SBE16 Tallinn and Helsinki Conference

Transcription

1 The chain of effects of energy retrofit measures a contribution to the project RentalCal Kai Mörmann and Thomas Lützkendorf, KIT SBE16 Tallinn and Helsinki Conference Build Green and Renovate Deep 5-7 October 2016, Tallinn and Helsinki Page 1

2 Funded by the European Union The chain of effects of energy retrofit measures a contribution to the project RentalCal Kai Mörmann and Thomas Lützkendorf Karlsruhe Institute of Technology (KIT), Kaiserstraße 12, Karlsruhe Corresponding author and presentation: Kai Mörmann Page 2

3 Schedule State the background Introduce the project RentalCal Eplain impact chains from retrofit measures to economic success Offer an outlook Page 3

4 Background Large shares of energy consumption for space heating Energy retrofit of the eisting housing stock is crucial to meet Germany's and the EU's climate targets Create incentives for proprietors to invest into their buildings' energy efficiency Page 4

5 Perspective of landlords For owner-occupiers, the incentives mainly come from direct savings in energy costs. For landlords: Tenants reap the benefits of improved energy quality, landlords have to bear the investment costs ("Landlord-tenant problem") For landlords, the most important incentives might be opportunities to increase rents. Page 5

6 State of research Some writings collect qualitative benefits and occasional pieces of data. Numerous studies also find empirical evidence for the financial benefits of buildings energy performance. Usually, there is no relation to the measure costs no direct profitability analysis. No comprehensive, detailed chain of effects from energy retrofit measures to individual benefits yet. Page 6

7 For investors, especially non-professional private landlords or energy consultants, it is difficult to assess the profitability of an energy retrofit of a certain building based on the state of research. Problem: thorough profitability calculation Measure cost estimates, rent increase assessments and profitability calculation are necessary but not easily available. This is where the RentalCal project steps in. Page 7

8 EU-funded Horizon 2020 project Incentives through Transparency: European Rental Housing Framework for Profitability Calculation of Energetic Retrofitting Investments The RentalCal project 11 participating institutions from 8 European countries Calculation tool for the assessment of the profitability of energy retrofits in rental housing. Page 8

9 Studies focus on impacts on prices and rents Source: Bio Intelligence Service, Ronan Lyons & IEEP 2013 Many studies analyse the effects of energy retrofit measures or efficiency ratings on prices and rents, but do not retrace a thorough impact chain. Page 9

10 For the project, cost information and empirical evidence of rent increase opportunities are collected and included into a profitability calculation engine. The chain of effects in detail Moreover, non-quantifiable and/or nonmonetary benefits of energy retrofits are collected and are displayed to the users in connection with their selected measures. One detail problem of RentalCal, that is addressed in this presentation, is how eactly the impacts of the different measures affect the landlords' financial success along a detailed chain of effects. Page 10

11 Impact chain measures step 1 step 2 step 3 effects repercussions for stakeholders economic benefits for landlords Common measures were listed and matched with their immediate effects. These effects' repercussions for different stakeholders were assessed. Finally, the various effects are merged and translated into economic benefits for landlords. Page 11

12 Impacts and consequences Step 1: Immediate effects from measures Measures Additional insulation of eterior walls Additional insulation of ceilings (basement ceiling / attic floors) Replacement of windows Replacement of the heating system (e.g. pump / burner replacement) Final energy savings /- Primary energy savings (non-renewable) /- Reduction in greenhouse-gas emissions /- Reduction in air pollutant emissions /- Improvement of thermal comfort in winter (+) Improvement of thermal comfort in summer (+) Building structure protection (+) Effect on the quality of design +/- Effect on rentable space +/- (+/-) (+) (-) Improvement of indoor air quality + Reduction of condensation damp / black + + (-) + mould risk Energy carrier echange Application of renewable energy Installation of a ventilation system Page 12

13 Impacts of measures Step 2: Mediate impacts for stakeholders Effect occurs for Owneroccupier Repercussions Final energy savings Heating cost reductions Primary energy savings (non-renewable) Conservation of resources Corporate image () Reduction in greenhouse-gas emissions Environmental relief Corporate image () Reduction in air pollutant emissions Environmental relief Corporate image () Landlord Tenant Society/ En- Improvement of thermal comfort in User satisfaction winter Improvement of thermal comfort in summer User satisfaction Building structure protection Etended lifespan of the envelope () Effect on the quality of design Sentimental value () () () Improvement of indoor air quality User satisfaction Reduction of condensation damp / black User health mould risk Building structure protection Increased maintenance epenses for additional building equipment (HVAC) increased non-apportionable operating costs Page 13

14 Step 3: Economic consequences Economic consequences are due to Rent increase (by modernisation apportionment, energetic quality surcharges according to rent inde, feasibility of higher rents, shifts from heating costs to rent within the gross rent) Value stability and increase (due to higher rents in (German) income approach, due to etended (remaining) useful life, due to discounts because of modernisation backlog) Reduced rental loss risk (due to reduced energy epenses, tenants can afford rent payments more easily from their disposable income); steady cash flow Reduced vacancy risk (amongst others due to improved thermal comfort, reduced heating costs etc.) Improved energy performance Reduction in heating epenses Conservation of resources Etended lease periods (due to increased user satisfaction) Reduced risk of damages due to black mould Increased goodwill due to positive sustainability reporting Environmental relief Image enhancement Health / user satisfaction Building structure protection / durability / useful life Interdependencies Reduced health epenses in the economy Reduced eternal effects from environmental pollution Reduced dependence on imports of energy carriers Page 14

15 retrofit measures insulation of walls insulation of perimeter/ceiling/ basement insulation of roof / attic floor replacement of windows ventilation system with heat recovery direct effects heating energy demand thermal comfort black mould risk indoor air quality apportionable oper. epenses non-apport. oper. epenses repercussions GHG / air pollutant emissions primary energy consumption final energy consumption tenants' total housing ep.s user satisfaction healthy living conditions mediate effects for landlords Complete chain of effects quality of location enhanced corporate image lease periods vacancy rate risk reduction risk increase economic consequences value stability / development rent revenues cash flow epenses for landlord financial success = positive relationship ( increases in A result in increases in B ) = negative relationship ( increases in A result in decreases in B ) = indefinite / uncertain (eistence and direction of an effect are uncertain or depend on various other factors) Page 15

16 Conclusions Analyses trying to assess the profitability of energy retrofits of rental dwellings which only take rent increases into account omit substantial effects. New approach: "chain of effects". At first only qualitative, in a second step it is to assess, which parts are quantifiable. Take up the concept of risk trees Our target: happy tenants, investors and a sound environment Page 16

17 Thank you very much The RentalCal project is supposed to last until February 2018 and the calculation tool should be available by August Please visit for further information and subscribe to the newsletter to be up to date about the project 's progress. Page 17