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New Reasearch: Energy Efficient Retrofits as One of the Best Energy Poverty Alleviation Tools

Habitat for Humanity Europe, Middle East and Africa has launched a new report on energy poverty aspects of the REELIH project in the three implementing countries – Armenia, Bosnia and Herzegovina, and North Macedonia. The aim of the study was to find out how these countries were able to contribute to the fight against energy poverty by encouraging energy efficient renovation of multi-family residential buildings. The study was conducted by the team of experts from Metropolitan Research Institute (MRI) and Buildings Performance Institute Europe (BPIE) and thanks to the financial support of USAID. Find out more about the interrelation between the energy efficient retrofits and energy poverty alleviation and read through the main findings of the study and our recommendations below.

How to define, measure and tackle energy poverty?

Energy poverty refers to a condition in which individuals or households are unable to meet materially and socially necessary energy services at an affordable cost in their homes. There have been many attempts to come up with a general definition of this term, however, the environment around the energy poverty stimulators is different in each country and therefore, proffered is to work with the concept of energy poverty on a specific national level.

The study highlights two standard ways of measuring this state of condition:

While each is required to capture both quality and affordability aspects of energy services that are important especially from a policy perspective, they differ in how they pin down energy poverty. As the study explains, the expenditure-based approach relies on monetary calculations derived from the ratios between the cost of energy and household income. The consensual approach relies on rather a subjective self-assessment of the households' comfort and on affordability of their housing costs. No matter what approach one uptakes,

the energy efficient retrofits have proven to be effective instruments in fighting against energy poverty faced by, especially, low-income households. What is more, they are considered the most sustainable and effective way to tackle energy poverty.

Under the REELIH project we have carried out energy efficient retrofits of multi-apartment buildings in the three of the implementation countries. The overall findings reveal that every REELIH renovation program increased the level of comfort among the multi-apartment buildings' inhabitants and symptoms of energy poverty were somewhat reduced as well. Furthermore, complex interventions managed to decrease the energy needs of apartments and thus either decreased the energy costs in a longer term or permitted to heat up at an adequate level the apartment without financial sacrifice. Read out more about the country level implementation of REELIH project in the next section.

REELIH Implementation Countries

1. Armenia: Crucial impact on the institutional level

In the common areas of 13 multi-family buildings in the cities of Yerevan and Vanadzor, the basic energy efficiency interventions that were carried out included the replacement of the doors and windows with more efficient ones, improvement of the lightning system and insulation of roof and basement. Due to the limited space for interventions, they resulted only in 2-6% of energy savings, therefore the impact on financial situation at the individual level was not that significant. However, at the institutional level, the impact was much more significant. The project initiated crucial changes in the framework conditions of energy efficiency renovations in three main ways:


2. Bosnia and Herzegovina: New Schemes supporting building retrofits

The pilot buildings in 4 cities were renovated. The owners joined the program to fix crucial structural problems of the buildings such as falling facades or leaking roofs. After the renovations, their comfort level increased and the energy costs are expected to decrease in the longer term. Very importantly, by upgrading from wood-burning stoves to electrical heaters, the projects have met the goals of the local decisionmakers to reduce the air pollution as well.

The shift of the project's focus from actual renovations of buildings to investment of the efforts into advancement of the legal and financial framework of energy efficiency retrofits has resulted in a growing number of municipalities and cantons starting to introduce new grants schemes to support energy efficient renovations of multi-apartment buildings.

Our implementing partner ENOVA in Bosnia and Herzegovina is conducting extensive audits of the residential building stock in multiple municipalities and based on the results of its analysis, prepare residential energy efficiency action plans for selected municipalities for implementation of recommendations.

The main obstacles that REELIH project faced in Bosnia and Herzegovina were related to the regulation of multi-apartment buildings. Namely, it is the paralyzing legal obligation that the owners who vote for the renovation have to finance it, where a simple majority decision already counts and enforcement of payment of minority is unacceptable; and non-transparent accounting mechanism of management companies. Moreover, some renovation is blocked also because of the uncertainty of the ownership of the buildings.

3. North Macedonia: enabling environment for energy efficiency retrofit works

North Macedonia is, from among the three implementing countries, a leading example in terms of tackling the energy poverty. The main reason for this is that its renovation processes are inclusive as the HFH loan is provided to low-income households as well. In North Macedonia, HFH Macedonia (HFHM) provided complementary financial assistance to the already existing renovation schemes of the local municipalities through a “Residential Energy Efficiency Revolving Fund”. A building management company funded by HFHM is now managing over 100 buildings in a professional and transparent way, and also carries out renovation works. Even in the cases where savings were not that significant, the comfort level of the apartment definitely increased. Outstanding success of Macedonian case is likewise connected with the fact that HFHM has several other energy efficiency projects accompanying the REELIH project which serves primarily as a creator of the enabling environment for energy efficiency retrofit works.

Learnings from the REELIH project and EU Best Practices

The study discussed the key considerations stemming from the evaluation of the implementation projects. It finds out that the financial and institutional environments are crucial for there are structural factors that hinder the implementation of energy efficient retrofits of multi-apartment buildings (e.g., low level of trust towards home-owner associations, lack of financial products). Improving building quality is crucial both for achieving energy efficiency and generally necessary maintenance of buildings. Another important learning from the REELIH project is that it is important to ameliorate not only the buildings themselves but the heating system as well.

