An Energy Transition for Spain The Residential Sector

Transcription

1 WORKING GROUP FOR BUILDINGS RENOVATION (GTR) Sponsored by: 2016 BP Madrid Forum on Energy & Sustainability September 28 th 2016 An Energy Transition for Spain The Residential Sector Prepared by Peter Sweatman, CEO Climate Strategy

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3 GTR is a Rehabilitation Working Group of 12 Experts working on Energy Transition of Spain s Builidngs since 2011 GTR Members Valentín Alfaya Luis Álvarez-Ude Xavier Casanovas Albert Cuchí Enrique Jiménez Larrea Francisco J. González Fernando Prats Juan Rubio del Val Peter Sweatman Alicia Torrego Ignacio de La Puerta Dolores Huerta Director de Calidad y Medio Ambiente del Grupo Ferrovial. Arquitecto Director de Rehabilitación y Medio Ambiente del Colegio de Aparejadores y Arquitectos Técnicos de Barcelona. Universitat Politècnica de Catalunya. Barcelona Tech. Abogado, ex-director del IDAE. Profesor de la Escuela de Arquitectura de la Universidad Europea de Madrid. Asesor del Centro Complutense de Estudios e Información Medioambiental para el programa Cambio Global España 2020/50. Director de la Sociedad Municipal de Rehabilitación de Zaragoza. Director general de Climate Strategy & Partners. Gerente de la Fundación Conama. Arquitecto Secretaria Técnica de GBCe Coordinated by: Sponsored by: 2

4 Context: Some of Europe s most Needy Buildings, a Great Plan, but very Limited Activity Spanish Housing, 1% of homes have rating of energy excellence Only 16% of Spanish homes have an energy rating between A and D. One out two Spaniards is not aware of energy efficiency ratings. August 8 th, 2016 The government ought to implement EU Directives effectively Despite of having drafted one of the best docs and strategies for the EU, the Spanish rehabilitation sector is sitll unable to take off September 12 th,

5 More Context: 11% of Spanish homeowners can t afford to heat their home properly in Winter Percentage of inhabitants that cannot afford to heat their home properly during Winter in the EU27 Percentage of Spanish Households that allocate a particular amount of their income towards energy % Homes Graph by Asociación de Ciencias Ambientales (ACA) using data from EU-SILC and Eurostat, 2016 Graph by ACA using data from EPF and INE,

6 Since 2011, GTR has been analyzing opportunities to assist the energy transition of Spanish Buildings GTR = Working Group for Buildings Renovation GTR 2011 Report Has gained momentum among Spanish policy makers and private sector GTR 2012 Report It is an update which has furthered the model and its conclusions GTR 2014 Report A National Strategy for Rehabilitation Assessment of the Autonomous Communities Study on financing tools. GTR Finance Review of the 2017 National Strategy: 5

7 Since Spain entered its Political Transition, GTR has focused at the local level and on finance 1) GTR LOCAL 2) GTR FINANCE 3) GTR CONCLUSIONS 6

8 GTR Local targets engagement with Spanish Regions and Cities to identify opportunities, projects and barriers to ET(R) March April May June July September Santiago de Compostela (Galicia) - 1 st Build Upon Workshop with Autonomous Communities (CCAA) Reps (14) 50 participants Madrid - Roundtable about the Future and Innovation in Mature Sectors 60 participants Zaragoza (Aragón) - 2 nd Build Upon Workshop, formation of CCAA Working Group and meeting of GTR Cities reps General Directors from Andalucía, Cataluña, Aragón y Castilla León Madrid - Event Sustainable and Future Cities by the Fundación Renovables 90 participants Valladolid (Castilla y León) - 3 rd Build Upon Workshop, 60 participants Madrid - Event Connected Cities, Cities with Future by the Fundación Alternativas 40 participants Madrid - 2 nd meeting of the CCAA Working Group Reps of 8 CAAA Madrid Leader s Summit 200 participants Madrid - II Casa que Ahorra Forum incl, reps from 4 main political parties 35 participants 7

9 1) Catalytic Role of the Autonomous Communities: Review of Administrative Role Autonomous Communities: The Essential Administrative Step for Renovation Took place in Santiago de Compostella, Galicia. Organized with the assistance of the Instituto Galego de Vivienda e Solo Representatives from 14 CCAA 50 participants 8

10 Step 2) Extension and Dialogue between Regions and City Administration on Renovation Municipalities for Urban Renovation Took place in Zaragoza, Aragón Cities have the power to conduct urban renewal activities which can embed EE in their works Organized with the assistance of: 9

11 Step 3) Understanding the Role of Finance Financing, The last or first barrier for the Energy Rehabilitation of Buildings Took place in Valladolid, Castilla y León 60 participants Touched upon the key role of financing as an enabler of EE Organized with the assistance of: 10

