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D1.1 – Barriers and needs for new processes and improved tools 29.2.2016

Grant Agreement No: 680447

Project acronym: MODER

Project title: Mobilization of innovative design tools for refurbishingof buildings at district level

Funding scheme: Innovation Action

Starting date of project: 1st September 2015

Duration: 36 months

D1.1 – Barriers and needs for newprocesses and improved tools

This project has received funding from the European Union’s Horizon 2020 research and innovationprogramme under grant agreement No 680447

D1.1 – Barriers and needs for new processes and improved tools 29.2.2016

Table of Contents

Table of Contents............................................................................................................................ 11 Introduction ............................................................................................................................. 3

1.1 Publishable summary ........................................................................................................ 31.2 Purpose and target group ................................................................................................. 61.3 Contribution of partners .................................................................................................... 61.4 Relation to other tasks/deliverables .................................................................................. 71.5 Terminology and definitions .............................................................................................. 7

2 Starting point and methodology ............................................................................................... 82.1 Interviews ......................................................................................................................... 9

3 Study of literature .................................................................................................................. 113.1 Needs and benefits of energy-efficient refurbishment at district level .............................. 113.2 Collaboration in energy-efficient refurbishment at district level ........................................ 123.3 New business models in energy-efficient refurbishment at district level .......................... 143.4 Financing possibilities for energy-efficient refurbishment at district level ......................... 153.5 Need of assessment tools ............................................................................................... 16

4 Interviews .............................................................................................................................. 185 Summary of interview results ................................................................................................ 19

5.1 Introduction ..................................................................................................................... 195.2 Legal and institutional barriers related to town planning and building permission practices

235.3 Legal and institutional barriers related to the practices, taxes and fees of energygeneration ................................................................................................................................. 245.4 Presence of several owners ............................................................................................ 255.5 Presence of several actors.............................................................................................. 265.6 Lack of activators or integrators ...................................................................................... 265.7 Lack of business models ................................................................................................. 275.8 Lack of proper procurement and delivery models ............................................................ 285.9 Available energy performance assessment tools ............................................................ 305.10 Design process methods for refurbishment at district level .......................................... 315.11 Design methods for the optimization of grid interaction and load matching .................. 32

6 References ............................................................................................................................ 34Appendix 1 Interview results / Finland ........................................................................................... 36Appendix 2 Interview results / Holland .......................................................................................... 52Appendix 3 Interview results / Slovenia ......................................................................................... 60Appendix 4 Interview results / Germany ........................................................................................ 72Appendix 5 Interview results / Lithuania ........................................................................................ 77Appendix 6 Interview results / Latvia ............................................................................................. 85Appendix 7 Interview results / Poland ........................................................................................... 88Appendix 8 Interview results / Austria ........................................................................................... 96

D1.1 – Barriers and needs for new processes and improved tools 2

Acknowledgements

The work presented in this document has been conducted in the context of Horizon 2020programme of the European community project MODER (n° 680447). MODER is a 36-monthproject that started in September 2015 and is funded by the European Commission as well as bythe industrial and research partners. Their support is gratefully appreciated.

The partners in the project are SWECO (Finland), VTT Technical research centre of Finland Ltd(Finland), Fraunhofer Institute for Building Physics IBP (Germany), Siemens (Germany), REMPRO (Latvia), W/E (the Netherlands), Ertex Solar (Austria), ZRMK (Slovenia), Finnenergia(Finland), and LEAG (Slovenia).


1 Introduction

1.1 Summary

The purpose of the work was to

· study and summarize the current understanding about barriers for refurbishment at districtlevel and lacks of tools

· interview representatives of engineering companies, consultants and energy managers,owners and municipalities, energy companies and contractors in different Europeancountries

· make conclusions of main barriers and needed changes and improvements in methods,tools and processes.

The starting point of the study was to formulate our assumptions about issues that either support orhinder energy-efficient refurbishment at district level.

By ‘refurbishment at district level’ we mean concurrent refurbishment of several buildings that arelocated in a same district, with the view to achieve cost savings, more effective use of renewableenergy sources, more cost-effective financial solutions or support to NZEB operation.

We assume that there are different kinds of issues that either force or justify refurbishment ofbuildings at district level. The assumed issues are as follows. All of these are not necessaryrelevant in all projects:

1. It may be possible to achieve cost savings because of doing refurbishment projects forseveral buildings at the district at the same time. Cost saving could be achieved in theprocurement of services – such as energy analyses, design, and construction - and inorganising financing for the project.

2. It might be possible to better and more effectively utilize renewable energy sources (likebio-based micro CHPs, solar energy, wind energy, geothermal energy) for heating, coolingand local electricity generation, when the local energy solutions can serve for severalbuildings instead of one single building.

3. More cost-effective financial solutions may be found for refurbishment at district level. Forexample it might be possible to finance refurbishment projects at district level with the helpof refill projects that require the participation of more than one building owner.

4. In nearly zero energy buildings the increase of the use of electricity is likely. Fulloptimisation of the performance of NZEBs requires that load matching and grid interactionaspects are taken into account. Higher peak loads and voltage deviations require a propersynchronization of consumption and production electricity with the help of demand sidemanagement, electrical storage and minimization of the energy consumption. To avoid thequestion concerning the grid connection, district level refurbishment projects can benefitfrom energy resource sharing on block level or on building group level.

On the other hand there may also be important barriers for the energy-effective refurbishment atdistrict level. We assume that obstacles and barriers may be for instance:


· There may be legal and institutional barriers related to town planning, and building andenvironmental permission practices

· There may also be legal and institutional barriers related to the practices, taxes and fees ofenergy generation.

· Presence of several owners is needed to start the refurbishment at district level.Achievement of common agreement among owners may be difficult because of differentconditions of owners (like financial conditions) and sometimes because of conflicts ininterests.

· Simultaneous presence of several actors – energy consultants, designers and consultants,energy companies, contractors – in addition to owners may be needed. Organization ofwork and collaboration may be difficult.

· There may be lack of actors who would be able to act as activators or integrators for thesekinds of projects although this kind of role might be needed.

· Associated to the previous barriers, there may be lack of proper business models fordifferent actors to effectively and profitably work in refurbishment projects at district level.

· Associated to the previous barriers, there may also be lack of proper procurement anddelivery models. Collaborative delivery models may not be familiar for many.

· Available energy performance assessment tools are mainly meant for the assessment ofsingle (new) buildings. There may be lack of tools that support the assessment of severalbuildings at district level.

· Current design methods and process descriptions do not consider problematics ofrefurbishment at district level.

· Related to the previous barrier, design and other methods for the optimization of gridinteraction and load matching may be missing.

The work was done with the help of a study of literature and interviews.

Interviews were carried out in the following countries:

- Finland

- Germany

- The Netherlands

- Slovenia

- Lithuania

- Latvia

- Poland.


All interviews were semi-structured interviews. The list of barriers for energy-efficient refurbishmentat district level was given for the interviewees in beforehand. During the interview the intervieweeswere asked to assess the importance of each barrier and explain and give practical examples ofthese barriers if possible.

The main conclusions on the basis of the results were as follows:

The most answers were gathered in Finland (23 altogether) where majority of intervieweesassessed that almost all questions are quite important. The most important barrier was presence ofseveral owners (barrier no. 3, see the list of questions above), and barriers no. 5 and no. 1.

In Slovenia the most important barrier is the presence and agreement of several owners that isneeded to start the refurbishment at district level (no. 3). The barriers related to legal and townplanning issues (no. 1) were also regarded as very important but also issues no. 4, 5 and 6(several actors that are needed, missing activators and missing business models).

In Lithuania the answers were more scattered but again the most important barrier was no.3followed by no. 1. Thus in some respect the situation is similar to Slovenia – both have problemsarising from the change of laws regarding owing the buildings from socialist to capitalist framework(common ownership turned into distributed but dispersed ownership). There was little knowledgeabout problems of grid interactions (no. 10) and problems related to taxes and fees (no. 2).

Similarly in the Netherlands the most important issue is no.3 – presence of several owners thathave to agree and with that connected problems of missing usable business models forrefurbishments at district level (no. 6).

For Austria and Latvia the number of interviews was small. Both interviewees from Austria agreedthat all of questions are very important while one responder from Latvia sees problems as rathernot important, except no.3 – the difficult agreement between many owners.

In Germany interviewees haven’t seen barriers connected to laws (no. 1) but as in other countriesthe highest obstacle is the presence of several owners that have to agree with refurbishment (no.3). They also indicate that proper tools for assessment at district level are missing (no. 8).

In Poland (though another pattern of response) the most important question was no. 5: lack ofactivator and integrators for refurbishment at district level. This is slightly connected also to theimportance of getting agreement from several owners (no. 3). In Poland the importance of the lackof energy assessment tools (no.8) is not seen important.


1.2 Purpose and target group

The purpose of the work was to

· study and summarize the current understanding about barriers for refurbishment at districtlevel and lacks of tools

· interview representatives of engineering companies, consultants and energy managers,owners and municipalities, energy companies and contractors in different Europeancountries

· make conclusions of main barriers and needed changes and improvements in methods,tools and processes.

The first target group is the MODER consortium. The main purpose is to help the consortium todeepen its understanding about potentials and barriers for energy-efficient refurbishment at districtlevel to focus the later work of the project (to be done in work packages 3 (tools), 4 (methods) and5 (processes and business models).

The results will be published as a conference article.

1.3 Contribution of partners

The following partners have contributed to the deliverable:

· Tarja Häkkinen, VTT – main author and leader of the Finnish interview process

· Jaakko Ketomäki, Tarja Mäkeläinen, Mia Ala-Juusela, VTT – participation in planning theinterview and participation in doing the Finnish interviews

· Marjana Šijanec Zavrl¨ and Samo …- rapporteurs of the Slovenian interviews andparticipation in summarizing the results.

· Jyri Nieminen, Sweco – participation in planning the interviews and doing the interviews inLithuania and Poland

· Erik Alsema, W/E – rapporteur of the Dutch interviews

· Ervins Palmbahs, REM - rapporteur of the Latvian interview.

· Dieter Moore, extex solar– rapporteur of the Austrian results.

· Hans Ernhorn – rapporteur of the German results.


1.4 Relation to other tasks/deliverables

The results of the work form a basis for the other parts of the work by explaining the main barriersand challenges for energy-efficient refurbishment at district level. The following figure presents therelationships of the work-packages:

Figure 1 – Relationship of the work with other parts of the project

1.5 Terminology and definitions

CHP Combined heat and power plant

GHG Greenhouse gas

NZEB Nearly zero energy building

NZEBR Nearly zero energy building refurbishment

RES Renewable energy sources

PPP Public-private partnership

4P Public-private-people partnership


2 Starting point and methodology

The starting point of the study was to formulate our assumptions about issues that either supportor hinder energy-efficient refurbishment at district level.

By ‘refurbishment at district level’ we mean concurrent refurbishment of several buildings that arelocated in a same district, with the view to achieve cost savings, more effective use of renewableenergy sources, more cost-effective financial solutions or support to NZEB operation.

We assume that there are different kinds of issues that either force or justify refurbishment ofbuildings at district level. The assumed issues are as follows. All of these are not necessaryrelevant in all projects:

- It may be possible to achieve cost savings because of doing refurbishment projects forseveral buildings at the district at the same time. Cost saving could be achieved in theprocurement of services – such as energy analyses, design, and construction - and inorganising financing for the project.

- It might be possible to better and more effectively utilize renewable energy sources (likebio-based micro CHPs, solar energy, wind energy, geothermal energy) for heating, coolingand local electricity generation, when the local energy solutions can serve for severalbuildings instead of one single building.

- More cost-effective financial solutions may be found for refurbishment at district level. Forexample it might be possible to finance refurbishment projects at district level with the helpof refill projects that require the participation of more than one building owner.

- In nearly zero energy buildings the increase of the use of electricity is likely. Fulloptimisation of the performance of NZEBs requires that load matching and grid interactionaspects are taken into account. Higher peak loads and voltage deviations require a propersynchronization of consumption and production electricity with the help of demand sidemanagement, electrical storage and minimization of the energy consumption. To avoid thequestion concerning the grid connection, district level refurbishment projects can benefitfrom energy resource sharing on block level or on building group level.

On the other hand there may also be important barriers for the energy-effective refurbishment atdistrict level. We assume that obstacles and barriers may be for instance:

1. There may be legal and institutional barriers related to town planning, and building andenvironmental permission practices

2. There may also be legal and institutional barriers related to the practices, taxes and fees ofenergy generation.

3. Presence of several owners is needed to start the refurbishment at district level.Achievement of common agreement among owners may be difficult because of differentconditions of owners (like financial conditions) and sometimes because of conflicts ininterests.

4. Simultaneous presence of several actors – energy consultants, designers and consultants,energy companies, contractors – in addition to owners may be needed. Organization ofwork and collaboration may be difficult.


5. There may be lack of actors who would be able to act as activators or integrators for thesekinds of projects although this kind of role might be needed.

6. Associated to the previous barriers, there may be lack of proper business models fordifferent actors to effectively and profitably work in refurbishment projects at district level.

7. Associated to the previous barriers, there may also be lack of proper procurement anddelivery models. Collaborative delivery models may not be familiar for many.

8. Available energy performance assessment tools are mainly meant for the assessment ofsingle (new) buildings. There may be lack of tools that support the assessment of severalbuildings at district level.

9. Current design methods and process descriptions do not consider problematics ofrefurbishment at district level.

10. Related to the previous barrier, design and other methods for the optimization of gridinteraction and load matching may be missing.

The work was done with the help of a study of literature and interviews.

The study of literature aimed at summarising the findings of recent research about barriers andpotentials for energy-efficient refurbishment at district level.

2.1 Interviews

With the help of the interviews the consortium aimed at finding an understanding about thesituation and specific barriers for district level refurbishment in different Northern and MiddleEuropean countries. The purpose was also to find out whether significant differences exist betweendifferent countries.

In the interviews we asked the interviewees to explain the following issues:

1) Role of the company and own role in the company (in accordance with Table 1)

2) Importance and validity of the claimed barriers 1 - 5.

We asked the interviewees to assess the importance with the help of the following scale:

5 = very important,

4 = rather important,

3 = rather unimportant,

2 = not important,

1 = I do not know/not relevant from my view point.


We also asked the interviewees to identify issues that either support or are against the claimedbenefits or barriers. For each claim we asked the interviewees to tell if they have experience orknowledge of either successful or non-successful cases.

Building owners with big building portfolio

Designers and consultants that work in refurbishment projects at district level

Engineering companies and consultants

Energy companies

Town planning and building permission authorities

Renewable energy technology/service providers

Contractors that do refurbishment at district level

House managers, Maintenance

Table 1 – Outline of company roles


3 Study of literature

3.1 Needs and benefits of energy-efficient refurbishment at district level

Recent research emphasizes the need for district level approaches especially when a radicaltransition towards energy-efficiency and utilization of renewable energy takes place. In accordanceto (IEA 2013) future buildings will play an active role in the energy system by using, generating andstoring energy; there must be renewable electricity generation and – additionally – a transitiontowards systems that are able to store large amounts of energy; efficient solutions andmanagement require neighbourhood level approaches; finally a transition towards smart energygrids will be necessary.

The focus will be more and more directed to nearly zero energy neighbourhoods or districts.(Marique & Reiter 2014) define that nearly zero energy neighbourhood is a neighbourhood in whichthe annual energy consumption for buildings and transportation of inhabitants is balanced by theproduction of on-site renewable energy.

Nearly zero energy buildings (NZEB) require an increased integration of local renewable energysources (e.g. photovoltaic systems) and very good energy efficiency (e.g. improved insulation ofbuilding envelop). However, the increased use of electricity because of technologies (such as heatpumps for space heating and domestic hot water and plug-in (hybrid) electric vehicles) is typical.For instance, heat pumps may double the electricity use depending on the existing heatingtechnology and the building energy performance. In addition, the intermittent and seasonalproduction profile of renewable energy may have an impact on the distribution grid since the localconsumption and production do not match (Van Roy et al. 2013).

When the local production surplus is supplied into grid, this results into bidirectional power flows.Salom et al. (2013) explain that higher peak loads and voltage deviations require a propersynchronization of consumption and production of electricity through demand side management,electrical storage and minimization of the energy consumption. The concept of a zero energybuilding and refurbishment would require the consideration of the relationship between buildingloads and power generation and the resulting interaction with the power grid. Load matchingdescribes how local energy generation matches with the building loads; grid interaction refers tothe energy exchange between the building and the power grid. These are independent but relatedissues (Salom et al. 2011). Both aspects are important to consider. Otherwise net ZEBs may havea harmful effect of the grid performance at high penetration levels. Increasing peak loads requireadditional generation and transmission capacity from utilities and they may also increase voltagevariation in local distribution grids.

District level refurbishment projects advantageous because those can benefit from energyresource sharing on block or building group level. The prerequisites for local distribution systemare (Salom et al. 2011):

· Renewable electrical energy system has to be designed according to the electricity demand ofthe included buildings taking into consideration load variations between the buildings. Thebuildings’ electricity demand needs to be reduced by intelligent refurbishment measures.

· Load matching indicators may guide designers in comparing different design scenarios,technologies and selecting equipment, sizing energy storage devices and HVAC components,adjusting orientation and slope of building integrated solar systems, optimizing strategy forbuilding integrated CHP systems, and in assessing the vulnerability of the building to naturalcatastrophes, weather events and grid breakdown.


· The buildings’ energy use needs to be managed to guarantee proper delivery according toelectricity demand.

There may be conflicts between energy conservation measures in buildings supplied by districtheating systems and the operation of the district heating systems. District heating systems aremore efficient and economic with higher load densities; measures that improve efficiencymeasures in large building stocks may have effects on the load density. (Elci et al. 2013) show howthe refurbishment of a district has significant implications on a district’s combined heat and powerdistrict heating system.

3.2 Collaboration in energy-efficient refurbishment at district level

Professional operation of the renewable electricity systems is also a prerequisite for efficientutilisation of produced electricity. Building owners are seldom capable to operate the systems withmultiple users. Proper business models need to be developed for investment, operation, resourcesharing and befits of energy production and delivery.

Municipalities and social housing companies need the consider sustainability and energy-efficiencyaspects in refurbishment projects because they need to execute national and/or local energystrategies. The benefits of Public Private Partnerships (PPP) are often emphasized in energy-efficient refurbishment projects. The PPP has been used in development processes when thepotential for land value development is essential. In these projects the Public party agrees onnegotiating the planning regime and provides incentives for other parties to achieve its own policies(Kuronen, Luoma-Halkola, et al. 2011).

One of the significant challenges of implementing optimal sustainable and energy-efficient buildingand refurbishment at district level is the necessity to involve actors representing differentstakeholders of the value chain in the early phases of projects and through the whole process andprovide these actors with tools, process models and business models that enable effective andprofitable refurbishment projects.

(Kyrö et al. 2012) have studied the involvement of occupants in neighbourhood level energy-efficient refurbishment of privately owned multi-storey residential building located in Helsinki. Theirfindings suggest that it is possible to form a functional partnership between the three parties togenerate common aims. They say that the so called Public-Private-People Partnership (4P model)may be useful; “Focus group and resident meeting can be fruitful platform for collaboration andfinding new, low-energy alternatives”.

(Kyrö et al. 2012) point out that people do not share the same values; this causes challenge tosuccessful urban development processes. Another problem can be that the layman boards ofhousing companies do not have required experience in large renovations. As occupants tend tobase their decision on financial issues and short-term preferences, the role of the Public partner inthe partnership is very important with regard to energy efficiency goals.

According to (Kuronen, Heinonen, et al. 2011) “People” (flat owners) and “Private” (privatecompanies) expect “Public” sector to offer “governing services” in an effective way. People seethemselves as inhabitants of the area rather than as economic actors, whereas Private partnerclearly approaches the issue from the viewpoint of an economic actor. Public partner sees that theurban redevelopment process helps to implement the energy-efficiency and other policies and todeliver projects within cost frames.


It is essential that all the parties involved in the refurbishment projects - owners, buildingcompanies, and public administration - are collaborating equally to achieve a partnership thatbenefits all. The following Table characterizies the stakeholöders’ need in collaboration model(Kyrö et al. 2012):

Partner People Private Public

Housing company Individualoccupants

Target High qualityapartments

Maintain openspace, green

areas

Low costretrofitting

Lower energycosts

Redevelopment

High qualityretrofitting

More housing

Meeting low-energy targets

Goal Getting better linving environment Achievingeconomic profit

Delivering andexecutingdecisions

according tostrategies

Table 2 – Targets and goals of different partners in 4P Model

(Kuronen, Luoma-Halkola, et al. 2011) have studied the potential of urban refurbishment projectsto accommodate ambitious low-energy solutions. They say that this could be made possible by“aligning the interests of the community (energy conservation) and owner (increased value)through redeveloping the land owned by present residents being used as equity to finance the low-energy upgrades to existing dwellings.“

One specific reason for the complexity of refurbishment and redevelopment at neighbourhood levelis the number of stakeholders present (Kuronen, Luoma-Halkola, et al. 2011). In Finland thestakeholders include homeowners, tenants, housing companies and associations, central and localgovernment, developers, banks, institutional and private investors, companies and registeredassociations practicing in the area. Approximately 60% of Finnish homes are owner-occupied. InFinland in blocks of flats home-owners are shareholders in housing companies entitling them tocontrol their own house or apartment and obligating them to share the costs of management.Housing companies are limited liability, nonprofit organizations not allowed to take risk by law. Thedecision making processes in housing companies alone may be very slow.

