Cities Advice for Sustainable Housing - Sophie Moreau

7/29/2019 Cities Advice for Sustainable Housing - Sophie Moreau

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TABLE OF CONTENTS

INTRODUCTION

THE EUROPEAN UNION POLICY CONTEXT

TECHNOLOGICAL DEVELOPMENT

LEGAL FRAMEWORK

FINANCIAL ENGINEERING

CITIZENS INVOLVEMENT

ENERGY PRODUCTION AND DISTRIBUTION

SYSTEMIC PROJECT MANAGEMENT

CONCLUSION

TABLE OF CONTENTS

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Disclaimer: the sole responsibility for the content of this report lies with the authors. It does not necessarily reect

the opinion of the European Union.


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A GUIDE FOR INTEGRATED ENERGYEFFICIENT RENOVATION OF SOCIAL HOUSING

Cities advice for greater EU support to green social housing

CASH (Cities Action for Sustainable Housing) is a network of 11 partners(10 cities- Utrecht, Tatabanya, Sonderborg, Les Mureaux, Brindisi, Bridgend,Frankfurt, Yambol, Eordea, Echirolles and one region Region Rhne-Alpes) ledby the city of Echirolles in France.

The ambition of the CASH project is to propose new solutions and promote newpolicies for the sustainable renovation of social and affordable housing units in theEuropean Union.

The network has organised local technical seminars and meetings in order toexchange experiences and collect good practices on issues such as the legalframework related to refurbishment of social housing, the involvement of citizens,the technical and nancial aspects of energy efciency investments.

1. Technological developmentsTechnological possibilities for energy efcient renovation are developing fast.Availability of techniques is not a guarantee that they always will be used in the bestand most effective way. CASH partners have made some suggestions regardingenergy refurbishment of social housing in cities.

General justication:

Any renovation plan includes the choice of approach, target, energy sources,technical installations, devices and their adequate sizing. It also requires theimplication of stakeholders throughout the process.The renovation approach, whether global or on a step by step, is indeed a majorissue. Many stakeholders, in particular communities and social landlords, often askthemselves if they should act on a limited number of buildings to achieve expectedEE renovation targets (80 kWh/m.year) or if they should intervene on few of thecomponents (i.e. insulation and glazing or energy supply and equipment, etc.) overa large number of buildings. Careful decision should be taken so as to keep alongwith the municipal energy reduction goals, available nancial resources, otherobligations to full, as well as the time lag between major renovations (average of20 to 30 years).City Hall of Echirolles where the k ick-off meeti ng of the CASH network was held in September 2010.


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3. Financial instrumentsIn order to improve the nancing possibilities for energy efcient large-scalerenovation operations, the CASH network has proposed a series of recommendations,presented as the Frankfurt resolution.


It has been estimated that the comprehensive energy renovation cost for a dwelling,is in average 23,000 Euro1 (in France). In order to reach the European CO2reduction goals for housing, approximately 70 to 180 million housing units in theEuropean Union (EU) need to be renovated according to low energy consumptionstandards. This would require from 1,500 to upwards of 4,000 billion Euros ofenergy refurbishment investments in the residential sector before 2050, which

represents roughly 27% of the energy consumption in the EU.How can this be achieved?To reach national and international climate and energy goals, more funds andgreater contributions are needed from Europe and from national governments forall homeowners. The available nancial instruments should be: based on long-termplanning, be better coordinated.

Concrete suggestions:

- National and regional revolving funds (supported by additional fees on rent or energybills) can be an important instrument, favouring long-term and large-scale projects.

- Independent third-party managing entities should be created or supported toorganize technical, nancial and organizational aspects and monitor themeasures. They could act as a facilitator between landlords/owners of the housingunits and tenants. The role can be taken by local/regional foundations or energyservice/supply companies or even by tenants organizations.

- To implement energy improvement in an integrative and optimum way, measuresto reduce other running costs for water, electricity and waste -the second rent-should be included.

- European funds such as the European Regional Development Fund (ERDF)should not only be provided for energy measures in general, but should also befocused on social housing with an integrative approach (energy, livingenvironment, maintenance and integration).


- Make a survey on the heat energy demand (heating and domestic hot waterDHW).

- Look for potent ials of reduc ing demand (through insulation, water savingdevices).

- Make a comparison calculation of different heating systems (only boiler, boilerand CHP, heat pump, biomass heating systems -stoves, boilers-, districtheating), comparing not only acquisition, installation and maintenance costs, butfuel dependency and emissions (CO2 and others) - keeping in mind that prices fordifferent fuels may develop differently in the future.

- Make a long term 15-20 years calculation.To avoid ad-hoc decision making, Social landlords and house owners should makea structural renovation plan, where technical, social and economic aspects as wellas environmental aspects play a role. The grey (hidden) energy, including theenergy required in transporting and in recycling the different materials / technologyat the end of their life cycle, should be taken into account in their selection.

2. Legal FrameworkBased on the barriers, needs and enabling factors, CASH partners have identiedrecommendations for an effective energy efciency legal framework, agreed in thefollowing Brindisi Manifesto.


As we showed in the introduction, there are many EU legislative texts that applied tothe renovation of social housing in cities. Not only the EU directives on energy or theStructural Funds regulation but also for instance the Public Procurement Directive ornational regulations on rent setting. Cities and Managing authorities have toimplement this legislation and gain expertise of how to make it positive for localprojects.

Concrete suggestions:- Create local clusters on green social housing. Local clusters may be developedfor the whole supply chain of energy efcient renovation from supplier, planners,architects via installer, to users. In such a cluster Quality management can bedeveloped, using energy labelling.

- Flexible mechanism for rents to t to local context (deprived neighbourhoods) anda form of protection from rent increase for existing social rents should be ensured.


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5. Energy production and distributionKey recommendations for efcient energy production and distribution systems forsocial housing are provided by CASH partners through the Snderborgdeclaration.


Energy efcient renovation deals not only with technical aspects of insulation, heatand ventilation systems, but with the energy sources and their distribution to thehousing units, affecting costs paid by tenants and CO2 emissions. How therenovation can take place, the technical possibilities and the efciency of themeasures are often related to the energy forms and sources that are available forthe building. The carbon emission per unit of energy varies strongly between

different energy mixes, as well as the cost per energy units. That is why CASHpartners have suggested to use strategic energy planning in order to choose themost suitable energy scenario for a given city (for instance low cost energyscenario or lowest impact energy scenario?) and most suitable energy sources.Fossil energy supply is characterized by low per kWh construction costs and highproduction costs, which represents variable energy costs for the end user.Renewable energy supply is characterized by higher per kWh construction costsbut very low production costs and the costs per energy unit.


- Diversication of several green energy sources is important and should beencouraged.

- Green Combined Heat Power cogeneration should be promoted, because it is aexible and efcient method for energy transformation. Cogeneration offerstremendous efciency and cost savings (more than 30% of total primary energycompared to separated production) and can be implemented by energycompanies (contracting), the social land lords or tenants associations.

- Communities of tenants can be involved in the production and distribution of

renewable energy, to keep transport lines short and xed costs low.- European directives and funding should take into account, that social housing

building blocks and areas which need to be modernized may be the nucleus oflocal energy distribution grids, thus giving better practical and economicconditions for the implementation of cogeneration units and transforming thesupply from fossil fuels to renewables.

- Regions should use more than 10% of their European regional development fund(ERDF) allocation for the modernization of the energy production eld linked tosocial housing

4. Citizens involvementKey recommendations for an effective citizen involvement in Energy Efciency (EE )renovation process and in the reduction of energy consumption are provided byCASH partners through the Bridgend resolution.General justication:

Combating climate change needs ambitious policies and Urban Climate Policy canonly be effective with citizen participation, for the following reasons.Firstly, in the housing sector much energy can be saved, not only with technicalmeasures, but also with behavioural change. Studies show that around 10% ofenergy can be saved only by routine behaviour change (switching off lights, loweringtemperature, etc.). Secondly, many technical energy efciency measures will beless effective if the related behavioural change is not carried out. Thirdly, there is

the investment-behaviour. The choice to invest in buying energy efcienthousehold appliances is depending on the knowledge and awareness of the public.For these three reasons citizens involvement is an indispensable and essentialpart of any climate change policy.


