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These are important developments on the road to Net Zero. In fact, commercial building owners often ask us to explain how the European Green Deal and Fit-for-55 relate to each other and request our help in pinpointing the implications for their new build and renovation projects. With offices throughout Europe, we are well placed to provide tailored advice depending on where projects are located.
In this blog we will cover some of the main points, but it is important to bear in mind that this is a complex policy initiative spanning all EU member states, so there will be differences in interpretation. Building owners should always check local regulations to ensure compliance with existing laws, as well as the impact of potential future laws.
Our overarching view on Europe’s rapid shift to carbon Net Zero is that it is better for building owners to start their energy transition journey now, than wait for new laws and regulations to come into effect.
The European Green Deal is a set of policy initiatives committing member states to climate neutrality by 2050. The EU is putting its legislative weight behind Green Deal goals via its Fit-for-55 legislative proposals, and countries outside the EU are developing similar legislative packages, all with the same aim: to reduce carbon emissions. Some laws and regulations are already in place, some are being revised, and others will be set over the coming months.
Fit-for-55, which was published by the European Commission in two tranches in July and December 2021, will bring the EU’s climate and energy legislation in line with its target of achieving a 55% reduction in carbon emissions, compared with 1990 levels, by 2030. This target – just eight years away - was announced in 2021, when Fit-for-55 was launched, and there is no doubt that laws and regulations will come into force across Europe, within the next couple of years, to ensure delivery of the intended outcome.
As a power management company, commercial building owners and developers often ask us questions about the regulatory timescales they need to consider, particularly when they are scheduling renovations. They want to know when fossil-fuelled heating will become a thing of the past, how ventilation and air conditioning systems may be affected, and what sort of power infrastructure they need to support the ever-growing number of smart applications that are increasingly part and parcel of 21st century living.
Installing electric vehicle charging infrastructure has also come more sharply into focus. Fast growth in EV ownership, together with regulatory deadlines in virtually every European country to phase out fossil-fuelled vehicles, means that modern buildings must be equipped with EV chargers.
It’s clearly no longer a question of ‘whether or not’ to install EV chargers, it’s more a matter of how many chargers will be needed, how quickly, and where will the power come from?
Of the various EU directives and regulations that underpin Fit-for-55, and ultimately the European Green Deal, there are four that are particularly relevant for the commercial buildings sector. These are the Energy Performance of Buildings Directive (EPBD), the Energy Efficiency Directive (EED), the Renewable Energy Directive (RED) and the Alternative Fuels Infrastructure Regulation (AFIR).
These directives instruct EU member states to legislate and develop local regulations – and it is the regulations themselves that really matter to commercial building owners because they must comply with them. Regulations have the force of law and EU Regulations (such as the AFIR) are directly applicable in all member states.
Some of the relevant directives are probably already familiar to building owners. That’s because they already exist and will be revised or recast as part of the Fit-for-55 process. The directives are complementary, so they intersect with each other, and occasionally overlap in their requirements, but they were all originated with one goal in mind: to reduce the EU’s carbon emissions.
That’s a good question and we have to say that these directives are complex. It is critical to understand the implications fully before embarking on either a new build or renovation. We can help. As power management experts, it is part of our job to understand the detail of existing and planned regulations as they relate to energy management and the energy transition.
We are in regular talks with regulators and others across our industry to ensure we have a detailed knowledge of what building owners must do, and we’re also active in the process of deciding what type of regulations are needed. We work with our trade associations at local, national, and international level to understand and promote the routes to Net Zero that will be helpful to our customers as they undertake energy transition projects.
If we were asked to choose the single most important thing commercial building owners need to understand, it is the pressing nature of the deadlines.
Fit-for-55 means the EU is seeking a 55% reduction of carbon emissions compared with 1990 levels, just eight years from now, and as buildings account for approximately 40% of the EU’s energy consumption, much of that saving will need to come from buildings.
We’ve written a separate blog that explains how owners and developers can prepare their buildings to align with Fit-for-55 and Green Deal. In that blog, we examine various aspects of RED III, particularly the revision proposing that 40% of energy in buildings should come from renewable sources by 2030, up from 32% under the current directive, and that renewables should account for 49% of the energy used in buildings.
A guiding principle of the energy transition is ‘sector coupling’ - this is about making the most efficient use of energy, particularly renewable energy, by coupling energy consuming sectors with energy producing sectors. Also known as direct and indirect electrification, it is about better integrating energy supply and consumption.
As bi-directional energy flows become more common, even the smallest ‘flexibility assets’ such as electric vehicles will be able to participate in sector coupling, provided the regulations that emerge from Fit-for-55 (and similar legislative processes in other European countries) permit and encourage this type of flexibility.
We believe flexibility and sector coupling are the lynchpins of the energy transition.
Sector coupling will be vitally important to building owners - and vehicle owners - in the years ahead because it introduces flexibility into energy management. Our Buildings as a Grid approach is based on sector coupling. It unites the power needs of buildings and EVs with on-site renewable energy generation and supports the operation of EV charging infrastructure.
At an enterprise level, the Buildings as a Grid approach means businesses can use digitally controlled energy storage to manage power and reduce costs within the confines of their building or site. At its most basic the approach involves taking off-peak energy from the grid and storing it for use when needed. This can be done quickly and effectively, without grid upgrades.
But the Buildings as a Grid approach is about much more than that. It is truly strategic because it paves the way for energy transition. It prepares the building for an energy future beyond fossil fuels and because the exact shape of that future is still unclear, the approach is highly flexible. Buildings as a Grid is not a single product, or even a single system - we call it ‘an approach’ because it will be different for every business that adopts it. It will certainly help with regulatory compliance.
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