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Overview article | A holistic approach for the energy renovation of the residential built environment in the Mediterranean area: the HAPPEN project

Introduction: the MedZEB approach

The development of the retrofitting market is a significant challenge throughout Europe. This challenge faces particular conditions in the Mediterranean region due e.g. to its environmental and climatic factors, to the structure of the ownership and of the built stock, to social and economic factors, and to the consequences of economic crisis, which struck European Med countries with a higher impact than the other countries in Europe.

A specific approach is therefore needed when it comes to promoting retrofitting of the residential built environment in the Mediterranean area. To this extent, the H2020 HAPPEN project¹ has developed the MedZEB approach (Mediterranean Zero Energy Building), which is characterized by the following features:

Tailored for the EU Mediterranean zone;
Holistic, i.e. aimed to integrate the most relevant aspects of the retrofitting supply chain (e.g. technical, financial, procedural, entrepreneurial, social, etc.);
Transparent, i.e. aimed to put on the market novel tools for enhancing investors’ trust;
Adaptive, i.e. focused on enhancing “added values” of the retrofitting (e.g. flexibility, well-being, etc.).

This article provides an overview of how the outputs of the HAPPEN project can contribute to responding to some of the key challenges facing deep retrofitting in the Med area.

Specific climate types and buildings characteristics

The retrofitting market in the Mediterranean area has specific peculiarities when it comes to energy consumption modalities, buildings typologies, ownership models and socio-economic conditions of the households. For instance, despite the warmer climate in Mediterranean countries, it is often challenging to keep homes warm² in winter, due to the bad quality of the building envelope. This is also true when it comes to keeping the homes cool in summer. For what concerns the built stock, the biggest percentage of dwellings in the Med area is represented by old and modern ones (around 86% are below 1990), which reflect basic construction systems and technologies, and do not include essential energy efficiency solutions.

To respond to this challenge, HAPPEN has developed Packages of Optimal Solutions (POS) for the deep retrofit of residential buildings. This has been done by developing: i. a homogeneous set of macro-climatic zones extended to the whole European area; ii. a set of reference buildings characterizing the residential built stock of the seven partner countries; iii an abacus of renovation measures encompassing a very extensive list of solutions, with special reference to measures tailored for the Med markets, including passive solutions and RES integration, grouped country by country.

Basing on this, cost-optimal packages of solutions have been determined following the calculation methodology proposed by the EPBD and its delegated regulation. These optimal packages of solutions minimize the life cycle cost of the building after the intervention calculated for 30 years. In particular, a total of 546 possible cost-optimal packages of solutions (42 reference buildings x 13 reference climates) have been determined and assessed. The POS can be implemented in one moment in time process or following a step-by-step approach: for this situation HAPPEN has proposed how to split the whole POS in stages in order to support the development of step-by-step renovation roadmaps.

Click on the links to download the related documents:

Specific bottlenecks to financing energy renovation

In the Mediterranean area, Eurostat shows a prevalence of private ownership with a high ratio of mortgages/loans; financial capacity is mostly stored in elderly population groups, who are less keen to undergo long-term investments; younger population may be burdened by house loans, or hindered by a weaker income with respect to other European countries; the rate of low-income households is higher than in other countries. All these features make it challenging to invest in deep energy renovation works, and in addition, dedicated and effective financial support mechanisms are often missing.

In order to address these market bottlenecks, HAPPEN has developed an innovative financial solution fully integrated with the cost-optimal POS, aimed at easing access by households to the relevant financial requirements connected to the deep retrofit standards, and enabling them to take advantage of a higher flexibility as well as of the possibility to repay the renovation works through the energy savings achieved.

This is the Versatile Energy Loan (VEL) solution, which consists in a single mortgage arrangement entailing multiple steps of disbursement, according to the subdivision in intervention steps of the deep retrofit. The association of a staged financial solution combined with a step-by-step renovation plan characterized by a cost-optimal approach allows to trigger a self-repaying mechanism, for which the whole retrofitting costs could be covered thanks to the sole energy savings achieved after each step. Such a mechanism goes to the benefit of families that may have difficulties in meeting the whole costs of the retrofitting, also due to the lack of split incentives or to the difficulty to meet their requirements.

Furthermore, the VEL solution is designed to provide a high flexibility both to the financial institution involved and to the applicant to the mortgage, allowing to adapt the solution to the specific necessities of each case, and to face the challenges that might arise in the timeframe (medium-to-long) needed for the completion of a step-by-step retrofitting. In particular, the flexibility of this solution regards the following points:

possibility to opt for all the steps or only for an initial number of them;
decide to privately co-fund some of the steps also during the course of the disbursement, in order to extinguish the loan earlier without additional fees, or even to entirely fund some steps;
decide whether to proceed with the completion of the whole planned steps, with the possibility to opt out of the retrofitting at the end of any step;
possibility to update the successive steps by taking advantage of positive developments such as technological advances or material costs reduction.

