''Energy efficiency in Buildings - A business opportunity in Greece'' EUFORES, 24/11/2012
Παρέμβαση του Προέδρου του Συμβουλίου ΣΕΒ για τη Βιώσιμη Ανάπτυξη κ. Ευθύμιου Βιδάλη στη 12η Διακοινοβουλευτική Διάσκεψη του EUFORES, στο χώρο του Ελληνικού Κοινοβουλίου, 24 Νοεμβρίου 2012.
Διαβάστε παρακάτω την παρουσίαση στα αγγλικά
I would like to thank EUFORES, President Claude Turnes, Vice President Anni Podimata, for the invitation and the honor, as well as the co-host of this event, Mr. Yannis Maniatis and to thank you for being here at this critical time.
As President Turnes remarked yesterday, we are all aware and sensitive to the impact of climate change for the sustainability of life, in the way we know it, on our planet and its impacts on Greece. Our Council, in one of our first events after we were found,
SLIDE - Sir Nicholas Stern addresses ath the Greek Parliament- 27 November 2008
invited in Greece Sir Nicolas Stern, who presented the importance and the impact of the issue, who also stressed on the role of business among other key stakeholders, in addressing it.
There is no doubt that the climate change is manifesting itself and the associated weather phenomena are becoming more and more evident.
At the same time, business associations such as the SEV Hellenic Federation of Industries, the Business Europe and the WBCSD (World Business Council for Sustainable Development), believe that Europe should re-examine its approach to sustainability to ensure that it is not a single issue pre-occupation as we struggle against marginalization in economic and competitive terms.
The sustained high oil prices during the past years, is changing the landscape of energy production, enabling new exploration efforts (like the recent ones in Greece, Cyprus and the Eastern Mediterranean) and significantly shifting the geography of energy resources.
SLIDE – A shifting competitive challenge for Europe and its Production (employement) Base
Key among these changes are those in N. America, which do not only have the potential for N. America to reach its goal for self-sufficiency (incorporating new technologies as fracking, horizontal drilling, shale gas and unconventional oil production), but have the potential to also change the international competitive map, affecting the prices of electricity and energy intensive industries (glass, ceramic, steel, cement). Idle petrochemical facilities are being re-commissioned in the US and plastics capacity that was moving to the Arab Gulf area, is staying put in North America.
The business associations I referred to, reflect the concerns that for Europe to remain relevant and to have the power to shift to a sustainable future, it must maintain its core competitiveness and its manufacturing base. Our challenge is to address the issues of energy holistically, without preconceptions, based on facts and not on ideology.
SLIDE – A complete and feasible strategy for meeting our CO2 Abatement
In this vein, in late 2009, we contemplated together with McKinsey & Co. to develop a complete CO2 Abatement Strategy for Greece, that would meet our EU commitments and make techno economic sense in terms of the cost avoidance, capital expenditures required and cost of energy for the economy. The key organizing principle of the study would be the development of the well known McKinsey GHG Abatement Cost Curve for Greece. The principle advantage of this approach would be the comparability to similar curves that have been developed for other major European and global economies. Eventually, this work was undertaken in 2010 with the full participation of the Ministry of YPEKA, the PPC, and several leading enterprises with significant energy consumption.
As the study developed throughout 2011 and the impact of the recession was becoming obvious, the Hellenic Republic’s energy strategy continued to assume sustained growth of the economy and ample availability of capital. One of the key findings of the study is that adapting an optimized abatement strategy, including a different mix of energy sources, would meet our European targets and save a billion euros of CAPEX/year for the next decade and reduce the cost of electricity by at least 10% across the board, compared to the reference national strategy. Unfortunately, a thorough re-examination of the national strategy has not yet happened. Similar results have been raised by a report by the Academy of Athens. Very relevant to today’s discussion, Professor Loukas Christoforou in a speech on November the 12th, in reviewing the Academy’s report, pointed out that “energy efficiency is probably the most important energy resource in Greece, not only as energy source but also as technology of GHG abatement”.
In this point, we totally converge and agree, as do most credible European Institutions : energy efficiency in buildings, transportation, agriculture and industry, is the first priority.
SLIDE –CO2 Emissions in Greece in Decline
Of course there is another way to lower emissions, which is very traumatic for the economy and the society, which is what is happening with Greece and the depression we are in, for the past several years. As you see our CO2 emissions in 2010 are at the level of 1997-1998, are declining and will see a further decline when the data is available for years 2011 and 2012. This is inevitably so, as traffic is down (toll roads revenue vs 2007 down 45%, construction activity down by close to 80% vs 2005, industrial production is down and so on).
This is definitely not a sustainable way to achieve CO2 reduction, as we observe 56% youth unemployment, 1.4 million reaching 26% of working population unemployed (mostly from the private sector) and an increasing brain drain.
SLIDE – The most powerful and economic lever is building Energy Efficiency
In terms of Energy Efficiency, the building sector should be the first priority opportunity to energy efficiency, since this sector contributes with ca 40% in total energy consumption in Greece and accounts for 19% of the total identified reduction potential in 2020. At the same time, the relevant investment is only 5% of the total one required for the target emissions reduction and delivers net saving for the society of 22 EUR/MtCO2e.