(Ferrante 2014) claims as environmental sustainability and energy-efficiency in urban settings aremore than technical problems the architects should adopt a new role in energy-efficientrefurbishment projects. “Architects should consider the users’ perspective and their need as self-organised processes of negotiation. This strategy can help in engaging a real shift from the current


practice towards a social sustainable process where inhabitants and designers work together tofind effective and real solutions to social and technical questions.”

3.3 New business models in energy-efficient refurbishment at district level

Business model can be defined as “the rationale of how an organization creates,delivers,andcaptures value (Richter 2013) (originally Osterwalder and Pigneur).

According to (Crobie et al. 2015) a new type of service provider and new business businessmodels are needed in energy positive neighbourhoods. “Distribution network operators, energyservice companies and district heating providers are the envisaged service providers in thebusiness models developed to enable the roll out of energy positive neighbourhoods.”

(Green et al. 2015) claim that the lack of affordable solutions and new suitable business modelsare important barriers for the wide employment of systemic renovation strategies at district level inEurope. The development of ambitious energy concepts for neighbourhoods or campus areas maybe demanding tasks as introduced for example by (Coccolo et al. 2015).

(Paiho et al. 2015) have studied the suitability of different business models for energy efficientrenovation of residential districts in Russian cold region. Theu say that none of the stuidedbusiness models well suits to the Russian markets. They studied and described the followingmodels:

· The ESCO model

Two basic ESCO (Energy Service Company) business modelscan be distinguished, whichprovide either useful energy (EnergySupply Contracting – ESC) or energy savings (EnergyPerformanceContracting – EPC) to the end user.

ESCOs offer energy services to final energy users, includingthe supply and installation ofenergy-efficient equipment, and/orbuilding refurbishment, maintenance and operation, facilityman-agement, and the supply of energy

· Customer-side renewable business model

In this business model the renewable energy systems are locatedon the property of thecustomer. The systems can also be owned by the customer. In small-scale business, thedominant sources or renewable energy are typically wood pellet stoves, small wind tur-bines,and small-scale combined heat and power systems,solar thermal collectors, solar photovoltaicsystems, geothermal,and heat pumps.

· Utility-side renewable business model

In this model, the projects range from one to some hundred megawatts. In large-scalebusiness, the dominant sources of renewable energy are typically biomass and biogas plants(or CHP plants), on/offshore wind energy, large-scale photo-voltaic systems, and solar thermalenergy like concentrated solarpower. For the utility management, clean energy and energyefficiency are often a lower priority than reliability and cost.

· Mankala company

In a Mankala arrangement the shareholders establish a limitedliability project company, thepurpose of which is to operate like a zero-profit cooperative to supply electricity to


shareholders at cost price. The owners gain electricity in proportion to their ownership at acost price. The owners consisting mostly of whole salers and retailers and on the otherhand ofcompanies with large energy consumption, such as largeindustrial companies, can use theelectricity in their own produc-tion or sell it on through the exchange or bilaterally.

· Heat entrepreneurship model

This refers to a business model which is to some extent similar to traditional energycompanies’ district heating business but in small scale. A heat entrepreneur or enterprise canbe a single entrepreneur, entrepreneur consortium, company or cooperative providing heatingfor a community.

· On-bill financing

On-bill tariffs are a mechanism for charging customers forenergy efficiency investments orupgrades provided as a serviceby the utility. Preferably the overall utility bill should still belowered, because of the associated energy cost savings.This model is originally targeted toowner-occupied single-family houses and small commercial buildings but it could be extendedto apartment buildings at least ifenergy is billed based on building-level metering.

· Energy leasing

Energy leasing enables a building owner to use an energyinstallation without having to buy it.There are two main typesof leases: operational lease and financial lease. Leasing can beacentral component of the business model of an Energy ServiceCompany. Leasing can alsobe a central com-ponent of the business model of a company that introduces aspecific newtechnology to the market via a leasing arrangemen including a service and maintenancepackage.

(Richter 2013) has studied utilities' business models for renewable energy utilization in Germany.The electric power sectors are in the beginning of a fundamental transformation process towards amore sustainable production based on renewable energies. Consequently, electric utilities asincumbent actors face a massive challeng to find new ways of creating, delivering, and capturingvalue from renewable energy technologies. (Richter 2013) says that utilities have developedviable business models for large-scale utility-side renewable energy generation. At the same time,utilities lack adequate business models to commercialize small-scale customer-side renewableenergy technologies.

3.4 Financing possibilities for energy-efficient refurbishment at district level

(Ferrante 2014) summmarizes results based on a survey of social housing providers across EU.The survey identified 5 key categories of barriers (economic, technical,credibility, social, legislative)in delivering new construction and retrofit to NZEB standards. The difficulty to access to availableand affordable finance to retrofit existing stock towards NZEBs was stated as one of the majorbarriers

According to (Kuronen, Luoma-Halkola, et al. 2011) suburban redevelopment projects have anopportunity for equity financing insteead of solely relying on the debt financing in financialarrangements. In the traditional debt financing, a housing company borrows money for therefurbishment and the lender receives interest payments until the whole principal has been paidoff. To safeguard its investment, the lender keeps an adequate part of the borrower’s property ascollateral. When the lender has received the whole principal, it does not retain ownership rights.However, in the equity financing a housing company sells or rents part of its property to an external


investor in order to raise additional capital for financing the refurbishment. This external investorretains an ownership right and requires a certain level of yield in order to embark on theinvestment. The risk is higher for equity investment than for debt investment as debt is paid off firstand there is strong collateral backing it up. For the equity, there is no guarantee about the cashflows, thus the amount of uncertainty is higher.(Kuronen, Luoma-Halkola, et al. 2011).

The current land ownership of housing companies can be transferred as equity to financerefurbishments. Energy efficient refurbishment may be possible to finance in such a way that thehousing association or housing company sells buildings rights. However, when there are noavailable building rights, the local government that possesses the planning monopoly has animportant role. The local governmenr may want to use this kind of method to promote the low-energy targets. However, this kind of procedure can be applicable for redevelopment processesonly in that kind of urban areas, where the building rights have a market and their relative pricecompared to construction costs is high.(Kuronen, Luoma-Halkola, et al. 2011)..

3.5 Need of assessment tools

Tools are needed for simulation, scenario building and comparison of alternative systems in urbanplanning and design. Different types of tools are needed. Easy-to-use simple tools help urbanplanners while dynamic tools for the complex analysis of system are used by experts. A tool forintegrated district energy assessment (District Energy Advisor) has been developed by theFraunhofer Institute for Building Physics in Germany. This tool can be further developed forassessment of energy demand of a number of buildings and simultaneous assessment of energyresource sharing for refurbishment design (Baetens et al. 2012). Apros® District1 owned by VTTand Fortum is an existing dynamic simulation tool that can be used for the assessment, sensitivityanalyses and scenarios comparison of complex energy systems.

(Nouvel et al. 2013) say that 3D city modelling can be very important tool for municipal actors andenergy planners to enable them to make diagnostics of existing urban areas and to make plans forenergy-efficiency and low-carbon strategies. Further applications would support cities to definerefurbishment priorities and long-term urban energy policies. The main challenge for this isaccurate data collection; it should be applicable at the city scale but not too time-consuming.

(Cheng & Steemers 2011) also introduce a tool to support national and local energy policies.Further development needs include the incorporation of various renewable and energy savingtechnologies and the prediction of the energy and GHG emission trends to 2050.

Also (Elci et al. 2013) say that disctrict level assessment tools are necessary. On the basis of theirstudy the approach of utilizing simplified models was useful, despite the discrepancies, which werediscovered in the evaluation of the models. Their study also showed that the refurbishment of adistrict can have significant impacts on a district’s combined heat and power generation.

User behaviour plays a key role in the energy demand of residential buildings, and its importancewill only increase when moving towards nearly NZEB refurbishment. (Aerts et al. 2014) havedeveloped a methodology to identify different occupancy patterns and a probabilistic model toreproduce individual daily and yearly occupancy sequences based on the features of theseaverage occupancy patterns. The model produces occupancy sequences that reflect realistic userbehaviour. It is applicable to building energy use simulations, in particular for the modelling ofNZEBs, since for these buildings the impact of user behaviour on the energy balance of thebuilding is crucial. Furthermore, it may be valuable for the modelling of distributed energy

1 Apros, the Advanced Process Simulation Environment, brochure by VTT, Technical Research Centre of Finland, accessed online at:http://www.apros.fi/filebank/68-Apros_overview.pdf , 2014


generation systems on neighbourhood level or of smart grid applications. In these cases, theimplementation of realistic variations of user behaviour is crucial to manage energy demand andproduction (Aerts et al. 2014).


4 Interviews

Interviews were carried out in the following countries:

· Finland

· Germany

· The Netherlands

· Slovenia

· Lithuania

· Latvia

· Poland.

All interviews were semi-structured interviews. The list of barriers for energy-efficient refurbishmentat district level was given for the interviewees in beforehand. During the interview the intervieweeswere asked to assess the importance of each barrier and explain and give practical examples ofthese barriers if possible.

The interviews were either face-to- face meeting or teleconferences. The duration of an interviewwas typically one hour.

Most of the interviews were done one at a time. However, in Poland and Lithuania the stakeholderswere interviewed as a group.

We tried to find representatives of different stakeholders as interviewees. In addition, we searchedfor interviewees who had had some experience about refurbishment at district level

The country specific reports are presented in Appendices 1 – 6. The summary of the results ispresented in Section 5.


5 Summary of interview results

5.1 Introduction

The collected data (responses – grades given by interviewees about importance of the question)was illustrated in two ways:

- with bubbles representing the number of answers for each grade category (see

· Figure 1 on the left side)

- with calculated average together with representation of standard deviation (smeared barcharts on the right side of

· Figure 1).

On the basis of the bubble chart we can see all answers but on with the help of the chart withaverages the relative importance between questions is easier to understand (higher – moreimportant). The size of the bar also indicates the deviation of the responses.

The purpose of interviews was also to find out whether significant differences exist betweendifferent countries. The difference can be observed on the chart presented below (Figure 2 and Figure 3) for each country where different patterns – importance of particularquestions can be seen.

Figure 1 Number of answers per grade (from very important 5 to not relevant 1) (rightoron the right – average of answers grade with indication of standard deviation in answers

The most answers were gathered in Finland (23 altogether) where majority of interviewees foralmost all questions were inclined that they are important (seeFigure 2). Most important seem to be no. 3 (see the list of questions above), no. 5 and no. 1.

In Slovenia the most important barrier is a presence and agreement of several owners that isneeded to start the refurbishment at district level (no. 3). The barriers related to legal and town


planning issues (no. 1) were also regarded as very important but also other issues questioned inno. 4, 5 and 6 (several actors that are needed, missing activators and missing business models).

In Lithuania the answers were more scattered but again the most important turned-out to be no.3followed by no. 1. Thus in some respect the situation is similar to Slovenia – both have problemsarising from the change of laws regarding owing the buildings from socialist to capitalist framework(common ownership turned into distributed but dispersed ownership). There was little knowledgeabout problems of grid interactions (no. 10) and problems related to taxes and fees (no. 2).

Similarly in the Netherlands the most important issue is no.3 – presence of several owners thathave to agree and with that connected problems of missing usable business models forrefurbishments at district level (no. 6).

For Austria and Latvia the number of interviews was small. Both interviewees from Austria agreedthat all of questions are very important while one responder from Latvia sees problems as rathernot important, except no.3 – the difficult agreement between many owners.

In Germany interviewees haven’t seen barriers connected to laws (no. 1) but as in other countriesthe highest obstacle is the presence of several owners that has to agree with refurbishment (no. 3).They also indicate that proper tools for assessment at district level are missing (no. 8).

In Poland (though another pattern of response) the most important question was no. 5: lack ofactivator and integrators for refurbishment at district level. This is slightly connected also toimportance of getting agreement from several owners (no. 3). In Poland the importance of the lackof energy assessment tools (no.8) is not seen important.

If we combine all the received answers (see Figure 1) we can see that most of the questions are atleast to some extent important. It is also evident that the interviewees do not hold the similaropinion as the answers are somewhat scattered. There are also different problems perceived asmost important in different countries but overall ‘winner’ is the problem of evolvement of manyowners into the process of refurbishment at district level (no.3) because an agreement is needed.Problems related to the legislation (no.1) and missing actors that would activate the refurbishmentproject and motivate many owners and other stakeholders are connected to that.


Figure 2 Number of answers per grade (from very important 5 to not relevant 1) in each country; size of the bubblerepresents the number of answers

0 1 2 3 4 5 6 7 8 9 10 11

Finland

0 1 2 3 4 5 6 7 8 9 10 11

Slovenia

0 1 2 3 4 5 6 7 8 9 10 11

Lithuania

0 1 2 3 4 5 6 7 8 9 10 11

Netherlands

0 1 2 3 4 5 6 7 8 9 10 11

Austria

0 1 2 3 4 5 6 7 8 9 10 11

Latvia

0 1 2 3 4 5 6 7 8 9 10 11question no.

Germany

0 1 2 3 4 5 6 7 8 9 10 11question no.

Poland


Figure 3 The average grade of importance for questions (1 to 10) per country (with +/- standard deviation).

0,0

1,0

2,0

3,0

4,0

5,0

6,0

1 2 3 4 5 6 7 8 9 10

Finland

0,0

1,0

2,0

3,0

4,0

5,0

6,0

1 2 3 4 5 6 7 8 9 10

Slovenia

0,0

1,0

2,0

3,0

4,0

5,0

6,0

1 2 3 4 5 6 7 8 9 10

Lithuania

0,0

1,0

2,0

3,0

4,0

5,0

6,0

1 2 3 4 5 6 7 8 9 10

Netherlands

0,0

1,0

2,0

3,0

4,0

5,0

6,0

1 2 3 4 5 6 7 8 9 10

Austria

0,0

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2,0

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5,0

6,0

1 2 3 4 5 6 7 8 9 10

Latvia

0,0

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1 2 3 4 5 6 7 8 9 10

Germany

0,0

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2,0

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4,0

5,0

6,0

1 2 3 4 5 6 7 8 9 10

Poland


5.2 Legal and institutional barriers related to town planning and buildingpermission practices

On the basis of the German interviewees’ responses, the most important legal / institutionalchallenges are related to town planning. This was also seen important in Finland. Energy efficientrefurbishment at district level can typically cause townscape related changes. In Finland theplanning processes are often very slow especially if local actors oppose changes and startcomplaint processes. Thus the current town planning processes formulate a significant barrier forenergy efficient refurbishment at district level. Building permission processes may also be a barrierespecially when permissions would be needed for several plots at the same time because theprocess requires a lot of time. The possibility of new type of group calls for building permissionsshould be considered. Basically, building permission processes do not hinder energy-efficientrefurbishment: Municipalities are very supportive in many cities.

In the Netherlands if the building owner wants to make improvement and he needs to increase therent in order to finance the improvement, in that case 70% of tenants living in the building orhousing estate need to approve the renovation and related rental increase. This is a majorlegislation-related barrier for housing associations that delays processes although the justificationfor the issue is widely agreed upon. Similarly also in Slovenia the interviewees agree that this isone of major problems for renovations in general. The problems are caused due to the rigidity oflegislation and requested high percentage (even up to 100%) of owners that agree about majorrenovations. In old city centres the protection of cultural heritage buildings also causes obstacles.

In Lithuania it was emphasized that public spaces need to be included into a district level projectfor improving the cityscape and urban comfort. Due to the land ownership the authorities need tojoin large scale projects and also for financing the improvement of public spaces.

As a first step a general guiding document on how to start a refurbishment project including legaland practical issues like examples from pilot projects with costs and energy benefits couldencourage private building owners to start refurbishment projects in Poland. It seems that largescale district level project would also require clear guidelines on how to proceed especially with aview master and general plan requirements.

Figure 4 Number of positive versus negative answers on question


5.3 Legal and institutional barriers related to the practices, taxes and fees ofenergy generation

The current practices regarding taxation and tariffs cause some obstacles for energy-efficientrefurbishment at district level in Finland. If one actor takes the responsibility of renewable energygeneration and sells energy locally to the grid when there is excess of energy. In this kind ofsituation the generation of for instance solar energy is treated in a similar way as an energycompany which may be too complicated for a small actor (like a housing association). Taxationmay also be a barrier when the capacity is bigger than 100 kVA, and energy production exceeds800 MWh. If even a small part of the generated local electricity goes to national net, the wholegeneration needs to be reported for tax authorities. Also in Germany if energy is locally generatedand somebody sells this to different users and possibly also to the national net, there are problems.

The payment of the energy transmission may also cause barriers in Finland. The long term goal isthe development of (nearly) zero energy buildings. This will require the development of practicesthat enable the reaction for short term loading situations. This – on turn – require the developmentof more open and transparent information management systems and services. In Finland and inGermany in many urban areas all properties have to use district heat; it is possible to make anexception from this only on the basis of very important reasons. This kind of thinking does notsupport the development of local energy generation.

In the Netherlands the energy subsidies for private households vary from town to town and fromyear to year. New legislation increases administrative burdens for collective heating systems inapartment buildings; it appears to be a driving force away from collective heating systems andtowards individual gas boilers. Legal issues with regard to energy taxation and net metering arealso a major barrier for solar energy installation on roofs of apartment buildings or to sharerenewable energy generated on neighbouring buildings.

Due to present favourable prices of energy in Slovenia the motivation of owners towardinvestments in RES and RUE is weak. The fiscal policy is also not strong enough instrument topromote energy efficiency. Because taxes and fees formulate a significant share of pricing, theinvestments in energy generated from renewable sources are not very interesting as the return oninvestment becomes quite low.

In Lithuania and Latvia the taxation or fees are not a barrier in district level refurbishment. Buildingintegrated renewable energy production is financially well supported in Lithuania. In Poland pilotprojects might be one way to gain understanding and interest towards renewable.

In Austria, concerning the liberalisation of the energy market this is seen an important problem.



5.4 Presence of several owners

In Finland the decision making processes in housing associations is a significant delaying issue fordistrict level refurbishment in areas with many housing associations. In Lithuania, the residentialapartments are owned by individuals. All the owners are responsible for their own apartments.Residential apartment houses do not always have a board for decision making on public spaces.This is also a problem for decision making.

In general, the presence of several owners in refurbishment projects brings a lot of hindrances andbarriers for smoothly proceeding processes because of different interests and financial possibilitiesin all countries. The availability of convincing information about the profitability of simultaneousrefurbishment projects might help to solve the problem. Examples of successful projects withtransparent results on costs and benefits are required.



5.5 Presence of several actors

The simultaneous presence of several actors is a barrier if nobody is leading the process. This is abarrier when non-professionals lead the process because the people who are in the administrativeboards of housing associations are not professionals in building. Because district refurbishment isa big and demanding project the proper organization and management of the project is important.However, building professionals are used to work in projects where there are several actors; ingeneral the presence of different actors and disciplines is not a problem.


5.6 Lack of activators or integrators

The absence of a new kind of facilitator role in energy-efficient refurbishment at district level is animportant barrier for successful cases. This is especially important with regard to privately ownedbuildings. This kind of actor is especially important in the early phase to initiate the process.Different kind of actors – for example house managers, owners of big building portfolio, ESCOcompanies or even municipalities - could take the role of an activator.

The issue was not seen important in Latvia nor in the Netherlands .In the Netherlands the socialhousing associations sometimes take the lead, but only if their own property in question. In Austriasome contractors are specialized in the refurbishment of areas with historical buildings.



5.7 Lack of business models

In Slovenia the question is among important ones while in other countries it tends to attract equallyboth sides of answer and in Germany on the ‘not important’ side (see chart below). Currently, forlarge investment projects in Slovenia, the plans are prepared including business plans and keymanagers are appointed. Such approach should be extended to district refurbishment. Adevelopment of effective business plan for district renovation in case of multi-owners situationwould be a step forward.


A feasible business model for a district level refurbishment project should have a level of flexibilityand variations depending on the composition of the whole consortium. It is obvious that anactivator with good communication and relatively high technical skills is necessary for the wholeoperation. Then models that share the responsibilities and benefits with case by case evaluationmay attract the group that is considered the most difficult to join a project – the apartment owners.


In Germany they do not lack business models for refurbishment work, but for system integration(Smart Neighbourhoods). As building professionals currently do not have business models forthese kinds of projects and a development of such business models is needed.

Few group-building-projects have been realized in Finland and these offer examples andexperiences about situations where a service provider takes care of the management of the projecton behalf of the owner. New business models are needed for the implementation of collaborativerefurbishment projects and especially the role of a facilitator could be a new business forconsultants, house managers, principle designers or some other actors.

In Netherlands this issue is considered to be a quite important barrier. For example housingassociations are not allowed to finance sustainability measures outside their houses, at districtlevel. In general public/private models are needed here. But municipalities are not willing to makerisk-bearing investments, but with commercial investors an unclear situation may arise. It would behelpful if housing associations could take a role here (again as in the past). Another model iswhere the municipality works with a selected group of companies to offer renovation approachesfor private owners (e.g. City of Amersfoort). A problem in this context is whether municipalities areallowed to select preferred suppliers.

The guarantees for quality and actual performance are also needed and consumers are notsufficiently aware of certification schemes (which are in place for builders). Another problem is thatvalue of sustainability is evaluated at the long term, maybe two decades, while most actors think inshorter periods. Financial model should be offered together with technical renovation offer.Combination of financial and construction company is needed (for private owners).

DBMO (Design-Build-Maintenance-Operation) contracts may help to stimulate sustainability. But itis difficult to include the long-term perspective into procurement processes because of the issue ofjuridical succession (e.g. when companies are taken over by other companies). It is a very complexproblem how to formulate the specifications for the procurement process. Also it is difficult to placeresponsibility with young companies. Volume of scale and replication will often come from largeestablished companies. Sometimes it is convenient to let energy companies do the organisation ofthis process.

