Combining energy efficiency with demand response – which buildings are most suitable?
The NOVICE project aims to bring a new business model to ESCOs and Aggregators that combines revenues from energy efficiency measures and demand response services to improve the return on investment from Energy Performance Contracts. In this article we present the results of research carried out by the NOVICE team to determine which types of buildings in which geographical areas of Europe are most suited to this innovative approach.
To answer the questions of where we might find existing buildings that are suited to adopting the dual energy services model (i.e. energy efficiency with demand response), and what are the ideal building characteristics, the project team first identified a number of key attributes that an ideal building would have. In particular, to ensure a good return on investment, the ideal building would most likely have
- High energy consumption per unit floor area.
- At least 20 years old with equipment coming to the end of its useful working life and therefore due for upgrade.
- Located in a country with a well-established ESCO market.
- Located in a country where demand response services are available. For example, whilst in the UK the market for demand response aggregators is growing, in Spain and Italy, it is not currently possible to offer demand response services within current regulations.
Using this initial deduction on the profile of the ideal building, the team developed a detailed methodology with the aim to further elaborate upon and suggest a number of candidate non-residential buildings, dependent both on geographical, typological and market characteristics.
The first step of the methodology entailed a review of available building typologies. The differentiation of buildings based on their intended use was considered of major importance to the process, since it can highly affect the parameters of interest. Two main standardization documents were found, the European Union (EU) Directive 2010/31/EU and the California Code of Regulations, Title 24, Part 9. Due to the context of the project, and the more intuitive classification provided by the EU Directive, this classification was adopted, with the following building types: Offices, educational buildings, healthcare facilities, hotels and restaurants, sport facilities, wholesale and retail buildings and other types (e.g. public, industrial).
Having established this general typological characterization, the next step pertained a more concrete, quantitative analysis of building characteristics. Using statistical data from a number of available reports, databases and relevant project outputs, we explored the following points:
What is the distribution of the various building types within the EU?
A common pattern was observed in NW, SE and SW Europe. Hotels, restaurants, retail and wholesale buildings commonly occupy more than 50% of the non-residential floor area, with offices and educational facilities taking up about 40-45% on equal shares. UK, in particular, exhibits the largest percentage of retail and wholesale buildings (approximately 45%) of all EU countries. Central and NE regions have, in general, a more balanced area distribution, with offices and educational buildings accounting for around or even more that 50%.
How many and how big are the buildings?
Average sizes across the EU were found to be approximately: Offices – 695 m2, Education – 1434 m2, Healthcare – 765 m2, Hotels and restaurants – 881 m2, Wholesale and retail – 338 m2. The key observation was the high deviation in average sizes among EU countries. This strengthened the assumption that a tailored approach, in terms of location is needed.
- What is the representative construction age of the various building types?
- The percentage of buildings build after 2000 ranges between 5% and 20%, with highest percentages belonging to retail, industrial and other buildings, including sport facilities. On the other extreme, pre-1980s buildings comprise around 75% of educational buildings. Public buildings and offices have a more balanced distribution which could translate to a higher renovation potential.
- How much do the different buildings consume in terms of energy, and for what purpose?
- In many countries, especially located in Southern Europe, we notice very high consumption per square meter in healthcare facilities. Hospitals appear to be energy thirsty buildings in other European countries as well. In southern Europe, the wholesale and retail sector is also consuming large amounts of energy per m2. This is different in central and northern Europe, where the second place is taken by hospitality buildings. Offices and educational facilities have similar consumption patterns. The former type does not show any discernible variation pattern associated with geographical region, while educational buildings do appear to have increasing consumption values from north to south (see figure below).
- In the majority of countries, the biggest share of energy is used up for heating purposes. Central and northern European countries, in particular, exhibit heating consumption ratios around 60-75%, very little energy spent for cooling, and the remaining energy used equally between water heating, cooking and lighting.
Having explored these building characteristics, the team turned its attention to the regulatory and market scheme in EU regarding both Energy Efficiency and Demand Response.
EU’s main regulatory prescription texts on energy consumption and energy markets are the 2010 Energy Performance of Buildings Directive (EPBD), the 2012 Energy Efficiency Directive (EED) and the 2009 Renewable Energy Directive, along with their respective recasts. While the end objectives defined in these documents are uniform across the EU, different rates of compliance are applied in the various countries. For example, in terms of renewable energy integration, NE European countries are at the forefront, and also have significantly higher targets to reach by 2020, while on the other side, SW countries lag considerably behind, and carry less expectations.
Similar variability was observed in the energy efficiency and demand response markets. Companies specialising in energy efficiency services are thriving mainly in central Europe, but are not as widespread in other regions. In general, the particular market can be considered well established.
The last remark cannot be unfortunately made for the Demand Response market, since the opening of energy markets and support for such programs is still limited across Europe, with countable exceptions, such as UK and Ireland.
Armed with the aforementioned knowledge, a qualitative evaluation of the various building types was carried out and rankings / suggestions on the appropriate buildings for dual EE/DR retrofitting programs were presented. This evaluation took into consideration the detailed list of variables given below:
Energy Consumption per square meter (High, Medium or Low).
Floor area coverage, according to the percentage coverage of each building type (Very High, High, Medium or Low).
Yearly Energy Consumption per building (High, Medium or Low).
In particular for building size distribution, we report on the most common class of individual building sizes: Large, moderate or small. It must be highlighted that this parameter is not ranked, since each type of size can be appropriate, depending on the desired scenario of the renovation project and the scale of investment.
- Energy Efficiency Potential (High, Medium or Low).
- Demand Response Potential (High, Medium or Low).
- Operational Constraints, regarded as Good, Moderate or Bad, depending on whether the sets of constraints for applying DR comprise of mostly superfluous, or health-related and officially imposed regulations.
- Building Age distribution (Good, Moderate or Bad).
- Status of implementation of EU regulatory obligations (Good, Moderate or Bad).
- ESCO market maturity status (Good, Moderate or Bad).
- DR market maturity (Good, Moderate or Bad),
- Availability of EE Financial instruments (High, Moderate, Low or None).
The evaluation scores of different building types, in further association to a wide geographical localization can be seen in the next table, leading thus to a general prioritization regarding which type of building in which European region is likely to be the most suitable for the NOVICE model, as shown afterwards.
Further in-depth evaluations were performed for a number of Eu countries, while typical building archetypes were also estimated.
Read the complete report here