dena publishes the second part of its Fit for 2045 study
The public sector is expected to lead the way in climate protection and building refurbishment/costs for the transformation to climate-neutral public buildings is still unclear/dena estimates the necessary investment by 2045 at around €120 billion
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© HoffotografenSebastian Boie
Senior Expert, Communications T: +49 30 66 777 - 168 sebastian.boie(at)dena.de
Berlin, Germany, 9 Sept. 2024. Today, dena published its study entitled ‘Fit for 2045 (Part 2): Investment requirements for the transformation of public non-residential buildings – Investments required for a climate-neutral public building stock and possible financing approaches’. The study is the first to identify the specific financing requirements for the energy-efficient refurbishment of all public buildings in Germany to a climate-neutral level by 2045. The costs alone for a corresponding reduction in energy consumption amount to €120 billion, which corresponds to €6 billion annually. The greatest financial burden falls on Germany’s municipalities, totalling €4 billion, as most public buildings are owned by municipalities.
Corinna Enders, CEO, emphasizes, ‘The implementation of the energy transition will require high levels of investment over the next few decades, particularly in the building sector. The public sector should lead the way here. It is the task of politicians to create the necessary framework conditions for scalable business models for the refurbishment of public buildings. The aim must be to activate private capital and to bundle and accelerate the tasks associated with energy-efficient refurbishment.’
Costs and cost effectiveness determined in two scenarios
The study takes two scenarios and compares the energy-related additional costs with the achievable energy cost savings for eleven building types. The basis for this cost-effectiveness calculation is a comparison between current refurbishment activity and the target of a climate-neutral building stock by 2045. An analysis of possible financing approaches was also performed.
The ‘business as usual’ (BaU) scenario depicts the current refurbishment activity with a refurbishment rate of around one per cent and a depth of refurbishment in accordance with the minimum standard of the German Buildings Energy Act (Gebäudeenergiegesetz, or GEG): The result shows that Germany would fall well short of its climate targets in the building sector in this scenario.
The second scenario is the target scenario: It assumes a significantly higher refurbishment rate of 4 per cent and a depth of refurbishment in accordance with Germany’s Efficiency Building Standard (EG 40) in order to achieve the building sector targets under the German Climate Protection Act. The resulting additional energy-related investments of €120 billion could save €45 billion in energy costs by 2045. And in approximately 20 years, the investment would have been amortised through the savings.
Cost effectiveness of different types of heat generation
An analysis of both the cost effectiveness of refurbishment using the minimum standard according to GEG and the EG 40 standard was performed using eleven representative type buildings such as administrative buildings or schools, and differentiated according to the type of heat generation. The result shows that over the calculated life cycle of the measures, refurbishment to EG 40 can be economical even without funding.
Further develop existing financing instruments
Nevertheless, the need for investment and the long amortisation period raises the question of the provenance of the necessary incentives and financial resources. The study lists 20 financing instruments and evaluates six of them in detail: equity, debt, energy supply contracting, intracting, energy performance contracting, climate protection contracting. The study concludes that the speed and depth of implementation of energy refurbishments can already be significantly increased and scaling, bundling and standardisation can be achieved if external service providers contribute their expertise, assume implementation and operating risks, and provide guarantees for results and savings, such as in the case of energy performance contracting (EPC). According to the study, such instruments should be further developed in a targeted manner and closely dovetailed with financing models in order to avoid a piecemeal approach. New financing models should also be trialled so that a range of solutions can develop on the market. It is also worth rethinking the debt ceiling, improving the framework conditions for investors and recognising that public buildings represent an attractive investment portfolio.
Information on the study
The study entitled ‘Fit for 2045 (Part 2): Investment requirements for the transformation of public non-residential buildings’ was prepared by Prognos AG and the Fraunhofer Institute for Solar Energy Systems ISE on behalf of dena for the Centre of Expertise for Contracting. It builds on the study entitled “Fit for 2045 (Part 1): Target parameters for existing non-residential buildings from 2023”. The Centre of Expertise for Contracting acts on behalf of the Federal Ministry for Economic Affairs and Climate Action.
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