5.8 Lack of proper procurement and delivery models

The perceived importance of proper procurement and delivery models varies a lot betweencountries and stakeholders. The answers range equally from important to unimportant sidecancelling to ‘in between opinion’ (see chart below). In the open text answers, it is not consideredto be major barrier.



There are very few sharing/leasing/penny stock-systems available in Netherlands. It is also hard toexpect all kind of start-ups (the green economy is young) to come up with complex businessmodels and a long term profit. Furthermore, collaborative delivery models usually only address asmall customer segment. It could be argued that, for being energy effective, it is better to look atlarge scale institutions like housing associations, energy providers, large contractors, etc. and usetheir channels.

Performance-based contracts are needed at district level. But are the consumers really alwaysinterested in the best offer for the longer term? Housing companies on the other hand haveconsiderable experience with collaborative procurement for example when selecting a company forrenovating large apartment buildings. Increasingly they use the “co-making” or “chain collaboration”model, in which a certain party is selected for a long term contract in which both parties (i.e. ownerand contractor) carry part of the risks.

Building of common systems for renewable energy generation and infill building (when it is used assource for funding) requires the presence of all actors including also planners and buildingauthorities. However, the contractor may not be needed in the initial phases. The use anddevelopment of suitable delivery models is needed, but the alliance model may not be the bestchoice as it is demanding from the view point of the client and requires that there is a professionalclient.

There are not many actual projects of city districts refurbishments completed in Slovenia due tocomplex interactions (sans agreement) between owners, municipalities, banks… Therefore pilotprojects have an important function by providing a model for others. To show in practice how toobtain grants, how to close the financial structure (with partnership), which contractors provedreliability and quality, how to organise management, communication and supervision of project incase of distributed ownership.


New collaborative project models are needed in most observed countries. The use anddevelopment of suitable delivery models is needed, but the alliance model may not be the bestchoice as it is demanding from the view point of the client and requires that there is a professionalclient. A committed supporter is needed here. A local energy agency might be a useful actor.

The PPP (private-public-partnership) can be one way to solve the problems concerningprocurement and delivery of a project. Transparent and clearly stated requirements throughelectronic procurement system are seen as a solution to part of the problem. Tools have to bedeveloped for procurement as well together with tools to support wide collaboration during process.

5.9 Available energy performance assessment tools

The lack of suitable calculation methods for the assessment of energy saving potentials in theenergy-efficient refurbishment at district level is a barrier (thou in most countries more on notimportant side). This is important because in initial phase, the availability of information aboutpossible savings is extremely important to convince the owners about the benefits. In later stages,the designers can apply the existing energy assessment methods, but those cannot be used inearly phases because too much data would be needed for modelling.


Easy-to-use tools are very needed in the early phases at district level. It is extremely important toshow evidence of benefits for the potential clients. The initial phase is very important – how to getthe process started, how to convince the client especially if there are several owners.

The availability of district level data is also important. Many districts include similar types ofbuildings and if open information data was available, it would offer a basis for comparisons andunderstanding the potentials. Models need to consider several energy-related issues, for examplesolar potential or access to networks. With connection to database of buildings in a district apotential for refurbishment would be evident and best approach to refurbishment could be found.


There are already some tools available to do energy assessment on district level (in Netherlands),for residential buildings and utility buildings. There are two major bottle necks in energy modelling(for residential areas):

· There is always a significant difference between the real and calculated energyconsumption. The calculation assumes certain standard ways of using the building butthe role of the user is quite large of course. Even if average savings are predictedcorrectly (which is not always the case), there is still highly uncertain what the actualsavings will be for an individual household. This uncertainty is a major barrier forinvestments in energy saving renovations, not only for private owners but also forhousing companies.

· When considering heat supply systems, there are not much performance data aboutlosses of the heat distribution network. It is not easy to make assessment about whethercollective heat supply with pipes in the ground is less or more energy-efficient thandistributed boilers or heat pump systems as data of energy loss is missing. Energycompanies know it but have no interest to make it publicly available.

In Slovenia similar programs exist (for energy performance assessment) - in particular for energyaccounting (Energy watch, Termis – by Petrol, ENIS – by Enekom). There are also programs forsimulation of the energy needs of the individual buildings which can be extended to calculate theneeds of a group of buildings.

Qualified tools – simple tools for urban planners and more complicated tools for consultants - mightopen the opportunities for sophisticated renewable energy systems.

5.10 Design process methods for refurbishment at district level

The lack of common guidelines for energy-efficient refurbishment at district level is an obstacle –though not very significant. Currently refurbishments are focused on individual buildings but thereare also projects on a district level. There are examples of planning and supervision of (re-)building of several industrial zones. District perspective is (already) taken into account in suchrehabilitation areas during the design, but legislation, analyses and licenses still relate mostly toindividual buildings. Experienced companies dealing with such projects already have their internalknow-how.



Guidelines and process description extended from previously stated cases should be created tosupport the refurbishment projects at district level. The common guidelines and processdescriptions should describe the roles and tasks of different actors including the municipal actorswho take care of district level refurbishment projects. For better adoption it is important that districtlevel process steps, required permissions and explanations help the stakeholders to betterunderstand the process and benefits.

It is certainly a complex problem to bring our build-up areas to net zero energy level. The solutioncannot come only from new buildings since these consist a very small part of the total existingbuilding stock. One the other hand measures for existing buildings are very often not cost-effective.A solution may be to consider renovations at district level so that for example roof area fromneighbouring buildings may be utilized. In historic districts this will remain difficult to exploit.

A lack of suitable models is observed, for example to compare collective versus individualsolutions. As the conditions are different in each district a tailor-made process in inevitable.

5.11 Design methods for the optimization of grid interaction and loadmatching

To enable optimal use of energy and energy-efficiency at district level in the context of nearly zeroenergy buildings, new kind of simulation methods are needed. There were a lot of answers thatinterviewees were not acquainted with the problem. Currently there are seldom connectionsbetween buildings in terms of distribution, storage and usage of electricity and HVAC. Heatingdistribution systems exist that connect buildings in a district. Connection for other purposesbetween buildings offers a potential energy savings and should be improved. Together withincrease of buildings connectivity a simulation, planning and real time management tools for thedistrict should be developed.



The matching of supply and demand is a difficult issue, especially for heat. Models for this kind ofmatching may be available at energy or network companies. Heat networks need to become more“smart”, like the smart grid for electricity. Feed-in of heat from heat pumps or solar installationswould be desirable. Necessary issues for this are:

1) Operation at lower temperature levels.

2) Open heat network with market based operation model.

It should be noted that buildings of similar usage and therefore of energy consumption pattern arelocated in groups. That even emphasise problems with load matching of supply observed at singlebuilding level.

In overall this issue is not considered to be major barrier at present (to some extent due to notbeing well aware of the topic) but it may become a barrier when prediction models will be neededwith propagation of energy generation inside districts.


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Appendix 1 Interview results / Finland

The main objective of the interview was not to measure or compare the importance of differentbarriers. The objective was rather to develop an understanding about all significant barriers forenergy efficient refurbishment at district level in Finland. We aimed at a situation where the numberof interviewees was high enough and the representation of different stakeholders was wide enoughto ensure that all significant barriers would come up during the interviews by one or moreinterviewee. The interviewees were not randomly selected among the Finnish buildingprofessionals, but we aimed at finding building professionals that might have some experience /knowledge in energy efficient refurbishment at district level. We also aimed at interviewing therepresentatives of different kinds of stakeholders as shown in Table 1. There is still almost no realexperience in that kind of nearly zero energy refurbishment at district level where the gridinteraction and peak power demands would have been taken into account. Thus the insight of theinterviewees on the barriers for energy efficient refurbishment at district level could mainly bebased on real cases where a group of buildings has been refurbished at the same time and ontheoretical discussion and prediction of hindrances.

Table 1 Description of the Finnish interviewees

Building owners with big building portfolio 5

Designers and consultants that work in refurbishment projects at district level 4

Energy companies 3

Town planning and building permission authorities and building regulationauthorities

5

Renewable energy technology/service providers 2

Contractors that do refurbishment at district level 2

House managers, Maintenance 2

Total 23

All interviewees were in important positions in the organisations that they represented (mangingdirectors, other directors, department heads, senior architects responsible for the issues inquestion, project managers).

All interviews were either face-to-face meetings or teleconferences. The duration was typically onehour or a little over one hour.

Assumed barriers and responses of interviewees

There may be legal and institutional barriers related to town planning, and building andenvironmental permission practices.


Town planning

On the basis of the Finnish interviewees’ responses, one important legal / institutional challengeamong the three mentioned fields is related to town planning.

The interviewees mentioned several issues that may cause changes in the townscape in thecontext of energy-efficient refurbishment at district level. For instance energy-efficientrefurbishment at district level may be based on the idea to utilize renewable energy sources (RES)based on local generation such as common bio-based CHP plant, common solar panels, or windmills. The construction of these may require space and change the townscape. In cities this meansthat the existing town plan needs to be developed.

Some kind of infill building is often needed in energy-efficient refurbishment at district level. Thismay be forbidden on the basis of the existing town plan. On the other hand the change of townplan needs a lot of time.

In Finland these kinds of changes call for the participation of local people. The participation (ofcitizens) in planning processes as required may have an effect that the process takes very muchtime. The law defines that citizens must have a right to participate and express their opinion inplanning processes. Typical reaction by local people for proposed changes is negative.Participants also have the legal right to complain and complaint processes may last for years andthus delay building and refurbishment processes also for years.

Some interviewees said that town planning processes should be proactive. If city planners do notconsider these kinds of issues on their own initiative, it is very difficult for them to manage theprocess in a good way. If town scape related changes take place local people very easily react andoppose.

It was also emphasized that city officials (experts in departments of town planning and assetmanagement) should be involved in district level co-refurbishment projects including energyrenovation. Municipalities should be part of projects in a similar way as in new urban regionalplanning covering infrastructure development (traffic networks, public services networks and localenergy networks).

The processes might be easier if city planners were proactive and involved in energy efficientrefurbishment processes at district level in very early phases. Town plans should be initiallydeveloped so that those allow and consider new methods of using local RES.

One interviewee said that the whole town planning and participation processes should be changed.“When new town plan is introduced to local people and they notice that the environment willchange, they will always be against these changes. However, if the local people were invited toparticipate in a much earlier phase the situation might change. The process should go so thatbefore planning anything, the local people should be able to say what kind of improvements theywould like to have. They should be involved in the very development processes and they should beable to tell their expectations and needs. If they participate in very early phases, local people aremuch more positive for changes, because then they themselves would consider what kind ofchanges would be necessary. If their reaction is asked only for the outcome of development thetypical reaction is resistance.”

On the other hand, some changes may also be easier, when the permission for change is appliedfor several buildings at the same time. One interviewee described an experience where the changeof flat roof to ridge roof was not permitted for one single building but later it was allowed when thesame permission was searched for several local buildings.


On the other hand, funding of energy-efficient refurbishment may be based on infill building. Thisagain would cause changes in the townscape and might also require changes in the existing townplan.

One interviewee said that legal issues are an obstacle only when infill building is needed: “Planningprocesses are very slow and difficult. To change the town plan may take 5 years. In practise thisrequires that the housing associations should start to make these kinds of preliminary planningvery early - years before the actual planned refurbishment will take place”.

Except slow planning processes, cities or building authorities cause no barriers. At least Tamperetries to support energy-efficient refurbishment as much as possible. Helsinki is also trying tosupport all energy-efficient refurbishment. At least up till now, however, all required town scaperelated required changes have been so small (like single solar panels etc.) that it has been easy todeal with those. One interviewee who represented municipalities said that “Anyway the plannersshould start to be proactive and forecast future needs so that these kinds of changes would notcome as a surprise. The problem now is that these kinds of situations - where changes for townplan are required because of refurbishment at district level - are at the moment very rare. Thoseare single cases and there are no “normal methods” for dealing with the situations”.

Building permissions and decision making in housing associations

The intended source of funding may be based on the idea that instead of refurbishment, thebuildings are demolished and new and larger buildings with extra space are built instead. Thefunding is based on the expected income because of selling the extra space. This kind of solutionmay be profitable in growing regions. According to the Finnish law this kind of decision requiresthat all members of the housing association (all flat owners) agree about demolishment. If evenone opposes the decision cannot be done. This is a barrier for the utilization of this kind of solution.

When infill building is the intended source of funding a majority is required instead of consensus.

However, when doing infill building, normal building permission is required as always in the contextof new building and significant refurbishment or renovation. Sometimes the building permissionprocesses are slow. One interviewee said that “The municipal processes regarding buildingpermissions are sometimes so slow that this causes – if not a barrier – at least a delayingelement.”

A contractor said that currently it is a precondition that the building permission process is notneeded. In the case when very time consuming processes would be required, other ways to carryout the renovation are usually used.

Building authorities may also be against infill building because of townscape related reasons. Thishappens typically when there are specific architectural or historical values. One interviewee alsoclaimed that “strong desires to retain architectural and historic features unmodified can also bevery problematic. The architectural values are not universal and the building permission authoritycan oppose changes because of ideological reasons which are not shared by all. Buildingpermission authorities may cause obstacles if they have some strong ideological standpoints likefor example related to townscape issues. The Finnish National Board of Antiquities and HistoricalMonuments often has views that are not shared by all. They may cause big barriers by opposingchanges.”

Some interviewees pointed out that there are also very proactive building authorities. Goodexamples in Finland are the City of Oulu and the City of Kouvola where building permission


authorities actively support builders in building processes and in finding good solutions forrefurbishment.

The representatives of cities (2 were interviewed: Helsinki and Tampere) said that buildingauthorities do not cause any obstacles. The law defines in which kind of building and refurbishmentprojects the permission is required. The starting point of the law is that all citizens are in equalposition.

Building permissions are dealt with and given separately for different plots. If the building orrefurbishment project that needs the permission takes place on several plots or more than one plot,separate permissions are needed. This may - of course - make the process slow.

Couple of interviewees said that although the written law is the same for everybody, interpretationis always needed for real cases. The building permission authorities don’t interpret regulations inexactly similar ways. This may cause troubles and different kinds of situations in differentmunicipalities. Applying building code in an unexpected way often courses delays to the projectand expenses to the client.

There is still very little experience about really doing refurbishment at district level. In most casesthe experience is based on cases where big building owners renovate several buildings at thesame time. When the owner is the same for these buildings, no specific problems occur. InFinland, the first co-refurbishment cases and examples involving housing associations aregathered to an informative web portal.

However, if local renewable energy generation would be needed this would cause probablydifficulties especially if - for example - bio based CHP (combined heat and power) or wind powerwould be needed. There are legal requirements that define minimum distances and maximumnoise levels for wind power for instance. However, these kinds of regulations are important. Typicalissue might be the need to build local solar energy generation, wind energy generation or need tobuild local heating plants.

If refurbishment at district level (refurbishment of many buildings) causes any encumbrances (likefor example pipe systems to go through neighbouring plots) for neighbouring plots, it easily causestroubles..

The Finnish regulation based on the European Energy performance directive speaks about “near-by” renewable energy. At the moment it is a problem that it is not well clarified what “near-by”means.

At the moment, it is easiest to build all solar panels at building level because the transmission ofelectricity is economically impossible (not beneficial).

VVO has – but only on theoretical level – sometimes considered the possibility to make a new (forexample) geothermal based net for heating when refurbishment is done for several buildings in thesame neighbourhood at the same time. However, the plans have never proceeded so that VVOwould have started to find out what would happen if there was district heating net and this localheating net would compete with that.

VVO has no experiences in doing refurbishment projects in such a way that also private housingassociations would be involved. It would probably be very problematic because their decisionmaking processes are so slow (no building professionals and a lot of participants).


One interviewee (manufacturer of solar panels) said that the practices vary a lot in cities. In somecities solar panels need a building permission while in others only “permission for minorconstruction” is needed. If the permission is needed it is clearly a problem for energy-efficientrefurbishment. The building permission process needs time and it costs. If there were district levelplans for big areas of solar panels, the legal processes (both building permissions and changes intown plan) would probably be extremely difficult.

One interviewee pointed out that the refurbishment at district level is not a technological problem.Good technologies exist for improved energy-efficiency at district level. However, we missexamples and models, good procedures that show example and can be followed and copied byothers.

CONCLUSION

Energy efficient refurbishment at district level can typically cause townscape related changes. Theexpected changes are based on the space requirements and construction of structures required byrenewable energy generation (common solar panels, wind mills, power plants, pipe systemsassociated to geothermal heat generation and delivery etc.). This may require changes in theexisting town plan and normally requires the building permission. The planning processes are oftenvery slow especially if local actors oppose changes and start complaint processes. The currenttown planning processes formulate a significant barrier for energy efficient refurbishment at districtlevel. New type of proactive way of working should be adopted by municipalities. Energy efficientrefurbishment at district level and its requirements should be considered in beforehand and localactors should be initially invited to participate in the processes in very early phases.

Building permission processes may also be a barrier especially when permissions would beneeded for several plots at the same time because the process requires a lot of time. Thepossibility of new type of group calls for building permissions should be considered.

Basically, building permission processes do not hinder energy-efficient refurbishment:Municipalities are very supportive in many cities. However, problems may occur because theinterpretation of national regulations may differ. There is a need to unify processes.

In single cases, the strict or extravagant opposing attitude for architectural changes in the townscape and in buildings by some municipalities may cause hindrances for energy-efficientrefurbishment.

There may also be legal and institutional barriers related to the practices, taxes and fees ofenergy generation.

On the basis of the Finnish interviewees’ responses some practices related to energy fees andtariffs cause hindrances for energy efficient refurbishment both at building and district level.

If the producer uses all solar energy generated, the use is uncomplicated and there are noeconomic barriers (in the scale of < 100 kVA plants). However, if energy is locally generated andsomebody sells this to different users and possibly also to the national net, there are problems.

In accordance with the current legislation, the producers need to pay energy taxes for his ownenergy use when the solar power station is producing over 800 MWh per year2. Thus there should

2 Since 2015 the power plants are divided into three classes which have different obligations with regard totaxation: 1. Micro power plants nominal output of less than kVA have not obligation with regard to taxation.


be no problem with regard to one building. However, the situation is more complicated if the energyplant serves for several users. An energy company must be established and the transmissionnetwork must be used. This means that there are also transmission fees and this weakens theprofitability of distributed energy generation.

In many urban areas all properties have to use district heat and there are no other options. It ispossible to make an exception from this only on the basis of very important reasons. This kind ofthinking and these kinds of regulations do not support local energy generation.

Steering methods are somewhat contradicting because district heat is sometimes given as theabsolute priority but at the same time it is required that RES should be used more and more. Theadvantageousness of district heat from the view point of environment depends on the energysources of district heat generation. One interviewee said that “Sometimes the carbon footprint isvery high and sometimes very beneficial. This should be considered instead of giving tight andstraight requirements.”

Energy companies have developed models and practices for purchasing local electricity (like solarelectricity) and sometimes also for purchasing heat. However, the fee is typically very low.

The main problem with regard to local renewable energy generation is that – if this energy needs tobe transmitted – who pays the transmission. If the energy company takes care of the transmissionof locally generated energy, the company may need to charge and this weakens the profitability ofsolar energy or other renewable energy.

In the future the structure of tariff (rate) systems will change and the transmitted power will have aneffect on the tariff.

In the future there will also be automatic management of energy use. For example houses that areheated with electricity will steer the energy consumption in accordance with (short term) price.When information about momentary electricity consumption can be available through cloudservices, the energy companies can – on the other hand - for example cut the electricity basedheating from houses for a short while and thus the peak power demands could be reduced. Thusthe transmission net could be lighter. The development and realization of these kinds of potentialswill be important for low energy districts.

One interviewee said that the energy companies are at present in very difficult situation, and theydo not really know how to manage if local RES will be generated and used a lot.

The current regulations of taxation with regard to energy generation are difficult for minorproducers. Although it is right that the rules are the same for everybody, this does not supportminor actors in starting this kind of activities (local energy generation based on RES).

Taxes and also substitution can also be changed by political decisions makers and this will makeprofitability calculations difficult.

In practise several buildings or housing association cannot start to run solar energy generation in asimilar way than a solar panel can be built onto one’s own roof. Common generation of solar

2. Small-scale power plants nominal output of more than 100 kVA and the annual output of up to 800 000kWh, which are registered for tax purposes and give one income tax return for the entire year for the amountof electricity they produce. Electricity tax does not need to be performed.3.Power plants nominal output of more than 100 kVA and annual output more than 800 000 kWh; obligatedto give a normal tax return monthly regardless of the amount of electricity supplied to net.


energy is interpreted as a power plant or energy company. This weakens the potential of the use oflocal RES extremely lot.

In Finland the payment that you receive from selling extra electricity (extra generated by solarpanels and which you do not need by yourself) is so low that there is no point to sell.

There are some examples of local distribution networks. HELEN (energy company in Helsinki) hassometimes purchased these – sometime also with negative price.

In addition to the energy related fees and regulations, the interviewees pointed out the lack offinancial incentives for energy-efficient refurbishment. For example when housing associationstake care of renovation, the private flat owners cannot get the domestic tax reduction. (Accordingto the current law it can be received only when the consumer pays directly to the company thatdoes the renovation. If the housing association pays (and flat owners pay to the housingassociation) no tax reductions are received for households.) In addition, refurbishment at districtlevel should be supported so that if more than one housing association starts refurbishmenttogether at the same time, the tax reduction should be bigger.

