A new era of building energy

Could all European buildings be classified in the highest energy rating category, “A”, by 2050? The EU is taking giant leaps towards achieving this, by implementing impressive new regulations to promote energy efficient buildings with a high energy performance.

Why is this being done so urgently? According to the European Commission, 42 percent of energy consumption in 2021 was related to buildings; and 80 percent of energy for households was used to heat or cool down either buildings or the water used in buildings.^[1] With more than a third of the EU’s energy-related greenhouse gas emissions originating from buildings, cutting energy use in the sector can obviously help a lot towards meeting European climate commitments.

Regulations swiftly implemented

To get this done, two ambitious directives from the EU, which were rammed through in December 2023, are being quickly implemented in early 2024. According to the European Commission [1), the “Energy Performance of Buildings Directive” and the “Energy Efficiency Directive”, aim to: 

1. achieve a highly energy efficient and decarbonized building stock by 2050
2. create a stable environment for investment decisions
3. enable consumers and businesses to make more informed choices to save energy and money 

The new directives are making an immediate impact across the EU and beyond, including Norway, which is committed to the EU’s race towards net zero, by way of the EEA Agreement, the mechanism though which EU directives are implemented into Norwegian policies and regulations.

The new directive, known locally in Norway as the “Bygningsenergidirektivet” (which is quite a mouthful) imposes a bit of urgency. According to a report by Estate News, by 2030 all new buildings in Norway must be of zero emission standard [2].

Renovation moves up on the agenda

The contents of the revised EU directive set the spotlight on renovation. Impressive improvements in the energy performance of old buildings can be made through measures such as insulation, building envelope (which refers to the components of a building that separate the indoor and outdoor environment) like changing doors and windows, smart grid applications, electric vehicle charging infrastructure or introducing new energy sources like solar rooftops or heat pumps.

For team Solutions, new regulations are interesting to follow because they represent milestones that confirm the fact that governments and municipalities are following up on the targets that have been set by the Paris Agreement. When all the arguments of legislation are exhausted, there is always the weightiest argument left: firms and households save money by wasting less energy. Hence, business models with products or services that enable this energy efficiency may gain higher profitability as a result sales growth, an effect of higher demand.

Firms that offer such business models are categorized as “solution companies”. Across various solution themes, we collect and organize profiles of solution companies in “Alvis”, our solutions database.

Solution companies that may benefit from improved energy efficiency in buildings are found in our solutions sub-theme “Urban Planning” with the following sub-categories: Lighting, Building Materials, Heating, Ventilation and Air-conditioning (HVAC), Energy Efficiency and Urban Infrastructure. Some exciting stocks in the smart cities theme of the fund Storebrand Global Solutions strategy, are the Spanish infrastructure consultancy Acciona, French energy efficiency champion Legrand, American insulation giant Owens Corning, American software firm Trimble and Japanese housing manufacturer Sekisui House.

Sources:

[1] Energy Performance of Buildings Directive (europa.eu)

[2] Et skritt nærmere nytt bygningsenergidirektiv (estatenyheter.no)