Evaluation of effective renovation programs reaching vulnerable households in the selected countries has shown, however, that a number of challenges likely accompany their implementation. Therefore, the study collects the practices of different retrofits programs across the European Union and reflects on the lessons learned there as well. For instance, the analysis of the “Multi-Apartment Buildings Modernization” program in Lithuania has revealed that the uptake of loans increased, when local municipalities got involved in the program. Or that tackling the problems of the poorest can be an efficient tool to accelerate the renovation market in general. The first large-scale renovation program in Greece, so called “Saving money at home”, has managed to increase the share of dwellings with C or better energy certificate from 0% to 33%. Our analysis has, however, pointed out that sophisticated income-based criteria incorporated in the program are likely to work well only in the case of individual contracts, such as in the case of the detached houses' renovation.

However, in the setting of multi-apartment buildings where an entire building as a single entity applies for a grant might cause significant difficulties.

Overall, the lessons learned from the non-REELIH case studies suggest that the seemingly competing environmental and social goals might be united though well-designed financial schemes that combine socially targeted subsidies with loans. Social targeting of financial schemes for energy efficiency retrofits will accelerate the renovation rate if:

Recommendations for policy makers

Last part of this research is devoted to proposing several recommendations following the deep analysis of REELIH project and other best practices in tackling energy poverty across Europe, and even beyond. The recommendations are made for both EU and national level representatives. The following are the areas and the topics that should not be omitted when looking for solutions that attempt to tackle energy poverty, especially in co-owner multi-apartment buildings.

Find the full study here and the short summary here.

Find more information about Buildings Performance Institute Europe here.

Find more information about Metropolitan Research Institute here.




What is the EU Green Week about?

The European Union is becoming very serious about creating a greener future and the annual event called EU Green Week only proves this fact. The week starting with the 31st of May, until the 4th of June was dedicated to hosting the annual series of events concerning how to tackle pollution. These events included high-level political debates, awards, virtual exhibitions, preview features and side-events, as well as the hundreds of the EU Green Week Partner activities staged all over Europe.

Pollution affects each of us through the air we breathe, the water we drink and the land that sustains us. Pollution can be present in our residences, making living conditions much worse than they should be. It is the largest environmental cause of both physical and mental illness, and a major factor in the premature death of children, people with medical conditions and the elderly.

The EU Green Week 2021 brought together different groups in society together with stakeholders and policymakers to thrash out the solutions and make the ambition for a zero-pollution and toxic-free environment a reality.

Air pollution and energy poverty

Perhaps the most interesting of the events that took place during the EU Green Week was a partner event, which discussed how to tackle and combine energy poverty and air pollution into a single-issue area. This event took place on the 3rd of June, and was organized by the new Energy Poverty Advisory Hub. This is a currently ongoing EU initiative aiming to build upon existing energy related structures, transforming the Energy Poverty Observatory into it, while using the Covenant of Mayors for Climate and Energy and the Clean Energy for EU Islands project as extensions of its base.

In large parts of Europe, low-income households often suffer from a combination of poor domestic heating systems, insufficient insulation and limited financial resources to access sustainable energy services. As a result, there is a visible impact on the air quality, which has a big impact on the livelihoods and health of residents. Therefore, this partner event focused on the tight connections between air quality and energy poverty, and how household energy renovations could be the answer to the problems of vulnerable energy consumers, such as those living in the region of Central and Eastern Europe, for example.

Analytics and good practices

The event was moderated by Jeppe Mikel Jensen from the Climate Alliance, which is a group dedicated to stopping further deterioration of the climate and environment. The speakers represented a wide variety of organizations across Europe, with people such as Teresa Aristegui, a Policy Officer from DG Energy, EU. She presented the EU’s views on how the Fit for 55 package will be one of the key measures in strengthening the energy performance of buildings to promote greener and healthier renovation.

Ina Karova from the Energy Agency of Plovdiv in Bulgaria, which is an agency that has been studying the link between energy poverty and air pollution for more than a decade, has contributed to the discussion, too. According to the investigation that Ina has been a part of,

energy poverty increases the use of raw materials for heating, as well as it creates a culture of low energy consumption, poor energy habits, lack of energy and environmental damage.

This is especially true for households heating with wood and coal, which they found to encapsulate the heaviest issues of energy poverty, such as poor housing conditions, cramped apartments, and the fact that the elderly and disabled live in even worse conditions than those heating with wood and oil.

Wood and coal are expensive, impractical, and ineffective materials for heating, hence a solution to tackle the alarming air quality that stems from such heating sources would be to change stoves into more efficient ones, upgrading boilers as well as a reduction in energy generation by using fossil and non-renewable fuels. This, according to their research, brought a 10% reduction in energy consumption and a 30% increase in air quality, which is a small, but significant win.

A living example of grave air pollution is also North Macedonia's capital city of Skopje. Back in 2019, Habitat for Humanity EMEA in cooperation with Habitat for Humanity Macedonia produced a short video "Winter, Leave" capturing the situation in Skopje to raise awareness and knowledge about this particular issue.

Joao Pedro Gouveia, a senior researcher from FCT-NOVA University of Lisbon, highlighted the issues of energy poverty in Portugal, but also shed a light into how such problems can be universal across Southern and Eastern Europe. According to him, it is also important to look at

different backgrounds standing behind the problems of energy poverty which definitely differ between EU regions.

Energy poverty is linked the abundance of harmful pollutants present in homes due to inefficient energy consumption. Electrification and a replacement of inefficient biomass and coal fueled equipment should, therefore, be a necessary step to address energy poverty as well as health related concerns.

Find more information about the EU Green Week and the recordings of the sessions here

Find more information about the transition of Energy Poverty Observatory here.



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