CONCLUSION

The current practices regarding taxation and tariffs cause especially three kinds of obstacles forenergy-efficient refurbishment at district level:

If RES is utilized in energy efficient refurbishment at district level, a probable solution would be thatthere is one actor who takes the responsibility of energy generation and sells energy locally to thegrid when there is excess of energy. Common generation of for instance solar energy is treated ina similar way as an energy company which may be too complicated for a small actor (like ahousing association). In addition, the taxation as such is a barrier when the capacity is bigger than100 kVA, and energy production exceeds 800 MWh. In this case, if even a very small part of thegenerated local electricity goes to national net, the whole generation needs to be reported for taxauthorities. The payment of the energy transmission may also cause barriers. The transmissioncharges may weaken the profitability of solar energy or other local renewable energy. Betterfinancial and taxation practices that enable and support the use of local RES should be developed.The long term goal is the development of (nearly) zero energy buildings. This will require thedevelopment of practices that enable the reaction for short term loading situations. This – on turn –require the development of more open and transparent information management systems andservices.

In many urban areas all properties have to use district heat and there are no other options. It ispossible to make an exception from this only on the basis of very important reasons. This kind ofthinking and these kinds of regulations do not support local energy generation.

Presence of several owners is needed to start the refurbishment at district level.Achievement of common agreement among owners may be difficult because of differentconditions of owners (like financial conditions) and sometimes because of conflicts ininterests.

This is a real obstacle also at building level refurbishment. Every owner has a different economicsituation. Some may not have money or possibilities for collateral. Interests may be different also.The plans for the future may be different. A young person's point of view can be completelydifferent than that of older flat owners in housing associations.


This would also be difficult in the neighbourhoods with small houses of different ages because theneeds for refurbishment differ.

There are no incentives that would encourage and support several owners for simultaneousrefurbishment at district level.

Big owners may have a longer time perspective but small house owners and housing associationsusually have quite short perspective.

If several housing associations should start to make energy renovation at the same time, it wouldprobably be very difficult because of different interests, different ways of operations, differentheating solutions and because of low knowledge about building and construction. One intervieweesaid that “A typical mistake is that some owners start to search for savings in the very beginningand require very low-cost design. The more complicated the project would be because of severalbuildings, the more problematic would be the lack of careful design”. Each housing associationalso commits separately one after another to the co-renovation project.

In Finland this is a very big barrier for refurbishment at district level because a big share ofresidential buildings is privately owned.

To achieve a common understanding is possible only if there is strong evidence that cost savingscan be achieved by refurbishing at the same time. However, the true benefits and evidence of costefficiency (or their profitability to service providers) of these kinds of projects are still lacking.Example cases and success stories could help owners to see collaboration with the neighbouringrefurbishment projects more positively.

In the case of chancing heating system to ground heating systems with heat recovery, the processconsists of a info session where service provider introduces possibilities. Sometimes a housemanager is active inviting housing associations to a common meeting. Sometime service provideris active pointing out high potential of using the local RES. There are synergy benefits which canreduce final cost up to 5 % saving of the investment cost (app. 170 k€ in case of typical block offlats).

When refurbishment is funded with the help of infill building, typically several owners are present.However, infill building is profitable only in some districts. In those districts that are not attractiveanymore, this is not an option.

This is a barrier because there are no common practices for these kinds of projects.

A common agreement is also a precondition for district level renovation. If there is no commonunderstanding of what kind of renovation should be made in the area, it is difficult to start theproject and it might be profitable to prepare one or several smaller project on the area.

However, there are also successful cases. For example if the same property maintenancecompany takes care of several different building in the same location, it has been possible to carryout for example pipe renovations at the same time in the whole district and achieve savings. Thisrequires that there is an actor who can and is willing to take care of the process. Success caseswould be really important.

New kind of actors would be needed to lead the processes. In addition, if the idea would be to buildlocal RES energy generation, new kind of actors would also be needed to run these processes andprojects.


New kind of operational models are needed. For example one idea would be that the housingassociation starts to act as a stakeholder in for example in wind-park. This is how they couldreceive energy for themselves or for the whole district.

CONCLUSION

The decision making processes in housing associations may be a barrier or at least delayingaspect for district level refurbishment, in areas with many housing associations. This barrier isavoided in areas where the buildings are owned by a single owner.

The presence of several owners in refurbishment projects brings a lot of hindrances and barriersfor smoothly proceeding processes because of different interests and financial possibilities. Toovercome these problems, practices should be developed and established. An importantrequirement is the availability of convincing information about the profitability of simultaneousrefurbishment projects.

Simultaneous presence of several actors – energy consultants, designers and consultants,energy companies, contractors – in addition to owners may be needed. Organization ofwork and collaboration may be difficult.

This is a barrier when present project delivery models are used. In accordance to that, designservice is first purchased and normally with as little money as possible. The overall project takesplace with separate steps and the needs of occupants are not listened to. There should be oneactor that leads the whole process from the beginning to the end. However, sometimes it is difficultto start this kind of process because the final price cannot be predicted precisely.

This is a barrier if there are non-professionals who lead the process. The people who are in theadministrative boards of housing associations are normally not professionals in building.

When the client is one big owner, this is not a problem. Some challenge can occur in organisingthe bigger teams.

On the other hand, the big number of clients in the same project will increase the total budgetavailable, and a wider scale of expertise and professionals can be used for defining, designing andexecuting the project.

At present there are no actors who would take the leading role. This would mean that this leaderwould start to manage a refurbishment process where there are several owners and severaldifferent actors present. A business model for this kind of activity is missing.

One interviewee said that “This kind of actor is definitely needed – one who maintains the’continuous flame’. A small incentive would be needed for this. For example if housing associationsreceive a little ‘nest egg’ to show that this kind of activity is supported. If several housingassociation work together and each pay for this project leader for example 300 €/month it wouldenable a consultant or project leader to manage the process” (infill building and district levelrenovation).

The presence of energy companies would be important in these kinds of collaboration processes.They should develop their service models. The collaboration could also increase the possibility toreceive up-to-date information about technologies, regulations and benefits.


Some energy companies have already developed solutions for smart grid. There is also goodunderstanding about the environmental impacts. This knowledge would formulate a good basis forcollaborative refurbishment at district level.

Service providers with comprehensive solutions agree that the degree of difficulty will increase,when there are many clients in the same project.

CONCLUSION

Organization of work and collaboration would be important. The simultaneous presence of severalactors is a barrier if nobody is leading the process. This is a barrier when non-professionals leadthe process because the people who are in the administrative boards of housing associations arenot professionals in building. However, this is not a significant barrier when the client is one bigowner. In that case too, the use of design-bid-build delivery models may not be the best solution, ifthe design process remains very separate and continuous consideration of end-users needs is nottaken care of. The presence of energy-companies would be important.

There may be lack of actors who would be able to act as activators or integrators for thesekinds of projects although this kind of role might be needed.

Such an operator is really required. The best word is the facilitator. He/she should be the kind ofperson who knows how to facilitate collaboration; how to activate co-creation and search forcommon agreement.

The competence needed by the activator is mostly process management and ability of buildingconfidence towards the clients (housing associations).

One interviewee said that “This is a challenge for us (consultancy companies). We should be ableto develop our services and create and offer these kinds of new services. The key issue is thatsomebody should be able to create collaboration. There have been few examples already. But thisis very new and rare still.”

Also house managers could act in this kind of role. The national association of house managerscould start to support the development of this kind of role. However, one interviewee also said thatthis actor should be somebody else than the house manager.

This kind of actor would be especially needed in the initial phase. Projects do not start if there isnobody who initiates the process. One interviewee said that it would also be useful if this activatoralso studied potentials on district level. The facilitator or activator could also organize collaborativeprocesses to enable common thinking and co-creation.

Also big portfolio owners and some kind of ESCO companies could act as activators. Also biggerservice producers have resources to take the role of an activator or integrator.

If energy-efficient refurbishment at district level was actually realised considering grid levelefficiency, it might require that the building authorities and/or energy companies should be initiallyactive and plan and provide district level solutions. Then also town scape related aspects could betaken into account.

One interviewee said that it might be difficult to find funding for this kind of activities. Anotherinterviewee said that investing a small amount of public money for activators, it could be possibleto start many large renovation projects.


One interviewee from the Finnish ministry of environment in Finland emphasized the importance ofthe participation of municipalities in refurbishment projects at district level. Municipalities shouldhave an important role when the future of the district is discussed and planned in the context ofrefurbishment at district level. The cities also have an important role if new infra structure is neededbecause of refurbishment at district level. The municipalities should have strategies for districtlevel refurbishment. The challenge is that currently municipalities do not really have actors whoserole would be to guide refurbishment at district level. Municipalities could also have an importantrole in activating refurbishment at district level by contacting housing associations. One advantagemight be that the municipality represents a balancing role with regard to those that havecommercial interests and different housing associations that may have contradicting interests.

CONCLUSION

The absence of a new kind of facilitator role in energy-efficient refurbishment at district level is animportant barrier for successful cases. This kind of actor is especially important in the early phaseto initiate the process.

This is a challenge for consultants consultancy companies and they might be able to develop newbusiness if their created new services for this kind of needs.

However, different kind of actors – for example house managers, owners of big building portfolio,ESCO companies or even municipalities - could take the role of an activator.

Associated to the previous barriers, there may be lack of proper business models fordifferent actors to effectively and profitably work in refurbishment projects at district level.

This is linked to the previous question. A facilitator / integrator / activator is needed but this wouldbe a new business for somebody (for consultants, house managers, principle designers…?). Newbusiness models are needed for the implementation of collaborative refurbishment projects.

“Group building projects” (several private people start to build for them and employ a professionalto manage the project) differs much from a typical design-build project which is a common deliverymodel in residential (multi-storey) building projects. These projects have given experiences wereseveral non-professional actors start a project together.

Building professionals do not have business models for these kinds of projects. This is a barrier.However, the importance of the issue was not much emphasized by the interviewees.

One interviewee pointed out that the administrative models of companies do not supportcollaborative projects. E.g. if the housing company is a public organisation, it has to follow theofficial open bidding procedures.

Another interviewee said that also those consultants who have developed business models forcollaborative projects have only little thought about their service models. The focus has been onprofitability. When the client oriented service process as part of good business model is clear, thisno longer is a barrier.

Good business models should be based on value proposition and value configuration within theservice network. One interviewee stressed that one should think to whom the added value will beprovided – whether to client or to other partners like system or component manufacturers.

In construction management (also called agency-CM) a service provider takes care of themanagement of the project on behalf of the owner. Construction manager organises bidding of


separate design and construction (packages), but the design and construction contracts are madewith the owner. If the service provider and the housing association work together and organize thecompletion of all actors (design and construction etc.) there can be a maximum price and if this isunder bid, the housing association receives the half of the saving and the service provider theother half. For example Consti uses this model in Finland.

CONCLUSION

A facilitator (or integrator or activator) would be needed in energy-efficient refurbishment projectsat district level. New business models are needed for the implementation of collaborativerefurbishment projects and especially the role of a facilitator would be new business forconsultants, house managers, principle designers or some other actors. Few group-building-projects have been realized in Finland and these offer examples and experiences about situationswhere a service provider takes care of the management of the project on behalf of the owner.

Associated to the previous barriers, there may also be lack of proper procurement anddelivery models. Collaborative delivery models may not be familiar for many.

New collaborative project models are definitely needed. However, this barrier was not consideredvery important.

Alliance model might help in refurbishment at district model. However, there is no experience aboutthis.

One interviewee commented that the term alliance is too difficult. It is not attractive if people do notunderstand what it means.

One interviewee said that “There are signs that building sector is changing and not any more soconservative. Many companies are willing to start new kind of processes but there are also actorswho have little experience and some lack of courage for new kinds of processes. Alliance modelmight be good in refurbishment at district level, because there all participants work together fromthe beginning. However, it may be complicated to solve the earning principles and how to sharebetween partners. Interesting co-refurbishment cases exist for example in farming sector. Wecould try to learn from these.”

Infill building definitely requires that all actors – including planners and building authorities – areinvolved from the very beginning. However, the contractor is not needed in the initial phases. Thecollaboration goes normally quite well between professionals, so this is not a big barrier.

The alliance model is clearly a model that requires that there is a professional client. It might bebeneficial when there is one big owner but it does not fit to situations where there are several non-professional owners. Alliance models are not suitable for projects that are led by private housingassociations.

Contractual models are also related to this issue. It would also be important to develop these sothat these would be better suitable in neighbourhood level refurbishment projects.

CONCLUSION

The lack of experiences, methods and common practices is an important barrier for energy-efficient refurbishment at district level. Building of common systems for renewable energygeneration and infill building (when it is used as source for funding) requires the presence of allactors including also planners and building authorities. However, the contractor may not be needed


in the initial phases. The use and development of suitable delivery models is needed, but thealliance model may not be the best choice as it is demanding from the view point of the client andrequires that there is a professional client.

Available energy performance assessment tools are mainly meant for the assessment ofsingle (new) buildings. There may be lack of tools that support the assessment of severalbuildings at district level.

There is a lack of tools that can be easily used in the early phases at district level. It is extremelyimportant to show evidence for the potential clients. The initial phase is very important – how to getthe process started, how to convince the client (and especially if there are several owners at thesame time). It is important, that there are tools for rough estimation of the energy aspects at thebeginning of the project without making building or space level energy simulations.

However, with regard to assessment in later stages, this is not a problem. Present tools can beapplied to refurbishment cases also at district level (NOTE! Compare the question number 10.There is lack of tools that consider grid interaction and load matching issues). Also energycorporations can provide building based energy consumption data (five years consumption withdegree day factor) and the energy system technology providers each have their dimensioningtools

On the other hand, it is important to remember that energy saving is seldom a motivation for anyhousing association to start the refurbishment. Energy saving refurbishment is done only in theconnection of other needs of renovation or refurbishment.

One interviewee spoke about the possibility to get the energy companies involved. “At the momentthe data protection requirements are abused to hide information. All data about energyconsumption should be available for housing associations and for the district. As many districtsinclude similar types of buildings (as districts have been built so that many buildings have beenbuilt at the same time in the whole neighbourhood). If data was available and collected, this formsthe basis for comparisons and understanding what is potential and what has been achieved.Monitoring would be important and this would help also planners to better understand thepotentials.”

One interviewee said that we should develop and start to use also district level energyperformance labels.

In real cases the availability of data about existing buildings is often poor. This is a problem. Forexample in one big case with 200 flats the realized technical solutions often varied significantlyfrom stair case to another although all buildings should have been built in similar way on the basisof drawings.

CONCLUSION

The lack of suitable calculation methods for the assessment of energy saving potentials in theenergy-efficient refurbishment at district level is a barrier. This is important because in initial phase,the availability of information about possible savings is extremely important to convince the ownersabout the benefits. In later stages, the designers can apply the existing energy assessmentmethods, but those cannot be used in early phases because too much data would be needed formodelling.


The availability of district level data is also important. Many districts include similar types ofbuildings and if open information data was available, it would offer a basis for comparisons andunderstanding the potentials.

Current design methods and process descriptions do not consider problematics ofrefurbishment at district level.

The problem is that there is often so little time and other resources for doing the designs that theseare done by copying existing solutions. The lack of process descriptions or methods is not a bigproblem itself. One interviewee even said that the task descriptions are not needed as they providetotal solutions.

However, there is a lack of common process descriptions and methods for these kinds of districtlevel projects. Present “plans of work” do not consider at all the problems or needed processphases of refurbishment at district level.

From the view point of a municipality it would be good if cities had specific actors to deal withdistrict level refurbishment projects. He/she would be specialized and could thus support clientsbetter.

One interviewee said that there are so many roles in refurbishment and infill projects that newprocess description would be needed. Different actors take care of different aspects (like safety orenvironment) and their roles are not well defined. So a lot of overlapping work takes place.

Different kinds of guidelines and process description should be created to support therefurbishment projects at district level.

One interviewee pointed out that there is lack of professionals and training for considering energyissues especially at district level. For example the training of architects does not consider so muchthe functional or energy issues, but rather the aesthetical issues.

CONCLUSION

The lack of common guidelines for energy-efficient refurbishment at district level is an obstacle –though not very significant - for these kinds of projects to become more general. The commonguidelines and process descriptions should describe the roles and tasks of different actorsincluding the municipal actors who take care of district level refurbishment projects.

Related to the previous barrier, design and other methods for the optimization of gridinteraction and load matching may be missing.

There is clearly a lack of these kinds of simulation methods. Those would be needed when nearlyzero energy refurbishments will be done. This problem should be solved by developingassessment methods and guidelines.

It is also important that even if these tools existed, the issue is so difficult that it is hard tounderstand the meaning of assessment results and make conclusions. The reliable profitabilitycalculation is important.

If this aspect was considered on building level, it would require the availability of data about districtlevel boundary conditions. At the moment this data is not available. The transparency of data andthe ability to predict the demand are key issues.


Especially there is no understanding about these kinds of issues among the boards of housingassociations.

As there have not been so many local level / neighbourhood level collaborative e-refurbishmentprojects or local level energy designers, the tools have not developed either.

Also big owners very seldom try to take these aspects into account. For example VVO (owner ofbig building portfolio) has considered this aspect only in few cases. Another owner said that thereshould be pilot districts or neighbourhoods where we could test and gain experience. This wouldrequire more collaboration between several actors.

There are technological solutions like distributed storages but the potential has not been studiednor adapted other than in single cases. Designers lack tools that enable the consideration ofenergy storage and the synchronization between energy demand and supply.

CONCLUSION

To enable optimal use of energy and energy-efficiency at district level in the context of nearly zeroenergy buildings, new kind of simulation methods are needed. The lack is a barrier for energy-efficient refurbishment at district level.

Assessed importance of different barriers

The interviewees were also asked to assess the importance of each claimed barrier by usinga scale

· 5 = very important,

· 4 = rather important,

· 3 = rather unimportant,

· 2 = not important,

· 1 = I do not know/not relevant from my view point.

Table 2 shows all given answers.

Table 2 Importance of barriers

1 2 3 4 5 6 7 8 9 10

Owner 2 4 3.5 3.5 3 4 3 1 4 4

Owner 5 4 5 4 5 4 5 1 3 3

Owner 2 1 4.5 3 4.5 3.5 3 3.5 1 3

Owner 4 1 2.5 3/2 2 3 2.5 3 3 4

Owner 3/4 4.5 5 4 4 2 4 4 1 3


Contractor 4 3 5 5 5 3 4 4 4 3

Contractor 4 1 3 4 4 4 3 1 4 1

Designer Consultant 4/2 5 3 2 3.5 4 4 4 2 5

Designer Consultant 4 4 5 5 5 5 5 4 4 4

Designer Consultant 4 2.5 4 2 3 2 2 2 2 4

Designer Consultant 5 5 3.5 5 2 5 2 4 5 5

Building Authority 4 5 5 3 5 2 5 2 2 5





Energy Company 3 2 4.5 3 4 3 3? 2 3 3

Energy Company 2 4 2 4 3 3 3 2 2 3

Energy Company 3 2 4 3.5 4.5 4.5 4 2 2 2

Manufacturer Solutionprovider

5 4 4 3 2 2 1 3 1 4

Manufacturer Solutionprovider

3 1 4 4 4 4 4 2 2 4

House Manager 4.5 4 4 3 4 5 4 3 4 5

House Manager 4 1 5 2 4 1 3 1 2 1

Number scores 4 and 5 13 12 17 9 15 11 10 7 7 12


Appendix 2 Interview results / Holland

Summary of interviews in the Netherlands


Designers and consultants that work in refurbishment projects at districtlevel

2

Energy companies

Town planning and building permission authorities 2

Renewable energy technology/service providers

Contractors that do refurbishment at district level

House managers, Maintenance

Total 6

All interviewees were in important positions in the social housing organisations, municipalities andconsultancy companies they represented and had strong expertise in the topic.

The interviewees were also asked to assess the importance of each claimed barrier by using ascale






Table 2 shows all answers given by interviewees.



Question: 1 2 3 4 5 6 7 8 9 10

Average score (if >1) 3,4 4,0 4,8 2,8 3,2 4,0 2,7 3,8 3,8 3,0

Respondent:

owner (soho) 4 5 4 2 1 2 2 1 1 1

owner (soho) 1 4 5 2 2 3 2 3 2 1

town planning authority 3 4 5 3 4 5 1 4 5 2

energy expert municipality 3 3 5 3 4 4 1 4 4 3

Consultant town planning 4 4 5 4 4 5 4 4 5 3

Consultant energyplanning 3 4 5 3 2 5 1 4 3 4

Assumed barriers

There may be legal and institutional barriers related to town planning, and building andenvironmental permission practices

Most of the town planning is refurbishment nowadays and there is little new development ongreen fields (less than 1% of housing stock in NL). It is difficult to impose and maintainsustainability ambitions in renovation projects.

For building renovation there exists less regulation. In theory large renovations should complyto the same energy performance requirements as new construction, but in practice this is notimplemented much.

For monumental buildings the building permit, especially with regard to facades and windows,may be a barrier for implementation of energy saving measures. This problem is mainlyencountered in historic city districts with a special protected status (e.g. districts built in 19 th

century.) Installation of solar panels meets with less barriers, as long as they are not visiblefrom street.

In districts that have a priority for renovation (60’s and 70’s areas) there is no problem for 80-90% of cases. But in Amsterdam it is perceived as more difficult. Especially renovation ofmultifamily buildings is difficult if you are not allowed to change the envelope because ofaesthetic regulation.

