Seizing the opportunity: three foundations for a smart and affordable building decarbonization
The conclusions of COP26 are clear: we have to speed up to keep the 1.5°C targets within reach. That is a priority of the new German government, the guiding principle for the EU Green Deal, and also for my company: Viessmann has aligned its strategy and operations to meet science-based targets in line with the 1.5°C scenario.
Maximilian Viessmann is the CEO of Viessmann Group
I am convinced that the decarbonization of buildings is a unique opportunity to reconcile climate actions with economic growth and improved quality of life: zero emissions, improved health and lower energy bills – an enticing triple win!
We will master this radical transition smartly and affordably with three foundations.
Ambitious and smooth building renovation
Reducing emissions from buildings by 60% is a cornerstone of the Fit for 55 package. This task seems monumental. The key is heating, as it accounts for 80% of energy use in buildings. I am positive that we can live up to the challenge without disrupting people’s lives and acceptance.
The technologies are available: heat pumps, heat pump/gas boiler hybrids, solar thermal, and many more. When rolling out new renewable technologies, we have to ensure that they are sustainable. For heat pumps that means for example counting on environmentally friendly and natural refrigerants.
Subsidiarity cannot be overestimated. Member States need leeway to tune buildings renovation roadmaps to their specific needs. Flexibility is required to optimize the mix of reducing heating energy needs by insulation, and providing decarbonised heat with the range of technologies that fit energy infrastructures and energy carriers best. One-size-fits all sunset clauses for certain energy carriers are not useful in my view – and not needed, because the phase-out pathway can be steered by emission trading.
Different building types need different solutions: producing and integrating on-site PV is often rather straightforward for a single family home, but often more difficult for multi-family houses without access to a district heating grid. In short: we have to ensure that EU legislation allows for sufficient flexibility across Europe, when setting out top-down targets such as for zero emission buildings.
Mutually reinforcing energy infrastructures
Seasonality of heating poses a unique challenge for embedding the sector into an optimized overall energy system. The best solution is: mutually reinforcing energy infrastructures that deliver green electrons and green molecules to a diverse fleet of heat generators.
Being a member of both the European Clean Hydrogen Alliance and the German Hydrogen Council, I am aware that the need for molecules is controversial. But the benefit is intuitive: securing adequate electricity supply at all times is very tough, when shutting down firm generation while electrifying heating and transport. Because heating demand during winter increases by a factor 3.
For illustration, for Germany it means: heat pumps become the backbone of heating. Yet every batch of 5 million heat pumps adds 12-45 GW load to the electricity grid, a recent study found. The roll out of heat pumps works best if supported by green molecules, as they deliver “stored” green energy via existing gas networks when the energy system needs it most.
The combination electrons plus molecules reduces overall system costs and energy prices for households and businesses. In short, to my opinion, the real question is not if we will have green gases in heating by 2050 but how much.
Transitioning buildings into the digital age: Smart buildings are a prerequisite for efficient energy management in a decentralised and decarbonised system. Fit for 55 provides a window of opportunity to equip buildings with smart control features at scale. This will increase energy efficiency, save time and resources in the maintenance of heating systems, make a real contribution to congestion management and more importantly: increase comfort of living tangibly.
A consistent and just framework
Predictable regulation and financing: households need affordable heating, manufacturers need certainty for billions of investments into new digital concepts and production capacities, installers need time to adapt to new technologies. To cope, we need predictable and supportive frameworks, short-lived stop-and-go measures undermine investment certainty.
Launch a skills initiative: Fit for 55 has the potential to create more than 1 million jobs in the next decade. And yet, we are facing a dramatic labour shortage that risks derailing our ambitions. In Germany, for illustration, one third of the installers are above 50 years old, yet the number of apprentices has dropped by 40% in the last 25 years. We must attract young talent and women and support the workforce – our most important asset – by providing the right training opportunities.
Social justice: the building transition is social at heart. Ambitious decarbonization targets – while urgently needed – ask a lot from citizens that are faced with rising energy prices and the costs of energy renovation. The financing of the high upfront investments has to be secured also for those who are not well-off. It is remarkable that the Fit for 55 proposals have already created a solid foundation to balance climate ambition and affordability in a framework with a clear vision towards 2050.
On Wednesday, 15 December, Vice-President Timmermans described the task at hand as an enormous opportunity. I couldn’t agree more. The building transition will pay itself back not only in reduced emissions and lower energy costs but in improved quality of life. Let’s seize this opportunity together!