CASH partners give the following advice:It is important to involve citizens at all stages of a policy, for instance :- from the planning phase and during all stages of the renovation process for the

co-conception of energy efcient renovation to ensure an appropriation of theequipment and systems and the proper functioning of the renovated EEbuildings.

- In the co-creation of schemes with tenants not only to improve the energyefciency of homes but to improve citizens health and their environments inneighbourhoods to give ownership and empower tenants to include energyefciency measures and change behaviours.

To reach that objective, CASH partners suggests for instance to use of a mixture ofinnovative tools favouring exchanges between all stakeholders, such as independent

energy advisors, trained champions, ambassadors of energy, trained to changebehaviour and attitudes and educate citizens in realising the benets of energyefciency renovation.


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6. Social housing energy efficient renovation project engineeringKey recommendations for an efcient social housing energy renovation project areprovided by CASH partners through the Yambol declaration.


During the 2 years of the implementation phase of the CASH project, several topicsimpacting the energy efcient renovation of social housing were covered, includingtechnological, legal, nancial, social and energy production components. It ishowever essential to ensure the appropriate use of these ingredients through theadequate participation of the different groups of energy renovation actors and thedevelopment of synergies between them.

Such an optimization of the engineering and management of a social housingenergy efcient renovation (SHEER) project should contribute to raising theefciency and lowering the cost of SHEER operations which deal with low incometenants &/or owners and which have to be replicated on a large scale, social housingrepresenting 12% of European housing stock and 20% of CO2 emissions.


- Develop a new model ensuring a systemic approach of SHEER project integratingsocial, political, environmental, legal and nancial components and competences.

- Set-up an independent project management body specically created for theproject, integrating critical stakeholders.

- Involve as many strategic stakeholders as possible in the planning phase- Take into account the different timescales of the stakeholders and ensure actions

in line with the different needs.- Ensure the use of technology: energy efcient, simple to use, requiring low and

easy maintenance, applicable to large-scale operations, with competitive price- Match the funding schemes with the timeframe / rhythm of the project and allow

adjustments according to the project evolution.

- Provide the end users with project details at the different stages to increasetransparency and to improve public consultation.


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The European Union policy contextCities consume between 60 to 80% of energy production worldwide and accountfor a roughly equivalent share of global CO2 emissions1. How cities grow and operateinuences energy demand and thus greenhouse gas emissions. Lifestyles, spatialform and public transport availability but also the way housing is built and used arecrucial. Taking this reality into consideration, the European Union has adopted awide range of initiatives (pieces of legislation or soft measures) that have an impacton the way cities can contribute to the mitigation of and adaptation to the globalclimate warming.Residential buildings which count on average for 40% of the energy consumptionand 30% of CO2 emissions in cities are a key sector to deal with, if cities are todeliver the necessary energy revolution that will allow a better mitigation of and

adaptation to climate change.

One can classify the EU initiatives in the eld of housing and energy in 2 categories: Initiatives that impose new standards and therefore will bring about short-term costs Initiatives that will help cities cope with this short term costs

The rst category is made essentially of the legislation related to the energyefciency and energy performance of buildings.The recently adopted Energy Efciency Directive (EED) is deemed to be animportant step forward to reach the objective of 20% reduction of energyconsumption in the EU by 2020 compared to 2005. Some of the most importantnew provisions with an impact for housing are the following:- Member states are required to implement a set of binding, exible measures and

set a national energy efciency target - which would have to be 20% energysavings for the EU as a whole by 2020.

- Energy companies are requested to reduce their energy sales to industrial andhousehold clients by at least 1.5% each year;

1 http://www.oecd.org/gov/citiesandclimatechange.htm


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The second category of EU initiatives in the eld of climate change and housingrefer to the legislation and soft measures that are supposed to help cities copingwith the new standards in terms of energy efciency.

The EU structural funds fall under this category as the new provisions3 give newopportunities for regions and cities to support social housing in particular in theeld of energy efciency.

There are at least 3 areas where investment in housing could be co-nanced by theEuropean Regional Development Fund4:

1 Energy efficiency:Former objective 2 regions (the most developed EU regions in the EU) will have todedicate at least 20% of their operational programmes to investment in supportingthe shift towards a low-carbon economy in all sectors. In particular investmentshould be made to support energy efciency and use of renewable energy in thehousing sector; there is therefore no ceiling any more for investment in energyrefurbishment in housing, which means that a region is free to invest as muchERDF as they want on energy refurbishment in housing. One have to note thatreference is made of housing sector in general, which means that every kind ofhousing (including cooperative housing) is eligible to support.

2 Social infrastructures:The European commission foresees the possibility to invest in social housingunder 2 circumstance:(a) investing in health and social infrastructure which contribute to national,regional and local development, reducing inequalities in terms of health status, andtransition from institutional to community-based services;(b) physical and economic regeneration of deprived urban and rural communities;

3 At the time of writing, the new legislation was s till subject of negotiation between the European Parliament and the

Council of Ministers. Minor changes might therefore come up from what was proposed by the European

Commission.

4 http://ec.europa.eu/regional_policy/sources/docofc/ofcial/regulation/pdf/2014/proposals/regulation/

erdf/erdf_proposal_en.pdf

- A 3% renovation rate for public buildings which are central government-ownedand occupied;

- An obligation on each EU member state to draw up a roadmap to make theentire buildings sector more energy efcient by 2050 (commercial, public andprivate households included);

- The new directive also includes additional measures on energy audits and energymanagement for large rms, cost-benet analysis for the deployment ofcombined heat and power generation (CHP) and public procurement.

- An article (art.15) refers to the nancing mechanisms that have to be set up inorder to full the new obligations (in particular national energy efciency funds)

Another Directive has a direct impact on how housing is built , renovated and used:the Energy Performance of Buildings Directive (EPBD). The EPBD is the mainlegislative instrument at EU level to achieve energy performance in buildings takinginto account outdoor climatic and local conditions, as well as indoor climaterequirements and cost-effectiveness. The main elements are :- Extension of minimum requirements to all new and renovated buildings- Strengthening Energy Performance Certicates (EPC) by:

Independent control system for EPCsPublication of the EPCs in all commercial announcementsExtension of display (>500m2, 2015>250m2)

- Methodology for calculating cost-optimal levels of minimum energy performancerequirements

- Introduction of nearly zero energy buildings (NZEB) for new building by 2018

To have an overview of the implementation of those 2 directives 2, we have put thetimeline below (MS = Member States)

2 For further information see also : http://www.powerhouseeurope.eu/policy_work/eu_impact/


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3. Urban development:The regulation stresses that at least 5% of the ERDF resources allocated at nationallevel shall be allocated to integrated actions for sustainable urban developmentdelegated to and directly managed by cities. It means that cities wil l manage at least5% of the ERDF national pot directly to suppor t urban development/renewal.Furthermore cities will be allowed to support pilot projects and studies to testinnovative solutions linked to sustainable urban development. There is therefore agreat scope of cooperation between cities and affordable housing organisations.

The European Social Fund also gives new funding opportunities for climate changerelated initiatives in the housing sector, since it could support the shift towards alow-carbon, climate-resilient, resource-efcient and environmentally sustainable

economy, through reform of education and training systems, adaptation of skillsand qualications, up-skilling of the labour force, and the creation of new jobs insectors related to the environment and energy5

Beyond the Structural Funds, we have to mention a soft initiative which works asa catalyst of the efforts of cities to cope with the energy efciency challenge:the Covenant of Mayors. After the adoption, in 2008, of the EU Climate and EnergyPackage, the European Commission launched the Covenant of Mayors toendorse and support the efforts deployed by local authorities in the implementationof sustainable energy policies. In order to translate their political commitment intoconcrete measures and projects, Covenant signatories notably undertake toprepare a Baseline Emission Inventory and submit, within the year following theirsignature, a Sustainable Energy Action Plan outlining the key actions they plan toundertake. Beyond energy savings, the results of signatories actions are manifold:creation of skilled and stable jobs, not subject to delocalisation; healthierenvironment and quality of life; enhanced economic competitiveness and greaterenergy independence. There are currently more than 4000 cities that have signedup to the Covenant of Mayors, including most of CASH partners.