The prescribed building alignment (“rooilijn”) in the town plan may also be a barrier whenrenovating the façade from the outside. The added insulation will extend over the line ofbuilding alignment and this requires a special exception from the building regulation.


Technical quality is usually the main motive for owners to start the refurbishment. EE (energy-efficiency) is seldom or almost never the actual starting point, though the last years the totalcosts of housing for tenants is increasingly important especially in the social housing sector. Inmost renovation initiatives the quality for living in the buildings is considered too low or itbecomes too costly to do the maintenance. Also it may be that you need to upgrade certainneighbourhoods because of social problems.

Legal issues: If the building owner wants to make improvement and he needs to increase therent in order to finance the improvement, in that case 70% of tenants living in the building orhousing estate need to approve the renovation and related rental increase. Otherwise it is notallowed to increase the rent for all 100% of the dwellings. Very often the tenant situation issuch that it can be often very difficult to get this 70% approval. Not all people are keen onmoving from their house during the refurbishment or to pay the higher rent.

This is a major legislation-related barrier for housing associations. It is not something that youwant to remove or really change but something that requires a lot of effort. Often a poor relationbetween tenants and house owner is at the core of the problem, and this needs to be improvedfirst before discussions on renovation are started.

There may also be legal and institutional barriers related to the practices, taxes and feesof energy generation.

The quality of the legal/political framework is always visible when it comes to finance/feasibility.In Germany even very conservative investors go for energy-effective investments thanks toreliable legal framework/policies. A negative example is the energy subsidies for privatehouseholds in the Netherlands; these vary from town to town and from year to year. Financialvaluation of real estate is also a barrier. Sustainable measures in single buildings are valuatedto some level, but it is very hard when it comes to measures in the public domain or at districtlevel. For commercial real estate a high sustainability level can provide an added value. Atlonger term it is important to have reliable and low-risk regulation.

One respondent has the opinion that energy is too cheap nowadays. He thinks that maybe weshould increase energy taxes, except for historic buildings where energy efficient renovation isquite difficult.

The opinions about the tariff structure for heat supply and about new legislation on heat supplytariffs3 vary considerably. Many interviewees, especially from housing associations, see manybarriers from the new legislation, mainly because it increases the administrative burden forcollective heating systems in apartment buildings. For this reason it appears to be a drivingforce away from collective heating systems and towards individual gas boilers. Othersinterviewees are of the opinion that the new law is not more difficult than the old situation.Another problem that is mentioned involves the management of collective heat pumps systemsunder the new heat legislation.

In Amsterdam and other major cities new buildings have to be connected to the heat supplynetwork, for existing buildings this is usually not obligatory. Some consider the relatively highfixed fees in case of heat supply to be reasonable because the cost of a gas boiler is avoided.(€ 250 p.y.) In the rental sector this cost advantage goes to the building owner. But housingowners and developing parties

3 An important aspect of this legislation is that requires a transparent calculation of heat supply tariffs, also forcollective heating systems on building level. Also it places maximum on the heat prices that may be charged toconsumers.


The tariff structure of district heating is felt by many as a barrier especially because it is notvery transparent how these costs are built up. Calculation models that give more insight incosts and efficiency of district heating also for house owners may help.

It is also remarked that there is a lack of “level playing field” in the organisation of districtheating.

The system of rental points (which determines the maximum allowed rent) is seen as a barrierfor housing associations to start with energy efficient renovation. There is a split incentivebecause the decrease in energy costs is not returned to the house owner.

Legal issues with regard to energy taxation and net metering are also a major barrier for solarenergy installation on roofs of apartment buildings or to share renewable energy generated onneighbouring buildings.

Presence of several owners is needed to start the refurbishment at district level.Achievement of common agreement among owners may be difficult because of differentconditions of owners (like financial conditions) and sometimes because of conflicts ininterests

Most respondents see this issue as extremely important. Several owners have usuallycompletely different: a) notions of sustainability, b) business cases c) scope in terms of time (ahotel thinks in daily bills, a energy company in monthly bills and an infrastructure engineer inperiods of maybe 30 years).

It might therefore be easier to look at value chains rather than to consider geographic areas.For example if there is a source of waste heat, then try to find a consumer or it and a way toconnect these two (distribution system). A model for this kind of matchmaking for heat or coldenergy would be helpful.

Some large engineering consultants already have this kind of models available and also thereare evaluation methods (not models) which are publicly available and supported (i.e.“Energiemaatlat”). Visualisation of energy demand and supply on geographic level may also behelpful for match making, although one should think more from actor perspective than in termsgeographic boundaries.

A major barrier is the involvement of private home owners in a district renovation project.This group is very difficult to mobilize. Individual owners have different financial means anddifferent preferences with regard to the preferred house improvements and with regard tothe timing of these improvements. It is very difficult to combine all those different wishesand financial possibilities into one renovation package. This problem exists with row houses(difficult to renovate one house in a row), but even more in apartment buildings where acommon agreement has to be reached among all the individual owners. Most difficult arebuildings with “mixed ownership”, that is private owners and social housing companies, asituation that is occurring more and more because housing companies sell their houses toresidents.

Past projects for district-level refurbishment (i.e. the “blok-voor-blok” scheme) have largelybeen a failure because of the problem to mobilize private owners. Private home ownersare seen as the show-stopper for any district-level project.


One respondent thinks that only obligations and/or subventions will be sufficient to mobilizethe group of private house owners. A subvention scheme with an extra bonus in case of acommon renovation project over multiple houses, may also be helpful.

In response to this problem building companies are trying to develop technical solutions toallow a modular approach in building renovation, the so-called “series-of-one” approach.Each apartment in a building is renovated at the time when the owner or tenant is ready forit or when there is a change of tenant. This modular renovation approach is nowadaysseen is a very important and perhaps indispensable element for refurbishment of apartmentbuildings but probably also at district level. A modular approach for building renovationinvolves quite a few technical challenges (e.g. with respect to building envelope, operationof collective heating systems, organisation of the building process)

The presence of several owners is also a difficulty if one tries to implement a collective heatingsystem for instance with underground thermal storage. Companies and house owners do notlike to be mutually dependent. ESCO’s that could provide a sort of guarantee of supply forcollective heat systems could be helpful but not many initiatives seen yet. Low return oninvestment high-risk projects. On the other hand, in business areas successful examples arefound where utilisation of waste heat is organised via a heat distribution system.

In general there is a wish from the side of house owners and municipalities for an “open” heatdistribution network into which several actors may feed there excess heat and whereconsumers have a freedom of choice between multiple suppliers. But currently all heatdistribution networks are owned by large energy companies that have no desire or need toopen their network to third parties. However, there exist some initiatives from citizen groups tocreate such an open heat distribution network.

Overall this issue is considered to be the most important barrier.

Simultaneous presence of several actors – energy consultants, designers andconsultants, energy companies, contractors – in addition to owners may be needed.Organization of work and collaboration may be difficult.

Opinions vary on this. Some find it “obviously problematic”. “We live in a period in which thegovernment leaves a lot to the market. But this market is not a single entity, it is a veryfragmented collection of companies and individuals. Energy is a lot about networks, so the roleof all the actors mentioned is to connect the fragments. Communication is an important part ofthis.”

Other respondents hold the opinion that in practice the initialisation and organisation of suchmulti-actor projects processes is not a big problem. Very often it begins or ends with a singlemajor investor. Although it is a problem that in smaller projects the energy companies show alack of interest.

In any case consultants have an important role in this situation to act as independent processmanager and integrating party. Also the balancing of sustainability ambitions versus economicinterests requires a party that provides an independent evaluation of options. Municipalitiesmight also take such a role but usually they do not have the capacity or expertise to lead sucha process. Also municipalities often have their own specific interest.


Performance-based procurement models are used more and more by large housing companiesand this offers a good method to obtain the best technical solution from market parties.

Overall this issue is not considered to be major barrier

There may be lack of actors who would be able to act as activators or integrators forthese kinds of projects although this kind of role might be needed.

The best integrators may be those parties that have a clear earning model (like a companywhich is leasing PV panels and has to mediate between private owners, a housing associationand the local government). Other activators could be active civilians, networking association orlocal governments. Citizens often form the “conscience” and/or the “memory” of the city. Forthis reason citizens have a better perception of the long-term perspective. However, in the endyou will need professional parties for risk-bearing investments.

In the early phases the initiative may also come from the municipality because it is seen asmore independent than commercial parties. Municipalities may need more experts for this role.A problem may be that municipalities and heat supply companies operate together to closelybecause of certain common interests. In such cases the municipality has less credibility asindependent initiator.

Also social housing associations sometimes take the lead, but only if their own property (orformerly owned property) is involved.

Overall this issue is not considered to be major barrier.

Associated to the previous barriers, there may be lack of proper business models fordifferent actors to effectively and profitably work in refurbishment projects at districtlevel.

“Very much true. A clear example in NL are the housing associations who are not allowed tofinance sustainability measures outside their houses, at district level. Business models is a lotabout time-value. The value of sustainability is at the long term, maybe two decades, whilemost actors think in shorter periods.

May be the government should use money earned from old energy (e.g. from the sale ofenergy company shares in NL) to create a revolving fund which invests in sustainable energyat local levels.”

In general public/private models are needed here. Municipalities will not make risk-bearinginvestments, but with commercial investors an unclear situation may arise. It would be helpful ifhousing associations could take a role here (again).

DBMO (Design-Build-Maintenance-Operation) contracts may help to stimulate sustainability.But it is difficult to include the long-term perspective into procurement processes because ofthe issue of juridical succession (e.g. when companies are taken over by other companies). Itis a very complex problem how to formulate the specifications for the procurement processAlso it is difficult to place responsibility with young companies. Volume of scale and replicationwill often come from large established companies. Sometimes it is convenient to let energycompanies do the organisation of this process.


Another model is where the municipality works with a selected group of companies to offerrenovation approaches for private owners (e.g. City of Amersfoort). A problem in this context iswhether municipalities are allowed to select preferred suppliers.

Also needed very much are guarantees for quality and actual performance. Consumers are notsufficiently aware of certification schemes (for builders).

Financial model should be offered together with technical renovation offer. Combination offinancial and construction company is needed (for private owners).

Overall this issue is considered to be a quite important barrier.

Associated to the previous barriers, there may also be lack of proper procurement anddelivery models. Collaborative delivery models may not be familiar for many.

“Correct. There are very few sharing/leasing/penny stock-systems available. It is also hard toexpect all kind of start-ups (the green economy is young) to come up with complex businessmodels and a long term profit.

Furthermore, collaborative delivery models usually only address a small customer segment. Iwould argue that, for being energy effective, we better look at large scale institutions likehousing associations, energy providers, large contractors, etc. and use their channels.”

“Performance-based contracts are also needed at district level. But are consumer alwaysinterested in the best offer for the longer term?”

Housing companies on the other hand have considerable experience with collaborativeprocurement for example when selecting a company for renovating large apartment buildings.Increasingly they use the “comaking” or “chain collaboration” model, in which a certain party isselected for a long term contract in which both parties (i.e. owner and contractor) carry part ofthe risks.

Overall this issue is not considered to be major barrier

Available energy performance assessment tools are mainly meant for the assessment ofsingle (new) buildings. There may be lack of tools that support the assessment ofseveral buildings at district level.

Models need to consider several energy-related issues, also for example solar access. But thisaspect alone will not be sufficient.

There are already some tools available to do energy assessment on district level, forresidential buildings and utility buildings. There are two major bottle necks in energymodelling (for residential areas):

There is always a significant difference between the real and calculated energyconsumption. The calculation assumes certain standard ways of using the building but therole of the user is quite large of course. Even if average savings are predicted correctly(which is not always the case), the still it is highly uncertain what the actual savings will befor an individual household. This uncertainty is a major barrier for investments in energysaving renovations, not only for private owners but also for housing companies.


If you consider heat supply systems, there are not much performance data about losses ofthe heat distribution network. It is not easy to make assessment about whether collectiveheat supply with pipes in the ground is less or more energy-efficient than distributed boilersor heat pump systems. This kind of energy loss data is missing. Energy companies know itbut have no interest to make it publicly available.

Overall this issue is considered as a barrier although not the most important one

Current design methods and process descriptions do not consider problematics ofrefurbishment at district level.

It is certainly a complex problem if we want to bring our build-up areas to net zero energy level.We cannot expect the solution for this to come from new buildings since these form a verysmall part of the total stock. One the other hand measures in existing buildings are very oftennot cost-effective. A solution may be to consider renovations at district level so that for exampleroof area from neighbouring buildings may be utilized. In historic districts this will remaindifficult.

A lack of suitable models is observed, for example to compare collective versus individualsolutions. Also standardized methods for the organisation the process are needed.

On the other hand these projects will always involve tailor-made process approaches.Therefore a good process manager is needed.. There exist specialized companies that offerthis kind of service. Check lists may also be helpful to organize the process

Overall this issue is considered as a barrier although not the most important one

Related to the previous barrier, design and other methods for the optimization of gridinteraction and load matching may be missing.

The matching of supply and demand is a difficult issue, especially for heat. Models for this kind ofmatching may be available at energy or network companies.

Also prediction models will become necessary, this may become a barrier.

Heat networks need to become more “smart”, like the smart grid for electricity. Feed-in of heatfrom heat pumps or solar installations would be desirable. Necessary for this:

1) Operation at lower temperature levels.

2) Open heat network with market –based operation model.

Heat transportation infrastructure as public service?

Overall this issue is not considered to be major barrier (at present)


Appendix 3 Interview results / Slovenia

Table 1 Description of the Slovenian interviewees.



4

Energy companies 2


Renewable energy technology/service providers 0

Contractors that do refurbishment at district level 0

House managers, Maintenance 1

Total 13

All interviews were either face-to-face meetings or teleconferences. The duration was typically halfto one hour.

All interviewees were in important positions in the municipalities, energy companies, housinginvestment companies, and design and house management companies they represented and hadgood expertise in the topic.

In Slovenia interviews were performed by ZRMK and LEAG which put results together in thisreport. The answers of interviewees on the 10 questions are collected below in a short form. Foreach question a conclusion of answers is formulated as average but adding also interestingindividual points of view.



Interviewee agrees that that is a major problem. In old cities such as Kranj there are manyproblems with the renovation of buildings that are under the protection of cultural heritage.Especially in town centres that is a major factor.

Legal barriers in Slovenia are the route of great amount of trouble in this field. Domplan is onlymanaging and controlling the boiler rooms, district heating system, and natural gas distribution andneeds to obtain 100% agreements needed for the installation of systems larger than 50 kW. Inpractice that is practically impossible to achieve (unable to get in touch with everyone, objections,etc). They propose that the agreement percentage needed for the start of the project would belowered to 50 or 75%.


Interviewees pointed out that the problems that occurred on several projects regarding districtheating systems refurbishment and energy management were based on the rigidity of Slovenianlegislation. There are many permissions and legal documents that need to be acquired before thestart of the refurbishment or building process. One of the main problems is that many of buildingsand parts of the landscape or cities are protected by the Institute for the protection of cultureheritage of Slovenia (IPCHS). Interviewees had many experiences with situation where they had toalter or even abandon plans and construction of district heating, electrical or sewer grid system dueto such barriers. This is a serious problem because is very difficult to identify such problems andlimitations in the early phase of planning.

That is a serious problem in Slovenia. There are many documents and agreements are needed forthe start of the project. Many projects were banned because few building owners didn’t concur withthe project.

The urbanistic framework of the municipality of Kočevje does not restricts renovation.

Without the definition in the Local Development Plan the implementation of the action (or analysisof the potential) is not feasible or not reasonable. The investor initiate action to the Department ofUrban Development of municipality. The scope of the changes of LDP (OPN in Slovenian)depends on the volume of request.

Our legislation is complex, yet we lack specific laws dealing with larger scope of buildingsreconstruction.

We haven’t had problems of this sort yet.

There have not encounter situations that residents would file a request for change of LocalDevelopment Plan (OPN).

For large district heating systems (over 1 MW) it is necessary to have plans in the LDP (OPN –local development plan), otherwise it is necessary to carry out the change of the LPD, it isnecessary to implement amendments to Local Energy Concept, etc. For smaller systems therewere no major problems.

CONCLUSION

Interviewees agree that this is one of major problems in Slovenia about renovations. The problemsare due to rigidity of legislation and requested high percentage (even up to 100%) of owners (andother stakeholders) approval for major renovations. In old city centres a wide spread protection ofcultural heritage buildings is another huge obstacle. Many permissions and legal documents areneeded to be acquired before the start of the refurbishment. Sometimes the changes in theMunicipality’s Local Development Plan (OPN) and Local Energy Concept has to be implementedwhich takes time and effort. Quite often investors abandon the reconstruction/upgrade projects dueto mentioned problems. But there are also cases of proactive municipalities where they don’t havethose problems.


There was quite some documentation and work to get in order to install and distribute electricenergy in Slovenia. With the legislation of new regulation for self-supply with electricity fromrenewable energy sources, it is expected that thing will be a bit easier.


District heating energy depends on the CO2, taxes, excise duty and energy sources prices. Alltogether represents a great part of the final price, and has therefore a great impact on the price ofthe supplied energy.

Interviewees feel that this is not a main problem, because the taxes and fees of energy generationare exact and well known. Because they didn’t had such problems in their project, they feel thatthis is not a great barrier. However there is a correlation between energy generation anddistribution investments and fees, taxes and grants. Lately, because of the low energy prices andlack of grants, the investments in energy generated from renewable sources are not thatinteresting.

Because the process of gathering all the necessary documents, terms and conditions (specially inso-called public-private partnership) is time consuming and complicated, there are many problems.

Due to momentarily favourable prices of energy the motivation of owners toward investments inRES and RUE is weak. The fiscal policy is also not an instrument for promotion of energyefficiency.

It is important to correctly set the depreciation period for calculation of investment and ROI.

In the case of owing a bigger (energy) system it is possible to trade and regulate the price. Overallthe price is dependent on the state policy.

CONCLUSION

Due to momentarily favourable (low) prices of energy the motivation of owners toward investmentsin RES and RUE is weak. The fiscal policy is also not strong enough instrument for promotion ofenergy efficiency. Because a great part of final price for supplied energy are taxes and fees, whichare directed from the government, the investments in energy generated from renewable sourcesare not that interesting (low return on investment).


The biggest problem is very fragmented ownership of the buildings. Therefore there are manyproblems (especially in private sector) with gathering of necessary agreements anddocumentation. This is a big challenge even in individual buildings yet alone for groups of them.The key to refurbishment of several buildings is Slovenia is for them to have as few owners aspossible.

As said earlier, Domplan has lots of problems obtaining the necessary agreements. There aremany potential projects with the systems around 100 - 200 kW which need the building permit, andare not in progress because lack of agreements. The biggest problem with obtaining agreements isthe lack of trust people have for energy refurbishments. Correct approach to the correct people iscrucial. These people need to be in good relations with the residents, and are needed for themotivation and communication.

Interviewees feel that legislation about refurbishment is too strict. Too many consents andapprovals are needed for the start of the process. That is a serious problem especially in projects


on a district level. Many projects were aborted because of this. This seems to be a big problemespecially in private buildings. Public buildings have fewer shared ownerships of the buildings.

As said before, that is a big problem. Especially private buildings have lots of different apartmentowners. And that is a challenge for a single building. When dealing with a few buildings that is anenormous challenge. Projects needs to be presented and explained to the owners as best aspossible.

The problem is mainly how to get a consent of the owners of apartment buildings.

The key is in good presentation of ideas, which should be correct and in favour of at least themajority if not all stakeholders. It is still possible/in accordance with the legislation to ensure thewishes of the majority, even though individuals disagreed.

There was a case of reconstruction in a multi-apartment building where owners renovated onlytheir part of roof and the optimum cycle of kindergarten reconstruction in the ground floor was lostdue to inadequate execution.

Common agreement is reached faster with good preparation and presentation of the project. Animportant aspect is an indicator of savings.

We had specific difficulties to establish a district heating biomass in the municipality of Cerknica.People are suspicious because they have mostly poor opinion and experience with energyproviders. In district heating systems, this is a big problem because they do not need to commituntil the establishment of a system. Therefore, the setup of a system constitutes a major risk forthe investor. In some cases the people themselves organize and finance the renovation.

CONCLUSION

The biggest problem is very fragmented ownership of the buildings. In Slovenia more than 80% ofbuilding stock is privately owned. Therefore there are many problems with gathering the necessaryagreements and documentation (especially for private multi-apartment residential buildings). Thisis a big challenge even in individual buildings yet alone for groups of them.

The key is in good presentation of ideas, which should be correct and in favour of at least themajority if not all stakeholders. Also it helps if fewer owners are involved.

As there is a prevailing lack of trust people have for energy refurbishments a good preparation andpresentation of the project to the correct (influential) people (/ stakeholders) is crucial.


Majority of problems are (as mentioned before) with owners. Designers, engineers and contractorshave many expiriences, and have undertaken many projects. And so there aren't many seriousproblems in this aspect.

Organization and management of the city district refurbishment is a big and demanding project. Inrefurbishment of the Planina district, our company took care of the renovation of thermal stations,


and installation of the boilers. For the installation of the CHP a project group consisted of severalcontactors was formed. Civil initiative represented interests of the owners.

Ours company vision is to incorporate and join a large variety of experts (mechanical, electricaland energy engineers) in order to offer complete service for energy management, distribution andrefurbishment. Because of the good collaboration they have with many experts and stakeholdersthey feel that this barrier is not a main concern. It is a problem to get everything in motion(especially owners), but once the project starts there aren't many problems because oforganization and collaboration difficulties.