12 Case Study 1 City Funded Deep Renovation: 35 buildings and 345 homes in Zaragoza improve their EE The city of Zaragoza invested 4 million in July 2016 to retrofit 35 building and 345 homes. 100% financed by the city Image by Zaragoza Vivienda, 2016 Retrofits aim to reduce energy consumption by 50% in buildings older than 45 years. Zaragoza is moving in the right direction when reducing emissions. Building s emissions were reduced by 8% in the period. Image by Zaragoza Vivienda,

13 Case Study 2: Urban Renewal in Madrid Madrid s Plan MAD-RE Preferential Areas to Promote Urban Renewal Launched in 2016, provides subsidies for EE measures in homes. 16 million in funding. Subsidies of 35% for majority of homes in Madrid Subsidies of up to 70% in low income áreas (see graph) Expected to create 3,500 jobs. Graph by Idealista using data from City of Madrid,

14 Case Study 3: Urban Renewal in Catalonia Catalan Generalitat renovates 854 homes in Barcelona Renovation of 854 homes located in 14 blocks in the Canyelles neighborhood in Barcelona. Project worth 13 million. 60% financed by the Catalan Generalitat 25% financed by the City of Barcelona Homeowners have contributed 15% of the capital If home owners have incomes below , subsidies can cover up to 100% of the renovation works Images by el Digital D Barcelona,

15 In parallel, GTR established a Finance working group with 50 members and supported by the CNC GTR Finance = Seeks to solve financing needs for the energy rehabilitation of buildings Other (Please specificy), 12, 26.10% ESCO/ Industry, 4, 8.70% NGO, 8, 17.40% University / I+D, 7, 15.20% Central Administration, 7, 15.20% Regional or Municipal Administration, 1, 2.20% Independent Expert, 5, 10.90% Government Agency, 0, 0.00% Bank, 3, 6.50% 14 Consultancy, 6, 13.00% Coorporate, 7, 15.20% GTR Finance Mandate: Define those essential and much needed instruments for the financing of the sector; Identifiy changes needed to increase the economic activity regarding energy works 50 participants in the GTR Finance TG Participants belonged to multiple sectors: Banks, Private Sector, Public Sector, Experts, Industry, ESCOs, SMEs, Trade Associations, Distributors of plumbing and electricity supplies, Spanish Banking Association, Construction Companies, and NGOs

16 which looked at finance for Spanish renovation using tools created by EEFIG 15

17 GTR Finance s survey determined Top 10 Demand and Supply Drivers for Energy Renovation in Spain DEMAND Behavioral Economics (personal priorities) Price of energy (Individual/ Owner) Payment Capacity Clear Business Case Tailored Financial Product availability Measurement, Reporting & Verification (MRV) and Quality Assurance Body of Evidence (including Social Benefits and Costs) Buildings Regulation, Certification and Energy Performance Certificates Awareness of appropriate timing for energy efficiency measures within the traditional building cycle "Green Premium" / Brown Discount SUPPLY Price of energy Definition and common understanding of the value of energy cost savings Sustainable Real Estate Funds Use of National Energy Eficiency Fund Use of European Structural & Investment Funds Communication between market actors Regulatory Stability Fiscal Support Buildings Regulation, Certification and Energy Performance Certificates Risk-return targets 16

18 Demand Drivers vary greatly by Segment Tertiary / Commercial Public Primary Residence occupied by its owner Rented Housing Public Housing 17

19 Analysis: Results for Demand Drivers GTR Finance notes the following results based on the Expert Survey: Demand drivers are aligned across several sectors except in Public Buildings Energy Efficiency is not a priority in any segment when compared to Other Priorities There is a lack of awareness (except for the Public Sector) of the multiple economic benefits inherent to energy efficiency upgrades The Value Increase ( Green Premium ) due to retrofits is indeed a big driver within housing and commercial buildings A Tax benefit could significantly catalyze the retrofit of properties 18

20 Comparing Spain vs EU, Demand Drivers for Residential Properties are Surprisingly Similar Tertiary / Commercial Primary Residence occupied by its owner Public Housing Public Rented Housing 19

21 Analysis: Spain vs EU, Demand By Segment GTR Finance notes the following results based on the Expert Survey: In Spain the price of energy and the availability of capital is more relevant than the EU average, except in dwelling occupied by owners The demand drivers for energy renovation in the Spanish public and comercial sectors differs considerably other EU countries Regulatory instability and human capacity are less important in Spain when compared with other EU countries In Spain, Technical asistance, Data and Rules on Accounting are not percieved as such strong barriers as in other EU countries 20

22 Analysis: Supply Drivers by Segment Tertiary / Commercial Public Primary Residence occupied by its owner Rented Housing Public Housing 21