To summarise the policy context, we can say that cities are acting in between newcollectively agreed constraints from the EU and new opportunities as well.CASH partner cities have developed during the project recommendationsaddressed to the managing authorities of the funds and more generally EUdecision makers on how to make the best use of EU opportunities in that eld. Thefollowing section presents these recommendations.

5 http:/ec.europa.eu/regional_policy/sources/docofc/ofcial/regulation/pdf/2014/proposals/regulation/esf/

esf_proposal_en.pdf


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TECHNOLOGICAL DEVELOPMENT

What to do?

Which technology to use?

Which energy-efficient

renovation approach to adopt?

Is certification needed?

Is labelling important?



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Introduction & subject significance

A network of 11 European city and region partners involved in the EuropeanURBACT Cities Action for Sustainable Housing CASH project, upon the lead ofEchirolles city (France), is working on issues of energy efciency (EE) andsustainable renovation of social housing. In that frame, the aspects of technologicaldevelopment, legal framework, nancial engineering, citizen involvement, energyproduction and project engineering are being analysed during thematic seminars.Each leads to the production of a mini-guide presenting the state of the art on thesubject, key issues, advice with associated experiences in partner cities andsources of information.

This edition, covering the theme of technological development is the 1st in a seriesof 6 mini-guides.

Which technology to use? Which renovation approach to adopt? Is certicationneeded? Is labelling important?

This Mini Guide on Technological development helps pinpoint: the key elements tofocus on (heating systems, insulation, glazing, ventilation) when renovating, aswell as, the renovation type and the approaches, all issues tackled by theEuropean directive 2010/31 EU on the energy performance of buildings.

Its purpose is to give practical support to cities interested in identifying effectivemeasures to enhance energy performance of existing housing stock.

STATE-OF-THE-ART

The envelope of the buildingEnvelope air-tightnessThe technical installationsEnergy production and tr ansformationMonitoring

Some hints to help choosing energy systemand technological aspects

KEY ISSUES DISCUSSED

CertificationEnergy performance labelsRenovation approach

EXAMPLES FROM PARTNERS

Energy renovation plan of social housing,Rhne-Alpes Region, FranceDecision making tool: renovation in a portfolio strategy,Utrecht, The NetherlandsShared energy skill center, Les Mureaux,France

CONCLUSIONS& RECOMMENDATIONS

MORE TO LEARN

CONTENT

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Its disadvantages: it reduces residential area, it often requires occupants to movetemporally and it wears an additional risk of moisture problems.

New is the use of Ultra-light-weight aerated concrete. Next to having a low thermalconductivity, this material is also hygroscopic (moisture buffer) and has low water

vapour resistance.While performing wall insulation, control of moisture balance and condensation inwalls is key. Since the impact of thermal insulation on water vapour disseminationis low, vapour diffusion retarders available as membranes or coating are used.They reduce the rate at which water vapour can move through the buildingenvelope and prevent air leakage through the envelope. Multiple layers of paint inexisting housing units act already as vapour diffusion retarders.

RoofThe roof is most exposed to environmental inuences. For individual houses it isthe rst criteria to be considered. High insulation thicknesses are highlyrecommended. In addition, a special importance has to be given to highair-tightness otherwise this can lead to moisture damage, especially in the woodconstruction.

Top floor ceilingFor the insulation of the top ceiling, insulation boards (mineralwool, foam...) or beds (perlite, cellulose) are possible. The insulation is placed on

the ceiling and/or between existing beams.To prevent cold air ow around the insulating material, joints must be avoided andinsulation boards should be laid with staggered joints. For uneven surfaces withmany penetrations, the bedding of perlite or cellulose akes offers a possibletechnique.Green roof installation can reduce cooling loads on a building by 50% or more, butthey have to be correctly built to avoid water leakage and material degradation andtheir maintenance cost have to be integrated.

While performing wall insulation, control of moisturebalance and condensation in walls is key. Since the impact

of thermal insulation on water vapour dissemination islow, vapour diffusion retarders available

as membranes or coating are used.

STATE-OF-THE-ART

The main objective of this overview of main technological development and

techniques is to provide local communities with key elements to consider and

choices to make when planning energy renovation.

It will cover:

the envelope of the building and the envelope air-tightness;

the technical installations;

energy production and transformation;

monitoring.

The envelope of the buildingEnergy efcient (EE) material and appliances for walls, roof, ceilings and windows,are synthesized hereafter:

Wall The effective insulation or inertia is key. Most common is the insulation of the

outer walls. Insulation panels are typically made of polystyrene foam, but mineralbre has much better re protection values (compulsory for high rise buildings).Natural insulation products, such as cellulose akes, wood bre mats, hemp,sheeps wool, etc., do not underperform when compared to man-made ones.Instead they are often far better in terms of performance, durability, in addition toproviding health benets. Furthermore, they present a lower carbon footprint andgrey energy and Offer the characteristics to allow protection from the cold duringwinter and optimum heat protection during summer. In presence of cavity walls,cavity can be lled with insulation material as perlite. New is to ll the insulationmaterial cavities with gas (e.g. CO2) or vacuum. However this technology has tomake its proof: uncertainty of keeping the vacuum over time exists, insulationcannot be punched and vapour migration over the aluminium cover is still an

unknown factor. With regard to Silica-aerogel based insulation, they are onlyavailable in semi-transparent glazing.

Ventilated curtain wall is an alternative to the thermal insulationpanels. It consists of a sub-structure (wood or aluminium proles) attached to theouter wall, with insulation material inserted in between and an air gap remaining forventilation between insulation. This technique allows avoiding moisture and mold.

Internal insulation offers an alternative for houses with facadesworth preserving and is less expensive than external insulation.


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The technical installationsVentilationCentral mechanical ventilation uses a ventilator, moving the air from the mostburdened rooms (kitchen, bathroom and toilet) via a pipe system to the exhaust.The result is a slight negative pressure in the building, which causes lteredoutside air to stream, via supply valves in the outer wall, to living areas. Energysavings can be gained by the choice of ventilator, the exhaust grill and by demandcontrolled or CO2 controlled exhaust.Hygro-adjustable ventilation and double ux ventilation are the most commonlyused ventilation systems and are widely available. The rst allows energy savingsthrough the reduction of airow (0,3 vol/h) but without control on indoor air quality(its reduced ow requires the use of indoor materials free of volatile organic

compounds and formaldehyde). The second allows energy savings withoutreducing airow (0,54 vol/h) through heat recovery from extracted air. New solutionsare oriented toward small decentralized devices, with simultaneous oralternated blowing and air extraction providing ventilation for a single room. Theycan be integrated in windows without requiring any ventilation network hard toinstall in existing housing units. These are not yet widely available.

Energy production and transformationThere exist several independent energy supply units that can be installed atbuilding and house scales for heating and for domestic hot water (DHW).

Heating Biomass heating

Biomass is a renewable low carbon fuel, producing a fraction of the carbonemissions of fossil fuels if correctly managed. A wide range of biomass fuels canbe used: virgin wood, energy crops, agricultural, food and industrial residues.Most widespread for small scale heating systems are wood pellets and chips from

round wood. There exist several types of biomass heating systems, the mostcommons being stoves, available from room heaters of 1.5 kW up to around12kW, and boilers > 25kW. Biomass-red boilers can be integrated into existingheating systems, and are therefore a real alternative in renovation projects ifadequately selected (high performance and low particle emission).

Condensing boilers

Condensing boilers are a further development of the low-temperature boilers.They are the most energy efcient boilers since they use two heat exchangers:one taking the water vapour (hot gasses) produced from burning the hydrogen

Basement ceilingTo reduce the heat losses from the basement, insulating plates can be attached tothe basement ceiling.For uneven or vaulted basement ceilings, airtight cloths can be attached acting asair chambers so as to form a natural insulation layer.

WindowsModern windows with heat-resistant glazing offer a signicant reduction in heatloss (about 40 to 70%). This is achieved by an invisible metallic layer (keeping heatinside) and an inert gas lling between the panes.Three-pane insulating glazing (Ug = 0,5 to 0,6 W/mK) is available on the market,offering additional heat loss reduction of 30% compared to the two-pane windows

and is becoming widely used. Their prices vary and can increase considerably thebudget of a renovation operation.