They have less problems in that manner, because they employ experts from different professions,and are able to design, prepare all the necessary plans, management and energy management forthe project. They have to manage the execution and control of the project. They say thatappropriate approach to the project is needed (transparent management, communication andguidance of everyone working on the project is needed).

In this respect the criteria of public procurement is a problem.

The participation of a large number of actors is essential. Unfortunately, this is practice only inmajor projects while in smaller only occasionally.

We include wider spectrum of stakeholders into the project development.

Cooperation is desirable. The actual practice shows that this is not achieved.

This is highly dependent on the participants in the process. If participants (architects, surveyors,contractors, owners) have experience then there is usually no major problem. Problems arise if thestart of the project is bad or if unrealistically low price for investments is set at the beginning.

CONCLUSION

The cooperation between professional actors (energy consultants, designers and consultants,energy companies, contractors) is usually not a problem because they are used to work incollaborative manner on big projects. Main problem is the inclusion of owners or organizing theirrepresentatives. Because district refurbishment is a big and demanding project the properorganization and management of the project is important. Specially a good start with clear prioritiesand definition of actors roles in the process.


It is very difficult to motivate public and individuals to help with the organization of the project,especially if they don't have their own interests. And when they have their own interests (they havetheir own companies, they sell certain technical solutions etc.) they are probably oriented in theirfavour. There aren't many people that are able to cooperate, motivate and help with the projectobjective. The same goes for small enterprises. One of the reasons for the lack of actor is thesheer complexity and duration of such projects.

This is also a problem. There are some activators, but their solutions and initiatives are mainly fortheir own interest. For the refurbishment of Planina district civil initiative was formed. They wereone of the activators for reducing the costs for HVAC. Technical, economic and legal study was


made, and that was the base for the refurbishment. They renovated thermal stations, boilers andinstalled CHP.

This seems to be a problem especially in private buildings. Far less problems occur, if there is acompany that is in charge of the project, has its own agenda and is able to carry out and managesuch tasks. Because Eltec is such company, they feel that this is not a big problem. And when theproject is in progress, people see the potential, so they become more willing to help and cooperate.

As said above. Good communication between everyone involved is very important. Everyone,especially owners or/and users should be well informed and motivated for the project. If everythingis well presented, and if people actually see the potential, than there is a better chance for them tocooperate and help. But at the start of the project that is a problem, especially in private sector.

Such actor (activator/integrator) would really be needed.

For larger investments the head of the investment is appointed. In smaller projects the integrationof actors in project’s phases is on individual basis.

It would not be an obstacle if we had developed such actors.

The municipality is an actor that proposes and give proposals in the budget, but that must beapproved by the municipal council.

More cooperation from construction and mechanical engineering disciplines is needed. Themunicipality should encourage the renovation due to a higher VAT.

The caretakers (or stewards) of the buildings are responsible for communication and help in thecase of private apartment buildings. While for public buildings this is generally not the majorproblem, since the initiator and also the investor is the municipality (office).

CONCLUSION

The lack of actors that would actively start refurbishment projects and integrate different experts isa problem especially in privately owned buildings. It is hard to motivate public/stakeholders forrefurbishment if they don't have their own interests or see benefits for them. Even if they haveinterests they tend to be partial and (only) for their own benefit. The role of activator and integratoris promising (and important) if only it can communicate well the benefits to the stakeholders andconnect experts of different disciplines.


On a municipal level there are no proper business models and practices. Holistic model andapproach needs to be made. When creating such models, special attention should be devoted tocommunication and motivation of building owners.

They have some experiences in this field, and have therefore less problems. Recently there werenew models for the refurbishment of individual buildings such as energy contracting. This is allfairly new, and focused on individual buildings. Therefore there is a lack and also need for thedistrict refurbishment business models.


There is a lack of business models that would encourage proper collaboration between differentactors needed for refurbishment at a district level. Also, many times there are problems withfinancial models especially how to stimulate and encourage different actors of the refurbishmentwith subventions and other resources

That is not a major problem, because refurbishment on a district level is nothing else than a bitbigger project. If the company has the necessary experiences, organization and employees, thatshouldn't be problem.

The PPP (public-private partnership) in this context does not exist in practice. But we assumegreater potential for PPP than in an individual projects.

For larger projects, such plans for investments (business models) are prepared. Also a keymanager of investment project is appointed. For the smaller projects/investments it is more up tothe individual person commitment.

Business model is solving among several owners, it is not just public-private partnership.

The company deals with the preparation of documentation for the energy rehabilitation of severalmunicipal buildings in Ljubljana (Extended energy audit and investment documents, they aremembers of the Task Force on technical assistance)

CONCLUSION

There are rare proper business models and practices on a municipal level. But for largerinvestment projects plans (including business plan) are prepared and key managers are appointed.Such approach should be extended to district refurbishment. A development of effective businessplan for district renovation in case of multi-owners situation would be a step forward.


Slovenia and municipalities fell behind in this segment. Municipality of Kranj is trying to work onprojects as a whole. They are trying to renovate buildings as best as possible. They pointed out,that the communication and collaboration between ministries and municipalities is needed andshould improve.

Basically there aren't many actual projects of city districts refurbishments completed in Gorenjskaregion. Our company was thinking about organizing such a project. They were planning to connectECO fund of Slovenia, some bank, and a well established contractor such as (for example JUB).But this never really started due to lack of common interest and other factors.

The company has learned from experience in this field, so they don't have many problems. Theyprovide everything from planning to actual refurbishment and instalment of district heating systems.They pointed out that the biggest problem is to get all the paperwork and consents.

If the company has the right approach and capability, than it can be managed.

Pilot projects have an important function by providing a model for others. For example therefurbishment of Štepanjsko district. The performers are mostly the same in this case. Even moreimportant is the connected communities, because those who have the renovation already carried


out, help others - sharing the experience working with contractors, obtaining grants and financialincentives from the Eco Fund. This is an example of good practice, where even the districts withthe lowest-priced source of heating energy are carrying out a refurbishment in accordance withcurrent legislation and guidelines for contemporary renovation.

Establishing new contacts (new companies) is now a new task as a lot of construction companieswere shut down. There is a lack of major working groups and organization in this field of work. Noweverything is too fragmented.

This presents a lot of problems. Especially now when it is necessary to establish a public-privatepartnership to obtain funds. Therefore, the lack of experience forms a problem.

CONCLUSION

There aren't many actual projects of city districts refurbishments completed due to complexinteractions (sans agreement) between owners, municipalities, banks… Therefore pilot projectshave an important function by providing a model for others. How to obtain grants, how to close thefinancial structure (with partnership), which contractors proved reliability and quality, how toorganise management, communication and supervision of project in case of distributedownership…


This barrier is not that important in public sector. There are tools (Energy watch – by Petrol, ENIS –by Enekom), that help with energy management in buildings. In Slovenia energy management isneeded for public buildings. Owners of private buildings aren't found of energy managementbecause their main focus is on reducing the costs of HVAC and electricity. Municipality of Kranj istrying to create a database of buildings that would incorporate private buildings as well. Thedatabase would include energy performance certificate, IR recordings, information about eachbuilding (year of construction, main material, HVAC information).

They are keeping track of the distribution with the help of their applications, and data automaticallygathered by the systems. They are also using software Termis developed by Petrol.

Because company has developed their own systems and tools for energy management for optionalnumber of buildings, they don't see this as a problem. Their tool called Energy Watch gathers inputmonthly data and is meant for energy management of buildings. They also have a tool calledTermis, for management and control of district heating systems.

It is true, that there aren't many tools that could do that, but that isn't such a big problem. With aproper analysis and the help of programs for single building assessment for each building,necessary conclusions for several buildings can be made.

We are in the initial stage.

Tools are not available (for us). Analyses are carried out at the level of single building.

At the municipal level the database is missing from where the potential for renovation would beevident.


Such programs exist, in particular for energy accounting. There are also programs for simulation ofthe energy needs of the individual buildings.

CONCLUSION

Such programs exist (Energy watch, Termis – by Petrol, ENIS – by Enekom), in particular forenergy accounting. There are also programs for simulation of the energy needs of the individualbuildings. With connection to database of buildings in a district a potential for refurbishment wouldbe evident and best approach to refurbishment could be found.


That is true. Currently refurbishments are focused on individual buildings. On a municipal levelsome steps towards district level refurbishments were made with the adoption of LEC (local energyconcept) for municipality of Kranj. The LEC includes plans for refurbishment and development ofcertain parts of the city.

In Slovenia every municipality need to make a document named LEC – Local energy concept. Thisdocument is made in collaboration with municipality and often plans the refurbishment of certaindistricts. Because company has collaborated in such projects, they don't feel that this is a bigproblem.

It is not entirely true that district level problematics in design methods are missing. There areprojects on a district level. Our company was involved in the planning and supervision of buildingseveral industrial zones. That is one of the examples for projects on a district level. However it istrue that the connections for renewable energy sources usage and generation between buildingsare not optimal.

The wider perspective is taken into account during the design, but legislation, analyses andlicenses relate mostly to individual buildings.

Such tools are missing and the analysis is performed at the level of one building. But they use aprogram for monitoring energy usage in buildings owned by municipalities. Operators of thebuilding enter results on a monthly basis.

Here the key is animation of owners and their awareness. It is an important thing, but it depends onthe interest of the owners. Do they care about the actual savings or just visual aspects.

This is not true. The data are clear and can be obtained, the procedures are known and welldefined, much has been done with the adoption of LECs. They set and to some extent define anindividual measures and objectives.

CONCLUSION

It is not entirely true that district level problematics in design methods are missing. Currentlyrefurbishments are focused on individual buildings but there are also projects on a district level. Forexample planning and supervision of (re-)building of several industrial zones.

On a municipal level some steps towards district level refurbishments were made with the adoptionof LEC (local energy concepts) where plans for refurbishment and development of certain parts ofthe city are often included. So district perspective is taken into account during the design, but


legislation, analyses and licenses still relate mostly to individual buildings. Tools supporting allsteps of district refurbishment are therefore needed.


There are basically no connections between buildings in terms of distribution, storage and usage ofelectricity and HVAC. There are only some district heating systems. One of the reasons for the lackof connections between buildings is probably the building type and purpose division. Certain typesof buildings are located away from others (residential buildings are located close together, awayfrom other buildings such as offices, stores, etc). Therefore buildings in one sector have similarusage patterns. Connection between buildings offers potential energy savings and should beimproved.

They have had many projects, and with the help of their software they are well equipped for thiskind of challenges. If you do preparations and evaluation of certain possibilities, you will minimizepossibilities for problems later on. With the help of their software they evaluate possibleinteractions and possibilities.

This is a problem because buildings are usually treated individually. By connecting the buildings,better renewable energy generation and distribution could be achieved.

The interaction does have an impact on energy prices.

It is important, but given the current energy prices the optimisation is not financial viable.

Much can be done already by appropriate regulation of the buildings. In this area is still greatpotential for integration between buildings. A holistic approach to rehabilitation would be verywelcome.

CONCLUSION

Currently there are no connections between buildings in terms of distribution, storage and usage ofelectricity and HVAC. There are only some heating distribution systems that connect buildings in adistrict.

Connection between buildings offers a potential energy savings and should be improved. It shouldbe noted that buildings of similar usage and therefore of energy consumption pattern are located ingroups. That add problems to effective leverage of peaks in the distribution system.


The interviewees were also asked to assess the importance of each claimed barrier by using ascale:

5 = very important,

4 = rather important,

3 = rather unimportant,

2 = not important,

1 = I do not know/not relevant from my view point.

Table 2 Importance of barriers for Slovenia (questions are in columns)

On the chart below (Fig. 1) the perceived importance of questions is represented. It can beseen that most important question in Slovenia is number 3 (almost all interviewees see it asa very important) followed by questions 1, 4, 5 and 6. On the Fig.2 we can observe theaverage of answers together with the scatter. Most of the questions had a high scatter ofresponses (except for no.3) showing that projects of district refurbishment are new or at leastthat views of different actors are not yet consolidated. The questions 8, 9 and 10 areperceived as rather unimportant or that interviewees does not have knowledge about.

Stakeholder 1 2 3 4 5 6 7 8 9 10Building owners with big building portfolio 4 2 4 5 5 4 1 1 5 1Building owners with big building portfolio 2 4 5 5 4 5 5 5 5 5Designers and consultants that work in refurbishment projects at district level5 5 5 3 3 3 2 3 3 3Designers and consultants that work in refurbishment projects at district level3 3 5 5 5 4 3 2 3 3Designers and consultants that work in refurbishment projects at district level5 3 5 5 4 4 4 3 3 3Designers and consultants that work in refurbishment projects at district level4 5 5 4 3 5 5 3 2 5Energy companies 5 5 5 4 4 4 4 3 1 1Energy companies 5 2 5 1 5 4 2 2 2 2Town planning and building permission authorities 5 4 5 3 4 3 5 3 4 3Town planning and building permission authorities 2 2 5 5 4 4 5 1 1 5Town planning and building permission authorities 5 4 5 5 5 5 5 5 3 1House managers, Maintenance 5 4 5 4 4 5 4 4 4 2Policy makers, ministry 5 3 5 3 3 4 2 4 4 3

Important barriers for the energy-effective refurbishment at district level


Figure 1


Appendix 4 Interview results / Germany

The main objective of the interview was not to measure compare the importance of differentbarriers. The objective was rather to develop an understanding about all significant barriers forenergy efficient refurbishment at district level in Germany. We aimed at a situation where therepresentation of different stakeholders was wide enough to ensure that most of the significantbarriers would come up during the interviews by one or more interviewee. The interviewees werenot randomly selected, but we aimed at finding building professionals that might have someexperience / knowledge in energy efficient refurbishment at district level. We also aimed atinterviewing the representatives of different kinds of stakeholders as shown in Table 1.

Table 1 Description of the German interviewees.



1


Total 4

All interviews were teleconference meetings. The duration was typically around one hour.

All interviewees were in important positions (2 managing directors, one chief engineer, and onedepartment leader) and had good expertise in the topic.



On the basis of the German interviewees’ responses, the most important legal / institutionalchallenges are related to town planning.

There may be several issues that cause changes in the townscape in the context of energy-efficient refurbishment at district level. For instance energy-efficient refurbishment at district levelmay be based on the idea to utilize renewable energy sources (RES) based on local generationsuch as common bio-based CHP plant, common solar panels, or wind mills. The construction ofthese requires space and changes the townscape. In cities this means that the existing town planneeds to be developed.

Some kind of infill building is often needed in energy-efficient refurbishment at district level. Thismay be forbidden on the basis of the existing town plan. On the other hand the change of townplan needs a lot of time. Town plans should be initially developed so that those allow and considernew methods of using local RES. However, when doing infill building, normal building permission isrequired as always in the context of new building and significant refurbishment or renovation.


The representative of the city the city of Stuttgart said that building authorities do not cause anyobstacles. The law defines in which kind of building and refurbishment projects the permission isrequired.

One interviewee pointed out that his company has the legal status of a subsidiary of the city ofMunich, any decision concerning refurbishment projects on a district level are linked with theBavarian state capital.

There is still very little experience about really doing refurbishment at district level. In most casesthe experience is based on cases where big building owners renovate several buildings at thesame time. When the owner is the same for these buildings, no specific problems occur.

However, if local renewable energy generation would be needed this would cause probablydifficulties especially if - for example - bio based CHP (combined heat and power) or wind powerwould be needed. There are legal requirements that define minimum distances and maximumnoise levels for wind power for instance. However, these kinds of regulations are important.

One interviewee pointed out that the refurbishment at district level is not a technological problem.Good technologies for improved energy-efficiency at district level. However, we miss cases andmodels, good procedures that show example and can be followed and copied by others.


On the basis of the German interviewees’ responses some practices related to energy fees andtariffs cause hindrances for energy efficient refurbishment both at building and district level.

If energy is locally generated and somebody sells this to different users and possibly also to thenational net, there are problems. However, the situation is more complicated if the energy plantserves for several users. An energy company must be established and the transmission networkmust be used. This means that there are also transmission fees and this weakens the profitabilityof distributed energy generation. Some building companies are not allowed to act as energyprovider.

In some urban areas all properties have to use district heat and there are no other options. It ispossible to make an exception from this only on the basis of very important reasons. This kind ofthinking and these kinds of regulations do not support at all local energy generation.

In the future the structure of tariff (rate) systems will change and the transmitted power will have aneffect on the tariff.

In the future there will probably be automatic management of energy use. For example houses thatare heated with electricity will steer the energy consumption in accordance with (short term) price.The development and realization of these kinds of potentials will be important for low energydistricts.


It is only possible to achieve a common understanding, if there is strong evidence that cost savingscan be achieved by refurbishing at the same time.


However, there are also successful cases. For example if the same property maintenancecompany takes care of several different building in the same location, it has been possible to carryout for example pipe renovations at the same time in the whole district and achieve savings. Thisrequires that there is an actor who can and is willing to take care of the process.

Joint development of concepts, joint declaration of intent, social (local) control instead of regulationis needed.

New kind of actors would be needed to lead the processes.


At present there are no actors who would take the leading role. This would mean that this leaderwould start to manage a refurbishment process where there are several owners and severaldifferent actors present. A business model for this kind of activity is missing.

My company runs a technical department featuring highly skilled experts with outstanding expertisein all relevant fields. It also employs full-time project managers who coordinates all parties involvedin the project.

This is not a significant barrier when the client is one big owner


Such an operator is really required. This is a challenge for consultation companies. These shouldbe able to develop their services and create and offer these kinds of new services.

In Munich there is the political will to implement refurbishment project on a district level. There isalso an initiative within my company. We installed a technical department featuring highly skilledexperts with outstanding expertise in all relevant fields


We do not lack business models for refurbishment work, but for system integration (SmartNeighbourhoods).Building professionals do not have business models for these kinds of projects.This it is a barrier.

A facilitator (or integrator or activator) would be needed in energy-efficient refurbishment projectsat district level.


New collaborative project models are needed.

A committed supporter is needed here. What about a local energy agency?

Being a public contracting authority, my company is obliged to carry out tenders for all servicesaccording to the German contract award rules VOB and VOF. This procedure functions very well.


Procurement and delivery procedures are not possible in the scope of VOB (German ConstructionContract Procedures).

The use and development of suitable delivery models is needed, but the alliance model may not bethe best choice as it is demanding from the view point of the client and requires that there is aprofessional client.


In most cases, the motivation to tackle refurbishment projects on a district level is not associatedwith energy aspects. There is a great demand for housing.

There is a lack of tools that can be easily used in the early phases at district level. It is extremelyimportant to show evidence for the potential clients. The initial phase is very important – how to getthe process started, how to convince the client (and especially if there are several owners at thesame time).

It is not a matter of assessment tools, but of planning aids distinguished by a higher level of detailthat can be practically used by normal planners, enabling them to reliably plan (and optimize)system integration


Conditions are different in each district.

From the view point of a municipality it would be good if cities had specific actors to deal withdistrict level refurbishment projects. He/she would be specialized and could thus support clientsbetter.

Different kinds of guidelines and process description should be created to support therefurbishment projects at district level. The common guidelines and process descriptions shoulddescribe the roles and tasks of different actors including the municipal actors who take care ofdistrict level refurbishment projects.


Certainly, there are (academic) models , but which planner can use them?

Education/ further training/ communication/ advanced development (of tools) is necessary

GWG does not have any influence on the load management in the electricity sector.










1 2 3 4 5 6 7 8 9 10

Owner 3 4 5 1 5 2 4 3 4 5

Owner 3 5 4 2 2 1 5 4 3 4

Designer Consultant 3 3 5 3 4 3 3 5 4 4



Appendix 5 Interview results / Lithuania

Background

The residential apartments in Lithuania are owned by individuals. After the independence 97 % theapartments were assigned to the occupants. The ownership concerns the interior of the apartment.All the owners are responsible for their own apartments. Residential apartment houses do notalways have a board for decision making on public spaces. The government is pushing residentialbuilding owners to create housing associations with board for decision-making. Property isprotected by constitution.

The number of interviewees was nine. The interviewees represented municipalities, engineeringcompanies, real estate business and housing investors. All interviewees were in importantpositions in the organisations (like head of town planning department, chief architects, mayoradviser, directors) and had good expertise in the topic.


1. There may be legal and institutional barriers related to town planning, and building andenvironmental permission practices

The legal situation is complicated enough even for a refurbishment of a single building. A group ofbuildings makes it more complicated. Property rights in Lithuania are considered overvalued – thatmeans that there are no tools to consolidate property if radical solutions like demolition and newconstruction are needed.

Refurbishment of a residential building today requires 51% majority decision. Demolition of aresidential building requires acceptance from all apartment owners. There are three municipalitiesfor piloting and testing large scale (group of buildings – district level) refurbishment, and renewalprojects can be initiated with government acceptance and support. Also, the permission applicationprocesses have been simplified and there should not be legal problems in technical issues.

Public needs should be included in all district level projects. Present legislation allows publicauthorities to participate in the action. Co-operation between the authorities and developers orproject managers is needed. Barriers for district refurbishment are very case dependent. Ingeneral, due to the majority 51% rule the residential refurbishments are rather straight forward andeasy with single or only a few residential buildings. Large scale projects may cause problems dueto scattered ownership of individual apartments. Projects that include different ownership modeslike residential, commercial, public and office buildings are seen as profitable and cost-effectiveprojects but difficult to reach a common goal and agreement.

Apartment owners can also create a major barrier for residential refurbishment concerning buildingservices systems, balconies and in general refurbishment systems or components solely in use bythe occupants in spite of the majority rule. The principle is that the renovation should apply for allrequired common use objects including networks like central heating system located in particularflats (even the flat owner resists) but would not apply for the networks used solely by the flat(which are not of common use). However, practically in case a flat owner resists legally anadditional court decision would be required to enter into such flat and perform the works. The lackof housing communities and boards for decision-making may be a big barrier.


