New buildings and major renovation in the European Union will be “nearly zero energy” by 2021, though the phrase’s definition will vary significantly by country. Regulatory support has begun, and will increase with the 2011 and 2014 updates of National Energy Efficiency Action Plans. Less than 1% of existing space is nearly zero energy at present, primarily Passive Houses. Of the 30 billion square meters of floorspace in Western and Eastern Europe, 74% is residential, and 2% is affected annually by new construction or major renovation. Certified green building space will increase from less than 1% in 2010, to more than 2% in 2016, and is already 2% in France.

Most energy efficiency promotions have focused on residential and public buildings. The largest energy efficiency markets are in Germany and France, comparable to the combined market of the rest of Europe. In Germany, half of the cities require Passive House construction in new public buildings. Although most ESCO activity is in public buildings, large ESCOs and construction companies have barely started adopting Passive House methodology. In France, the Grenelle plan for the environment stipulates that new construction will produce net positive energy by 2020.

This Pike Research report examines market conditions and emerging opportunities related to energy efficiency for buildings in Europe. The study includes in-depth, country-level analysis of public policy and regulatory issues, energy service companies, performance contracting, green building certification, and the economics and financing structures behind energy efficiency retrofits. Key industry players are profiled and market forecasts, segmented by country, extend through 2016.

Key questions addressed:

• What are the main market drivers and barriers for energy efficient construction, renovation and energy retrofits in Europe?
• What are the main policies and national market drivers and barriers for energy efficiency in buildings in the three largest countries: Germany, France and the United Kingdom?
• Where will most new construction occur over the next 5 years, and how much of it will be certified as green building space?
• When energy efficiency measures are implemented gradually over time, which sequences are most cost-effective and which ones waste the most money?
• Which energy efficiency measures are compatible with one another? Which ones are financially incompatible?
• Why is a construction technique that currently covers less than a tenth of 1% of existing building space today, likely to hold a major share of the European building construction market by 2020?
• What effect does energy performance have on the market price of sales and rentals?

Who needs this report?

• Energy service companies
• Construction companies
• Manufacturers of building materials and components
• Building systems vendors
• Property investors, owners, and managers
• Utilities
• Government agencies
• Industry associations

