Luis Angel Bujedo - How to raise the number of nZEBs in Europe? Experts provide their insights into probing questions

Luis Ángel Bujedo is senior technician at the Renewable Energy department at CARTIF where he has worked for over 15 years in the field of renewable energy and energy efficiency.

Do you think there is a real market for nZEBs in Europe in the short term?

Clearly there is, although this depends on where you are in the European market. In areas with extreme weather conditions, whether hot or cold, the cost of heating or cooling can be high and so there is a market. However, in the more temperate regions the market is tougher of course.

There are two ways of tackling costs: high upfront investment to construct the building, but with lower energy costs during its lifetime. Or lower upfront investment but with higher operating costs.

For a market to exist, there needs to be a way of clearly quantifying both approaches, and funding mechanisms to balance them. If the interest of the upfront investment is lower than the additional energy costs, then we're in business. And this is where projects like DIRECTION come in, because they are important for undertaking this energy and monetary quantification.

How could nZEBs become more appealing to public and private developers and End Users?

Economic aspects are crucial and if we want to reach a win-win scenario, then we will have to take this into account alongside the other crucial aspects such as working conditions, the environment, sustainability etc. If the investment levels and running costs of an nZEB are the same as for a conventional building, then we are at a break-even point. If then, a business makes the investment, and if it is able to use energy savings to pay the interest while making a profit, then we are half-way there.

And then, if the user is also able to pay less for the investment and running costs, then it is to everyone's economic advantage.

Therefore we need to move toward a more integral business model (contractor – energy provider) where, instead of the contractor "disappearing" once the building has been completed, they defer some of their profit margin across the running costs and then benefit from the savings achieved.

In this type of scenario, the financial set-up is paramount. Returns of investment can be some 10-15 years down the line, and therefore sufficiently attractive credit facilities or sufficiently high levels of own capital must be available. Lastly, energy bills should reduce fixed costs and increase variable costs, those dependent on consumption, so that this type of business model might produce greater profit margins.

Do you think governmental initiatives (regulation, public funding, etc.) are enough to ensure the growth of the nZEBs market or does the private sector need to take the lead? Why?
nZEB buildings would lead to improvements for the environment but they involve high investment levels. Subsidy schemes would undoubtedly help to generate business opportunities as they represent an incentive at the start of the value chain. If enough businesses had the funds available to deal with this type of building, then there would indeed be more nZEBs. This could be a starting point, but ideally it would be better to be able to do without this in the first place. The nZEB business should ideally be able to self-sufficient drawing on the savings made and on private finance which can spread payments over time on an interest recovery basis. To summarise, I believe that public support in the form of loans should be used to kick start the market given that private entities don't give credit, until the ESES construction companies are able to be self-reliant financially.

Do you believe your company would benefit from a higher market share of nZEBs compared to traditional buildings?

Yes I do. nZEBs require more investment in technology, renewable energy and ongoing improvement in systems and processes. This is with doubt a good thing for technology centres which can come to the fore and deliver R&D solutions.

Which are, according to your expertise, the main regulation barriers currently hampering the design and construction process of an nZEB? How could these barriers be overcome?

I think there are two main barriers:

fixed energy costs tend to rise, thus reducing the share of variable costs. This makes it difficult to bring consumption levels down and complicates the introduction of renewables which have reached levels of maturity to be cost effective.
energy prices are unstable, which makes it difficult to transpose investment costs into running costs for the purposes of devising business plans and clear contracts.

More information:
This project has received funding from the European Union’s Seventh Programme for research, technological development and demonstration under grant agreement No. 285443
youris.com G.E.I.E.

drève du Pressoir 38
B-1190 Brussels, Belgium
youris@youris.com
www.youris.com