Housing, energy use, and climate change are a trio of critical, interrelated challenges that society and the real estate industry must address. The need to cut back on energy use and boost the resilience of the built environment is becoming more pressing as a result of climate change. The dangers to tangible assets like buildings and property are increased by the rise in flooding and harsh weather brought on by climate change, with an estimated 167 million homes worldwide at risk of ruin by 2040.[i] In the United States, Germany, the United Kingdom, and the European Union, buildings are responsible for between 30% and 40% of the energy used and between 20% and 36% of greenhouse gas emissions related to energy consumption.[ii] Recognising these issues, governments, landowners, property managers, and investors are searching for ways to protect buildings and users, support their investments, and meet legislative requirements. The critical and urgent need for improvements to increase the housing and building stock's energy efficiency, affordability, comfort, and resilience is one area where they have found common ground.[iii] Efforts to convert buildings for energy efficiency have, up until now, fallen far short of the level needed to accomplish energy and climate targets, despite the huge need and promise with the CCC describing “policy gaps” within the scope of energy efficiency for buildings.[iv] The majority of past retrofits concentrated on just one or a small number of components in isolation as opposed to renovating entire units or buildings. It is suggested that many of those responsible for the retrofitting do not have the financial and material resources necessary to carry out and support retrofit projects, or they do not fully comprehend how to do so.[v]
Source: Plentific
Between 2023 and 2026, the German government intends to spend €177.5 billion of the federal budget on addressing climate change and transforming the economy of the nation, with a focus on improving building energy efficiency.[vi] Over the financial years, 2022/2023 to 2024/2025, Phase 3 of the Public Sector Decarbonization Scheme in the UK will give grant cash totalling £1.425 billion.[vii] So it’s clear that action is being taken at a policy level to address the risk and opportunity within the built environment. Particularly in the case of the German government’s approach, there has been a distinct shift away from the construction of new homes and instead placing a larger focus on the renovation of older homes. A senior official from within the German government has been reported by Euractiv to have said that one euro spent on renovation is ten times more efficient than when it is spent on new builds.[viii] The German strategy will also be targeting the bottom 25% of buildings in terms of energy performance; the UK strategy does not outline whether such filtering will apply to their allocation of funding, but guidance does cover aspects such as the age of boilers which could result in the organic selection of lower performing properties.[ix] Much of the UK projects completed as part of earlier phases of the PSDS have been successful, with one school site in Barnsley reducing its emissions by 35%, but predominantly these projects address one specific facet of the carbon output, for example, heating systems or lighting.[x] These one-off or serial upgrades are one end of the renovation spectrum, while "deep" renovations are the other.
Barnsley college, a recipient of an air source heat pump through PSDS
Source: Barnsley College
Deep retrofits upgrade the system of interconnected parts that collectively contribute to a building's overall energy efficiency. According to research by BPIE, the expansion of deep retrofits is crucial for reaching national climate goals with an increase of 1000% by 2030.[xi]
Deep retrofits, according to its proponents, are higher quality and more likely to prevent problems than more incremental techniques. There are warnings that a serial upgrading strategy implemented gradually may unintentionally lock-in restrictions and reduce chances for future energy savings.[xii] For instance, adding a new fitted kitchen can make it impossible to insulate the neighbouring floor or walls later, or it might need tearing out the kitchen to achieve renovation goals. So whilst the success of PSDS in equipping UK actors to renovate and retrofit in pursuit of net zero has been significant, the arguments for “deep” retrofits remain compelling and perhaps represent an untapped opportunity moving forward.
The UK Green Building Council (UKGBC), a charity with over six hundred member organisations across the construction sector, has produced a report outlining the key considerations of commercial retrofits.[xiii] The report highlights that with 23% of the built environment non-domestic stock, there is a responsibility for businesses to engage in change at speed and scale.[xiv] In the foreword of the report David Bownass, head of UK net zero design consulting, JLL, summed up the issues:
“Collaboration across the sector is now key to drive towards this common purpose. JLL estimates that, in order to meet global emissions standards by 2050, the rate at which we’re repurposing our commercial building stock needs to increase to around 5% annually. In the UK, this means that the pace of office redevelopment needs to at least double from levels seen over the last ten years, while delivering a step change to achieve the 59% reduction in energy use needed by 2050. This publication provides insight into the key considerations for commercial retrofit established by key cross-industry stakeholders, from designers through to building managers, with a view to supporting your work when you plan your next commercial retrofit project. Along with retrofit case study projects, the established key considerations showcase how we and others have approached the challenge of commercial retrofit to deliver successful projects that begin to address the issues with our existing building stock.”[xv]
[i] Relief Web- Climate crisis to destroy 167 million homes in next 20 years
[ii] Plentific- Retrofitting the Property Sector: Future-Proofing Buildings, Health & Net Zero
[iii] Ibid
[iv] CCC- 2022 progress report to parliament
[v] Ibid
[vi] Euractiv- Germany’s €177bn climate budget to focus on renovations
[vii] UK Gov- Public Sector Decarbonisation Scheme
[viii] Ibid
[ix] Salix- Phase 3b PSDS Supporting Information Guidance
[x] UK Gov- Phase 2 Public Sector Decarbonisation Scheme: project summaries
[xi] BPIE- Thinking Ahead For Buildings, Climate And People
[xii] Ibid
[xiv] UKGBC- Delivering Net Zero: Key Considerations for Commercial Retrofit
[xv] Ibid
Oscar is a recent graduate with a background in earth science. He is currently studying an MSc focussing on disaster responses, emergency planning and community resilience. His postgraduate research project will assess the link between climate crisis risk perception and attitudes to green energy projects. “Adapting to the climate crisis through the pursuit of net zero requires community engagement and understanding. Zero Carbon Academy’s goals closely align with this approach and I’m excited to have the opportunity to research and communicate a variety of topics relating to our environment and sustainability”.