Not only should the U-value of the glazing be known, but also the one of the entirewindow inuenced by the quality of the frame. Highly insulated frame exist, as thepassive house window. If the window frame is covered with insulation up to 2 to 4 cm,an installation nearly free of thermal bridges is guaranteed.New is double vacuum glazing (Ug = 1,4 W/mK), but they are still very expensive.

Envelope air-tightnessAttention should be paid to achieve a good balance between energy efciency(air-tightness and air renewal) and sanitary conditions. Air-tightness (air permeabilityor leakage rate) of the envelope is an essential issue to keep in mind. Indeed, thecontrol of inltrations coming from: joinery-wall, joinery-oor and roof-wall junctions,as well as from expansion joints, sheaths, evacuations, electrical conduit, traps,rolling shutter, etc., must be ensured, knowingthat they can generate up to 50%overconsumption of heating in well insulatedhousing units. It is critical that any tape andsealant used should maintain a high exibilityover time to ensure it copes with differentialmovement and to resist high and lowtemperatures over the lifetime of the building.It should, as well, perform under highhumidity conditions.

Top left in orange indicating inltration from

rolling shutter after insulation, Echirolles, France.


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the carbon footprint. CHP saves more than 30% primary energy and CO2compared to separate production of heat and power. There exist solutions frommicro CHP ( 25 times more cost effective than solar electric systems.Evacuated tube solar collectors mounted on the roof or on another structureshould have a high performance so that high temperatures can be achieved evenwith cold outdoor conditions.

Electric heat pumps

A heat pump can prov ide heating or cooling, moving heat from a natural sourc e- at the highest temperature (outside air, soil, groundwater, water body, withconstant temperature from 5-10C), to a heat sink - at the lowest temperature. Tokeep this thermodynamic cycle, the heat pump needs electricity from an electricor gas engine, or from renewable resources. Most cost-effective are air / waterheat pumps, but these bivalent systems are less efcient. Air source heat pumpsare the least efcient but can still be used in low energy consumption dwellings.They have the disadvantage of high outside temperature differential which leadsto lower efciency. Geothermal heat pumps, since they draw heat from the groundor groundwater which is at a relatively constant temperature all year round, havetypically higher efciency but are more expensive, requiring excavation. Aperformance coefcient of COP > 4 should be selected (for 1kWh of electricityconsumed, 4 kWh of heat are produced). Most efcient systems have a COP of 7.Their capacity has to match heating and cooling demand without beingundersized (risk of inadequate cooling) or oversized (risk of inappropriate

dehumidication). Heat pumps most need additional heat source to cover peakconsumption (cold days, etc.). Intelligent heat pumps (as Syd Energi unitsinstalled in Sonderborg, Denmark) with a control unit collecting weather data,households consumption and electricity prices, produce heat when prices arelow and provide heat-through their heat-storage device, at peak consumption.

Co-generation units - Combined Heat and Power (CHP)

Cogeneration units (Combined Heat Power - CHP) generate heat and electricitysimultaneously, the heat resulting from the production of electricity or the reverse.This decentralised energy production system avoids transportation and reduces


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Certification of building is not mandatory but allowsensuring that specific energy efficiency (EE) targets are

met. There is not one standard European certification toolbut several national certification tools.

designers and operators of the sector). While the ITACA Protocol denes thestrategic guidelines and supervises the certication system, regions and provincesshould dene their own procedures of certication and accreditation systems and

issue the certicates.

Passive House Planning Package PHPPCalculating the energy balance ofbuildings with very low energy consumptionis a demanding task - existing regulations, standards and pre-standards lack therequired precision. The method developed by Passivhaus Institut in DarmstadtGermany is the widest accepted method, in Europe, to calculate the design processfor passive house renovation.

Energy performance labelsUnder the European Directive on Energy performance of Buildings (2002/91/EC) toachieve energy performance in buildings, Member States are responsible for:setting the minimum standards as regards the energy performance of newand existing buildings.To meet their commitment and promote the achievement of high energyperformance levels, countries have developed a series of energy performancelabels (EPL). In the absence of European standards, they have developed theirown national standards which are not directly comparable. This is becausecountries aggregate different components in the buildings total allowed energybudget (i.e. some countries ignore domestic hot water, equipment, lighting, orfans), they control different stages of the energy chain (e.g. net energy demand,delivered energy or primary energy) and have divergent assumptions on systemefciencies (e.g. boilers) and primary energy factors. Moreover, areas and volumesare calculated in different ways in different countries, which complicates simplecomparison of requirements that are normalized in relation to oor area or facadeareas, such as energy use [kWh/m.year] or air tightness.

CertificationCertification of materialsEven though the environmental aspects of products do not yet play a big role in thecertication process of the European Organisation for Technical Approval,specialised databases exist of validated and labelled building materials basedon Life Cycle Analyses (carbon emission and energy used during materialproduction, transportation, recycling...).Not all national validations come to the same results, depending on theassumptions made in the calculations and on differences made on how the materialsare being used or applied. In the Netherlands a national calculation system is beingdeveloped, bringing at least seven other systems together.

Certification of buildingsCertication of the building, demonstrates its commitment to energy efciency, sitesustainability and indoor environmental quality. It is not mandatory but allowsensuring that specic energy efciency (EE) targets are met .There is not one standard European certication tool but several nationalcertication tools. Some are proposing integrated calculation methodologyincluding all the EE aspects, such as heating, technological cooling and lightinginstallations, position and orientation of the building, heat recovery, etc., and notjust the degree of the buildings technical insulation. Some used in the countries ofCASH network are presented hereafter:

GPR BuildingGPR Building is a performance based tool developed by the municipality ofTilburg and W/E Consultants in the Netherlands. The aim of this quick and easy touse software is to raise building quality and reduce the environmental load ofbuildings, using ve indicators: Energy, Environment, Health, User Quality, andLong Term Value. It allows visualising the effect of every measure on thesustainability and gives achieved CO2 reduction. At the moment GPR Building isbeing extended so it can be used internationally.

ITACA ProtocolThe ITACA Institute (Federal Association of Italian Regions) in Italy, developed theITACA protocol as a tool for the certication of the residential public building.Indicators used are: Site, Consumption of resources, Environmental loads,Environmental indoor quality, Quality of the service and Socio- economic aspects.It helps providing a common baseline for all stakeholders (property owners, builders,


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-Renovation approach:

Rhone-Alpes Regional Council energy renovation plan forsocial housing, FranceStarting with the challenge of national EE targets set in the new French Environment bill

Grenelle 2, of 80 000 renovations by 2020 in Rhne-Alpes region with an energy

consumption performance level


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www.passiv.de

www.asiepi.eu or www.buildup.eu

(ASIEPI EP: Comparing Energy Performance Requirements over Europe: Tool andMethod, 2010)

www.norme-bbc.fr (French norms and Grenelle bill)

www.frankfurt.de/sixcms/detail.php?id=3076&_ffmpar[_id_inhalt]=102231

Leitfaden: Energetische Sanierung von Grnderzeitgebuden in Frankfurt;Herausgeber: Stadt Frankfurt am Main, Energiereferat.

http://ecocitoyens.ademe.fr/

www.logementsocialdurable.fr

www.energiaklub.hu

(Hungarian climate policy institute. Energiaklub concentrates on energy efciency,renewable resources, climate protection, energy policy.)

www.lakcimke.hu

(A Hungarian on-line and downloadable publication for owners about energyperformance certicate of buildings, energy efciency interventions and renewableenergy sources.)

MORE TO LEARN

GeneralThe CASH website with all presentations of the Thematic seminar in Utrecht:

http://urbact.eu/cash

State of the artMain reference used for the overview of technologies for housing renovation:Energieefzienz im Wohngebudebestand; Techniken, Potenziale, Kosten und

Wirtschaftlichkeit; Institut Wohnen und Umwelt.

http://www.iwu.de/leadmin/user_upload/dateien/energie/klima_altbau/

IWU_QBer_EnEff_Wohngeb_Nov2007.pdf

W/E Advisers presentation: Energy saving technology, state of the art on CASHWebsite.

La rnovation trs basse consommation dnergie des btiments existants.Olivier Sidler, France, 120 p., 2010.

Further website sources

www.institut-negawatt.com

www.lowenergyhouse.com

(England)

www.kliba-heidelberg.de/publikationen_oekobaubel.html

(Germany)

www.pro.baubook.at; www.sev.nl

http://ec.europa.eu/environment/ecolabel/

(all about eco-labels)

www.ecologicalbuildingsystems.com

www.gprgebouw.nl


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Which key energy efficiency topic s are most covered?

