The Covid-19 Crisis and Clean Energy Progress

Part of Tracking Clean Energy Progress
TCEP

Buildings

Buildings sector energy consumption profiles have changed during the Covid‑19 pandemic, as restrictions on movement have prompted mass teleworking and eLearning, shifting activities and energy use to the residential subsector.

For example, residential energy consumption in the United States has increased by an estimated 6-8% compared with this time last year. Increased ICT use has potential implications for energy consumption in homes (for connected devices) as well as in data centres and by networks, with global internet traffic surging by almost 40% between February and mid-April. Many non-residential buildings also need to adapt their energy operation schedules from full-space to partial-space operations, which is not always possible with existing control strategies. The energy impacts of these unprecedented changes – and whether they will be sustained after the crisis – have yet to be determined.

Construction and related sectors – which employ around 10% of the global workforce – have also been heavily impacted by the crisis. For example, the number of construction jobs in the United States dropped by 975 000 in April 2020. Upstream industries in supply value chains have been affected, particularly in the cement industry. Although recovery is expected, there is likely to be an ongoing impact, with a 10% decline in new building construction and retrofit investments expected in 2020.

Stimulus efforts will be essential not only for economic recovery, but to reshape the built environment to advance the clean energy transition and avoid locking in inefficient and high-emitting technologies.

Governments can prioritise policies to promote highly efficient building construction methods and in-depth retrofitting, as these operations are particularly labour-intensive, provide long-term value, and steer activity in many equipment and material manufacturing domains.

Renovation work may also be facilitated if physical distancing results in some buildings being unused or only partially occupied. Residential retrofits inside the home may reduce with such distancing rules, though there will still be an opportunity to undertake external work, such as rooftop PV or external building insulation cladding.

Policies may also stimulate demand for high-efficiency, low-carbon products at earlier stages of market adoption, which could help put the buildings sector on track to meet climate objectives while also reducing consumer energy bills. Heat pump installations and the integration of on-site renewable energy sources (e.g. solar thermal, solar PV, geothermal energy) are manifold opportunities that could be supported by economic recovery plans.

In addition, providing low interest rates and adopting new financial models to reduce the up-front costs of efficient technologies could encourage people to seize opportunities, which would reinvigorate the related supply chains. For example, Italy has launched a new 110% tax detraction eco-bonus for energy efficiency and seismic security renovations.

Service providers can support this process by developing new business models and offering attractive financing support to scale up the installation of energy-efficient solutions at low or zero cost for the consumer. The Cooling as a Service pay-per-service scheme is such a model.

In addition to reducing emissions, these measures may also enable job recovery. For every USD 1 million invested in buildings sector energy efficiency, 11 to 35 local jobs are created.

Recovery packages can also be used to improve building codes and innovation in building constructions and inspections. For example, they could include requirements that increase the resilience of building operations (through energy storage solutions, the use of renewable energy, and innovative control systems that enhance the synergies between demand and supply at the district or city level) as well as construction, by inducing improvements in off-site construction.