The Renovation Wave: it’s finally here but is it enough for electrical contractors?

Yes, it has finally arrived. It was supposed to be presented in September but was eventually pushed to 14 October. The Renovation Wave initiative has been discussed at length as it was first presented as one of the Green Deal’s key actions. Later, it was framed as a “flagship” initiative of the Green Deal, recognising the urgent need to decarbonise the European building stock, responsible for a major share of GHG emissions. And in 2020, as the pandemic came about, followed by tense discussions on the urgent economic recovery packages, the Renovation Wave was inflated again as a tangible measure the EU could enact to kickstart the recovery with a green impetus.

And here we are now, with the final widely-encompassing communication from the Commission. Although it touches on many aspects of the renovation ecosystem, the communication does not propose any binding targets nor proper dedicated funding.

Of course, the arguments and the content put forward in this communication are rather positive as it is in line with the electrical contracting sector’s vision to make buildings a climate resource rather than a climate problem. The Commission has defined “key principles” to guide this initiative such as energy efficiency first, circularity, integration of renewables, or the twining of green and digital transitions (e.g. with smart buildings). In this sense, they have rather accurately outlined the pathway to green buildings. But this account still lacks the real-world impetus that renovations need to actually meet the EU climate targets (which are poised to be reviewed upwards).

The Commission has anticipated this remark and followed with some “critical areas intervention” that address the more operational barriers for which principles are just not enough. Again, they have taken stock of stakeholders’ feedback and understood the areas that need to come under scrutiny.

First, there is a clear will to provide a fertile ground for the energy renovation ecosystem to flourish. “Strengthening information and legal certainty”, “reinforced accessible and targeted funding” or “increasing capacity and technical assistance” are the defined areas of intervention meant to make energy renovations more attractive and accessible to all actors. Information and certainty will be provided by a reviewed Energy Performance of Buildings Directive (EPBD) that could include minimum energy performance standards and the implementation of schemes such as the Smart Readiness Indicator (SRI), building logbooks or renovation passports. Funding is in the hands of the Member States as it will come from the Recovery and Resilience Facility. And technical assistance will be provided in the form of one-stop-shops and assistance from the European Investment Bank (EIB) to design renovation programmes.

Then, more tangible GHG emitters come under scrutiny. Heating and cooling is explicitly listed as a  critical area to be addressed in 2021 with the revised Energy Efficiency and Renewable Energy Directives, and could also fall under an extended Emissions Trading System. Highlighting circularity, the Construction Products Regulation will be revised to support a more sustainable built environment along with digital tools such as Building Information Modelling (BIM). Obligations to renovate public buildings may be increased, possibly accompanied by green public procurement criteria later on. Finally, the Commission is also looking to the users and consumers by emphasising energy communities and district approaches as well as smart living (again relying on the SRI), where it is specified that e-mobility provisions could be strengthened in the new EPBD.

Lots of talk… but what next?

Any obligations and concrete measures will first be proposed in mid-2021 for voting in the European Parliament, meaning that enforcement would not come before 2023. With a Renovation Wave that has been hyped-up in the past months as the flagship initiative of both the Green Deal and Covid recovery, both needing urgent action, such a delay might come as a disappointment to those looking forward to live in green and possibly zero-emission buildings. This is especially surprising as the EU has the stated aim to “at least” double energy renovation rates across the EU within 10 years.

In terms of funding, the Commission particularly points to the EU Recovery and Resilience Facility, currently under negotiation between members states and institutions. This Facility will be split between Member States (partly in grants, partly in loans) to support them on their own national recovery plans. There is no dedicated envelope for renovation but the Commission has proposed to earmark 30% of these funds for climate spending.

For the electrical contracting sector, the real stakes are thus at national level, at least for the short-term. Of course, the revision of the Directives on Renewable Energy, Energy Efficiency and Energy Performance of Buildings in 2021 will be important, but these will only be proposed next year and must be forward-looking to be future-proof as they will only come into force in a few years. The simple fact that they are already being revised now while they were adopted in late 2018 should motivate EU policymakers to embrace the energy and digital transitions and work towards a regulatory framework for buildings that will truly last in the coming years and push for decarbonisation and zero-emission buildings.

Electrical contractors

We see electrification as the keystone of many aspects listed above, and certainly when it comes to the wider needs for decarbonisation and digitalisation. Energy efficiency, (integration of) on-site renewables, smart houses and living, e-mobility charging, or prosumers are all (better) enabled by electrification and by your local electrical contractor. And, in addition to emissions reductions, we know there are many local and quality jobs at stake. But there is one precondition to unlock the emissions reductions and the accompanying job creation: skills.

EuropeOn has been calling for more regulatory attention to the skills shortages in the electricity sector, also through the #Skill4Climate campaign. With lots of work ahead (especially if we actually manage to double renovation rates) and electrical contractors already looking to hire skilled personnel, there’s a bottleneck in the making.

To end on a positive note, we should still highlight the inclusion of the need to up-skill workers and attract new talent in the Renovation Wave. The Commission underlines how the “installation and operation of circular and low-carbon solutions often require a high level of technical knowledge” which could lead to job growth as a result of increased energy renovations. Quite in-line with our #Skills4Climate recommendations, this entails increasing the share of women in the workforce, reforming Vocational education and training (VET) by including industry and involving social partners, such as employers’ representatives, in the design and implementation of up- and re-skilling measures.

Here, the Commission’s new Pact for Skill is poised to be the main initiative. EuropeOn is already involved in the roundtables on e-mobility and construction and is looking forward to meaningful discussions with fellow stakeholders as well as with Commissioners Schmit and Breton.

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