Where are the gaps?

Are enabling factors appropriate and sufficiently

covered?

What are the barriers to implementing?

Some interesting bottom-up approaches

Recommendations for an effective EE legal framework


LEGAL FRAMEWORK


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This edition, covering the theme of legal framework for energy efcient renovationis the 2nd in a series of 6 mini-guides for the CASH project.

Availability of affordable and energy efcient housing is not only a technical ornancial matter. European Directives, national / regional / local laws, decrees,ordinances and policies are forming the framework for cities to work within. Thismini-guide describes the existing legal playing eld for CASH partners from 9European countries at the local level and shows how they can manoeuvre withinthe given possibilities to enhance energy performance of affordable housing forsocial landlords, low income owners or tenants. It also highlights the gaps, barriers,

local needs and the potential solutions for a bottom-up approach more in line withlocal context.

STATE-OF-THE-ART

European policy & regulationCash partner legal framework

Key topics most covered by legal instrumentsTopics less covered by legal instrumentsSpecificities and strengths of CASH partners


Enabling factorsBarriers to implementingNeeds & required outcomes


Orca-apulia region, Brindisi, ItalyTenants union, Brindisi, ItalyApulia cluster for sustainable buildings, Brindisi, ItalyHeating source regulated in urban planning, Frankfurt, GermanyVoluntary agreement on local level, Utrecht, The Netherlands


Brindisi manifesto

MORE TO LEARN

CONTENT

4 2

4 8

5 3

5 1

5 5


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As illustrated by the table, this resulted in very different EE legal framework inCASH partner countries although they are all based on the same EUdirectives - except for EE targets specication, audits and energy performancecerticates. Table results are analyzed in the following subsections.

Principle of subsidiarity has ledto a variety of norms and regulations

that relate to national, regional or local context.

EE DIAGNOSIS

& SPECIFICATIONS

EE Targets + Energetic

requirements of buildings

Audits + Energy performance certicates

EPC of buildings + posting

Renovation labels

ENERGY PRODUCTION

& DISTRIBUTION

Energy sources

Co-generation

District heating

USERS INVOLVEMENT

Condominium / co-properties

Tenants contribution to energy

renovation

R&DClusters (industries & research

institutions)

FINANCIAL TOOLS /

ENGINEERING

Subsidies for energy efciency housing

units renovation

Eco-loans and low interest loans

Fiscal measures

Feed-in tariffs

Funds for state & municipal buildings

Yambol-BG

Sonderborg-

DN

CRRA,Echirolles,

LesMureaux-FR

Frankfurt-GE

Eordea-HE

Tatabanya-HU

Brindisi-IT

Utrecht-NL

Bridgend-UK

STATE-OF-THE-ART

European EE Policy and regulationAt European level the reduction of energy consumption in the building sector is an

important policy goal which is reected in many directives and regulations.

Well-known is the 20-20-20 goal (to reduce GHG emissions by at least 20 per cent by

2020; to raise the share of renewable energy to 20 per cent; to improve energy efciency

by at least 20 per cent), which many local and regional authorities in Europe have

committed to through the covenant of mayors (signed by 6 of t he CASH partners).

Probably the most relevant regulation for CASH is the EU Directive (2002/91/EC) on

Energy Performance of Buildings (EPBD), in force since 2003 and adapted in May 2010.

For EU legislations on Energy Efciency (EE), consult the link:

http://europa.eu/legislation_summaries/other/l27042_en.htm

On 22 June 2011, a new set of measures for increased Energy Efciency was proposed

by the European Commission (Energy Efciency Plan 2011). There will be a legal

obligation for member states to establish energy saving schemes and more efforts from

local and regional governments to be made for public buildings. Even though social

housing is not explicitly addressed in the new directive, it will be a topic to consider since

it is often within the inuence of local governments.

Moreover, the European Commission is developing a Low-carbon economy 2050

roadmap with objectives to reduce greenhouse gas emissions by 80 to 95% by 2050,

and further rules can be expected.

Cash partner legal frameworkTo understand how some European countries have adapted their legal frameworkto cope with these European directives and to pinpoint gaps and national specic

contributions, CASH partners have illustrated their national, regional and local legalEE instruments in the form of a table organized by key EE topics, synthesizedhereafter see detailed table on the CASH webpage (http://urbact.eu/cash/,Project documents, CASH Partner legal framework -.The information gathered has shown how the principle of subsidiarity centralprinciple in the EU context stipulating that political decisions in the EU must alwaysbe taken at the lowest possible administrative and political level and as close tocitizens as possible has led to a variety of norms and regulations that relateto national, regional or local context (cultural, nancial, climatic specics).


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For financial instruments:subsidies (national or local or a combination of both),loans and feed-in tariffs are regulated the most.

Topics less covered by legal instruments

Whereas all EE topics are important, several of them, presented hereafter,seem to be poorly regulated:

Renovation labels: only a few partner countries have regulated labelling aspect,such as France with its high environmental quality (HQE) and low consumptionbuilding (BBC). In Germany, the Passive House Institute (www.passiv.de) has

developed a calculation scheme independent from national standards withprocedures and boundary conditions not inuenced by political considerationsallowing fast integration of new research results which gives more correct results.Some renovation labels have inspired new national standard construction rules,enforcing EE and bioclimatic assets when constructing a new building (i.e. Thermicregulation RT 2012 in France). Compulsory renovation rules are expected tofollow.

Cogeneration and district heating: in some partner cities specic energy applicationsare promoted through legislation, be it cogeneration, district heating or the use ofnatural gas. Local circumstances, resource availability and economical aspects,inuence which option for energy supply is promoted, as in Tatabanya, Eordea orSnderborg with district heating.

Co-properties / condominiums: majority voting is ruled differently. In some cases aquorum requirement is used. In most partner countries this has not been the objectof legal instruments or the choice to be made by owners between normalmaintenance works and energy investments. The Netherlands is one of the

exceptions, with a law obliging the owners of apartments to set up a fund for longterm maintenance, with differences made between normal maintenance and extraenergy investments. There is no general rule for this in Europe. For Bulgaria, wherethe situation with ownership of buildings is the most complicated, The CondominiumAct, in force, stipulates that a qualied majority of votes is required for decisionsconcerning basic repair or renovations and in a months time, an amendment shouldindicate that every owner is obliged to pay monthly fees for the renovation of the

Key topics most covered by legal instruments

For EE diagnosis and specifications: all CASH member states have translated theEPBD into national legislation. Energy Efciency targets have been dened,monitoring methods developed and certication systems installed. However,there is no common calculation scheme between member states making it difcultto compare the energy consumption values (e.g.: there are over 25 different typesof energy certicates at European level). Regarding levels of target energy valuesfor energy modernization, whereas these are generally rather poor at nationallevel, partners have shown that, in some cases, the local governments havedened more ambitious targets.

For energy production and distribution: most countries are working onregulations to promote the use of renewable energy sources, accompanied bynancial measures (guaranteed feed-in tariffs, subsidies for solar units or heatpumps...). In some countries (France, Denmark) an assessment on different energyoptions for big projects is even required by national regulation, so that the choicefor energy source is not centrally prescribed, but is dependent on the localsituation.

For users involvement: several partner countries have legal instruments toobtain tenants contribution to energy renovation (Denmark, France, Germany,Hungary and the Netherlands). In Germany 11% of energy modernization costsmay be transferred to higher rents and most often, to pay back investments forhome improvement, rents are being raised. If and how much the rents in socialhousing can be raised varies between countries. Some cities (Utrecht, Frankfurt)are developing local rules for this. Because implementation mechanisms arecomplex and since this tenants contribution issue often raises social problems, inmost cases social landlords prefer not to implement them. Frankfurt and some

cities in Germany have introduced energy criteria in local rent comparison schemes(Mietspiegel). Landlords can justify higher rents, if they prove measures (newheating, insulation) or lower energy demand.

In some countries, an assessment on different energy

options for big projects is even required by national

regulation, so that the choice for energy source is not

centrally prescribed but is dependent on the local situation.


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in national plans of 6 of the 9 CASH countries, no legal instrument regarding thistopic has been mentioned by CASH partners.

