How cost-efficient is energy efficiency in buildings? A comparison of building shell efficiency and heating system change in the European building stock

Abstract

Mitigating CO ₂ emissions for space heating (SH) and hot water (HW) preparation in buildings is key to reaching climate protection targets. In this context, it is important to understand meaningful balances between CO ₂ reduction through thermal renovation activities and the change of heating systems. In this work, we develop cost-optimal balances for different system settings with the Invert/Opt model. This model optimises the measures applied in each building so that the system costs for SH and HW preparation are minimised under given constraints for a given country. About 500–1000 options are considered for each building. We calculate scenarios and sensitivities for all countries of EU-27, reflecting a 95% reduction in CO ₂ emissions for SH and HW with a mix of direct and indirect RES technologies. These differ in the settings related to the applicability and costs of building-shell-related measures and the costs and availability of resource potentials. The results show that probably a high share of thermal renovation on total upcoming refurbishment activities until 2050 is cost-efficient to reach a 95% CO ₂ reduction in the EU-27 building stocks. Assuming that up to 90% of the buildings in each EU-27 country is applicable for a thermal renovation in case a refurbishment activity is needed leads to around 4% lower system costs by 2050 (13 billion EUR/year) compared to assuming a maximum share of 35%. Energy needs are reduced on average more in older buildings than in newer buildings. Nonetheless, a combination of thermal renovation and heating system change is often the most cost-effective option to reduce system-wide CO ₂ emissions also in more recent buildings. The calculations lead to cost-optimal savings in final energy demand in the range of 29–47% between 2019 and 2050. Assuming less favourable conditions for thermal renovation (high capital recovery expectations, additional technical barriers and high availability of cheap fuels) the cost-optimal level of heat savings in buildings for overall EU-27 could be suspected at around 1/3 down to 1/4 of current final energy demand.