23 Analysis: Results for Supply Drivers GTR Finance notes the following results based on the Expert Survey: Price of energy is the most relevant factor for Financial Institutions finance supply in all sectors The understanding of the economic value of energy savings are certainly relevant drivers except in properties for rent and public housing For housing, risk-return targets for banks is a significant barrier yet not for the public and commercial sectors Tax benefits could also catalyze the supply of financing for the rehabilitation of housing 22

24 Analysis: Spain vs EU, Supply By Segment Tertiary / Commercial Public Primary Residence occupied by its owner Rented Housing Public Housing 23

25 Analysis: Spain vs EU, Supply By Segment GTR Finance notes the following results based on the Expert Survey: In the case of Housing in Spain, the price of energy and the availability of capital are more relevant supply drivers than the EU average The lack of funds and tailored financial products for rehabilitation in all sectors is indeed very relevant in Spain The supply of the so called integral rehabilitation of multiple measures (energy and access) is also relevant Standardization and Technical Issues are not perceived as barriers in terms of supply drivers, contrary to the EU level survey 24

26 Assessment: Barriers for Private Financing GTR Finance: Identify challenges and barriers that prevent the financing of the sector Barriers in terms of subsidies and private financing. Clear identification of the collateral provider. Who will pay back the loan? The occupier/user, the neighbors association, a third party? Collateral ought to be clear and measurable. The monetization of energy savings is quite complex for banks. Payback periods of over 5 and 8 years are barriers for private banks, as they face ever changing and complex regulatory barriers. Loan Amounts. Increased financing leads to banks requiring greater collateral making access to financing harder. This has a greater adverse effect on the integral rehabilitation rather than for instance just changing boilers. 25

27 Assessment: Barriers for Private Financing GTR Finance: Identify challenges and barriers that prevent the financing of the sector Barriers in terms of subsidies and private financing. Develop a single Model-Type for each segment: The challenge remains finding a tailored business model with clear definition for each building segment and typology Guarantee Scheme or Financing Collateral. Models that can increase finance flows include: Registered claims in the Property Rights Registry, collective guarantees (eg. SAECA type) or partial coverage (Junker Plan), payment insurance, equity like complex financial products, in addition ESCOs can also take part in the financing or providing part of the collateral. Clear Fiscal Signal: Fiscal measures ought to foster strategic economic activities. The possibilities to provide incentives to users through these activities are sometimes more effective than those with direct subsidies because they don t require as much paperwork/ processing. VAT, deductions on personal income and property taxes are fiscal instruments capable of promoting the energy rehabilitation of dwellings. Taxation on existing subsidies remains a problem. * SAECA is Spain s Sociedad Anónima Estatal de Caución Agraria 26

28 GTR CONCLUSIONS/FINDINGS 27

29 0 A Regulatory Framework that Promotes a Culture that Upholds Energy Efficiency #EnergyEfficiency First Spain lacks a massive offer of energy rehabilitation supported by its energy companies, retail networks, complemented by a fund that acts as a Green Bank focused on the development of energy efficiency projects. Energy Prices are not good signals as they are now more fixed than floating and prices are influenced by Govtwhich poses uncertainty in the future. 28

30 1 Educate and train Accredited Agents / Technical Tutors / Project Managers Mainly for neighbor associations as they need professionals that understand and promote the energy rehabilitation model and are trained and accredited to manage such projects on behalf of the owners. These professionals ought to be knowledgeable with the financing of the projects as well 29

31 2 Industrialization & Replication of Model Types Each climatezone and building type ought to have a modeltype. The supply chain for model types should be transparent and its financing should be simple and accesible in all Banks branches. 30

32 3 A financing packet that is simple and tailored specifically for energy retrofits The financing packet for energy retrofits ought to provide key elements such as the loan, public subsidies and precise instructions that would enable attaining tax deductions. Also, this packet should be available via a network of accredited agents. and easy to explain 31

33 Spanish work connected to EEFIG which launches Pan-EU Database (DEEP) in October Users can access: Latest EEFIG Report & supporting materials Engage with the Energy Efficiency De-risking Project Become a user and/or become a data provider and engage in an expert dialogue which contributes to enhancement of the fundamentals of energy efficiency investments in the buildings and corporate sectors Use the EEFIG National Tool & Database It relies on used a standardized method and process to engage with key expert stakeholders in Spain, France, Germany, Poland and Bulgaria over 12 months. Each country s results can be found with a series of summaries as well as an interactive review of the EU data 32

34 Thank you from Thanks! Please download GTR reports at: This document has been prepared for specific use and should not be published or circulated outside of its intended audience. The facts and figures are derived from public sources and have not been independently verified by Climate Strategy who provides no guarantees for its accuracy nor completeness nor will assume any liabilities for such arising from any third party use of the contents. Any opinions in this document constitute the present opinion of Climate Strategy which is subject to change without notice. There are no financial services marketed here nor intended as promoted herein. WORKING GROUP FOR BUILDINGS RENOVATION (GTR) Sponsored by: Coordinado por: Please refer to website for further information. 33