Specificities and strengths of CASH partnersThe detailed CASH partner legal framework table, presented on the CASHwebpage, stresses some trends and specicities:

Some countries like Italy have developed a series of legal instruments at regionaland local levels which deserve to be scaled-up (such as the Brindisi City Councilresolution to establish the service chart providing 30% of rental fees to the tenantsunion for self-management including for EE renovation). Others like France haveadopted a more centralized approach with less local and more nationalregulation.

Some countries have developed specic legal instruments for key EE topics: Hungarian Decree N389/2007 on feed-in tariffs related to cogenerated

electricity; Tatabanyas General Assembly Decree N4/2010 on measuring and sett ing

district heating and N10/2010 on the district heating modernization programme(Hungary),

German EE label, Apulian Regional Council Resolution N863, March 23, 2010on R&D (Italy) and French Tax Instructions N5B-22-09 establishing Tax creditfor EE expenditures on main houses and N6C-1-10 establishing a property taxrelieffor energy saving works on social housing units.

building.

Clusters: only a few CASH members, such as Snderborg and Brindisi, have regulatedthe creation of EE clusters, joining R&D institutions and industries for EEdevelopments. Clusters exist in other partner countries but as supportive measures.

Fiscal measures: these economic instruments are always mentioned in EUcommunication documents and policies as being important for realising the energyefciency goals. Different from subsidies, economical tools - such as tax regulations,should be available for all actors and make energy-friendly options nanciallyattractive. However, they are very rarely used in social housing EE renovation orare very recent towards low income owners.

Green Procurement (environment-friendly purchasing): even though it is included

The Netherlands is one of the exceptions, with a law obliging

the owners of apartments to set up a fund for long term

maintenance, with differences made between normal

maintenance and extra energy investments.


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Capacity building and training vary widely, going from schoolchildren toscholars: National educational programme for primary schools in Denmark;teaching programmes in technical schools around the PassivHaus building,including programmes for architects and builders in Germany; universityprogrammes with units on energy in Italy.Information & awareness raising stay the most standard enabling factors but are

still insufcient and untargeted: Awareness raising campaigns by municipalitiesand at national level in Denmark; website with advice on energy saving for privateowners and tenants in Denmark and the Netherlands; posting of energy efciencylevels in estate agencies, energy guides and information desk with information forco-properties and individual houses in France; NGO providing information onnancing in Hungary.

Barriers to implementingOften supportive measures are not diversied enough, or not adapted to thecontext, and the legal framework not appropriate. This can create barriers toimplementing the legislation. Below are aspects of legislation that are seen as

barriers by the CASH partners: Existing legal framework does not cover all the aspects of energy efcient

renovation and legal obligations are not always connected to facilitatinginstruments like capacity building & training or nancing.

There can be competitiveness between energy efcient (EE) legal instrumentsand other legal instruments (i.e. re security, elevators, building regulations, leaddiagnosis, etc.). This could make it hard to agree on how to implement

legislation. Goals set by legislation are not always nancially achievable or seen as realistic. Weak and unstable nancial measures in time, as well as the difference of

incentives between national and regional or local levels, make it difcult to reachnational targets.

Often supportive measures are not diversifiedenough, or not adapted to the context, and the legal

framework not appropriate. This can create barriers toimplementing the legislation.

Enabling factors exist, as regulatory mechanisms, nancial

measures, technical support, but many of them are short

term based.


During the Brindisi seminar, thematic workshops were held on enabling factors,

barriers and needs for partners to implement their EE legal framework. Hereafter,

are some key elements raised by partners.

Enabling factorsRegulatory mechanisms, such as: Volunteer modernization and no compulsivemeasures are found in Germany; posting of energy efciency levels by estateagencies in France; obligation to add certication to selling act in Italy; co-propertybeing able to act as a legal person in Italy, France and the Netherlands;

self-management by tenants in Italy and tenants agreement to adopt a renovationoperation in the Netherlands.

Financial measures are numerous, as listed hereafter, but are often ephemeraland project based, not adapted to large scale renovation operations : EC structuralfunds; preferential loans and tax incentives for social landlords in France and forowners in Italy; guaranteed 2-3% interest loans for social landlords at regional levelin the Netherlands; low interest rate credits from national funding banks -KfW- inGermany; eco-loans / green loans at 0% interest rate for private owners in Franceand Denmark; revolving fund for social landlords at local level by an independentorganization in the Netherlands; 3rd line tenants contribution in France); possiblesubsidies from state for low income private owners in France and to reach C levelin Hungary; regional nancial measures in France; exemption of land tax for socialowners in France; exemption of property taxes if level A is achieved in Bulgaria;reduced VAT in France; scal measure: tax deduction for some energy units andmaterial in France, Italy and Denmark; white certicates - selling of energy savingsby social landlords to energy companies in Denmark and France; creation of anational fund fed by xed rents once loans are paid-, managed by government on

the basis of social landlords requests justied by tenants in Denmark; subsidizedrent on the basis of energy savings in the Netherlands; public-private partnershipin Italy; nancial support for changing old boilers in Germany; risk sharing coveredby public entities such as municipalities through guarantees.

Technical support, less widespread, can cover: Technical assistance for thecertication process, accessing nancial support and helping draw up fundingrequests in France; technical assistance for energy measurements by universitiesin Denmark; development of district heating by municipalities in Denmark and theNetherlands; use of smart metering to raise awareness in Germany.


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Interesting CASH partners examples on how to favour a bottom-up approach to

draw up legal instruments reecting local needs are shared hereafter:

Orca Apulia Region, Brindisi, ItalyThe Regional Observatory of the Apulia Region (ORCA) has developed a databaseon stakeholders needs and is using it to support the region in drawing up adaptedregional regulation on EE renovation of public social housing. ORCA gathersfeedback from tenants, not only through data but mostly by talking with them andorders the data so that it is helpful to the evaluation units. The analysis leads to

matching peoples needs and the local laws to nd out if there are any gapsbetween them. Then new laws are drawn up or existing ones are implemented withthe support of politicians, to promote better practices at local level. ORCA pilotprojects for dissemination of good practices are available at:

www.orca.regione.puglia.it

Tenants Union, Brindisi, ItalyThe Brindisi Tenants Union promoted two resolutions which were approvedunanimously by the City Council, representing a cutting edge in legislation at nationallevel. These resolutions established the chart, called Carta dei Servizi eCommisione Gestione della Carta dei Servizi, now used by the social landlord IACP(Istituto Autonomo Case Popolari) and the self-management set of rules which regu-late the tenants and allows the Tenants Union to receive 30% of rental fees (onceused to pay management and administration fees) for self-management. It could beused for EE renovation or other improvements, in agreement with the IACP.

Furthermore, the Tenants Union hasdesigned a cartoon to raise tenantsawareness on the impact of housinglegislation This creative tool should bepromoted as a best practice to provide in-formation to citizens on legal framework.

www.unioneinquilini.it

A B rindis i Tenants Union represe ntative present ing the high impac t o f

their cartoon on legal instruments.

Legal instruments (laws, ordinances, regulations) can be inuenced by lobbiesand stakeholders of social housing do not have a strong lobby.

National laws are not always applicable to specic local conditions. Moreover, thescaling-up of local regulation, which have proven to be efcient, to nationallegislation is difcult.

Whereas these barriers are general for many policy areas, there are someadditional specic factors for the social housing sector: Governments may have high EE targets but social landlords could face difculties

to nance renovation, nancial instruments being limited (no access to tax deductionand to green loans for some stakeholders) and not adapted to large scaleoperations and rents being hard to raise when a high percentage of tenants liveon very low incomes or social welfare. Renovation investments charged on rentscan generate strong tenants opposition driven by their low awareness and

involvement in the renovation process. Mixed properties (social landlord buildings with private owners) do not t with

regulations made for standard average situations and social landlords bear alllegal obligations.

Multiplicity of funding sources leads to complex application or transactionalprocedures.

