and recommendations for LGs to integrate retrofitting of historic buildings in their policy and planning can be accessed here. Moreover the project 3ENCULT offers related methodologies, analysis and checklists and provides LGs with a virtual learning path for specific technologies (see above picture).
In the end, recognise that if you can deal with energy efficiency and renewable energy technology in historic buildings, imagine what you can do in normal old buildings. 


Solving strategies for the landlord-tenant dilemma
In the framework of refurbishment the landlord-tenant dilemma describes the possible discrepancy between the landlord’s and tenant’s interest to invest (up-front) into energy efficiency of a rented home. The former could only be interest in the rent (to pay off the loan), while the later has to cope with an increasing energy bill, but has no incentive to invest as he/she might not live there for long and won’t profit from the increased property value. Alternatively, if the landlord pays the energy costs, what is the incentive for the tenant to practice energy conservation? Considering that in the EU-27 29.3% of the population are tenants, this dilemma can become a difficult issue to solve by politicians (Source: Eurostat). Especially countries like Sweden, Denmark or Austria which have a high percentage of this tenure face this problem, while in countries like Romania, 96.6% live in owner-occupied dwellings.

In fact, landlords and tenants both have an interest in having a highly energy efficient building, but the question is, who will pay for the retrofitting and who will benefit from the energy savings? As the European Council of Real Estate Professions (CEPI) and the International Union of Property Owners (UIPI) analysed and formulated in a statement directed to the EU, the renter’s dilemma is a problem of split incentives and can effectively be solved by energy related housing policies that foster like for instance in France the separation of rent increase and redistribution of the saving in energy costs.

However, there is also potential within reconstruction. The tenants of the world’s first renovated residential high-rise to reach passive house standard in Freiburg, Germany, only experienced a slight rent increase, but a steep drop of their energy costs, since the high investment could mostly be covered by the reorganisation of some big to multiple smaller apartments. In Switzerland the City of Zurich followed a similar strategy, experiencing during their urban densification process that the addition of one floor level to retrofitted houses, prevents the rent from rocketing.  

Other solutions to consider to overcome the (dilemma’s) barriers for improving energy efficiency are mostly high upfront cost and potentially long payback periods. As there is no silver bullet for this complex issue, it is advisable that policy-makers and municipal staff think about several options for their strategy:

  • Provide information and assistance for individual behaviour change;
  • Pass municipal rental energy efficiency ordinances that outline minimum energy efficiency requirements for buildings coupled with penalties for non compliance in the long-run;
  • Issue local tax incentives, green leases and special local financing initiatives for rental buildings that flank larger state and federal programmes;
  • Introduce or enforce an existing labelling, energy scoring tools or rating system for the local rented stock to help increase communication between landlords and tenants;
  • Adopt schemes like UK’s “Pay As You Save” (PAYS) were owners can sell or a tenant moves out, while the new tenant receives both the energy savings and the remaining payments;
  • Use a surcharge to property tax bills to pay for energy efficiency to incentivise owners to provide tenants with green dwellings (cf. Property Assessed Clean Energy – PACE model);
  • Negotiate rebates for improving insulation and adding renewable energy with the local businesses in an energy saving campaign;
  • Initiate a landlord-tenant dialogue on energy-conservation issues for rented property;
  • Arrange interests and facilitate agreements in which e.g. the landlord does energy renovations for an agreed increase in rent that is less than the energy-cost savings, or the tenant helps with the refurbishment work and afterwards has no rental increase but a smaller energy bill;
  • Arrange for the energy supplier to pay for a retrofit and recover the money by adding a surcharge to the home’s electricity or heating bill. During its climate campaign the German City of Tübingen and its utility have exchanged heat pumps for free. The owner or renter only had to continue to pay the energy costs for another 3-4 years and afterwards owned the efficient device and experienced a reduced electricity bill of up to 10%. For a city utility this action combines marketing with customer retention.


In the end, a mix of policies which are able to divide the costs between landlord and tenant most fairly, will be the most successful.

Passive house and natural ventilation benefits
In a passive house a large part of the heat for space heating is achieved through internal gains, i.e. the heat emission by persons and devices as well as over solar gains (heat entry over windows). At the same time passive cooling takes place minimising heat gain from the external environment (e.g. by shading a building from the sun and insulating walls) and removing unwanted heat from a building e.g. by using natural ventilation (Faltin, Walther, Zimmermann, Indriksone, et al., 2009).