Land ownership can be a big or a small barrier case by case. The act on zoning and planning andthe land ownership are a legal barrier for district level refurbishment. The National Land Serviceowns all the land, and thus a refurbishment project aiming at improvement of the built environmentas well need permissions. Housing communities often lease (99 years term) the land from thestate. Building owners can also accrue the land from the state but this very seldom happens.

The municipal authorities do not see the present legal situation as a barrier. The government issupporting pilot projects within their scope of work. The people involvement and time frames forloans for private owners may create a barrier instead.

The methodology including measures and accuracy to find an optimum for a nearly zero energybuilding is considered wrong by the building owners. The methodology supports refurbishment ofbuildings with high energy demand although the number of buildings is low. The target area thatwould have a high impact in general suffers for the methodology. The methodology has an impacton almost all the assumed barriers (1 – 9).

The present government is looking for possibilities on district level refurbishment andmodernisation and has initiated some preliminary activities with investment plans.

CONCLUSIONS

Participatory planning methods can be interesting to go over some of the assumed barriersespecially where interaction between different stakeholders is considered crucial. Participatorymethods may include the relevant stakeholders for a common project.

Public spaces need to be included into a district level project for improving the cityscape and urbancomfort. Due to the land ownership the authorities need to join large scale projects and also forfinancing the improvement of public spaces.

The cost and energy optimum methodology utilised in Lithuania was heavily criticised by thebuilding owners. It should be of wider interest to check the basics of the methodology.

2. There may also be legal and institutional barriers related to the practices, taxes and fees ofenergy generation.

Each building is taxed separately; energy consumption of each building is known and evenpresented for public in the web although fees and taxes related to district level refurbishment arecommonly not known. It is not difficult to get data for whole district. After refurbishment eachbuilding can be treated separately as well.

Financing is the main question. Taxation is not a barrier. The methodology for cost optimum of anearly zero energy building distorts the financial plan for the refurbishment.

However, institutional barriers are seen as one of the questions to be solved especially concerninginformation barriers. There are no real practices for district level refurbishment. According toauthorities and building owners there is also lack of qualified designers and contractors for districtlevel nearly zero energy refurbishment.

There are incentives that aim at promoting energy efficiency refurbishments for apartment owners,e.g., solar power fed into the grid is compensated with higher price of energy than the price ofelectricity from the grid. However, there is lack of willingness and motivation for includingdistributed energy systems into refurbishment.


In general, towns do not have a culture for supporting refurbishment of old residential blocks offlats. These buildings are from the Soviet era and the buildings are not valued. There are no legalbarriers, rather the resistance may come lack interest by the town and from presumptions andattitudes of the occupants. The resistance concerns also extensions or additional floors althoughthese are seen as incentives for a profitable refurbishment.

Political situation may cause an institutional barrier. Town Mayor is the key person to promote thedistrict level refurbishment and thus political opinions and activities may hinder large scalerefurbishment.

CONCLUSIONS

Taxation or fees are not a barrier in district level refurbishment. Building integrated renewableenergy production is financially well supported in Lithuania. It is obvious that the basic conditionsfor district level renewable energy projects are good.

3. Presence of several owners is needed to start the refurbishment at district level.Achievement of common agreement among owners may be difficult because of differentconditions of owners (like financial conditions) and sometimes because of conflicts ininterests.

It is problem now in the process of renovation of single buildings and it would be even greaterproblem at district level. Individual apartment owners’ willingness to invest in additional worksrequired for energy efficiency improvements is considered low. The challenge is in motivation ofapartment owners to accept the energy efficiency refurbishment. The average age of apartmentowners is 50 – 55 years, and a large number of owners are already retired. Also, a number ofapartments are rented and thus the owner does not necessarily see the benefits of energyrefurbishment as such an incentive as an active owner would. Social-cultural aspects are forgottenin the process. The lacking discussion between stakeholders is a barrier.

District based mixed ownership and different modes of ownership create a barrier and influence ondecision-making and administration. Building type and ownerships and rental agreements withinmay influence as well.

The economic conditions, social situation, experiences from the history and the status of ownersare very delicate matters. These issues are a cause for reservations among residential owners:who can an individual owner trust?

In general, the owners’ wishes are equal, but the aims do not meet. State as a land owner is maybe a barrier that requires decisions by the state. Location of the individual building and the districthas an impact on the profitability of the refurbishment.

CONCLUSIONS

The possibility of value increase of a property is not well understood in residential sector especiallyas the subsidy for building integrated PV is very good in Lithuania. On district level an agreementon sharing the resources or income created from the investment may reduce the threshold toparticipate on the investment. It is obvious that an easy to understand agreement model is neededfor private owners.


A wider than typical approach is required for a district level project to tempt and motivate theapartment owners and tenants to join the project.

4. Simultaneous presence of several actors – energy consultants, designers and consultants,energy companies, contractors – in addition to owners may be needed. Organization ofwork and collaboration may be difficult.

There is scepticism on the profitability of district refurbishment among residential owners. As theownership is scattered it will be difficult to find a common basis for refurbishment which also makesthe project management a barrier. Preparations will probably take a lot of time. Also, lack of publicdiscussion on energy efficiency refurbishment and specifically on large scale projects is missing.

At present, there is practice of organization of cooperation of different consultants. Simultaneouspresence of different stakeholders as such is not a barrier; however, consultancy between differentstakeholders for permissions etc. may be a problem if the internal processes of the consortium arenot well developed in the beginning.

Well-formed and acceptable common financial plan is a barrier as it should be synchronisedamong stakeholders. One problem in solving the barriers is the level of academic studies andsurveys which seldom include building professionals’ views.

Again, the methodology how to predict the cost optimum at single building level may lead to wrongsolutions even with a skilled team. Developers and contractors see the size of the projectimportant: the bigger the more profitable.

CONCLUSIONS

A district level approach requires a high quality preparatory feasibility study to be performed. Thepresent conditions, social and economic status of the district, building stock, ownerships, andissues related to energy and environment are needed to promote the district level refurbishment. Afeasibility study should give the answer to go or no-go decision.

Organisation and model for co-operation are important as they should include representation ofvarious stakeholders Otherwise, an agreement inside a single group of stakeholders like theresidential owners may be difficult.

5. There may be lack of actors who would be able to act as activators or integrators for thesekinds of projects although this kind of role might be needed.

Lack of actors is not a problem in simple refurbishment projects but in district level actions the lackof actors is evident. There is lack of people or institutions that could integrate and activate theclients, consultants and industry. Time will be needed to prepare them and to get requiredexperience.

A lack of strategy how to proceed with a large scale project and what to do is missing. In general itis considered that the municipalities should take more responsibility in the project preparationsphase. There are many interrelated topics in a district level refurbishment that need to be solved atan early phase of the project.

Regulations concerning social sustainability may cause barriers of varying importance. One of thekey questions is how to involve users into the process and how to organise the process to atransparent to all. Tools for a transparent process are missing.


Re-thinking of the process is required from the project preparations to financing and construction isrequired. A new type of professional activator would be able to turn the probably negative attitudestowards district level refurbishment positive (e.g., Case Peltosaari in Finland). Municipalities couldhave a strong role as early stage activators, but they seldom want to have the role.

Legal work and training on new policies for large scale projects has been started including roles ofinitiators, actions for public spaces, pedestrian and bicycle traffic etc. and informationdissemination.

CONCLUSIONS

Municipality could be the initiator or the body to find an activator or integrator at the very beginningof the project by promoting the feasibility study. The institution carrying out the feasibility studycould be the collaboration body for the project. New types of district level ownerships or co-operatives may help to gain interest among owners.

6. Associated to the previous barriers, there may be lack of proper business models fordifferent actors to effectively and profitably work in refurbishment projects at district level.

A business model for single building renovation was prepared but it took several years to develop afunctioning model. The task is considered even more difficult for district level projects. Developersare interested in the business possibility: If there are market players there is space for newbusinesses.

There is a lack of common business models although there are models specifically developed forenergy performance as an incentive for starting a district level refurbishment. New businessmodels should also concentrate on convenience for the occupants and users, and how to convincethe owners to see the opportunities of refurbishment.

There may be a lack of flexibility among different stakeholders. . Very tight legal view is a barrier asthe whole legislation on district level operations by private stakeholders is somewhatunderdeveloped. The main question with legislations in this respect concerns problem solving indesign and construction works.

There should be activators or advisory bodies that have collected information from earlier domesticor foreign studies and that can help the owners on how to start, who to contact and how toproceed. The design community is also sceptic towards developers’ ability to start and run largescale projects and ability to adopt new business models.

CONCLUSIONS

A business model for a district level project is considered difficult. A feasible model should have alevel of flexibility and variations depending on the composition of the whole consortium. It isobvious that an activator with good communication and relatively high technical skills is a must.Then models that share the responsibilities and benefits with case by case evaluation may attractthe group that is considered the most difficult to join a project – the apartment owners.

7. Associated to the previous barriers, there may also be lack of proper procurement anddelivery models. Collaborative delivery models may not be familiar for many.

Scale of a district level project creates challenges in many ways. The regulated planning anddesign is a larger cost / unit for a project than that of a single building refurbishment due to theinteractions between owners, authorities and designers. The whole planning process will probably


go in phases from legal issues to infrastructures and finally to social issues with interaction withauthorities in every step. This is actually a local authority problem: How well the target isunderstood and how the municipality can help in the process. Therefore the municipality is the keyplayer in the process.

Public procurement procedures could probably handle a large scale project but at present theapproach is towards the lowest price not taking the quality issues into consideration.

The business should be qualified enough to solve delivery problems. There are no procurement ordelivery models that suit for a private district level refurbishment, however, the legislation supportsinclusion of renewable energy to refurbishment. A problem may come from the lack of trusttowards the contractors. The present delivery models do not guarantee the quality of works.

District level refurbishment includes a number of sub-projects. It is considered challenging tocombine these sub-projects into a fluently proceeding total project with common energyinfrastructures. Therefore public funding for energy infrastructure might help to convince morestakeholders to participate. There are negative attitudes towards community feeling (‘yhteisöllisyys’history).

Municipalities may be interested to join at least pilot projects, and collaborative models are inprinciple known to municipalities. Public Private Partnership –project could serve for the districtlevel projects provided that there are also public buildings included. Electronic procurementmethods are utilized but the system does not guarantee quality. The scale of the project can bringbetter financing possibilities.

CONCLUSIONS

PPP can be one way to solve the problems concerning procurement and delivery of a project.Transparent and clearly stated requirements through electronic procurement system are seen as asolution to some of the problems. Tools need to be developed for procurement as well. Widecollaboration is required for procurement as well.

8. Available energy performance assessment tools are mainly meant for the assessment ofsingle (new) buildings. There may be lack of tools that support the assessment of severalbuildings at district level.

Vilnius heat supplier has a huge GIS data of installations, piping, operation, consumption, etc. It ispossible to evaluate single building and networks at district level

A tool for simple energy analysis has been developed by the Ministry of Environment. Lack of toolsmay become a problem in large scale projects specifically in analysing the performance relatedconcept designs’ impacts. There are no clients for tools as there are no tools for such levelavailable. There is no marketing of such services. This is also a missed opportunity and a gap butnot a barrier as such.

All the buildings are energy audited which helps for the target setting. The need for district leveltools may be of use, but as the residential buildings are mainly Soviet era housing blocks, therefurbishment methods including solar electricity are always quite the same.

A barrier may come from the ownership of energy production facilities. E.g., Vilnius Energy is apart a French energy company.


There is a lack of tools for costs and financial impacts but sufficient tools for urban planners fordistrict level refurbishment.

CONCLUSIONS

It seems that the present state of energy use by building is well known especially in Vilnius.Qualified tools – simple tools for urban planners and more complicated tools for consultants - mightopen the opportunities for sophisticated renewable energy systems.

9. Current design methods and process descriptions do not consider problematics ofrefurbishment at district level.

This is mostly a valid assumption but not always a great barrier. It is a challenge for a design team.There is knowledge of designing of soviet districts – these issues are similar to districtrefurbishment. For present situation the current design approach is good. As the residentialhousing stock is quite uniform it has been estimated that 90% of the Lithuanian old residentialbuildings could be refurbished in about 60 large refurbishment projects.

There is no experience on large scale projects and whole district level design processes may bemissing. There are no direct regulations nor recommendations on how to proceed with the process.New regulations may help with a process with several different players but so such legislation isunder development.

Complexity of the project and the need to combine different issues can create a barrier. There is alack of participatory design approaches. A district level project would require one enthusiasticspokesperson with good skills for interactive processes and an eye for social questions. Currentcity scape and architecture should be modelled in the development.

CONCLUSIONS

A description for district level process steps and required permissions should help the stakeholdersto understand the process.

10. Related to the previous barrier, design and other methods for the optimization of gridinteraction and load matching may be missing.

Grid interaction is not a well-known topic among the interviewees and as such it is not consideredas a problem.

CONCLUSIONS (BASED ON COUNTRY REPORTS BY EC)

Lithuanian electricity grid ownership was recently unbundled according to the EuropeanCommission rules4. Lithuania is importing most of the electricity. The administration of LithuanianPower Exchange has been transferred to the power exchange operator for Nordic and Balticcountries – Nord Pool Spot AS. As the distributed energy production is already supported by thestate, these actions could be seen as a basis for increase of distributed electricity production inLithuania, while at the same time a challenge for grid.

4 https://ec.europa.eu/energy/sites/ener/files/documents/2014_countryreports_lithuania.pdf


Summary

1 2 3 4 5 6 7 8 9 10

Developer 4 1 5 1 3 1 5 3 2 1

Owner 5 2 5 1 4 5 5 3 2 2

Owner 4 2 5 3 3 4 2 5 2 2

Designer Consultant 2 5 4 4 2 3 2 3


Designer Consultant 4 2 5 2 3 5 2 2 2

Building Authority 5 4 1 3 2 3

Building Authority 3 3 3 3 3 2 1 1

Building Authority 1 5 2 4 4 1 1 4

Lawyer, construction 1 2

Average 3,3 2,0 4,2 2,4 3,4 3,2 3,0 2,7 2,5 1,7


Appendix 6 Interview results / Latvia

Assumed barriers Assess the importance with thehelp of the following scale:

5 = very important, 4 = ratherimportant, 3 = rather unimportant,2 = not important, 1 = I do notknow/not relevant from my viewpoint.

There may be legal and institutional barriersrelated to town planning, and building andenvironmental permission practices

1

There may also be legal and institutional barriersrelated to the practices, taxes and fees of energygeneration.

2

Presence of several owners is needed to startthe refurbishment at district level. Achievement ofcommon agreement among owners may bedifficult because of different conditions of owners(like financial conditions) and sometimesbecause of conflicts in interests.

5

Simultaneous presence of several actors –energy consultants, designers and consultants,energy companies, contractors – in addition toowners may be needed. Organization of workand collaboration may be difficult.

3

There may be lack of actors who would be ableto act as activators or integrators for these kindsof projects although this kind of role might beneeded.

3

Associated to the previous barriers, there may belack of proper business models for differentactors to effectively and profitably work inrefurbishment projects at district level.

3

Associated to the previous barriers, there mayalso be lack of proper procurement and deliverymodels. Collaborative delivery models may notbe familiar for many.

4

Available energy performance assessment toolsare mainly meant for the assessment of single(new) buildings. There may be lack of tools that

4


support the assessment of several buildings atdistrict level.

Current design methods and processdescriptions do not consider problematics ofrefurbishment at district level.

1

Related to the previous barrier, design and othermethods for the optimization of grid interactionand load matching may be missing.

1

It is critically important to realize that the Member States of the European Union differ from eachother not just in economic aspects, but in terms of trust towards innovations as somethingconventional as well. In Latvia, winterization is still perceived as an innovation, and thedevelopment thereof has in no way been steady, as there are certain barriers that are by no meanssimple to overcome. (1) Financial solvency of the population and trust towards the winterizationmeasures in the long-term perspective, as apartment blocks are largely inhabited by retirees,families with children and people of low-income group, who seldom have any extra funds to sparein favour of winterization measures. (2) In respect of taking decisions pertaining to winterization,the legislation of Latvia requires adherence to certain procedures, which render positive decisionsregarding buildings with large numbers of flats impossible. (3) Involvement of municipalities –certain Latvian municipalities are very active (Liepāja or Valmiera would be an example), yet othermunicipalities do not pay due attention to winterization issues. (4) It would be inadequate tosuggest any new solutions as pertains to heat supply or energy production at the moment without asufficient assessment thereof as compared to the existing systems. Previous experience providesclear evidence that local or individual solutions may not always be economically favourable for thepopulation in the setting of peak loads or fluctuating resource prices. (5) In Latvia, residentialbuilding winterization is a social and economic activity carried out for the purpose of prolonging thelife cycle of apartment block buildings rather than reducing the emissions of GHG. This should betaken into account, as the current circumstances, when urban heat supply is provided in acentralised manner, using biomass or gas as consumable resources, do not imply that theresidential sector in Latvia could be listed among the largest GHG-emitting entities. Attention mustbe paid to the agricultural and transportation industries instead of additional measures that couldpotentially increase the heat and power supply fees paid by the population.

Additional questions:

1) Is the issue of energy efficiency a priority in Latvia?

Winterization is deemed to be a priority in Latvia, as well as energy saving measures in theindustrial sector. At large, though, energy efficiency measures are very expensive in the setting oflow total national energy consumption, therefore this aspect is one of the priorities in powerindustry.

2) What the energy efficiency programs are implemented in Latvia? At the district level?

Through the usage of EU SEF funds, 4 support programs are going to be implemented in Latviaover the period of 2014 to 2020: winterization of apartment blocks, winterization of governmentbuildings, industrial energy efficiency, energy efficiency at the municipal level. No specificprograms are intended for implementation at the city / district or planning region level.


3) Does Latvian government organize events and seminars to inform the public of energyefficiency and green energy?

Along with other entities concerned, the government of Latvia organizes various events orientedtoward specific target groups. In 2015, for instance, a range of events took place concerning theEU SF support programs, including those pertaining to winterization. These events involvedmunicipal leaders, planning officers, entrepreneurs, non-governmental organizations and otherparties concerned.

4) Does Latvian government support projects with transition to renewable energy? Projectsfor building passive houses and low energy buildings?

A support program for the transition of central heat supply to renewable energy sources isscheduled for implementation within the period of 2014 to 2020. Certain activities are supportedwithin the boundaries of the residential house winterization program. At the moment, there are noseparate programs in Latvia that would be oriented towards zero energy consumption buildings.

5) What are the most active region of Latvia in matters of energy efficiency?

Vidzeme planning region was the most active within the period of 2007 to 2013, followed byZemgales planning region. The most active cities were Liepāja, Valmiera and Ventspils.


Appendix 7 Interview results / Poland

The number of interviewees was six. They represented municipalities, energy companies,engineering companies and construction companies. All interviewees were in important positions inthe organisations (directors, head architects, program director, department heads) and had goodexpertise in the topic.


There are two separate issues mentioned in the above barrier. In Polish reality town planning is acomplicated and very regulated matter; however usually the authorities are not causingproblems.

In Poland, new energy requirements according to EPB Directive are not introduced yet. Residentialand public buildings are first to be included. The legislation for nearly zero energy buildings isexpected by 2020. As the process for new buildings is still incomplete there are no initiatives forenergy requirements for existing buildings. Cities in general are willing to implement newrequirements as soon as possible, the legislation may be finalized afterwards.

Knowing that new regulations have to be implemented within coming years, local governments andnational funds are developing programs for energy efficient refurbishments, such as “RYŚ” and“Cities on Power”. Unfortunately for now they are only developed on a small scale, for single familyhouses or small tenements with a clear ownership status.

The interviewees didn’t mention that renewable energy sources might deteriorate the overalllandscape, and they don’t think they would be an issue. Public participation in Warsaw is not a verywell organized process, and its inhabitants are not very much involved in their local governmentsand communities, therefore their voice sometimes isn’t even taken under consideration. Theauthorities sometimes solely make decisions to receive multiple complaints afterwards. It usuallyprolongs the whole process, and people start to have a very negative approach towardsmunicipality. In result the governments don’t want to lose popularity before next elections andeither agree or postpone decisions.

The Polish Building Law and regulations are open to interpretation which can also be a big barrier.Certain authorities need detailed and strict documentation in order to approve a project, butsometimes their approach is very flexible and problem free. Unclear guidelines can causeproblems also during an already ongoing construction, and due to changes in interpretation, legalactions can be undertaken.

Refurbishment of buildings at district level might be very difficult in areas under heritage protectionlaws, which are extremely strict, and complicated. It might be a barrier for historic towns such asKraków, Wrocław etc. where the infrastructure is very poor, but historic value is the number onepriority.

There are no specific energy requirements for refurbishment. Although local governments’ role isalso in guidance and influencing there is a lack of knowledge especially in smaller towns. Differentcities and towns may also have different requirements for documentation for refurbishment permits.Also, the political environment is a problem as the local governments do not risk their position bymaking decisions that may cause larger resistance.


There is a lack of about 1 000 000 apartments in Poland, and thus the focus is clearly in newconstruction. Refurbishments concern so far mainly reduction of heating demand. There is aprogram for public buildings on how to refurbish, what are the costs, appropriate thermal insulationlevel and other solutions. However, municipal construction and refurbishment lack a view tooptimization and maintenance of buildings which causes a gap between the refurbishment and life-cycle costs.