Needs & required outcomesThe EE legal framework should cover several key aspects:Set ambitious technical standards, with realistic targets, whenever insulation of

the building envelope or a new heating installation is planned. In some Germancities and in the Baden-Wrttemberg region, the legal framework stipulates thatrenewable energies (i.e. Solar collectors) must be installed if the roof or heatingsystem is modernized;

Connect nancing and the legal framework to establish a transparent way toreach an equilibrium between the nancial interests of the landlord and of the ten-ant; develop coordinated multi-actor instruments (technical, social, nancial) forlow income owners;

Promote renewable sources of energy supply. There should be a clear frameworkto support the implementation of heat and electricity from cogeneration andelectricity from renewable energies. Feed-in tariffs, which have caused the high-est and most cost-effective boom of energy from renewables (as in Germany)should be stable for 15-20 years after installation of the plant.

Furthermore, it is fundamental to diffuse the various available EE legalinstruments to municipalities and to raise the awareness of households of thebenets of EE renovation.


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CONCLUSIONS AND RECOMMENDATIONS

At the Brindisi thematic seminar, the partners identied gaps between national

legislation and what is locally possible. Based on the barriers, needs and enabling

factors, they have identied recommendations for an effective EE legal framework,

agreed in the following Brindisi Manifesto.

Brindisi Manifesto,

Recommendations for an effective EE legal frameworkLong term vision of the legal instruments

Fast politically-motivated changes of legislation should be avoided.Coherent legal framework at national, regional and local levels

Legislation must be consistent, understandable and scalable.Flexible and adaptable legal framework

In this sense, voluntary legal instruments (soft law) associated with a higher controllevel should be favoured.Involving stakeholders in drawing up bills, including citizens, is key

to produce coherent legislation that can be implemented locally with the participationof EE actors, social landlords, private owners and tenants.Scaling-up, into national legal instruments, local Decrees and

Apulia Cluster for Sustainable Building, Brindisi, ItalyThe Apulia Cluster for Sustainable Building is promoting cooperation andeducational activities for sustainable development to increase awareness ofsustainability in the building process at any level. It brings together industries,companies and universities in the region, informs and gives training on sustainabledevelopment and energy-related issues, as well as initiates research andinnovation. Stakeholders involved share their experiences, allowing regions to givefeedbacks to the higher legislative level and to inuence new legislation, throughthe clusters R&D activities.

http://www.numix-ecoinnovation.eu/doc/pdf_67.pdf

Heating source regulated in urban planning,

Frankfurt, GermanySince 1997 Frankfurt obliges building companies and project developers toconnect the buildings to local district heating supplied by cogeneration. The use ofother heating systems of fuels is forbidden. This obligation is implemented throughlocal ordinations related to land-use plans in urban planning.

http://www.frankfurt.de/sixcms/detail.php?id=8686&_ffmpar[_id_inhalt]=50482

http://www.frankfurt.de/sixcms/detail.php?id=8686&_ffmpar[_id_inhalt]=50467

Voluntary agreement on local level,

Utrecht, The NetherlandsUtrecht has signed a voluntary agreement with social housing associations to havethem insulate 18,660 apartments from 2011 to 2015. In return, the city council willadapt legal rules which hindered housing associations from splitting up big housesor from selling part of their housing stock.

http://www.utrecht.nl/smartsite.dws?id=88530&GID=366375&commnr=17013

&sub


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MORE TO LEARN

An overview of relevant legislation and institutional framework can be found in the

Background Paper made for the thematic meeting in Brindisi.

(See CASH website: http://urbact.eu/cash)

Development of European policy relatedto Energy Efficiency can be found on the website of DG Energy

http://ec.europa.eu/energy/index_en.htm

http://ec.europa.eu/energy/efciency/action_plan/action_plan_en.htm

http://ec.europa.eu/energy/strategies/2011/roadmap_2050_en.htm

www.epbd-ca.eu

Other sitesCovenant of mayors:

www.eumayors.eu

Developments of European and national housing policies:

www.powerhouseeurope.eu

www.housingeurope.eu

municipal deliberations that have proven their efciency

Individual cities have often difculties to give feedback on successful localprocesses to national government or to the EU. By organizing themselves indedicated organizations and networks (like CECODHAS, Eurocities, ClimateAlliance, ICLEI, national municipal associations, etc.) they can have more inuenceon future legislation.Adopting a global approach to the cost of housing (rent-energy-heating)

Being part of the housing costs, heating and energy costs should be integrated inthe rent protection systems. Furthermore, claiming saved energy costs tocompensate energy investments must be made easier for house owners.Adopting a comprehensive, simple and fast approach to funding

Funding should be less oriented towards individual projects or pilots, but be morestructural support. It should be made less bureaucratic and procedureshomogenized and simplied.Providing adaptive mechanism for rents, on the basis of incomes

Flexible mechanism for rents to t to local context (deprived neighbourhood) and aform of protection from rent increase for existing social rents should be ensured.Favoring the creation of clusters

Providing appropriate communication and capacity building

Municipalities should receive clear and timely information on legislation and onpossible sources of funding in a systematic way and receive appropriate training.Educational programmes for stakeholders, in particular architects and builders, areneeded and energy efcient Certication of architects / builders should bepromoted. Awareness raising campaigns by cities and by tenants unions should bepromoted (e.g. Climate Tour in Frankfurt, Apulia Cluster for SustainableDevelopment, ORCA Watt/IN project). Even if the occupants of social housingare not always easy to involve in a renovation process, it is essential that they are,just as all other stakeholders, informed and involved.


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FINANCIAL ENGINEERING

What are the modalities to reduce the investment costs

and income gap?

How can the landlord / tenant dilemma be solved?

What are the barriers to implementation?

What are potential solutions for an eff icient financial

engineering?



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This 3rd Mini-Guide on Financial Instruments is based on the exchange ofexperience between CASH partners, in the preparation of and during the 3 rd

transnational thematic seminar held in Frankfurt, Germany, September 7 to 9,2011. It analyzes existing nancial instruments for energy efcient (EE) renovationavailable in the 9 European countries of the CASH partner cities. Besidesunderlining successful instruments in use in CASH partner cities, the guide alsohighlights obstacles and presents recommendations for developing nancialengineering adapted to long-term and large-scale EE renovation operations.

STATE-OF-THE-ART

How much money is needed? The European contextExisting modalities to reduce the gap betweeninvestment costs and income

Reducing the investment costs Getting additional income

Financing by a third party (TPF)


How are the financial instruments perceived by CASH partners?BarriersSpecific needs pinpointed by CASH partnersPotential solution for efficient financial engineering


The Danish Building Fund, Snderborg, DenmarkNational rent scheme and scoring system, Uthecht, The NetherlandsGreen Deal, Bridgend, UKKfW programs, Frankfurt, GermanyLocal financial instrument, Brindisi, Italy


FundingInvestor/user dilemmaNetworkingRecommendations for Managing Authorities

MORE TO LEARN

CONTENT

6 0

6 4

7 2

7 0

7 4


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of dividends, and that must be repaid within a xed period. A Green loan representsa sum of money lent for environmentally-friendly investments (including energysavings), at an interest seeking both nancial returns and environmental benets.Soft loans offer exible terms for repayment, usually at lower than market interestrates, and are provided customarily by government agencies. The difference withthe commercial interest rate is mostly covered by the government.

Bank guarantee

This tool consists in government taking over the bank guarantee to facilitate accessto loans for low-income private homeowners, social housing organizations, orsocio economically deprived groups of homeowners.

Tax credits and VAT reduction

In some countries, investments for energy improvements can be deducted fromincome tax or have a reduced VAT rate. The German government has associatedthis tool with a certain level of energy efciency that must be reached through theinvestment. Tax credits are less likely to be attractive to lower-income households.In some cases, big social landlords are excluded from tax credit reduction.

Investment transfer to rent

This represents investments paid back by a higher rent. For this tool to be usedeffectively, an appropriate legal framework has to be in place. In Denmark and theNetherlands, national regulations are in place. See also the chapter on theowner/tenant dilemma.

Getting additional incomeEuropean funds

The EC supports EE renovation through different funds which are mainlyshort-term based and project-oriented. Many funds are difcult to access owing totheir complexity or criteria. Among the European funds available for actions relatedto energy efciency are:

European Regional Development Fund (ERDF) is the most relevant for EErenovation programs with up to 4% eligible.

http://ec.europa.eu/regional_policy/thefunds/regional/index_en.cfm

European Investment Bank (EIB) gives energy loans for the public and privatesectors, including municipalities for sustainable, competitive and secure energy- with long-term xed rates.

http://www.eib.org/

STATE-OF-THE-ART

How much money is needed? The European contextIt has been estimated that the comprehensive energy renovation cost for a dwelling,is in average 23,000 Euro1 (in France). In order to reach the European CO

2reduction

goals for housing, approximately 70 to 180 million housing units in the EuropeanUnion (EU) need to be renovated according to low energy consumption standards.This would require from 1,500 to upwards of 4,000 billion Euros of energyrefurbishment investments in the residential sector before 2050, which representsroughly 27% of the energy consumption in the EU.