Table of Contents

1. Executive Summary

1.1 Energy-Efficient Buildings in Europe

1.1.1 Germany and France

1.1.2 Nearly Zero-Energy – Energy Policies

1.1.3 Efficiency Upgrades

1.1.4 Market Value

1.2 Report Focus

1.3 Report Terminology

2. Market Issues

2.1 Introduction

2.2 Analysis of European Union

2.2.1 Introduction

2.2.2 Building Stock

2.2.3 Energy Use in Buildings

2.2.4 Electricity Prices

2.2.5 Carbon Emissions

2.2.6 History of Energy-Efficient Building Industry

2.2.7 New Construction & Major Renovation

2.2.8 Energy Retrofits

2.2.9 Market Drivers

2.2.9.1 Cost and Risk Reduction (Commercial)

2.2.9.2 Quality, Comfort, and Risk Reduction (Residential)

2.2.9.3 GHG (Greenhouse Gas) Reduction and Public Image

2.2.9.4 Policy

2.2.9.5 Energy Performance Certificates

2.2.9.6 Energy Efficiency Action Plans

2.2.9.7 Energy Agencies

2.2.9.8 Energy as an Asset to Be Managed

2.2.9.9 Attracting and Retaining Customers, Employees, and Tenants

2.2.9.10 Property Values

2.2.9.11 Integrated Energy Contracting

2.2.9.12 Renovation and New Construction

2.2.9.13 White Certificates

2.2.9.14 Smart Energy Buildings Campaign

2.2.9.15 Hotter Summers

2.2.10 Market Barriers

2.2.10.1 Lack of Capital

2.2.10.2 Uncertain or Insufficient ROI

2.2.10.3 Low Priority/Apathy

2.2.10.4 Lack of Knowledge

2.2.10.5 Institutional Inertia

2.2.10.6 Split Incentives for Integrated Design

2.2.10.7 Split Owner-Tenant Incentive

2.2.10.8 Lower Incentives

2.2.10.9 Accounting Practices

2.2.11 Financing

2.2.12 Resources

2.3 Analysis by Country

2.3.1 Germany

2.3.1.1 Building Stock

2.3.1.2 History of Energy-Efficient Building Industry

2.3.1.3 Drivers for Energy Efficiency in Buildings

2.3.1.3.1 Policy

2.3.1.3.2 Energy Agencies

2.3.1.3.3 Performance Contracting

2.3.1.4 Barriers for Energy Performance Contracting

2.3.1.4.1 Public Tender

2.3.1.4.2 Lack of Bureaucratic Expertise

2.3.1.5 Financing

2.3.1.5.1 Public Sector Financing

2.3.1.5.2 Private Sector Financing

2.3.2 France

2.3.2.1 Building Stock

2.3.2.2 History of Energy-Efficient Building Industry

2.3.2.3 Drivers for Energy Efficiency in Buildings

2.3.2.3.1 Policy

2.3.2.3.2 Market Value

2.3.2.4 Barriers

2.3.2.4.1 Public Procurement Process

2.3.2.4.2 Electricity Prices

2.3.2.4.3 Radical Change

2.3.2.5 Financing

2.3.3 United Kingdom

2.3.3.1 Building Stock

2.3.3.2 History of Energy-Efficient Building Industry

2.3.3.3 New Construction

2.3.3.4 Drivers for Energy Efficiency in Buildings

2.3.3.4.1 Policy

2.3.3.4.2 Contract Energy Management (CEM)

2.3.3.4.3 Public Image and GHG Reduction

2.3.3.5 Barriers

2.3.3.5.1 Performance Contract (CEM) Not Integrated with Public Sector Processes

2.3.3.5.2 Shifting Policies

2.3.3.5.3 Split Incentives

2.3.3.6 Public Sector Financing

2.3.3.6.1 Department of Health

2.3.3.6.2 Scotland Public Sector Central Energy Efficiency Fund (CEEF)

2.3.3.6.3 London Climate Change Agency

2.3.3.6.4 Private Finance Initiative:

2.3.3.7 Private Sector Financing

2.3.3.7.1 Tax Incentives

2.3.3.7.2 Loans/Grants

2.3.3.7.3 Green Investment Firms

2.3.4 Italy

2.3.4.1 History of Energy-Efficient Building Industry

2.3.4.2 Drivers

2.3.4.3 Barriers

2.3.5 Spain

2.3.5.1 History of Energy-Efficient Building Industry

2.3.5.2 Drivers

2.3.5.2.1 Policy

2.3.5.3 Barriers

2.3.6 Nordics

2.3.6.1 Sweden

2.3.6.1.1 Barriers in Sweden

2.3.7 Other Countries of Note

2.3.7.1 Benelux

2.3.7.1.1 History of Energy-Efficient Building Industry

2.3.7.1.2 Drivers

2.3.7.2 Austria

2.3.7.3 Switzerland

2.3.8 Eastern Europe

2.3.8.1 Building Stock

2.3.8.2 History of Energy-Efficient Building Industry

2.3.8.3 ESCOs and Finance

3. Technology Issues

3.1 Compatibility and Timing of Various Efficiency Measures

3.2 Extreme Energy Performance

3.2.1 Passive House

3.3 What Is “Nearly Zero-Energy” Anyway?

3.4 Integrated Design

3.4.1 Performance Evaluation and Design Feedback

