Figure 1 includes payback periods of deep renovations in European countries. Periods are calculated by using variables from table 1.
Example Netherlands
Payback period = ((I*Y/100)*((100+V)/100) / (60 % * X * Z)
= (190 € * 114/100)*(121/100) / (60 % * 152 kWh *0.16 €/kWh;a) ~ 17.7 years.
Figure 1: Payback periods
0 5 10 15 20 25 Romania Latvia Slovenia Croatia Belgium Italy Czech Republic Poland Estonia Ireland Slovakia Germany United Kingdom Lithuania Portugal Spain Austria Hungary Luxembourg Denmark Greece Bulgaria Finland France Switzerland Sweden Netherlands Norway
The longest payback period (20 years) is in Norway, where construction price level is high and energy relatively cheap. When we take account of the fact that over 99% of the electricity production in mainland Norway is covered by hydropower plants, motivation for deep renovation is understandably very weak.
The shortest payback period is in Romania, the electricity price is nearly as low as it is in Norway. But because the construction cost level is also low, the payback time is very short, only four years. If we take account of the purchasing power parity, the affordability of reparation gets a new perspective.
Payback period 13–21 year (Northern and Central Europe)
This includes Norway, Netherlands, Sweden, Switzerland, France and Finland. All these countries have quite high residential construction price levels (114–188 index EU27) compared to other countries. They have also all quite cheap electricity prices (0.15-0.19 euro/kWh; with the exception of Switzerland with 0.23 euro/kWh). Together these cause a long payback period for deep renovation package.
Payback period 9–12 year (Central and Southern Europe)
The majority main part of Central European and Southern European countries are in this category. These countries have either the lowest or the highest electricity price (0.10-0.30 euro/kWh). Residential construction price level is either low or average in these countries. The only exceptions are Denmark and Germany.
Payback period 3–8 year (Eastern Europe, Italy and Belgium)
In this category are: Estonia, Poland, Czech Republic, Italy, Belgium, Croatia, Slovenia, Latvia and Romania. The specific energy consumption of residential buildings is rather high, 175–308 kWh/m2,a. The construction price level is quite low (index= 35–74; with the exception of Belgium, 99). Also, these countries have rather low electricity prices (0.12–0.16 euro per kWh, with the exception of Italy and Belgium, which have higher electricity prices).
6. CONCLUSION
Energy Efficiency Directive (EED) article 4 obligates countries to deep renovations or staged deep renovations of the existing buildings even if there is no common definition and content for “deep renovation”. Unofficial definitions estimate that deep renovations should save around 60–75 percent energy (heating energy, cooling, ventilation, hot water, electricity for building services).
Deep renovation payback periods are, generally speaking, long in Northern European countries and some middle European countries because of rather cheap energy and high construction cost. The payback periods are short in Eastern European countries and in Italy and Belgium. The reasons for this are high energy consumption (kWh/m2,a), low construction price level and low energy price level.
Financial costs are excluded from the payback period analysis. If a loan (interest) is included in the investment cost to be covered by energy savings, the payback period would be a little longer. Even though interest rates are above the average European level in Eastern Europe (~3.5 %), payback periods still stay so reasonable that renovations should be carried out immediately.
A structural renovations target is difficult and costly to achieve in most of the European countries. The goal is almost achievable in cases where the initial energy consumption is very high. The second question is whether it is worth repairing such weak buildings. This question is justified both in depopulation areas and in growing cities.
The goal can more easily achieved if savings can are generated by replacing bought energy by native energy production or by replacing fossil fuels by RES (geothermal energy, wind power, solar power, biofuels). In these cases energy needs and structural performance of building - except energy procurement system - stays the same.
Most European countries have efficient centralized energy production (district heating, hydro power, nuclear power networks) and distribution systems. Local RES production challenges this system but also secures energy supply. Parallel systems can be seen as a positive development even if they are also overlapping investments from the viewpoint of the national economy. Also, too big a distributed PV and geothermal energy production may cause problems in the form of sharp electricity demand peaks. Germany and Denmark are already planning to limit densified PV production.
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