How can this be achieved knowing that energy costs should be reduced by a factorof 3 to 4 and that 2/3 to 3/4 of the renovation costs are often dedicated to generalmaintenance measures?The trend is to cover these costs in the long term by the added value of the buildingand in the short term through higher rents. However, it is often not possible in thecase of social housing, to raise the rent and certainly not more than the expectedreduction in heating costs. Thus, additional nancial instruments are required.

Existing modalities to reducethe gap between investment costs and incomeAvailable nancial instruments for EE renovation in the 9 countries of the CASHpartner cities have been analyzed during the roundtable of the 3 rd CASH transnationalthematic seminar. They have been categorized into 3 modalities for reducing the gapbetween investment costs and incomes: reducing the investment costs, getting additional income,

nancing by a third party.

Reducing the investment costsLoan capital, soft loans or green loans

Relevant factors of these nancial instruments are the interest charged on loansand the time allowed for repayment. Loan capital is the part of an organizationscapital employed that is not equity capital, that earns a xed rate of interest instead

1 Energy Retrotting of social housing through energy performance contracts A feedback from the FRESH

projec t: France , Italy, Uni ted King dom and Bu lgaria . See www.fr esh-p roject .eu


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Subsidies (often related to revenues) provided by local and national governments.These are national grants, accessible to all categories of beneciaries (sociallandlords, co-properties and individual properties). Grants specically targetingenergy efciency may be directed either to the social housing provider or directly tothe individual resident. They vary in scale from large regeneration projects down tothe household level. The funds mostly cover only a percentage of the real costs andare project based, with only a limited number of projects open to funding.

Feed-in tariffs

The self-production of energy, by solar panels or wind, can be supplied to thepublic electric power grid. In many countries, regulations ensure a guaranteedminimum price for this energy. This provides an income stream which can helprepay capital loans. It can only be used when energy is being produced, in additionto energy efciency measures.

Market instruments : Energy Savings Certicates and Carbon Trading

A White Certic ate, also referred to as an Energy Savings Certicate (ESC),Energy Efciency Credit (EEC), or White tag, is an instrument issued by anauthorized body guaranteeing that a specied amount of energy savings has beenachieved. In most cases, the white certicates are tradable. In many countries,energy companies have energy savings goals to achieve. The amount of energysaved in a housing project can be subject to trading.

Financing by a third party (TPF)Energy Service Company (ESCO) and energy providers

This nancial mechanism involves the nancing by an outside energy serviceinvestment company (ESCO) or by an energy provider. These investments are thenpaid off using the cost savings achieved. The investor installs efcient technologyand maintains the system to make sure energy is saved. This might, for example,involve provision of the heating equipment, fuel and maintenance, as well as

energy saving measures or investments in renovation operations paid back onenergy savings. In some countries, as in UK, there are legal obligations whichcompel energy companies to contribute to the EE renovation costs.

Energy Savings Performance Contract

In this kind of contract, the contractor (public or private, or a holding) proposes theowner measures that will produce measurable guaranteed savings, committingitself to reach the level of savings dened in the contract. Projects are partly fundedthrough energy savings and may result in future revenue for the owner.

European Energy Efciency Fund (EEEF) for commercially viable EE andsmall-scale renewable energy (RE) projects from 5 to 25 M, targeting municipaland regional authorities and public and private entities acting on behalf of them,such as social housing associations, energy companies, etc.

http://eeef.eu/

European Local Energy Assistance Fund (ELENA) is a technical assistancegrant available to local authorities, designed to boost investments in the area ofenergy efciency (EE) and renewable energy sources. This grant can be used tocover the technical support necessary to prepare, implement and nance theinvestment program, such as feasibility and market studies, program structuring,business plans, energy audits, and tender preparation, etc.

http://www.eib.org/products/technical_assistance/elena/index.htm?lang=en

The Marguerite Fund is an independent Pan European equity fund for Energy,Climate Change and infrastructure investments, including sustainable energyproduction and distribution.

http://www.margueritefund.eu/index.php?pageid=1

Joint European Support for Sustainable Investment in City Areas (JESSICA)from EIB, promotes sustainable investments and growth in urban areas. Itconcerns repayable investments in projects forming part of an integrated plan forsustainable urban development. These investments, which may take the form ofequity, loans and/or guarantees, are delivered to projects via Urban DevelopmentFunds. Topics include: environment, innovation and promotion of sustainableenergy sources.

http://www.eib.org/projects/publications/jessica.htm?lang=en

Intelligent Energy Europe (IEE) program has targeted funding for creativeprojects promoting EE, increasing the use of RE sources and energy diversication(up to 75% of project costs)

http://ec.europa.eu/energy/intelligent/index_en.htm


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National nancial instruments are mostly available to all beneciaries but arepredominantly short-term based, except in Denmark, Germany and the UK, withlong-term instruments;

There are differences between countries regarding the contribution of tenants.The following ranking of nancial instruments was obtained from CASH partners: most successful: funds, grants, subsidies and soft loans, as well as energy

obligations and trading; most complex to implement, even if very interesting: third-party nancing,

transfer of investments into rents, tax rebates and VAT reduction. In third-partynancing, energy savings may not be large enough to repay the investmentswithin a reasonable contractual duration.

BarriersThe creation and use of innovative nancing schemes depends on how prevailingbarriers for nancing and implementing EE renovation projects can be overcome.Main barriers identied by the CASH network during workshops are illustrated inthe following Barriers matrix. (See table next page)

Most common barriers in the 9 countries, represented in the top of the matrix, are:Limited funding, not sufcient to meet important national targets. Climate and

energy efciency goals are often set by national governments. The funding toachieve these goals is not high enough or not available at all (see CECODHAScomment in Potential solutions section). Due to the overall savings on publicbudgets in European countries, this situation has only worsened.

The available funds are often short-term based and project-oriented, which doesnot allow mid- and long-term planning needed for large-scale energy efciencyrenovations.

Beneciaries are confronted with complex procedures and application forms forrelatively little funding amounts.

Lack of awareness among owners on funding and on the nancial aspects of EE

renovation, due to insufcient accessible information, is a widespread problem. There is a lack of coherence between various nancial instruments aimed at -

nancing different parts of the renovation process. Many municipalities are facing a fundamental lack of nancing possibilities, thus

with limited local action. It is difcult to reach an owners agreement in co-properties. There is a lack of control and monitoring of both the use of nance and of the

energy usage after the renovation.


How are the financial instruments perceived

by CASH partners?During a roundtable discussion, partners have classied nancial instruments betweenmost successful and most complex. Most successful for the network are funds,grants, subsidies, soft loans, energy obligations and trading. These results aresimilar to the ones presented in the EuroACE report (2010) which has addressedmore than thirty nancial instruments. The most complex instruments are thetransfer of investments into rents and 3rd party nancing.To understand the main gaps in the nancial instruments and the differencesbetween countries in the network, the partners have developed the following gridwhich summarizes the nancial sources available to different categories ofbeneciaries. (See table below)

Key ndings from the grid, depicting the situation in 10 cities from 9 Europeancountries: EU instruments are short-term based. Not designed for co-properties, they are

mainly used by social landlords;

BENEFICIARIES

Yambol-BG

Sonderborg-DN

Echirolles-FR

CRRA-FR

LesMureaux-FR

Frankfurt-GE

Eordea-HE

Tatabanya-HU

Brindisi-IT

Utrecht-NL

Bridgend-UK

Yambol-BG

Sonderborg-DN

Echirolles-FR

CRRA-FR

LesMureaux-FR

Frankfurt-GE

Eordea-HE

Tatabanya-HU

Brindisi-IT

Utrecht-NL

Bridgend-UK

Yambol-BG

Sonderborg-DN

Echirolles-FR

Documents

Cities Advice for Sustainable Housing - Sophie Moreau