3.4.2 Energy Models

3.5 Envelope Technology

3.6 ICT: Information and Communication Technologies

3.6.1 Building Energy Management Systems

3.6.2 Smart Meters

3.7 Lighting

3.8 HVAC

3.8.1 Introduction

3.8.2 Thermal Energy Storage

3.8.3 Chilled Beams and Raised Access Flooring

3.8.4 Thermally powered chillers

3.8.5 Heat Pumps

3.9 Carbon Management

3.10 Voltage Management

3.11 Occupant Behavior & Resilient Operations

4. Key Industry Players

4.1 Introduction

4.2 EU

4.2.1 Camco

4.2.2 Carillion

4.2.3 Cegelec

4.2.4 Cofely

4.2.5 Dalkia

4.2.6 Danfoss

4.2.7 EMCOR

4.2.8 ENER-G

4.2.9 Honeywell Building Solutions

4.2.10 Hochtief

4.2.11 INENCO/Spice

4.2.12 Johnson Controls

4.2.13 M&C Energy

4.2.14 Philips Lighting

4.2.15 Schneider Electric/TAC (www.tac.com)

4.2.16 Siemens

4.2.17 Skanska

4.2.18 YIT Group

4.3 Energy Companies (Utilities)

4.3.1 E.ON Energy Services

4.3.2 EDF Group

4.4 Industry Associations

5. Green Building Certifications

5.1 Introduction

5.2 EU Certification Programs

5.2.1 GreenBuilding

5.2.2 BREEAM

5.2.3 LEED

5.2.4 DGNB

5.2.5 Energy Performance Certificates

5.2.6 Passive House

5.2.7 Minergie

5.3 Country-Specific Certification Programs

5.3.1 Germany

5.3.1.1 DGNB

5.3.2 France

5.3.3 United Kingdom

5.3.3.1 BREEAM

5.3.3.2 RICS Ska

5.3.4 Italy

5.3.5 Nordics

5.3.6 Benelux

5.3.7 Eastern Europe

6. Market Forecasts

6.1 Introduction

6.2 Building Floor Space

6.3 ESCO Revenue Scenarios

7. Appendix

8. Company Directory

9. Acronym and Abbreviation List

10. Table of Contents

11. Table of Charts and Figures

12. Scope of Study, Sources and Methodology, Notes

List of Charts and Figures

• GDP and Population by Country, European Countries with GDP > €100 Billion
• Building Stock Floorspace by Region and Type, Europe: 2011
• Floor Space by Country & Type, Eastern Europe, Excluding Russia: 2011
• Annual Primary Energy Intensity for Residential Space Heating by Country: 2005
• Annual Primary Energy Intensity, Residential Households by Country: 2005
• Typical Electricity Prices, Select European Countries, plus United States
• CO2 Emissions per kWh of Energy for Space Heating by Fuel Source and Country: 2005
• Annual Energy Intensity for Heating, Building Code Limit, Germany: 1980-2012
• Number of LEED-Certified Projects by Country, Europe: January 2011
• Net New Building Floor Space by Region and Type, Europe: 2011-2016
• Certified Green Building Space by Segment, Europe: 2011-2016
• ESCO Revenue by Region, Baseline Scenario, Europe: 2010-2016
• ESCO Revenue by Region, Aggressive Scenario, Europe: 2010-2016

List of Tables

• National Requirements for Major Renovations (Compared to EPBD) by Country
• GDP and Population by Country, European Countries with GDP > €100 Billion
• Building Stock Floor Space by Region and Type, Europe: 2011
• Floor Space by Country and Type, Eastern Europe, Excluding Russia: 2011
• Annual Primary Energy Intensity for Residential Space Heating by Country
• Annual Primary Energy Intensity, Residential Households by Country
• Electricity Prices, Select European Countries, plus United States
• CO2 Emissions per kWh of Energy for Space Heating by Fuel Source and Country
• Annual Energy Intensity for Heating, Building Code Limit, Germany: 1979-2015
• Multinational and National Green Building Programs in Europe
• Sales & Rental Premiums for BRE-Certified Buildings in the United Kingdom
• Number of LEED-Certified Projects by Country, Europe: January 2011
• Net New Building Floor Space by Region and Type, Europe: 2011-2016
• Certified Green Building Space by Segment, Europe: 2011-2016
• ESCO Revenue by Region, Baseline Scenario, Europe: 2010-2016
• ESCO Revenue by Region, Aggressive Scenario, Europe: 2010-2016
• National Energy Efficiency Action Plans, New and Existing Buildings (EU-27): 2009
• National Energy Efficiency Action Plans, Horizontal Measures (EU-27): 2009