Economic-Engineering Modelling of the Buildings Sector to Study the Transition towards Deep Decarbonisation in the EU

Theofano Fotiou, Alessia de Vita and Pantelis Capros
Additional contact information
Theofano Fotiou: Researcher in E3MLab, National Technical University of Athens, 15773 Athens, Greece
Alessia de Vita: Researcher in E3MLab, National Technical University of Athens, 15773 Athens, Greece
Pantelis Capros: School of Electrical and Computer Engineering, National Technical University of Athens, 15780 Athens, Greece

Energies, 2019, vol. 12, issue 14, 1-28

Abstract: The paper presents a newly developed economic-engineering model of the buildings sector and its implementation for all the European Union (EU) Member States (MS), designed to study in detail ambitious energy efficiency strategies and policies, in the context of deep decarbonisation in the long term. The model has been used to support the impact assessment study that accompanied the European Commission’s communication “A Clear Planet for All”, in November 2018. The model covers all EU countries with a fine resolution of building types, and represents agent decision-making in a complex and dynamic economic-engineering mathematical framework. Emphasis is given to behaviours driving the energy renovation of buildings and the ensuing choice of equipment for heating and cooling. The model represents several market and non-market policies that can influence energy decisions in buildings and promote deep energy renovation. Moreover, the paper presents key applications for supporting policies targeting ambitious reduction of energy consumption and carbon emissions in buildings across Europe. The results illustrate that the achievement of ambitious energy-efficiency targets in the long-term heavily depends on pursuing a fast and extensive renovation of existing buildings, at annual rates between 1.21% and 1.77% for the residential sector and between 0.92% to 1.35% for the services sector. In both cases, the renovation rates are far higher past trends. Strong policies aimed at removing non-market barriers are deemed necessary. Electrification constitutes a reasonable choice for deeply renovated buildings and, as a result, almost 50% of households chooses electric heating over gas heating in the long term. However, heat pumps need to exploit further their learning potential to be economical and implementable for the various climatic conditions in Europe. The results also show that the cost impacts are modest even if renovation and decarbonisation in buildings develop ambitiously in the EU. The reduced energy bills due to energy savings can almost offset the increasing capital expenditures. Fundraising difficulties and the cost of capital are, however, of concern.

Keywords: energy system modelling; modelling the buildings sector; energy efficiency policy; EU policy (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

Downloads: (external link)
https://www.mdpi.com/1996-1073/12/14/2745/pdf (application/pdf)
https://www.mdpi.com/1996-1073/12/14/2745/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jeners:v:12:y:2019:i:14:p:2745-:d:249305

Access Statistics for this article

Energies is currently edited by Ms. Agatha Cao

More articles in Energies from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().