Kingspan : Why we need to consider buildings as part of the global energy system

First the good news. Buildings are becoming more energy efficient. Average energy use per m2 has reduced by an impressive 25 per cent in the last 20 years^₁. Now the bad news. In that same period, total constructed space worldwide has increased by an astonishing 65 per cent, reaching 245 billion m^{2 2}.
In fact, the global built environment has been growing at such a rapid pace that if every storey of every building were to sit on its own plot of land, it would now occupy space equivalent to the entire United Kingdom.
The energy efficiency gains we have seen in the past two decades are to be celebrated. They have been achieved primarily through more thermally efficient building materials and techniques and wider enforcement of building codes.

But efficiency improvements are simply not keeping pace with growth - nowhere near - and that's a big problem. During their operational phase buildings account for around 28 per cent of total carbon dioxide emissions³.
Ensuring that future construction complies with the highest standards of thermal efficiency is, of course, vital, but that alone will not deliver the improvements required to meet climate goals.
In developed economies, for example, eighty per cent of the buildings that will be standing in 2050 have already been built⁴, meaning that policymakers have to get to grips with the challenge of making the existing global building stock fit for the future.
Improving energy efficiency - for example by meeting Passivhaus standards - will be crucial if we are to avoid locking in energy demand and emissions over the longer term.
Unfortunately, progress has been slowing with energy use per m2 decreasing by only 0.5-1% per annum since 2010, while direct emissions from buildings grew 5% between 2010 and 2019⁵.
We are demanding more and more from our buildings' energy systems; heating space and water and powering countless appliances and devices. And as heatwaves become more frequent and intense, the demand for air conditioning grows.
It's true that the carbon intensity of buildings will decline as the global energy system transitions to renewables, but we cannot sit around for decades waiting for that process to complete. In any case, transferring the job of heating space and water from fossil fuels to the grid without also addressing energy efficiency would place a heavy burden on the system and incur significant cost to boot.
Electricity consumption in buildings already represents around 55% of global electricity consumption⁶, and the transition of other sectors such as transport to electrification will place further strain on the system.
It is clear that the transition to renewable energy must go hand in hand with improving the energy efficiency of the global building stock. Together, energy transition and energy efficiency can deliver a 90% reduction in world's energy-related carbon emissions⁷.
The solution is simple to articulate, but hard to implement. There needs to be a concerted global effort to retrofit mature buildings.
According to the IEA, average annual energy retrofit rates in buildings are currently less than one per cent in most major markets⁸, which is well below the level required to achieve sustainability objectives. Annual renovation rates globally need to reach four per cent by 2050 to decarbonise the existing building stock⁹.
Retrofits are most effective at reducing demand and emissions when improvements are made to the building envelope, for example, adding insulation and improving glazing. Other measures include a shift to heat pumps or heat solutions based on renewable resources, and digital energy management, though it should be noted that without high levels of thermal performance these measures will be not be efficient.
This type of deep retrofit is disruptive, and the payback can take years. But the prize is big. According to one recent paper¹⁰ a fully integrated system retrofit can deliver energy savings of 84 per cent.
Innovative solutions have an important role to play in minimising the disruption of retrofit. Interesting examples are beginning to emerge, for example overcladding systems which have been manufactured offsite being used for housing development retrofits. Advanced insulation materials can also minimise disruption in certain instances, as their thinner profile can be used without requiring major structural rework.
Unfortunately, energy efficiency investment has been stagnant in recent years and it is expected to show a decrease due to the pandemic¹¹. If investment does not keep pace with construction activity the overall efficiency of the global building stock may not be sufficient to meet the Paris goals by 2050.
A number of policy, financial and behaviour change levers are needed to deliver the renovation rate needed to reduce energy demand and help meet our carbon targets. These include tighter regulations for energy efficiency; stronger retrofit standards; training and upskilling the workforce; a financial sector willing to lend for energy efficiency projects; energy prices for renewables set within a level playing field; and supportive legal, financial and business environments.
Grants for building improvements are available in many markets, but these tend to be ad hoc, small-scale and carry significant risks, with insufficient attention paid to the choice of materials and workmanship.
A much more ambitious and coherent approach is required if we are to make our homes, public buildings and workplaces fit for the future. We need ambitious minimum energy performance standards for both new build and renovations, improvements to energy performance certification, and financial incentives and technical assistance for larger projects.
Improving the thermal efficiency of building stock also has the potential to contribute to solving fuel poverty, a problem that will accelerate without intervention¹².
Most importantly, buildings must be recognised as an integral part of the global energy system and central to an economically viable decarbonised future.