There are no programs for energy refurbishments of private buildings that could increase theinterest towards improvement of energy performance of buildings. The interest among privatebuilding owners is low due to ignorance and low awareness but also lack of knowhow. Guidelinesfor refurbishment of individual buildings exist.

The problem especially for large scale projects rises from town planning and related legislation thatrestricts actions that can be implemented. Master and general plans set strict limits for whatactions can be carried out. E.g., position of the external surface of wall is set by the master planand no deviations are accepted. This is a problem for exterior insulation systems in energyrefurbishment.

Time required for handling of permissions for refurbishment and bureaucracy are typical problemsbut otherwise no major institutional problems exist. Lack of coordination and communication alsoslows down processes. Large built areas are protected by law, and there are also Unesco worldheritage areas that have a big impact on district level refurbishment.

CONCLUSIONS

As a first step a general guiding document on how to start a refurbishment project including legaland practical issues like examples from pilot projects with costs and energy benefits couldencourage private building owners to start refurbishment projects. It seems that large scale districtlevel project would also require clear guidelines on how to proceed especially with a view masterand general plan requirements.


As refurbishment on a district level is not a big problem for town planners even from an aestheticpoint of view, regulations regarding an application of renewable energy is a whole different story.

Delays in implementing efficient and effective regulations, in particular the climate and energypackage and Directive on the promotion of energy from renewable sources, are the biggestbarriers and the source of large risk for bigger investments.

In Poland, the use of systems using renewable sources of energy is at the moment in many caseseconomically unjustified. The most important barrier is that renewables are still more expensive,and current energy providers are strong monopolists on the market. As 80% of inhabitants ofWarsaw are connected to the existing grid, and it is beneficial to many stakeholders, the authoritiesare not willing to break the status quo.

In 2015 the Parliament adopted a new amendment of the Law on Spatial Planning andDevelopment, and Building Law. Many professionals claim that the amendment might harm smallinvestors, as from now on it is only possible to install renewable energy above 40kW only in areascovered by the Local Plan of Urban Development. Creation of such plans is not only expensive, butalso very time consuming. In many districts the application of such projects might be simplyimpossible, plus the law won’t be changed only for one venture.


New regulations will ensure sales of produced electricity in small, domestic installations, at aguaranteed price for 15 years. The owners of installations with a capacity of up to 3kW will receivea guarantee of the sale of energy at a price of approximately 75gr / kWh, while in the range of 3-10kW at a price of up to 70 gr /kWh, depending on the technology of renewable energy sources.Unfortunately, the number of these micro installations which receive funding is reduced, and tariffsare due to expire, if the capacity of these plants will reach a total of 800 MW.

Obtaining a license for electricity generation is a prerequisite for the possibility of obtainingcertificates of origin and electricity production purpose of resale. However it is possible to obtain apromise, before the end of the installation. In practice a big number of documents must beprovided by an investor, and they should be obtained from multiple institutions, which increases theeffort to achieve them. On the other hand, there is no simplified procedure for small systems, andbecause the license for the production of electricity from renewable energy sources can beobtained only by an entrepreneur, a person wishing to install even a small photovoltaic system isforced to start a business. Small installations from renewable energy sources up to 5MW areexempt from fees the excise tax.

Economic, in particular fiscal, mechanisms are still insufficient, as they don’t enable to obtainbenefits in relation to the amount of capital expenditure on facilities, systems, equipment toproduce energy from renewable sources.

Major cities have a large district heating coverage, e.g. in Warsaw 80% of building use districtheating. District heat is typically produced by coal or natural gas. Heat consumption is measuredby building and the impact of reduced consumption is not visible to individual apartment owners,which in turn reduces interest on investing into energy efficiency.

Electricity metering in municipal residential buildings is apartment based and the electricity cost isshared by consumption. There are cases where apartment based water metering has reducedwater consumption which refers to a will to act if the benefit is visible.

A law restricts the tax free capacity of distributed renewable energy systems to a maximum of 40kW. Tax on PV electricity (> 40 kW) is a problem as in the cities possibilities to install are limitedand therefore larger systems as suggested by the EU-Moder project would be more desirable.There is no adequate legislation on distributed energy. Compensation for distributed electricitygeneration is poor and the rules are somewhat unclear.

However, there are pilot projects for grid connected economic use of solar power by privatelyowned PV systems but without compensation for feed into grid. The maximum capacity of aprivately owned grid connected system is 3 kW but for private the system capacity can be higher.

Other building based renewable energy systems like heat pumps, heat exchangers are economicand gaining popularity

CONCLUSIONS

Pilot projects may be one way to gain understanding and interest towards renewable energy.Projects like PROSUMENT project provide support for solar energy, and when well communicatedthe result may help for making the permit processes easier.

· Presence of several owners is needed to start the refurbishment at district level.Achievement of common agreement among owners may be difficult because of different


conditions of owners (like financial conditions) and sometimes because of conflicts ininterests.

Most of the interviewees claim that this is the largest barrier. Unfortunately in Polish conditionsowners believe that they can achieve what they want only on their own, and this is a persistingissue in many areas of economy.

Very often costs of media like water and heating are settled by the managers for entire buildings,and particular inhabitants don’t know how much of it they consume, as the meters only showapproximate values. Despite this they are forced to pay in advance, and very often pay too much.

Living costs in Poland are high in comparison to earnings, therefore people don’t feel encouragedto participate in activities that might be time and money consuming. As social benefit programs inPoland are still very basic, young people with families, and elderly wouldn’t prioritize refurbishmentat district level, especially if their housing association is not acting for their sake (which happensrather often). It is also worth mentioning that bigger schemes are not prioritized by themselves, andthere is no support to promote large scale refurbishments.

A lot of buildings in Poland have a complicated ownership status (also due to post-war chaos), andit might be a crucial barrier to create a structured model of a refurbishment on a larger scale. Bigconstruction works often involve closing certain areas, which is believed to be the biggest obstacle.

In order to be a part of a well-structured project new trustworthy actors are needed, wheretransparency is the highest priority.

The common awareness of benefits through refurbishment as well as the government’s and citycouncils’ interest on refurbishment are low. The impact of project scale, co-operation andcollaboration is not understood. The presence of several owners is clearly a problem to reach acommon understanding on goals, procedures and sharing the benefits.

Fortunately there is a bigger group of owners that are more aware of long term benefits from suchactivities, however public procurement never asks for running cost, which sometimes results in avery high maintenance costs like in Silesia.

Refurbishment is not attempting to private owners and for older generation in residential sector thereluctance grows from ownerships, lack of interest, attitudes, fears and the memories of the pre1990 era. Customer view is not enough on the agenda in refurbishment.

CONCLUSIONS

Refurbishment economy may be the key to success. Examples of successful projects withtransparent results on costs and benefits are required. Convincing one owner group could have animpact on the continuation of the process. Clearly, more information is required on a detailed butalso on the general level.


Project management and organizational models are a barrier. Suitable organizational models aremissing. Splitting the project into several sub-assembly projects can make the control difficultwithout clear organization and responsibilities. Project management’s role is crucial as the controlover subcontractors and sub-consultants can be difficult even in a typical large project. Low public


interest and legislative issues can cause bureaucracy to large scale projects. In general there is noexperience for a complicated multi-stakeholder processes.

Most of the projects in Poland are valued at below 3 million Euros which would not be sufficient fora large scale refurbishment at district level. On top of that designers and consultants, due toconstantly changing regulations, are not very experienced in such projects.

There are a lot of public buildings such as schools, hospitals that have to be modernized shortly,and there are some good examples like the hospital on Madalińskiego Street in Warsaw, Poland.The refurbishment was a part of the „Odnawialne źródła energii i kogeneracja w m.st. Warszawa”project, organized by the City of Warsaw.

Presence of actors who can become leaders is unknown to the interviewees. On a daily basis, theprojects run smoothly mostly if the designers and contractors already had an ongoing cooperationpreviously.

CONCLUSIONS

Descriptions of project management and organizational models with responsibilities of variousstakeholders may help for understanding the complexity of a district level project. Pilot projectsshould as well be helpful.


Finance is a major problem for a large scale projects and thus an activator with goodunderstanding of possible financing sources is required. Currently there are no actors (with anexception of city/town governments) who would take a leading role in this kind of a project. InPoland, an activator or integrator should have also a public status but as the public interest is lowand impacted by political pressures such players are not available. Local government could be inthe key role as an activator but changes in political environment (elections) easily reflect toeagerness of promote large scale refurbishment. This is why local governments are slow orunwilling to tackle district level issues – may lead to loss of power.

Qualified service providers do not exist and there are no organisations that could take role of anactivator at the moment.

Unfortunately responsibilities of different branches are very spread out, and usually differentstakeholders have completely different interests. In order to combine all of them, a very active andtransparent actor is needed

CONCLUSIONS

Clearly, a district level project requires more time in the very early phase than maybe in some othercountries. The preparations should be started with well-prepared presentations on the targets andbenefits for the city management. The benefits for the city (brand value) should be clear to attractthe city leaders.


As for 2015, it is not clear what model could work for a refurbishment at district level. Differentprojects require different means. PPP schemes become more and more popular on a Polish


market, and the actors realize that good results are only possible to be achieved by a properenergy operation. These schemes are slowly introduced to authorities and local governments. PPPschemes require clear regulations, and good education in VFM definition.

In general the common opinion is that there are no such business models that could make a districtlevel project profitable or even feasible. Typical residential building owners don’t see very clearuser and owner related benefits are not taken as an incentive, e.g., city financed new heatingsystems for buildings with coal burners in city centre to reduce smog. The fear is in future costs:Even though the change is free of charge the future energy costs is feared to be higher thanpresent.

For companies that have worked with Public Private Partnership projects business models are nota problem as such. PPP projects have been carried out with good success for hospital, school andadministrative buildings. Main problem is to find reliable operators for PPP projects that canmaintain the buildings for 20 – 25 years contract time. The companies see that public ownersshould be included in a district level project as the key stakeholder. This would help for otherowners to join the activity.

In some cases also energy efficiency improvements such as lighting and heating systemmodernization have been included into PPP project: however, the clients do not value possiblesavings. Finance is in any case the major problem, although local government has funds andpossibility to guarantee loans.

CONCLUSIONS

A well-prepared co-operation based (e.g., PPP) pilot project even on a smaller scale includingpublic and private stakeholders could help to see the bottlenecks of a district level refurbishment. Itseems that tangible examples are required in Poland.


This is not a barrier if one big owner/investor is taking leadership in the project, and takes care of it.Unfortunately like in a previous barrier, there are few collaborative models that are already provento be functional and beneficial in long term.

Socio-economic problems can be a big barrier for district level refurbishment. Presently, heatingenergy is cheap and thus no changes are desired. At the same time refurbishment market is weakas the specialized companies are not experienced in the business.

There are no procurement models for district level actions. Old municipal and partly also privatebuildings are typically expensive in terms of maintenance. Public procurement does not deal withmaintenance of buildings. There are also legal issues that may create a barrier for procurement ifthe project includes public buildings.

CONCLUSIONS

A well-prepared co-operation based (e.g., PPP) pilot project even on a smaller scale includingpublic and private stakeholders could help to see the bottlenecks of a district level refurbishment. Itseems that tangible examples are required in Poland.



According to a renewable energy installation designer here are efficient tools to supportassessment of several buildings at district level. The problem starts with the application of thesetools, and open minded attitude to use them.

For example, inhabitants in Krakow, where the air is highly polluted, refused to use projections,prepared by a general contractor, for no particular reason. Probably the problem laid in animproper explanation or simply in a lack of knowledge of benefits that such tools bring.

Present tools are considered sufficient in Poland at least for typical refurbishment; the problem isnow in the development phase where the large scale project are not foreseen. Problem is in theuse of tools: same tool different results – correct use of tools important. Refurbishment modelscould be useful for giving examples on possibilities

To promote large scale project also life cycle tools are needed.

CONCLUSIONS

District level refurbishment is a new approach and the interviewees considered such large projectsnot feasible in the near future. One barrier is that the nearly zero energy building has no definitionyet and it may be difficult orientate to the actual problem.


There are no process descriptions for district level refurbishment available and the need will comeif district level projects start. Complexity of a large scale refurbishment project is not understoodwell enough. Process rules and requirements should have a directive role rather than decisive role.Too tight steering may reduce willingness to go for district level refurbishment.

There are a lot of districts in Poland that are considered as a big organism, mostly with regards tothe heritage preservation. As there are a lot of post-war historic buildings that need a restoration,big modernizations of large scale complexes (like old factories in Warsaw City Centre or Koneser)are common and very popular.

Big refurbishments shouldn’t be difficult from a designer’s point of view, the biggest problem couldbe connected to the structure of such a project.

CONCLUSIONS

A degree of freedom is suggested for the district level projects at the same time as municipalparticipation to the projects is desired. There is a conflict of interest in the views. However;according to the interviews a district level project is not possible without municipal participation.


Major problem for energy management may be energy sufficiency in the future, which in turn mayhave grid impacts itself. As the large scale distributed renewable energy is not foreseen by the


interviewees Load matching or grid interaction as such is not considered a problem in the nearfuture.

CONCLUSIONS

--

SUMMARY

1 2 3 4 5 6 7 8 9 10

Owner 3 5 4 3 3 4 4 2 4

Contractor 3 2 5 3 5 2 1 2 3

Contractor 2 3 5 4 5 3 2 2 4


Building Authority

Average


Appendix 8 Interview results / Austria

The main objective of the interview was not to measure compare the importance of differentbarriers. The objective was rather to develop an understanding about all significant barriers forenergy efficient refurbishment at district level in Austria. According to small contribution from ertexsolar to this WP two interviewees from two different stakeholders were interviewed. Theinterviewees were selected according to the personal network from the Austrian interviewer. Theinterviewee has some experience / knowledge in energy efficient refurbishment at district level.The kind of stakeholders is shown in Table 1. There is a lot of experience on theoretically basis inthat kind of nearly zero energy refurbishment at district level where the grid interaction and peakpowers demands would have been taken into account. Thus the insight of the interviewees on thebarriers for energy efficient refurbishment at district level could mainly be based on real caseswhere a group of buildings has been refurbished at the same time and on theoretical discussionand prediction of hindrances.

Table 1 Description of the Austrian interviewees.


x

Town planning and building permission authorities x

Total 2

All interviews were face-to-face meetings. The duration was typically one and a half hour.

One interviewee recommended the Report “SMART BLOCK GEMEINSAM BESSER SANIEREN”which is written in German. Some of the information’s below are taken form this report which youcan download at this link: https://www.wien.gv.at/stadtentwicklung/energieplanung/pdf/smart-block.pdf

The both interviewees were in important positions in their organisations and represented goodexpertise in the topic.



Some regulations are in the above mentioned report which are against an energy efficientrefurbishment on district level. These regulations are also related to question 2. of this interview.

Original Austrian Law: rough translation:

Elektrizitätswirtschafts- undOrganisationsgesetz (ElWOG)

electricity industry and organization law

Mietrechtsgesetz (MRG) Law of tenancy

Wohnungseigentumsgesetz (WEG) Law about ownership of residentialapartments


Wohnungsgemeinnützigkeitsgesetz (WGG) non-profit housing act

Heizkostenabrechnungsgesetz heat cost billing law

und weitere Rechtsmaterien and others

One interviewee mentioned that this is a very big obstacle in Austria especially in Vienna. Theinterviewee from the engineering office mentioned that this depends to local regulations.


Concerning the liberalisation of the energy market this is definitely a problem.

This should be explained at a certain project which was not part of an interview but it wasmentioned at a conference in Berlin from a “Building owner with big building portfolio”. They builtthe “Stadt Aktiv Haus” in Frankfurt Germany. The whole roof and facade is covered withphotovoltaic panels and delivers more energy than the tenant could use. Because of this specialtype of building/project they offered an all in rent to the clients (lease and energy service together).But this is definitely not allowed, because the clients should be able to choose their own energysupplier. That means at the moment they are “bending” the law.


This is also a very important question which should be answered more or less at a social level.

There is no problem-solving approach available at the moment. The big focus should be oncommunication and information. But this costs resources (and money) which is not available at thevery early beginning. State or town owned authorities could initiate that, but only until a certainstage. Some projects were financed from the Austrian capital Vienna, but the feedback was moreor less not satisfying. New models should be developed how different actors (owners) could belinked together.

Another problem is who will renovate how much and when. That means in terms of energyreduction but also concerning the amount of investment. The timeline is maybe also a problem. Anowner who exchanged the windows couple of years ago is maybe not willing to touch the buildingagain.

Some properties are used as a write-off model. That means rich investors invest in a property witha stable or maybe growing value. But the benefit out of the investment is zero or even afflicted withsmall losses. In total the investor pays fewer taxes but keeps a property value. This kind of owneris definitely not interested in a renovation on district level.

The possibility of binding or compulsory measures concerning renovation on district level is on onehand not possible because of missing legislation on the other hand not suitable of you try to bringdifferent actors together. This is impossible with arbitrary measure or sanctions.


One conflict should also be mentioned. Who will do the investment and who will get the benefit?The investor takes the risk, if the savings are not as promised there will be no benefit. The tenantwill have maybe a better quality of life, but is he willing to pay more for this improvement?


New business models even for consultant and engineering offices need to be developed. On onehand it could be interesting because this is a blank spot on the map, but on the other hand alsorisky concerning the upfront consultancy until a real job will be generated.

Two projects which were developed in Vienna considered more the architectural point of view.Energy consultants were not involved at this early stage. So the concept was more or less a widerapproach. It could be said, that the concepts in Vienna are focusing not only on the classicalrefurbishment approach like window replacement or thermal insulating. It´s also a big focus toimprove the quality of live. That means for example demolishing of fences or partition wallsbetween the different properties and installing of interrelated green areas. New mobility conceptswith less parking areas and safer bicycle storage systems were also considered.


One approach could be a kind of “general contractor” where several companies and serviceenterprises link them together and offer a kind of “turnkey solution”.

There are some examples in a different field of construction available in Austria:

Specialists in protection of historic buildings and monuments:

Some historically buildings in Vienna need very special kind of knowledge when you startrefurbishment. For example interior stucco but also exterior ornamentation facades renovationcould be done only by very skilled specialist. Some of the construction companies are specializedon that and will cooperate with other construction companies if necessary (maybe also competitorsin the “standard” construction business).

Initiative of “Traumhaus - Althaus” (dreams house – old house):

This initiative was founded in Vorarlberg (a federal state in Austria) where several actors fromdifferent disciplines work together. The principle behind: Owners renovate maybe once in a lifetime– but construction companies do it very often. Therefore they have a special kind of knowledge anda lot of experience.

The conclusion could be that some very special stakeholders from different disciplines should enterthe stage together.

The interviewee from the engineering office mentioned that the lack of financing the consultant atthe very early beginning is one of the biggest problems. They could supply worth full information forthe decision making process, but they couldn´t do it for free.



The answers are given at question 5.

Additional info is for the very special situation in Vienna. A lot of apartments are heated with stoveheating systems. Most of them gas fired some of them with very old – phase out modelled - oilfired. These are no central heating systems for one house or a block, these are individual ovens.Concerning this individual investment it makes it impossible to centralize it on house or block levelor even connect it to the district heating system. Connecting to district heating systems is alsocomplicated on several levels.

o If the houses or blocks are renovated, the energy demand could be quite low. Theinvestment for the district heating connection (heat exchanger) is quite high compared tothe energy consumption over the years. If the profit from the turnover of celling energy istoo less the investment for the connection is uneconomic.

o If the connection for the gas supply is already done in the past, the hurdle to switch fromgas to renewable and/or efficient district heating is quite high.

An open question is also about the situation for the tenants during the renovation of a wholedistrict. Where should they live in the meantime and who will pay for that?


The procurement is not the biggest problem. If the organisation structure is founded the rest will bea standard procedure.

In the report “SMART BLOCK” are some figures mentioned concerning the joint purchase. Thesaving could be between 6 to 10% compared to single orders.


The interviewee from the engineering office mentioned that they are working with Trnsys with a lotof special designed applications for their own needs. They made a lot of improvement in the lastyears and could offer very quick and precise information. For example the simulation for the SheikhZayed Desert Learning Centre (SZDLC) in Al Ain / Abu Dhabi needs couple of years ago appr. 6months, nowadays they could do it within 1 month.

The interviewee from the town planning institute mentioned, that they have no special knowledgein this kind of simulation. But what they know from their experience that most of the tools arespecialized on simulating new buildings. Nevertheless tools are available but the problems occur atthe stage of feeding them with input data. Data, or the needed date are usually not available. Sometools at building level (decision support tool) are very open to feed in the data, but the link from thebuilding to the city is missing. http://urbantransform.eu/wp-content/uploads/sites/2/2013/04/DSE-Deployment-Guide-v1.0.pdf

Some of the tools are very rough and not applicable on district level (Siemens city performancetool).



There is no stimulus to start refurbishment. Especially if it will be compare it with new built. Thecreativity or the freedom of design at refurbishment is very limited.

Green building design labels will be more relevant in the near future and are already established inthe design process. The project volume should be bigger than 500 Mio. € otherwise the overheadcost for this certification are too big related to the investment.


The interviewee from the engineering office agreed that these methods are missing, but asked alsoif they are necessary? For him it´s not a critically question because the energy suppliers arethinking in statistics. If they know the stock they know the loads.

The interviewee from the town planning institute mentioned that the network operator isresponsible for that. But it´s maybe problematic because of the separation between networkoperator and supplier. There could be some methods if they were allowed to apply. Smalldecentralized grids could save costs compared to big infrastructure. Instead of one big high voltagepower line, several small grids could be interacting between.









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