For the latter, there are two types: wind driven ventilation and stack ventilation. For instance, London’s City Hall was designed in a way that although the building is nearly completely covered in glass the natural wind driven ventilation is almost sufficient to cool the government building even during the summer months.

Stack ventilation is generated by a difference in the density of warm interior air and the cold air from outside. This principle was for example applied in the construction of the Lanchester Library at Coventry University, UK, where the centre-in, edge-out, buoyancy-driven stack ventilation keeps the interior comfortable and up to 5°C below ambient.

Some local governments like Stuttgart in Germany or Arnhem in the Netherlands explore the cooling of natural ventilation not for individual buildings, but as part of their urban planning. Here the potential for natural air flow along rivers and on downwards trajectories as well as the re-direction of wind through the strategic erection or dismantling of buildings is carefully analysed with the aim to optimise the wind penetration of streets, districts or the entire city. Thus the need for cooling energy is reduced, while the quality of life through wind comfort is enhanced. LGs should team up with its regional academia to tap this energy saving potential.


Fostering district cooling and green data centres

Cooling is hidden in the electricity bill. That’s why there is a general a lack of awareness in LGs regarding the amount of related energy and costs incurred. In central Europe cooling accounts for more than 10 % of the end energy consumption. In Southern European cities it is estimated to be much more.

Today the conventional cooling solutions are based predominantly on on-site electric chillers which need high amounts of primary energy. They not only increasingly produce greenhouse gas emissions, but also contribute significantly to peak electricity demands. A possible energy efficient solution lies within district cooling - an infrastructure (similar to district heating) of pipes to deliver cooling to the connected customers. However, only 1–2% of the cooling market is served by district cooling, although many cities like Barcelona, Paris or Helsinki save thousands of tons of CO2 annually (Source: RESCUE).

For more information on district energy, heating and cooling, see the District Energy with THERMOS module.


Also the recent nomine for the European Energy Award, Växjö in Sweden, has established a district cooling grid. Cold water is running through pipelines and helps to cool down the buildings that are connected to it. The cold water is generated via an absorption process, which actually means that the city’s district heating (from biomass) is also transformed to district cooling.

On its way to Fossil Fuel Free Växjö the city explores every route. Swedish policy-makers are aware that information technologies (IT) today make up to 10% of the European electricity use (Source: The °Climate Group). Therefore it went without saying that the newly inaugurated Green Data Center of Växjö was a cooperative effort between Wexnet (the broadband city net owned by Växjö Energy), the City of Växjö, the County Council and companies. This has already saved Växjö € 340.000. However, of even more interest is the fact that the Green Data Center is connected to the district cooling system and uses the returning water that has been used for the cooling of the nearby shopping center. Even if the water has already been cooling the shopping center, it is still cold enough to cool down the server halls. When passing the server halls, surplus heat is transferred from the server halls to the water pipelines. The now warmer water in the pipelines can further be of use. The pipelines run beneath the nearby football field, which makes it possible to extend the football season, since the field is less affected by frost. More detailed information about this innovative approach of Växjö is available here.

Energy performance contracting with citizens
In times of budgetary constraints for LGs, Public Private Partnership (PPP) is one of the alternative cooperation and financing mechanisms that can assist in the implementation of sustainable and energy efficient buildings. Besides typical Energy Service Contracts (ESCOs) with companies (see also Processes in the 1st level Building Module), LGs might like to choose a more cooperative approach together with its citizens and let them financially benefit from the energy saving contracting scheme.

One of the first European pilot projects of this kind was developed at the Staudinger Comprehensive School in Freiburg, Germany, which required renovation. Since at the time the city had no budget available it cooperated with the bottom-up initiative ECO-Watt and signed an energy saving contract for the period of 8 years. ECO-Watt collected € 280.000 from teachers, parents and citizens of Freiburg and invested the capital in energy conservation technologies. With the achieved savings in energy costs from the investment, a profit of 6% could be paid back to the investors.

A path breaking success story: The school achieved in eight years, energy savings totaling € 78.000 through the reduction of 200.000 kWh/a in electricity and 5.4 million kWh for heating even without the installation of Combined Heat and Power and the renovation of the building shell. The City of Freiburg profited from an economic added value of about € 1 million while having spend any Euro at all. Find more on ECO-Watt and cooperative energy investment.

Read also about energy performance contracting through public procurement and a competitive dialogue case.





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