Unfortunately this crucial sector, both for the economy and energy efficiency, is probably the hardest hit in this recessionary environment.
SLIDE- The depression in Greece has decimated construction activity
A very good proxy for construction activity is cement consumption in Greece, which is shown in this chart. One can quickly see in this chart, which goes back to the 60s, that the long term growth trend was pretty linear, which does not indicate a Housing bubble over the last several decades.
Unfortunately, the crash in construction activity has happened rapidly and has taken the activity levels back to the early 60s with a steep drop over a couple of years of over 75%.
Let us now focus on building energy efficiency against this tough economic background.
The Greek building stock’s performance can be considered as rather poor. A typical Greek residential multi-family building constructed before 1980 needs some 180 kWh/m2 annually; a building constructed in 2000, some 110 and a new one 80. These values are almost double than those of a respective German building, if the climatic differences are taken into consideration.
SLIDE - A large energy inefficient housing stock exists
How did we get to this. Until 1979 no legal requirements existed to ensure minimum energy efficiency. In 1979 the Thermal Insulation Regulation was introduced, as the first major initiative. After 1994 the implementation of the Construction Products Directive (89/106/EEC) contributed to a slow but steady improvement of the performance of building materials and elements, like thermal insulation materials, windows and glazings, boilers etc. The next major step was the harmonization of the Energy Performance of Buildings’ Directive (2002/91/EC) in the Greek legislation, which was carried out and adopted with a significant delay: the respective law was introduced in 2008, but the Regulation (KENAK) and the Technical Directives (TOTEE) were introduced in 2010.
As the slide shows, super imposing this chronology with the build-up of the housing stock, explains why the existing building housing stock is energy inefficient, given that most of the building activity had already materialized before these key legislations were passed. So, it is no accident that our energy efficient performance in buildings, compares unfavorably even to our southern peers like Portugal, where our higher energy per capita consumption is driven by buildings.
SLIDE - Energy inefficient Housing stock, compared to peers
This tough picture with another metric kw/h per year per m3 of building here in Athens, buildings consume 29kw/ hr per year per m3. Equivalent measures for Denmark is 13, Germany 21 and Holland 20. And the situation in Athens is better that across the country.
This tough energy efficiency history combined with the recession is leading to a related profound social problem that of “energy poverty”, recently documented by a study of the Universities of Athens, Piraeus, Western Greece, Polytechnion of Crete, Thessaloniki and the National Astronomy Lab of Athens.
As Energy prices (with increased taxation and the effort to eliminate subsidies) have increased :
45% for Heating Oil
17% for Natural Gas and
16,3% for Electricity
and with lower incomes (±30%) across the population, inevitably consumption of energy from year to year has declined by ± 35% average for residences. In the low & medium incomes this drop in energy for heating has been in the low 40% and a small 3% less has foregone heating for all of the year.
The combination of energy inefficient housing stock, decrease in heating due to income declines, is possibly affecting seasonal life expectancy, particularly for the vulnerable parts of our people.
This profound social problem presents an opportunity for solution to solve environmental, social and economic issues.
SLIDE – THE OPPORTUNITY IN GREECE 1
• Many of the challenges that have blocked the progress historically have been - funding, particularly for remodeling and upgrades, given the fragmented ownership of residential apartment buildings,
• the disconnect between those developing and building with concern for lowest cost construction and not particular care for the after sales economic performance of the unit,
• the considerable delays in the adaptation of European Energy Efficiency directives, as I have outlined before and finally
• a total lack of documentation and certification of energy performance for buildings.
SLIDE – THE OPPORTUNITY IN GREECE 2
In 2010 and 2011 a very determined effort was made by the Ministry of the Environment at the time, with emphasis on building efficiency and Yannis Maniatis at the time led the effort. Not only did we pass the relevant European legislation, but also understood that the upgrade of the energy performance of the building stock could help activate the moribund building activity, and meet our Emissions targets. A whole series of programs listed on the transparency were launched to provide funds and structure to the energy performance upgrade of residential and commercial buildings. At the same time, energy inspectors with a mandate to inspect and certify energy performance, were instituted for the first time to alleviate the gap between builder and eventual owner.
The same structure remains in place but the funding and liquidity situation of our country remain perilous. [For example, for residential buildings, the subsidies for the refurbishment of some 32,000 residences have been approved and approximately 6,000 have already been implemented. The initial goal for the first two years was 100,000 residences. ]
Despite the slow start, due in large part to the crisis, as well as some bureaucratic inertia in launching all of these programs, there are some encouraging signs from the market.
Sales of insulation materials in m3 declined by 65% from 2 million in 2008, to 700,000m3 in 2012 (Remember the drop in cement was even more precipitous, over 75% ) reflecting lack of new buildings. Within the insulation sector, wall systems for external insulation cladding went from less than 1000m3 in 2008, to over 75,000m3 so far for this year.
We need the whole economy to recover and I remain optimistic that this large scale opportunity for building materials trades specialized service companies and energy efficient building materials, is large and will be one of the first to get going as our economy recovers and IT WILL.