As result, a step by step solutions presents evident benefits in term of value upgrade of the asset and of the energy savings sustaining the advancement of the reimbursement plan.

Finally, the VEL proposes the application of a fixed interest rate extended to the whole duration of the repayment plan, benefiting from the actual convenience of the money market.

Click on the link to download the related document: D4.1 Report on regulatory framework and incentive systems in the Mediterranean countries

A fragmented retrofitting supply chain

In the Mediterranean area, several market-related bottlenecks make energy retrofitting particularly challenging. Among them, there is a lack of transparency and of the perceived reliability of interventions, poor access to expert advice about retrofitting, as well as limited awareness of the potential of reducing energy consumption and increasing the energy efficiency of buildings. Furthermore, the fragmentation of supply chains in small and non-integrated local operators makes it difficult to achieve high quality standards throughout the renovation process. The conviction that investments in retrofitting do not translate directly into added value for the real estate also plays a significant role in discouraging positive decision making.

In order to address these challenges, HAPPEN has developed the MedZEB Protocol with the aim of defragmenting the retrofitting supply chain through stronger integration of actors and of incentivizing overall quality enhancement. The Protocol is intended as a guarantee that the retrofitting process will be carried out properly along the whole value chain, thus increasing clients’ trust in the positive outcome of the retrofitting action. It consists in a document which will be signed by all the actors involved in the retrofitting interventions, in order to share and agree on quality targets and performance indicators to be fulfilled at each renovation step.

The MedZEB Protocol is a flexible tool which can vary according to different aspects, such as:

the target reduction of primary energy consumption to be achieved in each case. The target set within the HAPPEN project is from a minimum of 60% up to the NZEB level;
customers’ choice between step-by-step and single step renovation intervention in order to meet their needs;
the level of analysis of energy efficiency and comfort performance throughout the renovation process, from the preliminary analysis carried out before the interventions to the monitoring of the performance at the end of the renovation work(s). For this purpose, three different levels of analysis have been designed, i.e. standard, intermediate and advanced, to meet the specific needs of clients and professionals;
the voluntary certification process targeted according to both the level of performance analysis and the customers’ choice between step-by-step and single step renovation intervention.

Additionally, the MedZEB Protocol contains the quality conditions for accessing the HAPPEN financial solution, and includes the following instruments:

EPC (Energy Performance Certificate) of the target building, mandatory at EU and national levels.
Preliminary retrofitting project identifying boundary conditions, design contents and objectives.
Building Renovation Roadmap (BRR), a document that breaks down the retrofitting project according to a step-by-step process.
Business Plan based on the VEL financial solution.
MedZEB Voluntary Certification Scheme (VCS).

The VCS is a dynamic tool drafted prior to the renovation work(s), when the MedZEB expert and the Client agree on the target level of analysis. The VCS will be issued at the end of the first renovation step and updated at each further step after carrying out monitoring and verification of energy savings and improved comfort conditions.

The monitoring process, implemented after each renovation step in order to verify work and evaluate results and critical points, will not only be based on quick energy analysis and assessment of results (energy signature), but also on more complex specific systems, such as the Performance Measurement and Verification Protocol (IPMVP).

Click on the link to download the related document: D4.6 MedZEB protocol – First Batch

The HAPPEN Programme

In order to implement the MedZEB approach throughout the EU Med area, the HAPPEN Programme has been drafted, consisting in a holistic framework of integrated actions, services and tools in support to the deep retrofit market of the area. The HAPPEN programme includes three phases:

Engaging potential clients (e.g. households and property owners) by offering them easy-to-use and effective basic services, such as success stories, e-pills and other self-training tools, and a quick configurator for the assessment of house potential energy savings; the engagement is concluded by contacting a MedZEB expert, who is a trained professional responsible for the overall application of the approach.
Convincing the clients engaged by providing the MedZEB experts with a dedicated tool, which will enable them to customize the optimal technical and financial solutions developed by HAPPEN, in order to lead to a tailored draft design.
Performing the renovation work(s) after the MedZEB Protocol has been signed by all the actors of the retrofitting process. The renovation results will be monitored at the end of each renovation step and the VCS will be issued and updated at each further renovation step.

The HAPPEN Platform

The HAPPEN Platform addresses the needs of the different types of stakeholders of the retrofitting market:

Clients/Owners will have access to informative and awareness raising materials, such as short videos (e-pills), a basic training course, success stories, etc. They will also be able to use a quick configurator for the assessment of the potential energy savings of their home.
Service Providers/Makers will access the HAPPEN knowledge base, the MedZebinars (training courses for becoming MedZEB experts); the expert dashboard, containing interactive data tables for exploring and customizing the Packages of Optimal Solutions, and the MedZEB Protocol & Voluntary Certification Scheme management tools.
Policy makers will have access to relevant documents from the HAPPEN knowledge base, and to a dedicated dashboard aimed to keep track of the retrofit market trends emerging from the interactions between the platform’s users.

