Author: Zdravko Stefanovski, grad.mech.eng.
Senior Technical Energy Efficiency Expert
The building stock is both unique and heterogeneous in its relation to the cultural diversity and history of the Western Balkans. It is aged and subject to a slow pace of renovation. More than 7 million dwellings were built till 2015 covering more than 523 million m2 floor area. The annual renovation rate is very low, only 0.34% of the existing buildings are being renovated per year. This trend undoubtedly will continue until 2050 resulting in only 6% of the occupied buildings to be renovated if we continue business as usual.
Western Balkans households heat only 65% of their dwellings, but heating bills are a major share of their energy bills. These facts are also related to energy poverty in this region with lack of incentives to resolve it. The dominant heating fuel is biomass, that is to say firewood, registered and not registered, followed by electricity. As far as heating technologies are concerned, individual devices are predominant over central systems. Estimated 3,000,000 old individual stoves fueled by firewood with efficiency of max 55% are used in the region. Electrical thermal storage stoves and electrical heaters are also present with around 16% of the total heating stock.
Heating in the residential sector is estimated to account for 68% of the total final energy consumption in the sector. There cannot be a successful energy transition that leaves no one behind without changing how we heat our aged buildings. But first, attention should be paid to the buildings themselves, their poor energy performance and low indoor comfort conditions.
Renovation of building envelopes together with the heating systems is crucial to prevention of energy poverty and energy dependence. The present energy crisis confirmed that the energy prices are and will be increasing. The expectation of carbon taxation and cross border adjustment mechanisms will add to (fossil) energy prices all over the Western Balkan Region. Implementing energy efficiency measures in buildings, conservation of energy and maximized utilization of renewables are cost – effective measures that are minimizing both energy poverty and air pollution, whilst having an enormous development potential.
For our homes, energy efficiency is the first fuel. Why do stoves play such an important role in an average household?
Improving energy efficiency is equally important as increasing the share of renewables. Some estimates show that if the full potential of energy efficiency is met, global energy demand can be reduced by up to one quarter by 2030. The opportunity for energy efficiency improvement in Western Balkans is enormous, given the predominance of non-renovated buildings and inefficient technologies now in use.
Energy efficiency is recognized as the most cost-effective means of reducing emissions and the cost of the health services paid by citizens. It costs less to save a unit of energy than to generate that same amount of energy. Improved energy efficiency can also improve energy security at the local and national levels through reducing energy imports as well as the burden on electricity generation and distribution systems.
From the analyses, if regulators in the so-called Western Balkan 6 markets (WB6) were to set ambitious targets for improving energy efficiency with renovation of the entire building stock until 2050, the cumulative energy savings can reach between 75% – 82% depending on the renovation level. CO2 reductions are also enormous and are in the range of 67% – 73% compared to business as usual.
When it comes to implementation of the energy efficiency measures, the initial investment capital is crucial. To reach the revealed energy savings, huge investment capital should be engaged. In the 2050 horizon, the cumulative investments are between EUR 95 billion and EUR 107 billion while in the 2030 horizon they are in the range of EUR 20 billion and EUR 22.4 billion.
Does your house have a coat for the winter? Investing in building renovation will mitigate the effects of growing energy prices by introducing cost-effective measures for reducing energy consumption if it is accompanied by upgrading stoves
Apart from the obligation to maintain the building in usable condition in the Construction Act, there is no legal basis for initiating renovation or energy renovation of the building. The most probable moments in which the energy renovation of buildings is initiated are related to the change of ownership (purchase, inheritance, change of generations) of the majority part of the building or the dilapidation of the heating system. Due to the low purchasing power of the owners and at a very low rate of energy renovation, the biggest driving point of energy renovation are grants with a high percentage of co-financing of energy renovation works.
It is very crucial to indicate the needed capital in the next five year period (2022-2027), timeframe when the ‘Green Agenda for the Western Balkans’ should be implemented. The Green Agenda covers several topics. Clean energy and energy efficiency are among them. The planned budget of EUR 9 billion funding during 2021-2027 is proposed for the Plan’s implementation, of which a fair share is expected to finance buildings renovation and decarburization of heating and cooling sectors. Additionally, support through the new Western Balkans Guarantee facility, under the EU External Action Guarantee and the European Fund for Sustainable Development Plus, is expected to mobilise potential investments of up to €20 billion in the next decade.
In the analyses, investments in renovation of the existing building stock in the period 2022-2027 are between EUR 12 billion and EUR 14.0 billion, depending on the scenario. With these funding opportunities as part of the EU planned support, a large share of the needed investments can be financed toward acceleration of the renovation process of the residential sector. Well-designed, implemented and enforced policies with incorporated grant components are essential to fostering widespread and lasting improvements in energy efficiency.
We should not forget that investments in energy efficiency (EE) entail the development of local entrepreneurship, employment of people and stable development of small and medium-sized enterprises.
People are, indeed, replacing their stoves at some detectable rate already and paying more and more attention to their heating practices. The only problem is that these are ad hoc replacements and improvements rather than systematic and strategic approaches that we could call effective public policies. In this context one can also appreciate the claim that the existing retrofits of the heating systems are not driven by the ‘minimum technical requirements principle’ for example eco stoves with declared efficiency and emission factors. The decision on the type of the new device is usually based on past experiences or word of mouth.
As long as there are no meaningful and enforceable laws and regulations at every level, from each state to their local government we will be just counting individual good projects knowing deep inside that they are not enough.
From all the big ideas that support sustainability in energy consumption, the most important is probably education. Uneducated people both in developed and undeveloped countries are often locked into reinforcing the cycle of poverty and non-sustainable energy consumption. That is why we need a systematic plan to foster education in Balkan region on the importance of investing in our buildings and our heating technologies, on the attractive return on that investment – rather than being just a costly expenditure, and on why this investment has to be prioritised over other investments. It’s profitable and comfortable living to the users, it’s healthy to the users and everyone else by safeguarding the quality of our air, and it’s soothing to our planet and to our warming climate.