Each of the aforementioned stakeholders will have access to thematic forums where they could share experiences and talk about D&BR-related themes.

The HAPPEN Platform is currently under beta-testing: please contact the HAPPEN project team if you would like to become a beta tester!

Testing the MedZEB approach and engaging with the local community: the pilot actions and the Living Labs

Since its beginning, HAPPEN has activated 10 pilot sites across all the partner countries (Italy, France, Spain, Greece, Croatia, Slovenia, Cyprus), in which Living Labs have been launched and case-study buildings have been selected. In each partner country, HAPPEN has identified one or more pilot buildings, on which the solutions and the outputs developed by HAPPEN are tested and evaluated. Pilot activities consist in the concrete implementation of the main modules of the HAPPEN program: this will allow to collect success stories related to the application of the MedZEB approach.

The HAPPEN pilots have been selected to cover a wide range of possible situations related to the residential sector; in particular, pilot sites have been divided into two main groups:

Frontrunner pilot sites: they experiment the MedZEB approach within full-scale pilot demonstrators and they activate larger Urban Living Labs, aimed to contribute to the implementation of regeneration programs where social and district-scale aspects will be relevant. The HAPPEN Frontrunner pilot sites are: Castellón de la Plana (Comunidad Valenciana, ES); Les Crottes (Marseille, FR); Milan (IT)
Thematic/perspective pilot sites: they are tracked to planned or partially funded retrofitting projects, and are aimed to widen the HAPPEN outreach to other EU Med countries, and to explore the potential extendibility of the MedZEB approach to other themes (s. a. educational, touristic, cultural facilities). The HAPPEN Thematic/perspective pilot sites are: Brezno (SI); Raša (Istria, HR); Grdelin (Istria, HR); Strovolos (CY); Athens (GR); Paros and Nysiros islands (GR)

In each pilot site, a Living Lab has been activated since the beginning of the project, closely connected to the activities carried out on the pilot buildings, so to offer to the participants the chance of experiencing a concrete case study. All the HAPPEN Living Labs share the same structure, which consists in the following two phases:

Phase A: engaging actors of the retrofitting supply chain. In this Phase, the most relevant target groups of the retrofitting supply chain (such as households and owners of the pilot buildings, managers, professionals, service and materials providers, building companies, associations and media) have been engaged and targeted with a two-fold training: A) “Horizontal training”, bringing together all the actors of the supply chain, in order to share basic knowledge and introduce a common approach, with reference to the deep energy retrofitting of residential buildings and to the HAPPEN project. B) “Vertical training” addressing each target group, in order to provide specific knowledge related to the deep energy retrofitting and to the HAPPEN project research methodologies.
Phase B: HAPPEN incubators. This phase is dedicated to the dissemination and exploitation of the HAPPEN outputs in their advanced version. To that extent, the HAPPEN outputs (Packages of Optimal Solutions, Innovative Financial Solutions, Catalogue of reference buildings classes in Mediterranean Countries, etc.) have been recorded in the format of online training courses (the “MedZEBinars”) addressed to professionals in the building sector and that will soon be available on the HAPPEN platform. The aim is to gather relevant feedback from the different target groups engaged and to engage further actors, such as local administrations or financial institutions. The final outcome of the HAPPEN Living Labs experience will also be the definition of a replicable Living-Lab approach aimed to defragment the demand of deep energy retrofitting, with special reference to district level renovation programs, or to multi-property real estates.

For a complete overview of the pilot actions and of the Living Labs, click here

Conclusions and perspectives

The first phase of the HAPPEN project has allowed to develop the different tools needed to implement the MedZEB approach through the HAPPEN Programme; the most relevant target groups of the retrofitting supply chain have been engaged through the Living Labs, and the experimentation on the pilot buildings has started.

In the second and final phase of the project, full testing of the MedZEB approach and related tools will be carried out on the pilot buildings, so to extend the experimentation to the manifold climatic ranges, built typologies and regulatory situations of the Med area. This phase will also take into consideration different renovation steps and financial constraints: this will allow to generalize the first results, and to outline a complete exploitability field of the MedZEB approach in the reference markets. Furthermore, the Living Labs entered the “incubation phase”, where stakeholders and supply chains are actually being involved to cooperate with the consortium for defining the most effective exploitation strategy for the project outputs.

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_Endnotes:

_{1. HAPPEN – Holistic APproach and Platform for the deep renovation of the med residential built ENvironment; H2020 grant n. 785072; Call EE-11-2017; duration: 04/2018-03/2021; LP: ITC-CNR.}

_{2. JRC – Science and politics reports. Energy Renovation: The Trump Card for the New Start for Europe, 2015, p. 40}